Ramaphosa defends passing of national budget, says it's directed at growing the economy

CAPE TOWN - President Cyril Ramaphosa has defended the passing of the national budget in his latest newsletter, saying it was directed at growing the economy while funding the country's important services.

Last week, Parliament adopted the 2025 fiscal framework and revenue proposals as tabled in the Budget Speech by the finance minister and which also includes a 0.5 percentage point value-added tax (VAT) increase.

But Ramaphosa said the budget, which faces a legal challenge by the Democratic Alliance, is a "critical instrument" to drive the country’s development and narrowing inequality.

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The president's newsletter comes as South Africans brace for a 0.5 percentage point VAT increase on 1 May while Treasury tries to find alternatives to raise about R28 billion in revenue.

While it's unlikely the budget will be changed, Ramaphosa said it would advance government's "commitment to uplift the material conditions of South Africans".

Ramaphosa said that the budget must direct enough money to activities that encourage inclusive growth and also lay the groundwork for the economy to bounce back.

He said the budget allocated "substantial funds" to frontline services such as teachers, police and emergency personnel.

But he said that South Africa's expenditure on the social wage could only be sustained if there were higher levels of economic growth, adding that the budget did allocate funds for infrastructure development, which would drive the much-needed growth.