Government Budget drama puts business in a spin

The lack of consensus on South Africa’s budget has thrown businesses into “disarray,” Nedbank Chairman Daniel Mminele said, urging lawmakers to patch up differences to ensure policy certainty.

Parties within and outside the nation’s coalition government say they won’t support plans to raise value-added tax by 50 basis points in the coming fiscal year and next, as Finance Minister Enoch Godongwana of the African National Congress announced Wednesday. 

That “throws us into a whole new unprecedented set of circumstances, in that parliamentary committees have now got to deal with it in a system and processes that are new, that nobody knows,” Mminele, a former deputy governor of the nation’s central bank, said in an interview on Newzroom Afrika.

“We hope that that will be concluded speedily to give us certainty.”

Parties sent Godongwana back to the drawing board last month after his revenue and spending plan failed to get their buy-in, delaying the budget for the first time in at least three decades.

The dispute has heightened tensions within the so-called government of national unity, which had won investors’ favour with pledges to follow pro-business policies to boost the economy.

“We should take comfort in the fact that the minister tabled the budget documents today, which allows the process to continue and negotiations to progress,” the Nedbank chairman said.

“But we can’t be complacent about us having a budget — we don’t have a budget.”