All eyes will be on Finance Minister Enoch Godongwana on Wednesday as he tables the controversial and beleaguered 2025 Budget speech. .

A besieged Budget

The initial speech was meant to take place on February 19, but Godongwana was effectively sent back to the drawing board following a deadlock between parties within the Government of National Unity (GNU).

The postponement stemmed from the Democratic Alliance's (DA) opposition to the plan to impose a Value Added Tax (VAT) hike of 2%, ramping it up to a whopping 17%.

According to the DA’s party leader John Steenhuisen, the last-minute postponement came about because of the failure of the ANC, and specifically Godongwana’s failure to engage meaningfully with the alternative proposals tabled by his party.

Economic Freedom Fighters leader Julius Malema demanded that Godongwana present the Budget and said that Parliament could decide whether to adopt it.

“There is no government. It has collapsed. It has no capacity to present the Budget,” Malema said at the time.

Over the next two weeks, President Cyril Ramaphosa’s cabinet reportedly rejected a reworked Budget. However, this time without the 2% VAT increase, telling Godongwana that this would not work for the people.

Key points from the February 19 Budget speech

Even though Godongwana did not deliver the speech, it was published in various media outlets.

In it, Godongwana reaffirmed government’s commitment to raising living standards for all South Africans through infrastructure investment, economic reforms, and responsible fiscal management.

The 2025 budget aligned with the Medium-Term Development Plan (MTDP), focusing on inclusive growth, job creation, poverty reduction, and building a capable state.

He highlighted global uncertainties, such as geopolitical tensions affecting trade.

In the speech, GDP growth was projected at 0.8% for 2024, improving to 1.8% over the medium term, driven by investment, consumption, and stable inflation.

To accelerate inclusive growth, Godongwana said that government would focus on four key pillars:

Macroeconomic stability – Ensuring price stability, lower interest rates, and investor confidence.
State capability – Strengthening public institutions and digital transformation for better service delivery.
Structural reforms – Implementing changes through Operation Vulindlela to boost private sector investment, improve water and energy infrastructure, and cut red tape.
Infrastructure and urban transformation – Enhancing water, electricity, transport, and digital services while improving city infrastructure, commuter rail, and housing finance.

On infrastructure, Godongwana said that government is promoting private sector participation, capital budgeting reform, and alternative financing.

He noted that new regulations for public-private partnerships (PPPs) will take effect on June 1, 2025, streamlining approvals for projects under R2 billion and accelerating their development.

The minister said that the Department of Transport and Transnet will seek private investment in key rail and port projects. In energy, the Independent Transmission Project will launch this year, inviting private investment in transmission expansion.

Godongwana also noted that public infrastructure spending will exceed R1 trillion over three years, with major allocations for transport (R402 billion), energy (R219.2 billion), and water and sanitation (R156.3 billion).

He said these investments aim to boost economic growth, create jobs, and improve service delivery.

What can we expect from the new Budget speech?

Undoubtedly, the most important issue impacting Wednesday's speech will be VAT and whether the minister plans to raise the tax burden or will rather introduce austerity measures to balance the budget.

“Taxpayers are overburdened and cannot continue to bear an ever-increasing tax burden,” Riaan Grobler, Head of Advisory Services at Everest Wealth said.

“It is clear that government spending cuts are now necessary, and the state will have to tighten its belt significantly," he added.

Grobler said that this means there must be a focus on the government’s wage bill and Godongwana must explain how the government will manage its unsustainable debt burden.

"This comes amid new spending pressures, such as salary increases for public servants and the social relief grant that needs funding,” he emphasised.

Grobler said that government debt has exceeded 75% of GDP, and economic growth remains weak. Godongwana must explain how government aims to stabilise debt without imposing huge tax hikes on South Africans.

What should you be looking out for?

Casey Sprake, Chief Economist at Anchor Capital has said that there are certain things all South Africans should be looking out for during this controversial budget.

Here is her wish list for the budget speech and what she thinks all South Africans should look for:

NPA funding: No budget cuts should be made to the National Prosecuting Authority (NPA) and Special Investigating Unit (SIU) to ensure continued efforts against corruption and state capture.
Deficit Reduction: Godongwana must show a concrete plan for fiscal consolidation, reducing debt rather than merely slowing its growth.
USAID Funding: If South Africa assumes financial responsibilities previously covered by USAID, the minister must explain the fiscal impact.
Ease of Doing Business: Measures should be introduced to improve the business environment in South Africa.
Municipal Finances: A detailed strategy is needed to address the financial crisis affecting struggling municipalities.
SRD Grant: The Budget should clarify whether the Social Relief of Distress (SRD) grant will be formalised into a basic income grant and if the benefit will be increased.
Transparency on NHI & Fiscal Rules: Greater clarity is needed on the funding of the National Health Insurance (NHI) Bill and the Expropriation Bill, along with an update on the long-awaited fiscal rule framework.

Godongwana is expected to deliver his speech at 2pm.

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