South Africa’s coalition government has indefinitely postponed its first national budget speech, citing internal disagreements over proposed tax increases.
The highly anticipated speech, set to be delivered by Finance Minister Enoch Godongwana, was expected to outline the government’s fiscal priorities, including new revenue-raising measures. However, during a tense parliamentary session on Wednesday, Speaker Thoko Didiza announced the postponement, stating that coalition parties had failed to reach a consensus on budget proposals.
“We have decided to adjourn proceedings for a date to be determined,” Didiza said.
The delay marks a significant challenge for the African National Congress (ANC), which lost its parliamentary majority in last year’s elections and was forced into a coalition with nine other parties, including the Democratic Alliance (DA), a longtime rival.
Following the announcement, DA leader John Steenhuisen welcomed the postponement, calling it “a victory for the people of South Africa.” The DA had strongly opposed a proposed increase in value-added tax (VAT) from 15% to 17%, arguing that such a hike would cripple the economy.
However, the decision was met with sharp criticism from the radical-left Economic Freedom Fighters (EFF) party.
“There is no government, it has collapsed,” EFF leader Julius Malema declared in parliament.
The budget delay comes at a time of growing economic challenges for Africa’s most industrialized nation. South Africa is struggling to fill its financial gaps after losing U.S. aid, partly due to a recent law that U.S. President Donald Trump claimed allowed the government to seize land from white farmers.
The country’s economy faces multiple pressures, with inflation rising to 3% in December. South Africa also grapples with extreme income inequality, with over 60% of its 63 million citizens living in poverty.
Although unemployment dropped slightly to around 32% in the final quarter of 2024, it remains one of the highest rates in the world.
