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South Africa’s budget conundrum: The link between coalition politics and the budget crisis?

11 March 2025 Photo Supplied

Budget Speech Opinion 2025 — Dr Ambrosé du Plessis and Terrance Molobela, Lecturers in the Department of Public Administration and Management, University of the Free State.

Opinion article by Dr Ambrosé du Plessis and Terrance Molobela, lecturers from the Department of Public Administration and Management, University of the Free State.

The mechanistic administrative cog stemming from the sixth administration, through which policy development and implementation took place, has created a false sense of reality regarding the African National Congress (ANC)’s authoritative position in South Africa’s political landscape. The notion that the ANC remains the central political force in the country is increasingly proving to be a fallacy, especially in the face of the changing dynamics within the so-called Government of National Unity (GNU). Even though President Cyril Ramaphosa dutifully signed off on key legislative acts such as the National Health Insurance (NHI), the Basic Education Laws Amendment (BELA), and the Expropriation acts, the ANC, and indeed the broader GNU, have grossly underestimated the complexities of coalition politics.

One of the clearest illustrations of this miscalculation was the latest budget ‘negotiations’, which exposed the growing fractures within the governing coalition. With the budget tabled just two hours before presentation, it became evident that the coalition parties – especially the ANC – are facing a harsh political reality. In a move that has shocked GNU parties, the decision to raise value-added tax (VAT) by 2% has turned into a bone of contention. This cutthroat measure, aimed at generating an additional R58 billion, has sparked fierce opposition from within the very government it seeks to support. The bitter VAT debate has led to a near standstill in the budget process, with some GNU parties staunchly opposing it, while others view it as a necessary evil.

New can of worms

The proposal to raise VAT is indicative of a deeper issue. It is, quite frankly, a regressive measure in an economy already battling a cost-of-living crisis. Raising VAT disproportionately impacts the lower and middle classes, who spend a higher percentage of their income on consumption. This move is naïve at best. VAT might raise substantial sums, but it does little to stimulate the economy or promote productivity, both of which are sorely needed to grow South Africa’s GDP and reverse the country’s economic downturn. At this moment in time, the country cannot afford to further burden a shrinking tax base.

In addition, the VAT conundrum has opened a new can of worms. The Democratic Alliance’s (DA) publicly proposed budget goes beyond the initial 2% VAT increase, challenging the secrecy with which the failed budget was concluded. More importantly, it questions the political and financial ideological foundation on which the initial budget was compiled by the ANC, led by Minister of Finance Enoch Godongwana. There can be no doubt that the DA’s shadow budget, particularly its cost-containment measures, has thrown a spanner in the works of a deep administrative state. At this juncture, the lingering question is – can the true Minister of Finance please step forward? With various proposed budgets from the GNU parties, one can only wonder if the GNU is now officially facing a Pinocchio dilemma. This identity crisis emerged when the ANC indicated that it would now turn to the Economic Freedom Fighters (EFF) – who also opposes the 2% VAT increase – to approve the budget, although the EFF recently rejected the call for negotiations with the ANC and considered it a general discussion. From this stance, it is clear that the coalition game will be played both within and outside the borders of the GNU.

One cannot help but ponder how divergent political ideologies and principles are affecting government expenditure and revenue collection. Gone are the days when the ANC held a dominant, almost unquestionable position in government, able to dictate the terms of the national budget. Today, the ANC's reduced majority has forced it into an awkward position of compromise and negotiation, with the Minister of Finance increasingly serving as a ceremonial figure rather than an authoritative decision-maker. In years past, the State of the Nation Address (SONA) and the subsequent budget speech were seamless events under ANC leadership. But now the budget process has become an all-consuming political battleground, with ideological differences and party interests shaping every decision.

GNU a ‘death sentence’

The ANC's once-solidified grasp on the country's governance is now being tested in ways the party never anticipated. The ruling coalition is no longer a harmonious entity, but a group of political adversaries forced into uneasy alliances for the sake of governance. The impact of this fractured cooperation is glaringly evident in the stalling of critical national decisions such as the budget. What was once a party-centred process where consensus was driven by a unified political party, has now become a multi-party endeavour marked by negotiation, delay, and endless political wrangling.

