A Coalition Quarrel Has Caused South Africa’s Budget to be Postponed

Due to a disagreement within the coalition government, South Africa’s national budget presentation was abruptly postponed on Wednesday, causing an unprecedented postponement in the post-apartheid era. Speaker of the National Assembly Thoko Didiza informed legislators that there had never been a postponement of this kind in the previous 30 years. It is now anticipated that the budget will be presented on March 12.

In order to pass the budget, the ruling African National Congress (ANC), which lost its parliamentary majority in the election last year, needs the backing of coalition partners. The Democratic Alliance (DA), its principal ally, resisted the ANC’s plan to increase value-added tax (VAT) by two percentage points.

Financial markets were shook by the delay, and the South African rand dropped as much as 1% versus the US dollar. According to local media accounts, the proposed VAT hike was meant to make up for funding shortages in social programs and education. VAT was last raised in 2018, but opposition parties and labour groups have fiercely opposed any further increases.

The most industrialised economy on the continent, South Africa, has suffered from high unemployment, poor development, and growing public debt in the years after the global financial crisis of 2008–2009.

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