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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: Highlights at the UFS

2011-12-01

2011 was a phenomenal year in the life of the University of the Free State and the memorable moments will be engraved in the history of this proud institution.

World Universities Forum honours the UFS

The UFS was awarded the World Universities Forum (WUF) Award for Best Practice in Higher Education during 2010.The Best Practice Award recognises the most significant practices of the year around the world. The university’s implementation of a number of interlocking innovations to transform the institution is recognised with the award.

These innovations include: campus-wide racial integration for students; reinvigoration of the academic culture; nurturing of the most promising young scholars by means of the Vice-Chancellor's Prestige Young Scholars Programme; sending 71 first-year students to top American universities to assist with their development into non-racial campus leaders; the revision of the undergraduate curriculum to promote a cross-disciplinary approach to key societal problems; raising the entry requirements; the facilitation of open access to campus leadership through sessions with the Vice-Chancellor and Rector; extension of this spirit of dialogue internationally through the inauguration of its International Advisory Council consisting of key thinkers and practitioners; the identification of 20 of the most dysfunctional high schools in the Free State and the building of relationships with those schools.

This university-school partnership is based on a strict contract of reciprocal commitments to increase the chances of black children attending university. The WUF applauded this as the most innovative step.

New branding for our 107-year old institution

Our university turned a fresh new page with the launch of a new brand that will take the institution on its path to new horizons.

Two primary brands were adopted – an evolved academic crest and a new marketing brand for the institution’s offerings and services. The very foundation of the UFS is built on a dynamic learning environment where academic excellence and the development of leadership qualities. The new brand seeks to adapt to the changing needs of society, without sacrificing its rich history and heritage.

The rebranding process involved one of the most expansive and intensive process of consultations with staff, alumni, Senate, Council and other stakeholders.

The new brand is anchored in the university’s renewed motto “In Veritate Sapientiae Lux” (In Truth is the Light of Wisdom), which has been evolved to embrace the diversity of the community at the university without losing its essence.

Archbishop Desmond Tutu receives an honorary doctorate

One of the great sons of Africa, Archbishop Emeritus Desmond Tutu, received an honorary doctor of Theology and opened the International Institute for Studies in Race, Reconciliation and Social Justice on the Bloemfontein Campus at the beginning of 2011.

The Institute originated in the Reitz incident of 2008 and embodies the UFS’s determination to be a place where reconciliation, forgiveness and social justice would not only be studied, but where it would also be applied. Students and scholars from across the world can study the theory and practice of building societies across the boundaries of race, as well as religion, gender, disabilities and national origin.

By honouring Dr Tutu, the UFS recognises the contribution he has made in the field of Theology through his teachings and the books he has written. The UFS not only honoured him as a moral and religious leader who has maintained his integrity as a Christian, but also as “a great son of South Africa who has made a huge contribution to peace, reconciliation and justice in South Africa and in the world”.

Reconciliation closes book on the Reitz incident

The Reitz incident, that has taken the UFS to front pages and news headlines, could come to closure this year with a reconciliation ceremony between the former students and staff members. The parties involved could meet in private and also took part in a public ceremony with many dignitaries witnessing the closure of the incident and repercussions it had.

Messages of apology were read by Prof. Teuns Verschoor, Vice-Rector: Institutional Affairs, on behalf of the UFS, and Mr Danie Grobler, on behalf of the former students. A message of acceptance of the apologies was read by Ms Emmah Koko on behalf of the workers.

Deputy Chairperson of the South Africa Human Rights Commission, Commissioner Pregs Govender, said of this historic event: “The courage and compassion shown by the workers together with the students’ willingness to embrace the spirit of change have enabled a process of justice, transformation and reconciliation that is an inspiring example for South Africa.”

Grade 12s attend first Leadership Summit

More than 280 learners from all over South Africa and Namibia attended a three-day Leadership Summit on the Bloemfontein Campus in April 2011. The goal of the summit was to enable young leaders to develop their leadership capabilities by looking beyond their normal boundaries.

Prof. Jonathan Jansen, Vice-Chancellor and Rector, addressed the learners on leadership while Mr Louie de Necker, a training consultant, spoke about conflict resolution. Other highlights included a visit to the Boyden Observatory, picnic suppers, an introduction to residence life, a social evening, and a prize-giving ceremony aimed at learners who distinguished themselves as potential leaders during the three-day visit.

UFS honours great teachers

Our university and Sunday Times have joined hands in identifying 150 of the greatest teachers, who moved, inspired and transformed South Africans during their time at school. The project culminated in the book Great Teachers.

These are the teachers who stood out among their colleagues and made a lasting impact on their learners, inspiring them to excel, long after the mathematical equations and English literature tests are forgotten. The book is a powerful account of inspired and inspiring teachers.

All proceeds from the sales of the book will be used to provide bursaries to student teachers of today, who may become the great teachers for tomorrow’s generation.

Graduations now a celebration

By changing its format, graduations are now a festival to celebrate years of hard work and dedication of students and lecturers at our university. Some of the changes include the gathering of the procession on the Red Square in front of the Main Building, from where it moves to the Callie Human Centre. The graduation programme is also filled with music and song items with various young speakers addressing and inspiring the audience.

A total of 83 doctorates were conferred this year, making it the highest number in the history of the university.