Reflecting on the experience of the 1996 Government of National Unity led by Nelson Mandela, one sees a stark contrast. Despite hostilities within the tripartite alliance, that government was still able to implement policies and drive the country forward. However, the current GNU coalition partners have yet to demonstrate a similar level of cooperation and trust. In fact, the words of former Deputy President FW de Klerk seem eerily prophetic today. In his 1996 resignation statement, De Klerk described the GNU as a ‘death sentence’ for a meaningful government consensus. He feared that continued participation in the coalition would weaken the National Party’s influence and undermine democratic governance.

In many ways, these words echo the current state of the GNU. The budget process has become a metaphor for a government on the brink of collapse. Consultation among the political parties within the GNU has become a source of paralysis rather than progress. The government’s inability to align itself on critical issues such as the national budget, which totals more than R2 trillion, raises serious questions about its ability to move forward.

The so-called marriage of inconvenience between the coalition partners appears increasingly centred on securing positions rather than creating policies to address the pressing needs of South Africa’s citizens. The budget, a document that should have been a focal point of discussion since the formation of the coalition, has been delayed until the 11th hour. This delay in addressing the country’s fiscal needs points to a broader failure within the GNU. The South African economy, already battered by years of stagnation and underperformance, cannot afford further dithering.

The contemporary GNU, much like the former one in 1996, may have reached its breaking point. The promise of multi-party democracy and consensus-based governance is being undermined by the very factions that have come together in the name of unity. It is hard to escape the conclusion that the continued negotiations around the budget have become a form of political ‘death row’ for the current administration, with no clear path forward. As South Africa teeters on the edge of a political and economic crisis, the time for a new direction, grounded in pragmatism and focused on national interests, has never been more urgent. As South Africa stands at a critical juncture, with the deadline of 12 March 2025 rapidly approaching, the political landscape is poised for a moment of truth. Reports have indicated that the cabinet has reached an agreement on the finality of the budget, but conflicting statements from political leaders, particularly from the DA, suggest that this agreement is not yet a certainty. DA leader John Steenhuisen has publicly declared that no final agreement has been reached and that the parties are still working towards a resolution. For the country, the stakes could not be higher.

This raises significant questions about the future of coalition governance and the state of South Africa's fragile political economy. Several plausible scenarios could unfold, each with distinct consequences for the political stability and economic viability of the nation.

Scenario 1: A unified agreement – A lifeline for the political economy

In the first scenario, we imagine that the cabinet's agreement is genuine, aimed at averting risks to public confidence and the broader market. If the market-driven partners within the GNU recognise the overwhelming importance of a stable budget, they may choose to align their interests. With political stability hanging in the balance, the realisation may set in that South Africa is simply ‘too big to fail.’ This would, in theory, prevent a collapse into chaos, as the GNU partners, acknowledging the nation's susceptibility to political upheaval, would avoid creating conditions for widespread instability.

While this scenario seems like the ideal outcome, history suggests that political cooperation within the GNU has often been fraught with difficulty. The question is whether these partners can truly put national interests before political rivalries.

Scenario 2: The ANC’s secret deal – A recipe for distrust?

Alternatively, there is the possibility that the African National Congress (ANC) has reached a clandestine agreement with the EFF behind the backs of their coalition partners. This scenario would fracture the GNU, erode trust, and create a toxic environment of distrust in coalition governance. If the ANC manages to secure its hold on power, it risks alienating the markets, which would likely lead to a downward economic spiral. The longer this instability persists, the more vulnerable the country will become to a potentially catastrophic collapse in investor confidence.

Scenario 3: DA’s contradiction – The death of coalition unity

In a third possible scenario, the DA contradicts the agreement reached by the cabinet, exposing the extent of disunity within the GNU. This situation would further highlight the lack of trust among coalition partners, and the DA might find itself either paralysed within the coalition, or removed entirely, or even decide to withdraw from the GNU. This shift would trigger an intense debate about South Africa’s continued political economic stability.

