South African President Cyril Ramaphosa has called an emergency cabinet meeting after the Democratic Alliance threatened not to support today’s budget statement by Finance Minister Enoch Godongwana over a proposal to hike the value added tax.

Three sources told CNBC Africa that Godongwana proposed raising the rate from the current 15 percent to plug a hole created by the withdrawal of funding from the United States over South Africa’s land reforms and perceived support for Russia and China.

The rand declined more than 10 cents to as low as R18.46 against the dollar after trading mostly little changed in morning trade.