Finance Minister Enoch Godongwana takes the spotlight today at 2:00 PM at the Cape Town International Convention Centre, where he will deliver the 2025 National Budget Speech — a crucial moment after two scrapped budgets and intense public backlash over proposed tax hikes.
After a series of delays, including a postponement in February due to ANC-led demands for a 2% VAT increase, Godongwana will now attempt to strike a delicate balance in a budget that aims to fill a staggering R60 billion revenue gap without burdening South Africa’s already struggling citizens.
The Government of National Unity (GNU) has faced mounting pressure, with political tensions rising between parties like the EFF, DA, and the ANC. The original VAT increase was met with fierce public outcry and was swiftly scrapped, leaving Godongwana with limited options for raising funds. With VAT remaining at 15%, the minister now needs to be innovative, finding ways to fund key national priorities like social grants, public sector wages, and infrastructure development, all while addressing South Africa’s troubling 74% debt-to-GDP ratio.
Economists predict Godongwana will rely on a mix of strategies, including “bracket creep” (unadjusted tax brackets), strengthened SARS enforcement, and possibly higher sin taxes. But with an unemployment rate above 30% and economic growth at just 0.6% in 2024, pressure is mounting for him to unveil strong job-creation plans that will give hope to millions of South Africans seeking work.
In terms of social spending, a R35.2 billion allocation has been earmarked for the SRD grant, alongside increases to old age and child support grants. However, the ongoing financial struggles of the nation mean that Godongwana must balance these priorities with the broader fiscal constraints facing the country.
As Godongwana tables the Appropriation and Revenue Bills, all eyes are on his ability to unite a fractured government and present a budget that will calm both markets and the public, ensuring stability and economic progress for the country.
