How world sees SA: Coalition skirts crisis to pass national Budget

Key topics:SA's coalition passes budget after political standoffDA backs bill following dismissal of embattled education ministerMarkets rally as budget passage calms investor fears temporarily.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.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Ntando Thukwana and Paul Vecchiatto.South Africa’s parliament gave a final stamp of approval to the national budget, defusing the latest crisis to embroil President Cyril Ramaphosa’s 10-party administration.The Democratic Alliance, the coalition’s second-largest member, had threatened to withhold support for allocations to government departments headed by ministers implicated in wrongdoing, potentially disrupting the entire budgeting process. The party backed down after Ramaphosa fired his higher education minister, who was alleged to have misled parliament. That cleared the way for its legislators to vote in favour of the Appropriation Bill, which enables funds to be disbursed to state entities and programs.The political détente and the certainty over the government’s spending plans buoyed financial markets, with the benchmark South African stock index crossing the 100,000 level for the first time on Wednesday and the rand strengthening to its highest level against the dollar in almost three weeks. The rand was trading at 17.56 against the dollar by 8:29 a.m. in Johannesburg. Yields on 10-year government bonds edged a basis point lower to 9.8%.“There was definitely some caution and concern building up over the past weeks, as we got closer to yesterday’s vote,” said Sebastian Holzbach, fixed-income analyst at Northstar Asset Management, noting that South African bonds have rallied since the education minister was fired Monday.“Yields have declined by more than 15 basis points since, a sign of relief that a further budget debacle would be avoided,” he said. “Unfortunately, I don’t think this episode is any meaningful signal of GNU strength or progress.” .Durability Threat.Ramaphosa established the so-called government of national unity after his African National Congress lost its parliamentary majority in last year’s elections for the first time since it took power after apartheid ended in 1994. While the coalition’s commitment to prioritize economic growth cheered investors, the government’s durability has been under threat since it took office 13 months ago. Its main members previously clashed over a series of contentious laws, the National Treasury’s proposal to raise value-added tax - which was subsequently abandoned - and the president’s firing of a deputy trade minister from the DA for traveling abroad without permission. .The passage of the Appropriation Bill, the final piece of legislation needed to pass the budget, will give the GNU a temporary reprieve, but tensions will persist and it will likely continue to lurch from crisis to crisis, according to Daniel Silke, the director of Cape Town-based Political Futures Consultancy.“What we have seen is a major win for the DA in terms of applying pressure on the ANC” and on Ramaphosa to act against ministers from his own party, Silke said. “Many in the ANC now believe that in fact the DA is the tail wagging the dog of the GNU and I think this will create additional instability going forward.”.Police Corruption.Ramaphosa’s July 20 dismissal of Higher Education and Training Minister Nobuhle Nkabane came a week after he suspended Police Minister Senzo Mchunu over explosive allegations that he sabotaged an investigation into political assassinations. The DA has laid criminal charges against the two ministers, both of whom deny wrongdoing. The DA decided to back the Appropriation Bill in the national interest, and it was aided by the president holding compromised ministers to account, party leader John Steenhuisen said in a statement on Tuesday. He stopped short of signalling that he expects relations within the GNU to become more amicable. “The DA will not allow compromised individuals in the executive to paralyse government or harm the people of this country,” Steenhuisen said. “The ANC must also accept that it no longer governs alone. In a coalition, meaningful consultation with partners is not optional. It is essential to rebuild public confidence and ensure accountable governance.” The Appropriation Bill will be now be referred to the National Council of Provinces for final approval. That vote is scheduled to take place in Cape Town on July 30. .© 2025 Bloomberg L.P.

How world sees SA: Coalition skirts crisis to pass national Budget

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