Economy

SA faces budget crisis following political deadlock

Date: Mar 31, 2025

South Africa's (SA) African National Congress (ANC)-led government finds itself at a critical juncture as the proposed budget vote hangs in the balance.

The budget, which includes an increase in the country's Value Added Tax (VAT), has faced rejection from various political parties, raising concerns about the potential consequences of a failure to pass it.

Dr Oscar Van Heerden, Senior Research Fellow at the Centre for African Diplomacy and Leadership at the University of Johannesburg, has warned of the severe implications of such a scenario. "Failure to pass the budget on Wednesday would bring the country to a standstill, and some salaries won't be able to be paid," he cautioned.

Van Heerden highlighted the challenges posed by coalition politics, noting that this situation is not unique to SA. "This is the new reality with coalition politics. And also it is not new globally. Many countries have found themselves in this situation where the budget has not been approved. In recent years, we think of Belgium that has gone for a number of months and months without a budget," he explained.

While acknowledging the global precedent, Van Heerden stressed the importance of avoiding such a crisis in SA. "I'm not saying that's what the situation should be in SA. It will be a devastating blow, and we can only hope that maturity will prevail within the leadership of the various parties in the GNU to make sure that the country is not plunged into this chaos," he said.

--SABC/ChannelAfrica--

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