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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

Volksblad: Moshoeshoe Memorial Lecture

2006-05-27

27 Mei 2006

Moshoeshoe het mense saamgebind
KONING MOSHOESHOE kon bewys dat verskeidenheid ’n bindende eienskap kan wees. Dit blyk ’n sleutelbeginsel van sy leierskap te wees – en dit is nie ’n maklike een om te begryp nie.

Jy bereik die grootste eenheid tussen onderskeidende entiteite waar jy relatief vrye ruimte aan hulle gee om hul eiesoortige kenmerke na vore te bring.

Dít blyk uit prof. Njabulo Ndebele se gedenklesing oor koning Moshoeshoe.
Lesotho; het; onder Moshoeshoe se leierskap mense van verskeie dele van die subkontinent gelok.
Dié mense het hierheen gevlug van die verwoesting wat as lifaqane bekend geword het toe Shaka sy koninkryk met militêre onderwerping verstewig het.

Ndebele het gesê daar is algemene ooreenkoms dat die oorloë wat hieruit gespruit het, die maatskaplike grondslae van talle samelewings in Suider-Afrika geskud het.

“Dit was in dié konteks dat Moshoeshoe leierskap getoon het.”
Prof. Frederick Fourie, rektor en visekanselier van die Universiteit van die Vrystaat (UV), het gesê die lesing vorm deel van ’n groter debat oor leierskapmodelle, veral die konsep van Afrika-leierskap, en die voortgesette diskoers oor nasiebou en versoening.

Die Moshoeshoe-projek is in 2004 aan die UV begin om met Suid-Afrika se eerste dekade van demokrasie saam te val.
Die projek was deel van die UV se eeufeesvieringe in 2004.
Met dié projek word geprobeer om ’n groot Afrika-leier te vereer en die UV se verbintenis tot transformasie te toon sodat ’n ware inklusiewe en nie-rassige universiteit geskep kan word.

“As die stigter van die Basoeto-nasie, word daar wyd erkenning aan koning Moshoeshoe vir sy buitengewone leierskapstyl gegee.

“Diplomasie, versoening en vreedsame naasbestaan is van die kenmerke van sy leierskap, soos getoon in sy pogings om verskillende groepe in een nasie te verenig,” sê Fourie.

KONING MOSHOESHOE, een van Afrika se eertydse groot leiers. Hy is meer as 130 jaar gelede dood. Foto: verskaf

Waarde van openbare spraak ‘nou bedreig’
AANDUIDINGS bestaan dat die waarde van openbare spraak wat hoog deur koning Moshoeshoe van Lesotho op prys gestel is, nou onder ernstige bedreiging kan wees.

Om dié rede dra hy die koning Moshoeshoe-gedenklesing op aan al dié mense in Suid-Afrika en elders wat die moed het om hul oorwoë mening uit te druk oor belangrike sake wat die samelewing in die gesig staar, het prof. Njabulo Ndebele, visekanselier van die Universiteit van Kaapstad, gesê.

Ndebele, wêreldbekende skrywer, het gesê dié lesing kom op ’n kritieke punt in Suid-Afrika se nuwe demokrasie.
Dié lesing, om die buitengewone nalatenskap van een van Afrika se groot leiers te eer, is eergisteraand op die kampus van die Universiteit van die Vrystaat (UV) gelewer en het ’n staande toejuiging deur ’n groot gehoor uitgelok.

Ndebele het gesê die mense wat hul menings uitdruk oor belangrike sake, kan rubriekskrywers, redakteurs, kommentators, alle soorte kunstenaars, akademici, koerantbriefskrywers, nie-gewelddadige optoggangers met plakkate en strokiesprentkunstenaars wees “wat ’n spieël voor ons oë sit”.

“Selfs wanneer hulle dit waag op heilige gebied, soos sommige strokiesprentkunstenaars onlangs gedoen het, herinner hulle ons net dat selfs die heilige misbruik kan word vir doeleindes wat min met heiligheid te doen het.

“Dit is hul manier om ons te help, dalk meer diepsinnig as wat ons besef, om daardie einste ruimte van heiligheid in ons lewe te bewaar.

“Hulle verdiep ons insigte deur ons begrip te verdiep.
“Dit is gepas om hul dapperheid te vier,” het Ndebele gesê.
“Hulle herinner ons dat leierskap nie al is wat ons doen wanneer ons in ’n sekere magsposisie geplaas is om ’n organisasie of ’n sekere instelling te stuur nie.”

Hy het gesê onder die mense wat gevier moet word, sluit hy nie dié in wat deur haatspraak ander aanhits om geweld te pleeg; teen; mense; wat hul andersdenkende menings lug nie.

“Dit is nie met dapperheid dat hulle aanhits nie, maar weens hul toevlug tot die narkotiese beskerming van die skare.”

Mense voel glo ál kwesbaarder
Vise-kanselier lewer Moshoeshoe-gedenklesing
’n TOENEMENDE aantal hoogs intelligente, sensitiewe en toegewyde Suid-Afrikaners oor die klas-, ras- en kulturele spektrum heen bely dat hulle – soos nog nooit tevore nie – onseker en kwesbaar voel sedert 1994.

Só het prof. Njabulo Ndebele, vise-kanselier van die Universiteit van Kaapstad, gesê in die Universiteit van die Vrystaat (UV) se eerste koning Moshoeshoe-gedenklesing.

