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‘We must now move on’ – Ramaphosa downplays Budget fiasco

‘We must now move on’ – Ramaphosa downplays Budget fiasco
Victoria O’Regan
By Victoria O’Regan
20 Feb 2025
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Even mature democracies have ‘budget hiccups’, says President Cyril Ramaphosa.

President Cyril Ramaphosa says the unprecedented postponement of Finance Minister Enoch Godongwana’s budget speech on Wednesday, 19 February 2025, is “not a fatal fallout” for South Africa’s Government of National Unity (GNU). 

Godongawana’s budget speech was postponed because of irreconcilable differences, primarily over an increase in VAT from 15% to 17%, in the Cabinet of the 10-party broad coalition government. The finance minister had presented the two percentage point VAT increase to GNU partners in a snap Cabinet meeting on Wednesday morning, resulting in the stalling of the proposed Budget for the first time since 1994.

The shock Budget postponement casts a shadow on Ramaphosa’s big week in the global spotlight, wrote Daily Maverick’s Ferial Haffajee. 

Speaking to reporters on the sidelines of the Group of 20 (G20) foreign ministers’ meeting in Johannesburg on Thursday, 20 February, Ramaphosa said the delay in tabling the Budget and disagreement among parties over its substance, was not one of the issues that threatened the existence of the GNU.

“Yesterday, we were meant to present the Budget of our own country to our Parliament, and discussions that ensued prior to that presentation, in both the leaders of the GNU and also Cabinet, gave clear indication that some of the proposals that were being put forward would not be favourably accepted. The Cabinet then felt that we should postpone the presentation of the Budget.

“We are in a government of unity system now and, in the end, no one party can be able to truly impose anything without much negotiation and discussion,” said Ramaphosa.

“This is not a fatal fallout – the Government of National Unity is sustaining this, it will continue working. We are going to go back to the drawing board and find one another. We’ve been through a number of other near-crises that have threatened the existence of the GNU – this is not one of those that will threaten the existence of the GNU. It is a hiccup that we are going to get over.”

Read more: How the ANC’s GNU partners revolted after hearing of VAT increase at 11th hour




If the Budget had passed in the National Assembly, the increase in VAT would have kneecapped an already struggling nation – particularly the millions of South Africans still living below the poverty line, Daily Maverick’s Yeshiel Panchia reported. 

Tensions have arrived with regularity in the GNU, and the inability to table the Budget is one of many incidents that have evidenced significant fractures within the fragile power-sharing board, which is still divided on legislation, including the Bela Act, National Health Insurance Act and Expropriation Act. 

Read more: From confidence to chaos: the implications of South Africa’s unfolding Budget crisis

DA leader and Minister of Agriculture John Steenhuisen declared the Budget postponement a win against the VAT increase, saying that the postponement had “resulted from the DA’s resolute opposition to the ANC’s plan to hike VAT”.

However, in a media conference held after the postponement of Godongwana’s speech, the finance minister and Minister in the Presidency Khumbudzo Ntshavheni, both from the ANC, were at pains to highlight that the decision to postpone the budget speech was a Cabinet decision and not due to pressure from any particular party.

On Thursday evening, Ramaphosa said the government was “drawing a lot of lessons from what has happened”, and he did not see it as a “revenge act” by anyone in the GNU.

“Yesterday happened, it has given us a lot of lessons – but we must move on,” said Ramaphosa.

“The issue that came up was a concern about the ramifications of, or the consequences of, having an increase in VAT. We therefore need to pause and say, how do we then move forward in dealing with the substantive issues.”

Budget reworked


Ramaphosa told reporters on Thursday evening that the Budget, which has been postponed to 12 March, would be reworked. 

“The Budget clearly is going to be reviewed. That is going to be the process that we follow and in doing so, the minister of finance wants to move very quickly to start crafting what could be an alternative. But, also, he will bring to the fore the stark realities that we face and the budgetary challenges that he has had to [contend with] in crafting the Budget that he put forward,” he said.

Read more: After the Bell: What the 2018 VAT hike tells us – and doesn’t – about Budget 2025 postponement

Ramaphosa said Godongwana has “a very tight rope to walk”, and in the Budget that was meant to be delivered in Parliament on Wednesday, “he was trying to find some leeway to be able to support our ambitions, but at the same time, to ensure that it becomes a Budget that will support growth, but also support the livelihoods of South Africans.”

“The joy and good thing about it all, is that South Africans will be able to see… slight differences – and I’m sure there will be – as the minister tries to straddle having an increase in VAT and not having an increase and how his finances are going to stack up.”

Ramaphosa noted that, in other countries, differences over budgets have led to the fall of governments, citing the break-up of Germany’s coalition government in November last year, due to clashes over its budget. 

However, he was resolute that South Africa’s Budget fumble yesterday “should not be seen as a crisis”. 

“Other people have described this, or characterised this, as a crisis. Budgets in many countries are possibly the most important event that happens, even in your more mature democracies, they often have budget hiccups; they often have budget mini-crises, which they are then compelled to sit back and resolve and build consensus,” he said.

Wednesday’s Budget postponement was simply “in many ways, the maturation of our own democracy”, said the President. DM 

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