Ramaphosa’s big blunder

President Cyril Ramaphosa has tried to allay fears and anxiety around the 11th-hour postponement of the 2025 Budget Speech, saying that it shows the Government of National Unity (GNU) is doing its job.

However, business leaders and analysts say the delay has fueled uncertainties that South Africa can ill afford, questioning why the president and National Treasury allowed a budget that the GNU did not support get to parliament in the first place.

According to Ramaphosa, the delay of the Budget Speech would give the cabinet time to “intensify efforts” balancing the GNU’s plans to drive economic growth during a time of financial constraints.

He acknowledged that the budget postponement was due to disagreements within the cabinet but tried to paint these as a “collegial and mature consensus” that the proposals be worked through comprehensively and productively.

“We are working as partners to ensure that the Budget is one that works for individuals and investors alike,” he said.

However, questions are now being raised as to why the GNU had waited until 20 minutes into the sitting of parliament to cancel the budget speech.

Business Unity South Africa (BUSA), representing business interests in the country, said the move has sent a negative message about the GNU’s ability to collaborate effectively.

“This uncertainty is something we can ill afford,” said Khulekani Mathe, CEO of BUSA.

“It should have been apparent much earlier that the parties in the GNU were struggling to reach an agreement on the budget, and the postponement should have been announced sooner to avoid compromising the credibility of the National Treasury.”

Several political parties—some within the GNU—also expressed surprise at the sitting being cancelled, and at the exposed plans to hike Value-Added Tax (VAT) to 17%.

This was the main point of contention raised in the budget, which led to the cancellation.

Responding to this in a post-cancellation media briefing, Finance Minister Enoch Godongwana said that it shouldn’t have been a surprised to parties in the GNU, as the measure had been made known to them a week ago.

This implies that, somewhere, the GNU’s internal mechanisms failed spectacularly at addressing points of contention, and the budget simply intended to go ahead, regardless.

Krutham Managing Director and market analyst Peter Attard Montalto noted that this is the headline failure of this week’s chaos: that Godongwana and National Treasury should have known that the budget was not viable, but pushed ahead anyway.

“It turns out that the Minister of Finance rolled the political dice and lost,” he said. “(He should have) stopped it before National Treasury staff ever even tried to put it into cabinet structures.”

Instead, what ended up happening was both the president and the finance minister “allowed it to get so late in the day that NT was briefing people in lockup on a VAT hike whilst cabinet was simultaneously blocking,” Attard Montalto said.

According to the analyst, while this does present certain opportunities for the GNU to strengthen its processes, it still represents a marked failing point of the ANC and its role in government.

“It shows worrying and severe governance failures and internal ANC political failures within the cabinet system,” he said.

“The ANC, and ANC elements of the cabinet more broadly, were largely on autopilot or asleep to the risks here – unwilling to take the difficult decisions or even notice what was going on.

“This budget should never have gotten this far and we understand it did despite numerous times the Minister was told it wasn’t viable,” he said.

Businesses and markets will now look to 12 March to see what the GNU can come up with.

The unpublished Budget documents from this week point to a financial situation with very little room to move.

Even the GNU parties that are claiming victory for the postponement may find it difficult to come up with a solution that will make their constituencies happy.