South Africa’s economy, already vulnerable to shocks, would find itself in even deeper turmoil if this scenario were to play out. The markets would respond negatively, and the ripple effect would undoubtedly extend to the lives of everyday South Africans.

The real impact on South Africans

Regardless of which scenario unfolds, one thing is certain: the consequences for South Africa’s citizens will be profound. The allocation of funds to government institutions, provinces, and municipalities is likely to be severely affected by any political instability. Without a clear and stable budget, public services will suffer, leading to disruption in the functioning of provincial governments and municipalities. This, in turn, would delay public spending, putting vital services at risk and exacerbating the inequalities, poverty, and unemployment that already plague the country.

News Archive

During 2011: Achievements at the UFS

2011-12-01

Sarah Shannon

Dr Alex Amtaika, Department of Political Science

During a conference at Khon Kaen University in Thailand, Dr Alexius Amtaika from our Department of Political Science was elected as Executive Director and Convener of the International Committee of Scholars of Local Government. This honour was bestowed upon Dr Alexius during the first International Conference on Local Government at Khon Kaen University.

Sarah Shannon

We all have heard stories about inspirational people, who defy the odds, fight circumstance every day and never give up. Sarah Shannon has cerebral palsy but has never stopped dreaming and achieving them.

Sarah is also a competitive swimmer, and is currently ranked seventh in the world in her class of disabilities.

She is currently completing her postgraduate certificate in Education, Foundation Phrase, through Unisa. She is also studying Sociology at our university.

DW Bester and Sannah Mokone, Rhodes Scholars

Of the four open Rhodes Scholarships available to students from all universities in Southern Africa, two of our students won these prestigious scholarships. DW Bester, B.Sc. Hons. Actuarial Science student, and Sannah Mokone, BPub-cum laude student, joined Oxford University in the United Kingdom in September 2011 to further their studies.

The Rhodes Scholarships, arguably one of the most prestigious scholarships in the world, were founded in 1903 in the will of Cecil John Rhodes and cover the full costs of study at Oxford University.

While academic excellence is a pre-condition for consideration for the Rhodes Scholarship, these scholarships are unique in that Rhodes Scholars are outstanding young students who excel academically, but very importantly, demonstrate leadership, are committed to making a difference in the world, and have the energy to fulfill their ambitions.

Dr Derik Coetzee, Department of Sport and Exercise Sciences

When you suddenly receive a call during a World Cup year and requested to come and assist in leading the Springboks, then you have to know, you have something to offer. This is what happened to Dr Derik Coetzee from our Department of Exercise and Sports Sciences. This year he once again became involved in the Springbok rugby team, after he had been die Bokke’s conditioning trainer from 2004 to 2007.

His primary task as conditioning head was to help in seeing to it that the Springboks reached their best level of play – psychologically, physically an emotionally. Amongst others, his duties included the optimisation of the players’ muscle and explosive power, speed, anaerobic ability and technical skills.

Jefferson J Dirks-Korkee en Mart Kotzé

Jefferson J Dirks-Korkee, from Willowmore in the Eastern Cape, and Mart Kotzé from Bloemfontein, recently made history by being the first students from our Department of Drama and Theatre Arts featuring in an Afrikaans South African film Skoonheid, the first ever to be shown at the Cannes Film Festival.

The movie won the Queer Palm Award at the 2011 Cannes International Film Festival, where Robert de Niro was the chairperson of the panel of judges.

Prof. Muriel Meiring, Department of Haematology and Cell Biology

Prof. Muriel Meiring, Specialist Scientist in our Department of Haematology and Cell Biology, is responsible for establishing the Specialised Haemostasis Laboratory at our university and the Universitas Hospital’s National Health Laboratory Service. She established this centre as a reference centre for Von Willebrand disease, a genetic bleeding disorder, in South Africa. This laboratory is internationally recognised for their research and as a reference laboratory.

Prof. Meiring develops and tests antithrombotic (anti-clotting) agents and her long list of publications, research awards and congress presentations has earned her a nomination for the Department of Science and Technology’s Distinguished Woman Scientist Award. She was one of two scientists of the National Health Laboratory Services (NHLS) to receive the award – Prof. Meiring being the only woman from our university.

