South Africa’s turbulent 2025 Budget process is far from resolved, as escalating political tensions place the passage of critical public expenditure legislation at risk. The latest developments suggest that ongoing political uncertainty could hinder the proper implementation of the national budget, which is essential for maintaining government operations and public service delivery. Political insiders warn that a failure to pass this budget could result in service disruptions at schools, hospitals, and essential infrastructure projects across the country.
Key Takeaways
- 2025 Budget Faces Collapse Risk: The Appropriations Bill, central to implementing South Africa’s 2025 Budget, is under threat due to political infighting. If even one departmental vote fails in Parliament, the entire national budget process could be derailed.
- GNU Tensions Threaten Stability: The Government of National Unity, made up of ten diverse parties, is increasingly strained. Disputes between the ANC and DA over VAT hikes, cabinet discipline, and departmental budgets are undermining governance.
- Investor Confidence at Risk: Ongoing political deadlock and budget delays are eroding investor trust. Economists warn that instability within the GNU may cause more damage to the economy than the actual budget revisions.
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Concerns Over Appropriations Bill Passage
The Chairperson of Parliament’s Standing Committee on Appropriations, Mmusi Maimane, has raised concerns that the Appropriations Bill might not pass in the National Assembly. The Bill, which is scheduled for a parliamentary vote on 23 July 2025, is a key component of the legislative framework required to enact the country’s national budget. It works in conjunction with the Division of Revenue Bill and is responsible for assigning specific amounts of money to government departments and public entities through structured budget votes.
With the country facing increasing fiscal pressure, the stakes for this legislative process have never been higher since the dawn of democracy.
Division of Revenue Already Approved, But Appropriations Still Uncertain
While the Division of Revenue Bill was successfully passed on 26 June 2025, outlining the distribution of funds among the national, provincial, and municipal spheres of government, the Appropriations Bill faces a more complex road ahead. Each departmental budget vote within the Bill must secure majority support in the National Assembly before the entire Bill can move forward.
Failure to do so could result in a constitutional crisis, with legal experts warning of serious governance paralysis.
According to legal advice presented to Maimane by a Parliamentary legal expert, failure to secure a majority for even one departmental budget vote could effectively derail the entire Appropriations Bill. If this interpretation holds, the implications could be severe. Government departments would be legally constrained to operate on just 10% of their allocated budgets, a shortfall that would be insufficient to pay salaries, let alone fund essential programmes or services. This potential outcome could paralyse core public functions, causing a ripple effect across the entire economy.
The legislation governing the budget process, specifically the Money Bills Amendment Procedure and Related Matters Act, does provide a mechanism for Parliament to amend budget allocations and redistribute funding. However, in practice, Parliament seldom rejects full departmental budgets outright. Most disagreements are typically resolved during the committee stage through negotiation and minor adjustments, although the current political climate suggests that compromise may not be easily achieved this time. The fierce post-election power struggle has altered the traditional decorum of Parliament, replacing it with brinkmanship and factional posturing.
Tensions Rise Within the Government of National Unity
The fragile Government of National Unity (GNU), formed after the ANC lost its parliamentary majority in the 2024 general elections, has shown signs of internal fragmentation. The coalition, composed of ten ideologically varied political parties including the Democratic Alliance (DA), has been increasingly divided on key issues, particularly economic and fiscal matters. The once-hopeful GNU is now being tested by bitter ideological clashes and personality-driven conflict, exposing deep fault lines between members.
Budget Delayed Over VAT Dispute Within GNU
Traditionally, the Minister of Finance presents the national budget in February, including all related legislation such as the Fiscal Framework and the Appropriations and Revenue Bills. However, this year’s budget was delayed from its initial tabling date of 19 February 2025 due to disagreements within the GNU, mainly centred around a proposed increase in Value-Added Tax (VAT) from 15% to 17%. The delay sent shockwaves through investor circles, prompting credit rating agencies to put South Africa under review for potential fiscal uncertainty.
