South Africa’s Democratic Alliance criticized the African National Congress’s reluctance to share control of economic policy, escalating an impasse over the budget that’s strained relations between the two biggest parties in the nation’s coalition government.

The ANC on Friday balked at a proposal by the DA to share management of economic policy, news website News24 reported.

The rejection of that plan risks leading to the collapse of the so-called government of national unity, it said, citing an unidentified DA negotiator.

The rand fell as much as 1.1% against the US currency and traded 0.8% weaker at 18.38 per dollar by 6:26 p.m. in Johannesburg.

The DA entered a coalition with the ANC to “grow the economy and create jobs,” DA leader John Steenhuisen said by text message from Paris when Bloomberg News sought comment.

“If we are unable to do so and the ANC want to lock us out of key decisions, we have no way to influence economic policy,” he said.

ANC spokeswoman Mahlengi Bhengu-Motsiri wasn’t immediately available when Bloomberg sought comment. 

A business-friendly coalition was established after last year’s elections failed to produce an outright winner, but the ANC has angered the DA and some of its smaller rivals by unilaterally pushing through new education, health-insurance and land-expropriation laws. 

Tension between the ANC and the DA flared last month over a proposal by Finance Minister Enoch Godongwana to raise value-added tax by two percentage points.

Objections to that plan by the DA and others, including within the ANC, led the minister to propose increasing VAT by a single percentage point by mid-2026, though he’s yet to secure lawmaker support for the revenue-raising measure.

The first of a series of budget bills is scheduled to be presented to parliament next week, when lawmakers will begin debating its fiscal framework. The process of approving other budget bills is expected to continue through May.

Enlist Support

Godongwana has said he’ll enlist support from a range of political parties to get the budget approved.

Local media, such as Business Day, have speculated that the ANC may seek to bring the leftist Economic Freedom Fighters into the coalition government to secure passage of the budget.

“If they want to do a deal with the EFF then they must reap the consequences both for governance and the economy,” Steenhuisen said.

Asked whether the existing coalition government could collapse, he said: “If the ANC bring the EFF in then I assume it will.”