Medical facilities from all over the country make use of her and her team’s expertise when testing for blood disorders and she hopes to expand the centre even further.

Melinda Jonker

Melinda Jonker, one of our third-year financial economic students, won the overall national competition of the prestigious Traders Trophy competition at the Johannesburg Stock Exchange (JSE).

The competition, sponsored by Nedbank Capital and Oxyor in Amsterdam, requires participants to trade actual JSE-listed shares against one another on a simulated platform. The winner is determined not only by the highest profit, but also by the technique used throughout the trading session.

Christopher Diab, also a student from our Department of Economics, won the regional UFS competition.

ASSAf members

Seven of our academic colleagues have been elected as members of the Academy for Science of South Africa (ASSAf). They are Proff. Hendrik Swart, Physics; André Roodt, Chemistry; Zakkie Pretorius, Plant Sciences; Max Finkelstein, Mathematics; James du Preez, Microbial, Biochemical and Food Biotechnology; Maryke Labuschagne, Plant Breeding; and Neil Roos from our Postgraduate School.

Due main objective of the Academy is to promote and apply scientific thought in the service of the society, in order to determine the quality and scope of the role that the Academy can plays in the country’s life and progress, and eventually apply it

Other colleagues who are currently members of ASSAf include Proff. Jonathan Jansen, Vice-Chancellor and Rector; Johan Henning, Dean: Faculty of Law; and Frans Swanepoel, Senior Director: Research Development.

Samantha Renda-Dollman

Samantha Renda-Dollman, a BSc (Zoology) student on our Qwaqwa Campus, has obtained 19 distinctions out of the 22 modules she has written since 2009.

Her hard work earned Samantha the prestigious Dux Student award of our 2011 Annual Student Affairs Excellence Awards, held at our Qwaqwa Campus. This makes her the best overall academic performer of the entire student body on this campus.

Jaco Griessel

Jaco Griessel, an Honours student at our Odeion School for Music, received a prestigious Mandela Rhodes bursary for 2012 to study towards his Master’s degree next year.

Jaco, who is currently busy with his BMus Honours degree, is a performer par excellence, with many achievements to his name. In 2010, he received the Fanie Beetge Prize for the best undergraduate student in Systematic Music Studies. A year before, he received the same prize as best undergraduate student in Historic Music Studies. He shall continue his Master’s degree with Music Composition as field of specialisation at our university in 2012.

Prof. Helena van Zyl, UFS School of Management

Prof. Helena van Zyl, Director of the UFS Business School, was elected as President of the South African Association of Business Schools (SABSA). Since the beginning of 2010 she has been acting as president. Prof. Van Zyl is the first woman to occupy this position and also the first woman who is currently heading a business school in South Africa. She will serve SABSA as the president for the next two years.

Prof. Zakkie Pretorius, Department of Plant Sciences

Research by Prof. Zakkie Pretorius from our Department of Plant Sciences, has become part of Phase II of a mayor global project to combat deadly strains of a wheat pathogen that poses a threat to global food security.

Prof. Pretorius focuses on the identification of resistance in wheat to the stem rust disease and will assist breeders and geneticists in the accurate phenotyping of international breeding lines and mapping populations. In addition, Prof. Pretorius will support scientists from Africa with critical skills development through training programmes.

The Ug99 strain was discovered in Kenya in 1998, but are now also threatening major wheat-growing areas of Southern and Eastern Africa, the Central Asian Republics, the Caucasus, the Indian subcontinent, South America, Australia and North America.

Prof. Danie Strauss, research fellow in the Faculty of Humanities

Prof. Danie Strauss, a research fellow in our Faculty of the Humanities, won the Dooyeweerd Prize from the Board of the Association for Reformational Philosophies in Amsterdam. Prof. Strauss, former Dean of our Faculty of the Humanities and head of our Department of Philosophy, won the prize for his book Philosophy: Discipline of the Disciplines. The prize is awarded for work in the field of systematic philosophy.

