South Africa's Coalition Government Faces Major Crisis as Budget Divisions Deepen

South Africa's coalition government, formed less than a year ago, is on the brink of collapse after a contentious budget vote highlighted divisions between the African National Congress (ANC) and the Democratic Alliance (DA). With the DA opposing a VAT increase and calling for an austerity budget, the ANC secured support from smaller parties to pass the fiscal framework, prompting the DA to consider its future in the coalition.

South Africa's coalition government is currently facing a significant crisis, as the deepening rift between its leading parties, the African National Congress (ANC) and the Democratic Alliance (DA), was exposed during a recent vote on the national budget. The situation unfolded after the centre-right DA voted against the fiscal framework, a pivotal part of the budget, in response to a proposed increase in VAT and demands for budget cuts across government departments. The ANC, identifying itself as a centre-left party, rebuffed what it labeled the DA's push for an "austerity budget."

In a show of political strength, the ANC managed to rally support from a number of smaller parties, successfully passing the fiscal framework through Parliament with a vote of 194 to 182. In the aftermath, the DA filed court papers claiming the vote was "procedurally flawed", while its leadership deliberates on whether to continue as part of what is referred to as a government of national unity (GNU). Professor William Gumede from Wits University remarked that the DA is weighing its options, deliberating if this instance could be the tipping point for their continued participation.

This coalition was established less than a year ago after the ANC lost its parliamentary majority for the first time since the end of apartheid under Nelson Mandela in 1994. Business entities in South Africa had pushed for cooperation between the two parties, arguing it was the most viable option for achieving economic stability. However, growing tensions indicate that the relationship may be unraveling.

DA spokesperson Willie Aucamp accused the ANC of making a "serious infraction," implying that the ANC has "crossed a line" that undermines their coalition partnership. The DA's federal chair, Helen Zille, noted that while compromise is necessary within a coalition, the ANC had not demonstrated the willingness to share power. Responding to the criticism, ANC Chief Whip Mdumiseni Ntuli labeled the DA's actions as a "complete betrayal."

The DA found itself aligning with former President Jacob Zuma's uMkhonto weSizwe (MK) party and Julius Malema's Economic Freedom Fighters (EFF), opposing the VAT increase, which both parties believed would adversely impact poorer citizens. The ANC contended that a VAT increase of 0.5% this year, and another next year, was necessary to fund essential public services like health and education.

In a surprising turn, the Inkatha Freedom Party (IFP) voted alongside the ANC, signaling a break from an earlier agreement with the DA, while another smaller opposition party, ActionSA, supported the ANC after negotiating to explore revenue alternatives to the VAT increase.

Professor Gumede stressed that the optics for the ANC are negative, as they struggle to justify tax increases amidst deteriorating public services. By challenging the budget, the DA aims to position itself as a supporter of poorer citizens. The discord surrounding the budget vote reflects a broader pattern of conflict between the two parties, as the DA also pursues legal challenges against other controversial legislation concerning land expropriation.

Compounding these political challenges, the Trump administration's recent imposition of a 30% tariff on South African imports is poised to exacerbate the economic crisis in the country, where unemployment exceeds 30%. The ANC's office condemned these tariffs as "punitive," underlining the urgent need for the major parties to reconcile their differences for the sake of South Africa’s economic health.