Compromise Reached After Multiple Budget Revisions
Following pushback from the DA, which holds 86 seats compared to the ANC’s 159, the Finance Minister revised the budget to propose a smaller VAT increase of 0.5% over two years, aiming to generate an additional R43 billion. This proposal continued to face opposition from both the DA and other parties such as the Economic Freedom Fighters (EFF), uMkhonto weSizwe (MK), and ActionSA. In response, the ANC sought conditional support from smaller parties, agreeing to remove the VAT increase to gain their backing. The DA and EFF subsequently challenged the revised budget in court, arguing that it bypassed parliamentary procedures and would negatively affect the poor. Ultimately, a third version of the budget was introduced on 21 May, replacing the VAT increase with a hike in the General Fuel Levy, which secured broader parliamentary support.
Budget Crisis Reignites Amid Political Fallout
Despite initial signs of progress, the budget process has once again become unstable due to deepening political divisions. The situation deteriorated further when President Cyril Ramaphosa dismissed DA Deputy Minister Andrew Whitfield over an unauthorised overseas trip. This led the DA to threaten a vote of no confidence in the President, withdraw from the National Dialogue, and declare its intention to vote against budget allocations for ANC-led departments allegedly connected to corruption. This development reignited factional hostilities and raised concerns that the GNU could fracture beyond repair before the end of the financial year.
Following the DA’s announcement, some ANC members hinted at the possibility of voting against budget allocations for DA-led departments, although no formal confirmation has been issued. The potential for mutual retaliation poses a serious threat to the successful passage of the Appropriations Bill. According to the DA, if a majority cannot be secured for even a single departmental vote, the entire Bill could collapse.
Smaller Parties Hold Significant Influence
Opposition parties outside the GNU, including MK with 58 seats and the EFF with 39 seats, have already begun voting against several departmental budgets. ANC Parliamentary Chief Whip Mdumiseni Ntuli stated that his party would engage with all represented parties, not just those within the GNU, in order to build enough consensus to pass the Appropriations Bill on 23 July.
Behind closed doors, party negotiators are reportedly working around the clock to salvage enough support to avoid what some are calling a looming constitutional impasse.
Support from Some Parties Still Uncertain
While ActionSA has opposed a substantial portion of departmental budgets, it has not fully committed to supporting the Appropriations Bill. Party leader Athol Trollip highlighted that the current approach by the ANC differs starkly from previous years when the ruling party could push through the budget with ease. Now, even after three versions of the budget have been tabled, key disagreements remain unresolved. Trollip stressed that the rejection of just one department’s allocation would have wide-reaching consequences for the entire national budget. The shifting alliances in Parliament have transformed budget negotiations into high-stakes political chess, with each move carrying risks of national consequence.
A number of ANC representatives have indicated that if the DA fails to support the Appropriations Bill, it could be expelled from the GNU. This warning underlines the increasingly strained relationship between the coalition’s two largest parties and raises serious questions about the future structure of the GNU. Political commentators now question whether the GNU experiment is sustainable or if it is destined to unravel under the weight of competing agendas.
Public Reactions to the Budget Standoff
The EFF and MK have remained critical of the budget, particularly the spending cuts and what they describe as inadequate provisions for pressing socio-economic needs. Trollip argued that the ANC must change its expectations and cannot assume that other parties will simply comply with its direction.
Communities across the country have begun voicing concerns about the potential fallout, fearing delayed payments to schools, clinics, and grant recipients.
Maimane expressed concern that the ongoing political squabbling could damage investor confidence, a key area the GNU had committed to improving. He also noted that the budget impasse could result in real harm to ordinary South Africans who depend on functional government services. Economist Dawie Roodt echoed these concerns, noting that the instability within the GNU is eroding investor trust more severely than the budget delays themselves. He warned that capital flight, currency depreciation, and ratings downgrades could follow if political leaders fail to stabilise the situation quickly.
Roodt described the situation as fundamentally dysfunctional, with each major party seemingly waiting for the other to act first. According to him, the ANC has yet to accept its new role as part of a coalition, a reality that requires a different approach to governance. The continuing discord between GNU members not only undermines the 2025 Budget process but also casts doubt over the stability of South Africa’s political landscape.
Conclusion
South Africa’s 2025 Budget process has become a high-stakes political standoff, with the fragile GNU coalition showing signs of deep division. As the Appropriations Bill faces possible rejection, the country risks a fiscal crisis that could severely impact public service delivery and economic confidence. Unless coalition partners can put aside their disputes and act in the national interest, South Africa may find itself navigating a governance breakdown at a critical economic juncture.
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