African Student Affairs Conference a huge success

The first African Student Affairs Conference (ASAC) was hosted by our university. The conference was attended by delegates from universities across the continent and was aimed to place the focus on issues relating to student affairs in an African context.

Delegates shared and exchanged strategies, ideas and resources, and discussed issues related to the work of student-affairs professionals. A delegate from Nigeria said it was an important conference for Africa and it should become a regular event.

Research published in Nature

A research article on the work by a team under the leadership of Prof. Esta van Heerden, and counterparts in Belgium and the USA, has been published in the distinguished academic journal Nature on Thursday 2 June 2011.

The article – Nematoda from the terrestrial deep subsurface of South Africa – sheds more light on life in the form of a small worm (nematode) living under extreme conditions in deep, hot mines. It was discovered in one of the gold mines in the Free State.

The research can shed some new light on the possibility of life on other planets, previously considered impossible under extreme conditions. It also expands the possibilities into new areas where new organisms may be found.

Postgraduate School is one of a kind

Our Postgraduate School was launched with the aim of bringing research-bases education in line with national priorities and the focus of the UFS Academic Turnaround Strategy of 2010. It spans across our facilities.

The focus of the school is to produce graduates who are global citizens, research literate and able to reflect ethically on the purpose, process and product of research; to improve throughput rates of postgraduate students; and to make the experience of being a postgraduate at our university one which is stimulating, enjoyable and which contributes to the development of people beyond the limits of their disciplines.

Oprah Winfrey now a Kovsie

World attention was drawn to our university when an honorary doctorate in Education was conferred on media icon Oprah Winfrey on 24 June 2011 at our Bloemfontein Campus. The graduation was probably the biggest ceremony of its kind in South Africa, with more than 4 500 people attending.

Our university honoured her for her accomplishments and unparalleled work as a global media leader, as well as a philanthropist with vision and foresight in the field of education and development.

Prof. Jonathan Jansen, Vice-Chancellor and Rector of our university, said: “It is a great privilege for us to be the first South African university to honour Ms Winfrey in this way and to be able to recognise a global icon of her stature.”

UFS doctors make history in South Africa

Two procedures took the UFS to the forefront of the medical world this year.

History was made with the first implant of a special new aortic valve in South Africa. The advantage of this new valve is that it can be implanted percutaneously through a catheter from the groin. This eliminates the need for invasive surgery.

The valve is made from porcine pericardium (tissue derived from pigs) and is mounted on an expandable stent, which is threaded along an artery, until it reaches its desired position. The valve is especially useful in older patients who suffer from aortic valve disease and pose a high surgical risk. It also reduces hospitalisation time.

A rare malignant tumour was also removed in groundbreaking heart surgery. What makes this operation unique, is that the suspicious mass, identified in the heart of a 51-year old man, was rapidly growing into a highly invasive cardiac tumour seen in a small number of patients worldwide.

In the highly complex, 10-hour operation the entire right heart chamber had to be removed and the heart reconstructed.

School of Open Learning adds value

The activities of the new school are driven by a central principle: opening up access to those who have not had the opportunity to study at a higher-education institution due to geographical location, socio-economic circumstances or other factors.

Programmes are delivered through a blended-learning model, which blends contact teaching with distance education.

The school will collaborate with our various faculties, and is managing the continuing education-sponsored endeavours of the Faculty of Education. These include projects for in-service training of teachers in Mathematics, Natural and Physical Sciences, Languages, Literacy, Economic and Management Sciences, Technology and various areas of Management and Leadership.

Second group of young leaders abroad

A second group of first-year students in the Leadership for Change Programme visited universities in the USA, Europe and Asia. Our university could extent the programme to 150 students, up from 71 in 2010.

These students are seen as a leadership core, not only for their university life, but also in public life outside the university borders.

The main purpose behind the programme is to expose students to positive models of racial integration. Their experiences will go a long way towards changing and enriching the minds of young leaders, who have committed to building a truly non-racial society in South Africa.

Odeion School of Music launched

Our former Department of Music transformed into the Odeion School of Music. The name Odeion name portrays not only an excellent asset in the Free State, but also nationally and internationally.

The school’s new name bears the respected Odeion brand and a number of successful and respected ensembles operate under this brand. These include the residential Odeion String Quartet, student ensembles, the Junior Odeion String Quartet, the Odeion Sinfonia, and the Odeion Choir.

The formation of the school paths the way for more flexibility to complement its profile with new developments. These include the application of prestigious international experts as artistic fellows, membership to progressive European, jointly-developed degree programmes and curriculum development initiatives, the founding of a chair in Orchestra Conducting, a master’s degree in Arts Management, as well as the incorporation of bio-kinetics in the teaching methodologies of performance practice.

World-class Chemistry facilities opened

World-class Chemistry facilities, with state-of-the art equipment, opened on the Bloemfontein Campus.

The upgrading of the facilities and addition and replacement of equipment were the single biggest investment at our university in a long time.

Specialised research by the Department of Chemistry includes X-ray crystallography, electrochemistry, synthesis of new molecules, the development of new methods to determine rare elements, water purification, as well as the measurement of energy and temperatures responsible for phase changes in molecules, the development of agents to detect cancer and other defects in the body, and many more.

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