Third Time's The Charm? Godongwana's Budget Fight Continues

South Africa's Finance Minister, Enoch Godongwana, is set to make a third attempt to get his budget passed in parliament on 21 May, after facing significant roadblocks earlier this year.

The minister, who's already had to revise his plans twice, is hoping that this latest version will satisfy all stakeholders, particularly after a major internal dispute among the ruling coalition nearly derailed the process, as first reported by Business Tech .

The latest stumbling block arose from a proposal for a VAT hike , which led to fierce opposition from the Democratic Alliance DA, the second-largest party in the governing coalition. The DA's objections resulted in Godongwana pulling the tax increase , but the damage had already been done. The National Treasury is now grappling with a R75 billion budget shortfall that will need to be addressed over the next three years.

Godongwana acknowledged the challenge, stating that while the delay in finalising the budget was less than ideal, it highlighted the critical need for robust discussion on the country's fiscal policies. 'The postponement is a consequence of meaningful engagement, which is essential for the country's long-term economic health,' he said.

The political tensions surrounding the budget have also raised alarm among investors. The DA's stance on the VAT increase raised concerns that the coalition could fracture, potentially paving the way for left-wing parties like the Economic Freedom Fighters EFF to gain influence. This shift could jeopardize the government's ability to push through economic reforms that are viewed as crucial for growth.