Dawie Roodt - Finmin should resign, election should be called. Instead, SA drifts towards calamity

Chief economist of The Efficient Group Dawie Roodt provides context on the drama South Africans have experienced in the past two months over the on-off Budget. Bottom line: the naked emperor of idiotic economic policies are now exposed to all. There’s an obvious solution - but Roodt doubts the ANC would choose it as this requires putting the nation ahead of the party. He spoke to BizNews editor Alec Hogg..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.Chief economist at The Efficient Group, Dawie Roodt, sharply criticised South Africa’s handling of the now-abandoned VAT increase, calling the political wrangling surrounding it “a disaster” and symptomatic of a government lacking stability and coherence. Speaking to Alec Hogg of BizNews, Roodt expressed frustration at the way political parties, including the ANC, sought credit for blocking the VAT hike, despite previously voting in favour of it.Roodt painted a sobering picture of the fiscal and political implications of scrapping the proposed VAT increase. Originally expected to raise around R75 billion over three years, the cancellation has left the government with a significant funding gap. “We nearly brought the government down over a billion rand per month,” he remarked, stressing that while R1 billion monthly is not insignificant, the government's broader financial resources - such as R200 billion in the Exchequer account - make the drama around it hard to justify.The fallout has been more than fiscal. Businesses prepared for the increase, some even adjusting pricing structures, only to roll it back at cost. The result, Roodt argued, has been economic uncertainty and policy incoherence. “Actually, I think the Minister of Finance should resign,” he stated, citing both the chaos surrounding the VAT decision and the broader lack of confidence in the current government.Roodt was also critical of the Government of National Unity (GNU), suggesting it is structurally unsound and unlikely to survive its full term. “The ANC is waiting for the DA to leave, and the DA is waiting to be kicked out,” he said. He believes that while most South Africans seem to favour a centrist coalition between parties like the DA and ANC, the current arrangement is untenable. He warned that if the DA were to leave and trigger a vote of no confidence, it could collapse the government and force early elections.The interview also touched on deeper economic concerns. The Treasury’s optimistic growth projections of around 1.8% annually were dismissed by Roodt, who forecasts growth closer to 1% or even lower. This, he emphasised, is well below population growth, implying a continued decline in per capita income. “We are poorer today than we were 15 years ago,” he said, echoing sentiments from the IMF, which has similarly downgraded South Africa’s growth prospects.Roodt ended with a critique of South Africa’s fractured party-political landscape. While affirming the democratic right of smaller parties to participate, he suggested implementing a threshold, such as Germany’s 5%, to reduce legislative noise and fragmentation. In his view, the time has come not just for economic reform, but for a political reset—one that may require both fresh elections and new political formations to restore stability and growth.

Dawie Roodt - Finmin should resign, election should be called. Instead, SA drifts towards calamity

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