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South Africa's Coalition Government Faces Collapse After Contentious Budget Vote

The ANC narrowly passed a VAT hike budget with outside support as the DA plans a legal challenge and considers leaving the coalition.

Members of parliament stand in a makeshift dome after South Africa's Finance Minister Enoch Godongwana's 2025 budget speech was postponed, in Cape Town, South Africa, February 19, 2025. REUTERS/Esa Alexander/File Photo
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A woman walks past a logo of The African National Congress, at Luthuli House, the ANC headquarters in Johannesburg, South Africa, June 5, 2024. REUTERS/Siphiwe Sibeko

Overview

  • The ANC-led coalition narrowly passed the national budget in a 194-182 vote, relying on support from ActionSA, a party outside the coalition.
  • The Democratic Alliance (DA) voted against the budget, citing opposition to a VAT hike they argue disproportionately impacts the poor, and announced plans to challenge its adoption in court over procedural concerns.
  • The Economic Freedom Fighters (EFF) also criticized the budget process and threatened legal action over alleged procedural defects.
  • The DA is considering withdrawing from the coalition, accusing the ANC of dominating decision-making and undermining the coalition's shared governance structure.
  • South Africa’s currency, the rand, dropped 2% as investor confidence waned, reflecting concerns over the coalition's instability and broader economic pressures.