South Africa claims that the updated budget will continue to prioritize debt stabilization

The finance ministry of South Africa announced on Wednesday that a new budget, which would continue the government’s focus on stabilizing public debt, would be presented on May 21.

After abandoning a controversial value-added tax hike that revealed severe divisions inside the coalition government, Africa’s largest economy will revise its growth and revenue estimates.

Before the updated budget is presented to parliament, all coalition political parties will be thoroughly consulted, according to Finance Minister Enoch Godongwana, who also stated that fiscal consolidation is still in effect.

Stabilizing debt was described as “a crucial element in strengthening our public finances” in a statement released by his ministry.

The rand currency has suffered as a result of market concern brought on by months of political squabbling over this year’s budget.

The coalition’s difficulties over a plan to raise VAT from 15% to 17% caused the budget to be postponed in February.

The plan was also quite unpopular. In March, it was changed to include a one percentage point increase in VAT over two years.

Before reaching an out-of-court settlement with the finance minister, the Democratic Alliance, the second-largest party in the coalition government of national unity, filed a lawsuit against the budget.

On Wednesday, Godongwana admitted that the budget process had been disorganized.

“We are in a coalition government and we have to do things differently,” he stated.