Nida Jooste and Ryan Lamb, Abe Bailey Travel Bursary holders

Nida Jooste and Ryan Lamb are two of the proud recipients of Abe Bailey Travel Bursaries. Both students are academic achievers, but also excel in other fields. This is what set them apart from the rest of the applicants for the bursaries.

Ryan (23), a Medical Physics Honours student at our Faculty of Health Sciences, received the Senate’s Medal for the best Bachelor’s Degree student at the UFS. He was one of 100 students at the Brightest Young Minds Summit this year and was one of the 2008 delegates to the World Youth Forum, hosted by the International Association for Poetry and Solidarity in Italy.

Nida (21) is a very familiar face on our Bloemfontein Campus, as she served as the Deputy Chairperson of our Interim Student Council in 2011.

Loerie Award for Tarran Jacobs, Elizabeth Forson and Mafohlela Mahlatsi

The creativity of a group of students from our university was rewarded with a bronze Loerie Award after they won an internal competition. Tarran Jacobs, Elizabeth Forson and Mafohlela Mahlatsi, all third-year Marketing Communication students, won the award for an advertisement they designed for Cansa.

Each year, the third-year Marketing Communication students of our Department of Communication Science have the opportunity to flex their creative muscles in the Copy-writing class. The challenge is to design two advertisements for any charity organisation by applying the knowledge they gained from the subject in a practical way. The top three groups are then entered for the Loerie and Pendoring awards – two of the most prestigious awards in the South African advertising industry.

The top three groups designed advertisements for Cansa, the South African Blood Service and Crime Line.

Hendrik Kruger and Anke Malan walk away with awards at Pfizer UKZN Young Health Scientists Research Symposium

Two students in our Faculty of Health Sciences won awards at a Pfizer UKZN Young Health Scientists Research Symposium.

Hendrik Kruger, a medical student, represented his group, which won the clinical category with the paper “Injury patterns of occupants surviving motor vehicle accidents in the Free State”. This presentation was based on a study which is the first of its kind in South Africa.

The group with Anke Malan from our Department of Nutrition and Dietetics as presenter received the prize in the community-based category with the presentation ’Knowledge, practices and perceptions of undergraduate students at the UFS regarding the risk factors of osteoporoses’. Anke’s team was also nominated as the overall winner of the symposium. Presentations were delivered in three categories, namely clinical, community-based and laboratory research.

Prof. Louis Scott, Department of Plant Sciences

Prof. Louis Scott from our Department of Plant Sciences was formally rewarded the Fellowship of Royal Society of South Africa (RSSA).

Prof. Scott is an internationally recognised Palinologist at our university and a B-rated scientist.

Fellows of the RSSA are considered to be part of a very elite group of South African scientists who have achieved international acknowledgment.

Prof. Aldo Stroebel, International Academic Programmes in the Office of the Vice-Chancellor

Prof. Aldo Stroebel has been elected as a Founding Member of the South African Young Academy of Science (SAYAS).

He is Associate Professor in our Centre for Sustainable Agriculture, Rural Development and Extension, as well as the Director of International Academic Programmes in the Office of the Vice-Chancellor.

The Young Academy has as its objectives to represent young scientists in advising the government on science and technology policy and human resource development. In addition, they will prepare the SAYAS to join the Global Young Academy (GYA) to engage with high-level international bodies, including the World Economic Forum.

Prof. Lodewyk Kock, Department of Microbial, Biochemical and Food Biotechnology

Prof. Lodewyk Kock was a sought-after keynote speaker at various conferences and seminars around the globe on our nanotechnology breakthrough research.

He delivered keynote lectures at international conferences of repute in the USA, China and Greece. In the USA he delivered a the keynote address at the Conference & Exhibition on Pharmaceutical Regulatory Affairs (Pharma-2011), held in Baltimore, and was a keynote speaker at the 2nd World Congress on Biotechnology in Philadelphia. He was also invited to present various lectures abroad.

He posted two video lectures in e-conference format on his research on the web page of the journal Translational Biomedicine. He was also invited by the International Society of Translational Medicine (ISTM) to head their “Molecular Imaging” Division.

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