South Africa's Budget Presentation Delayed Amid Coalition Disputes

The unveiling of South Africa's national budget has been postponed due to disagreements within the coalition government over a controversial VAT increase. The delay marks a significant moment in the country's political landscape.

In a shocking turn of events, South Africa's Finance Minister Enoch Godongwana has been compelled to delay the announcement of the national budget due to intense internal conflict within the coalition government. The disagreement centers around a proposed increase in the value-added tax (VAT) from 15% to 17%, a move opposed by coalition partners, particularly as the nation grapples with rising living costs.

The postponement, unprecedented since the end of apartheid in 1994, sent shockwaves through the economy, causing the South African rand to decline against the U.S. dollar. The Democratic Alliance (DA), the second-largest party in the coalition, expressed strong opposition to the VAT hike, with leader John Stenhuisen stating that it could "break the back of our economy." The last increase occurred in 2018, when VAT was raised from 14% to 15%.

Coalition partners, such as the Freedom Front Plus party, claimed they were not consulted on the proposed increase until just before Godongwana was set to present the budget. The finance minister noted that the VAT hike was discussed in the cabinet only a week prior to the planned unveiling.

The national budget will now be rescheduled for March 12, allowing more time for coalition discussions to resolve the existing conflicts. The opposition party, Economic Freedom Fighters (EFF), criticized this postponement, suggesting it reflects weak and indecisive governance. Meanwhile, the DA has heralded the delay as a victory, promising to advocate for a budget that promotes growth and employment.