South Africa abruptly cancels budget speech as governing parties dispute the details

CAPE TOWN, South Africa (AP) — The South African government’s annual presentation of its budget was abruptly canceled Wednesday and rescheduled for next month over a dispute among parties in the governing coalition.

The finance minister’s budget speech normally takes place in February. Parliament Speaker Thoko Didiza said it was the first time that the presentation had been canceled over such a disagreement in the 31 years of South Africa’s democracy after the end of the apartheid system of white minority rule in 1994.

South Africa has a 10-party coalition in government after the long-ruling African National Congress, or ANC, lost its majority in an election last year for the first time since apartheid ended. That means it cannot pass the budget without support from other parties in Parliament.

The Democratic Alliance, the country’s second biggest party, said the budget postponement was over a 2% increase in value-added tax proposed by the ANC. The DA said in a statement that the tax increase “would have broken the back of our economy.”

The budget delay came just over a week after U.S. President Donald Trump ordered U.S. aid and assistance to South Africa to be cut over a contentious land law. That move by Trump was expected to put pressure on South Africa’s government to find funds to plug gaps, especially in the public health service. South Africa was already impacted by Trump’s 90-day global freeze on U.S. aid.

Africa’s most advanced economy has hardly grown in recent years. Finance Minister Enoch Godongwana, who was meant to present the budget to Parliament, told reporters that the South African government was facing fiscal challenges.

“Do we borrow more, and what are the implications of that?” Godongwana said. “Do we continue cutting expenditure? What are the implications of that? Do we raise tax and what are the implications of that?”

“There is general agreement that in the current environment, we need to find ways of funding our priorities.”

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