South Africa’s Finance Minister, Enoch Godongwana, has announced that the country will get a revised 2025 budget on May 21 in a bid to improve the country’s debt sustainability profile.
The revised budget is coming after months of political wrangling caused investor unease, leading to a slip in the rand’s value. The budget proposal had been postponed in February because of disagreements in the coalition over a plan to increase VAT from 15% to 17%, while a revised version in March proposing raising VAT by 1 percentage point over two years was also deeply unpopular.
South Africa’s coalition government has constantly faced the challenge of achieving consensus on fiscal policies since it was formed in 2024, and true to type, the Democratic Alliance, the second-biggest party in the Government of National Unity coalition, took the budget to court before agreeing on an out-of-court settlement with the finance minister.
To address these challenges, Finance Minister Enoch Godongwana said there would be thorough consultations with all political parties in the coalition before the revised budget is tabled in parliament.
