S.Africa rand weakens as budget disagreements remain

South Africa's currency, the rand, faced a decline as disagreements within the ruling coalition persisted despite Finance Minister Enoch Godongwana making concessions in the revised budget presented to Parliament. The budget proposed an increase in the value-added tax by 0.5 percentage points this year and an additional 0.5 percentage points next year. However, the second-largest party in the coalition, the Democratic Alliance, expressed its lack of support for the latest budget, highlighting the challenges faced in reaching consensus. In an exclusive interview with CNBC Africa's Palesa Mofokeng, Minister Godongwana addressed concerns and shed light on the consultative process that led to the budget's formulation. The budget, which some may view as a GNU budget due to the multi-party government's dynamics, encountered delays three weeks ago stemming from disagreements within the coalition. Minister Godongwana acknowledged the varying opinions within the coalition and emphasized the need for ongoing dialogue and collaboration to address the country's economic challenges. Discussing the ambitious reform agenda outlined in the budget, Minister Godongwana recognized the time and effort required for reforms to take effect, noting potential resistance to change. Despite the reform process's complexities, he remained optimistic about South Africa's economic growth prospects, projecting a 1.8 percent annual average growth over the next two years. The Minister cited key factors such as effective implementation of the reform program, reliable electricity supply, efficient logistics, and a supportive global environment as foundational to achieving the growth forecast. As South Africa navigates economic uncertainties and political differences, stakeholders look to the government for cohesive and strategic policymaking to drive sustainable growth and stability.