As South Africa's parliament gears up for a crucial vote on the 2025 budget, tensions are palpable within the ruling coalition government. On Wednesday, April 2, 2025, the Democratic Alliance (DA), the largest party in the coalition, convened to deliberate on the African National Congress (ANC)'s final offer regarding the contentious budget proposal. The stakes are high, as the DA's decision could determine its future within the government of national unity (GNU).
The proposed budget includes a controversial 0.5 percentage point increase in value-added tax (VAT) and a recommendation for the Treasury to identify alternative revenue streams within 30 days of the legislation’s passage. Should the DA reject this fiscal framework, it would signal a potential exit from the coalition, a move that could reshape the political landscape in South Africa.
President Cyril Ramaphosa has issued stark warnings to the DA, emphasizing that a failure to support the budget would lead to the party isolating itself from the GNU. In a recent meeting with ANC caucus members, Ramaphosa stated, "The DA, being the largest partner in the GNU, would be effectively choosing to exclude itself from the coalition if it opts to vote against the proposed fiscal framework and revenue proposals." This sentiment was echoed by ANC Secretary-General Fikile Mbalula, who noted that coalition parties risk self-exclusion without drastic measures from the ANC.
As the clock ticks down to the budget vote, scheduled for 2 PM on the same day, Deputy President Paul Mashatile urged the DA to consider withdrawing from the GNU if it cannot support the budget. Mashatile provocatively suggested that this self-ejection might be justified, given the DA's perceived disruptive behavior within the coalition.
In the lead-up to the vote, the DA's Federal Executive (FEDEX) met to finalize its position on the budget. DA spokesman Mark Burke made it clear that the party intends to oppose the framework, stating, "As the DA, we will remain on our course of growth and jobs and vote firmly against this farce of a report. We reject it." Burke's comments reflect the party's commitment to its agenda, even if it means exiting the coalition.
The budget's approval is further complicated by the ANC's need for support from other parties. The ANC managed to secure backing from ActionSA to get the budget approved by finance committees, but the DA's opposition raises concerns about the coalition's stability. As Barclays Plc economist Michael Kafe noted, if the ANC pushes the legislation through without the DA's support, the market-friendly DA's influence on economic policy is likely to diminish.
Investor anxiety is evident, with the rand slipping 0.5% against the dollar, reaching 18.5679 per dollar by late morning on April 2. The cost of insuring the country's debt against default has also surged, reflecting growing concerns about the coalition's future. This financial instability underscores the critical nature of the upcoming vote.
Despite the ongoing tensions, Ramaphosa and DA leader John Steenhuisen held discussions on April 1 to address their differences over the budget. Following this meeting, the ANC extended a final offer to the DA, but as of the vote day, no agreement had been reached. DA spokesman Willie Aucamp confirmed, "We have not received a document from the ANC about them acceding to our proposals. No decision has been taken yet on the DA’s future participation in the coalition government."
Meanwhile, the ANC's push for the budget reflects its broader strategy to maintain governance despite the fractures within the coalition. The party's ability to navigate these challenges will be tested in the coming hours as lawmakers prepare to cast their votes.
As the parliament session unfolds, the implications of the DA's decisions could reshape the very framework of the GNU, marking a pivotal moment in South African politics. The outcome of this vote will not only determine the fate of the budget but also the future of the coalition itself. Will the DA choose to uphold its principles at the cost of its coalition partnership, or will it find a way to compromise for the sake of stability? Only time will tell as the stakes continue to rise.
