As South Africa prepares for the presentation of the national budget this Wednesday, President Cyril Ramaphosa has expressed confidence in the finance minister’s ability to deliver a viable fiscal plan despite recent setbacks.

The budget comes after two failed attempts, primarily due to controversy over a proposed 0.5% increase in Value-Added Tax (VAT), which was ultimately scrapped. Economists warn that the government now faces tough choices to fill the funding gap, including expenditure cuts, raising other taxes, or increasing borrowing.

Finance Minister Enoch Godongwana is finalizing the budget, which is expected to focus on growth-enhancing strategies to expand the tax base and stabilize the economy. However, the absence of the VAT hike—which had already cost businesses over R1 billion in preparation costs—means Treasury must find alternative solutions acceptable to partners in the Government of National Unity (GNU).

Visiting professor at the Wits Business School, Jannie Rossouw, emphasized the importance of getting this budget right to restore Treasury’s credibility. “For the sake of economic stability, I can only hope this is the last attempt to get the budget approved this year,” Rossouw said. “South Africa cannot afford more fiscal uncertainty.”

Rossouw also noted that the National Treasury’s reputation has suffered after two unsuccessful budget submissions. “They really have to do serious introspection to see where things went wrong and ensure it doesn’t happen again,” he said.

Despite the challenges, Treasury maintains that its fiscal strategy will balance public finance stabilization, economic growth promotion, and support for low-income households.

President Ramaphosa assured the public that the budget will be ready for presentation on May 21, stating, “The minister of finance is putting the final touches to the budget, and that is not a problem at all.”

As the nation watches closely, the success of this budget could determine South Africa’s economic trajectory in the coming year.