Die onderwerp was Reflections on the leadership challenges in South Africa.
Wanneer ontembare optimiste beken hulle voel dinge is van stryk, versprei die naarheid van angs. “Dit moet iets te doen hê met ’n ophoping van gebeure wat die gevoel van dreigende inploffing oordra.”

’n Gevoel heers dat Suid-Afrika ’n baie komplekse samelewing het wat liewer eenvoudige, gesentraliseerde beheer voortbring in die hoop dat dienslewering dan beter en vinniger gedryf kan word. Die kompleksiteit van beheer word dan in ’n enkele struktuur van gesag gevestig, eerder as in die afgewentelde strukture soos wat in die Grondwet beoog word.

Dat die afgewentelde strukture nie hul grondwetlik-gedefinieerde rolle verwerklik nie, moenie toegeskryf word aan die mislukking van die beheermeganisme nie.

“Dit is te vroeg om te sê dat wat ons sedert 1994 bereik het, nie gewerk het nie,” het Ndebele gesê.
Dit lyk of ’n kombinasie van omstandighede tot die “gevoel van ontknoping” lei.
“Ek wil dit vermy om te sê: ‘Kyk na Khutsong’, asof u sal verstaan wat ek bedoel wanneer ek sê u moet na Khutsong kyk.”
Sulke kennis lei tot wanhoop, want dit roep ’n werklikheid op wat só oorweldigend is dat dit fatalisties kan wees.
Ndebele het gesê niks kon meer vreesaanjaend wees as toe ’n komplot van die Boeremag oopgevlek en sekere Boeremaglede aangekeer is nie.

Sekere Boeremaglede het van ’n maksimum-sekuriteit-tronk ontsnap. “Sover ek weet, is hulle nie weer gevang nie.
“Wat is gedoen om die gaping te oorbrug?” was een van sy vrae hieroor.
“Van só ’n belangrike saak weet die publiek nie baie nie. Die karige kommunikasie kan die gevaarlike boodskap uitdra dat óf niks gedoen word nie, óf die staat in dié saak misluk.”

Hy het gevra: “Hoekom het die kwessie van munisipale afbakening tot die situasie in Khutsong gelei? Dit lyk of die probleem voortgaan, sonder ’n oplossing in sig.”

’n Aantal soortgelyke, oënskynlik plaaslike rebellies het oor die land heen plaasgevind. “Is hier ’n patroon?”
Ndebele het na die onlangse verhoor van oud-adj.pres. Jacob Zuma, wat van verkragting aangekla was, verwys.
Dié drama blyk ver van oor te wees. Dit beloof “om ons almal sonder verligting te hou, in ’n toestand van angs”.
Die gemene draad van dié gebeure is die gevoel van ’n oneindige spiraal van probleme wat vertroue tap. Daar kan ’n sterk suggestie in al dié gebeure wees “dat ons dalk nooit sosiale samehang in Suid-Afrika gehad het nie...”

“Wat ons sekerlik oor dekades gehad het, is ’n mobiliserende visie. Kan dit wees dat die mobiliserende visie onder die gewig van die werklikheid en omvang van maatskaplike heropbouing kraak en dat die legitieme raamwerk om oor dié probleme te debatteer ineenstort?”

‘Swart mense staar hulself in die gesig’
DIE swart meerderheid staar homself nou in die gesig: dalk werklik vir die eerste keer sedert 1994.
Só het prof. Njabulo Ndebele gesê toe hy die koning Moshoeshoe-gedenklesing by die Universiteit van die Vrystaat in Bloemfontein gelewer het.

Hy het gesê dit lyk of Suid-Afrika ’n meganisme nodig het om selfvertroue te bou.
Deur dié meganisme “kan ons die situasie waarin ons is, erken, wat dit ook al is”.
“Ons het ’n meganisme nodig wat die verskillende posisies van die mededingers sal bevestig en hul eerlikheid sal bekragtig op ’n manier wat die publiek vertroue sal gee dat werklike oplossings moontlik is.”

Dit is dié soort “openheid wat nooit maklik kom nie”, wat lei tot deurbraak-oplossings.
Ndebele het gesê ’n komplekse demokrasie soos Suid-Afrika s’n kan nie oorleef met ’n enkele gesag nie.
Net veelvuldige owerhede binne ’n grondwetlike raamwerk “het ’n ware kans”.
“Kan ’n deel van die probleem wees dat ons nie in staat is om die idee van ‘opposisie’ te hanteer nie?
“Ons is verskrik dat enige van ons ‘die opposisie’ kan word.
“Dit is tyd dat ons die koms voorsien van ’n oomblik wanneer daar nie meer ’n enkele, oorweldigende, dominante politieke mag is soos wat nou die geval is nie.”

Ndebele het gesê: “Ek glo ons het dalk ’n oomblik bereik wat nie fundamenteel verskillend is nie van die ontnugterende, tóg hartversterkende nasiebourealiteite wat gelei het tot Kemptonpark in die vroeë jare negentig.”

“Die verskil tussen toe en nou is dat die swart meerderheid nie nou na wit landgenote oor die onderhandelingstafel kyk nie.

“Die swart meerderheid staar homself in die gesig: dalk werklik vir die eerste keer sedert 1994.”
Dit is weer “tyd vir visie”, het Ndebele gesê.

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