The government of national unity was formed after the ANC lost its outright parliament majority in May 2024 general elections.(@PresidencyZA/X)
The ANC and Democratic Alliance (DA) on Saturday confirmed a meeting had taken place between the two parties to try and resolve a budgetary impasse that threatens the governing coalition they lead, but gave scant details of the outcome.
In a statement, the ANC said the discussions between its team led by secretary-general Fikile Mbalula and the DA were constructive and reaffirmed its “unwavering commitment to the principles of dialogue, nation-building, and collective leadership in addressing the urgent socio-economic needs of our people”.
“The ANC will continue to engage all GNU (government of national unity) partners, civil society, and other stakeholders in pursuit of a stable, inclusive, and effective government that places the interests of South Africans at the heart of all its decisions,” it added.
In her own statement, DA federal council chairperson Helen Zille also described the talks in Johannesburg as “constructive”, with “both sides speaking respectfully yet frankly about the need to resolve the impasse over the budget and to enhance cooperation between the two parties in the context of the government of national unity”.
She reiterated the party’s position that a VAT increase, which is central to its rejection of the fiscal framework, was unaffordable for South Africans in the absence of meaningful reform that would increase economic growth and create jobs.
A DA source said they expected follow-up talks between the two parties after Saturday’s meeting.
Neither party has shown a willingness to either walk away from the coalition or cede fully to the demands of the other side to end the standoff, which dates back to 19 February when DA leader John Steenhuisen made clear the party would not support a national budget that proposed a two percentage point increase in VAT.
With several ANC ministers also balking at the likely negative effect on the finances of economically-struggling South Africans, Finance Minister Enoch Godongwana had to postpone tabling the revised budget in parliament to 12 March, now proposing a lower one percentage point VAT whose implementation would be staggered over two years.
Following heated debate in parliament, and financial committee processes mired in acrimony, the fiscal framework scraped through the National Assembly by a narrow margin on 2 April with the aid of smaller parties, including some outside the governing coalition like ActionSA, after the DA voted against it.
The next day, the party filed a court application to challenge the budgetary process.
The days since have seen a flurry of internal discussions within both parties about the way forward, and the ANC is exploring alliances with other parties outside the coalition such as ActionSA, should the DA opt to walk away, taking its crucial parliamentary votes with it.
A DA source told the Mail & Guardian earlier in the week that sentiment in the party whether to stay or not was deeply divided and shifting daily, with ongoing uncertainty about Zille’s stance. The six DA ministers in President Cyril Ramaphosa’s cabinet, formed after his party lost its outright parliament majority in May 2024 general elections, have signalled a willingness to continue working with the ANC.
Except the DA and the Freedom Front Plus, all parties to the government coalition voted in favour of the fiscal framework and sources said many shared in the ANC’s frustration with the continuous conflict in the structure.
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