South Africa’s Ministry of Finance has scheduled the release of a revised national budget for May 21, signaling a renewed commitment to public debt stabilization amid prolonged coalition tensions.
The announcement comes after months of internal disputes within the Government of National Unity, which have delayed key fiscal decisions and shaken market confidence. Finance Minister Enoch Godongwana confirmed the revised budget will include updated projections for revenue, spending, and economic growth following the collapse of a proposed value-added tax (VAT) increase.
That proposal, which aimed to raise VAT from 15% to 17%, exposed deep divisions within the coalition and was ultimately scrapped. “We are in a coalition government and we have to do things differently,” Godongwana admitted during Wednesday’s briefing, acknowledging the political friction that has complicated fiscal planning.
The finance ministry stated that stabilizing debt remains a “crucial element” of its long-term strategy to reinforce national finances. The budget revision, according to Godongwana, will be developed through broad consultations with coalition partners to ensure political alignment before presentation to Parliament.
South Africa’s original budget, expected in February, was postponed due to resistance from coalition members. A revised version introduced in March, suggesting a phased one-point VAT increase over two years, also faced backlash.
The Democratic Alliance (DA), the second-largest party in the governing coalition, took legal action against the proposed budget. The dispute was later settled out of court, allowing the Finance Ministry to resume budget preparations.
Investor reaction to the delay and policy uncertainty has been cautious, with the rand facing downward pressure and economists warning of the risks prolonged political discord poses to fiscal stability.
As South Africa prepares to table its new budget, all eyes remain on how the coalition government navigates internal fault lines while trying to maintain credibility with markets and the public.