An agreement between the ANC and the DA to pass the Budget cleanly and without upheaval was on course to be reached by Monday - but the ANC's final offer to the DA on Tuesday dashed any hopes of cooperation, writes Pieter du Toit.
On Tuesday, 1 April 2025, just two hours before Parliament's joint finance committees were to meet so that MPs could discuss the proposed fiscal framework, the ANC sent its final written offer to the DA.
It was markedly different from previous iterations of the same document. And it was a clear message from the ANC to the DA that the former's policies and plans were to hold sway. If any compromise was to be had, it would have to be the DA to cede ground.
Gone were three ANC offers of direct DA participation in significant reform programmes, included were various references to policies from the previous government that were to be implemented, and there was no reference to one of the DA's main demands: a direct stake in economic policymaking.
It seemed like the ANC was not only withdrawing offers the party itself made to the DA mere days before, but also that it was taking a hard position on party and government policy that was decided on even before the 2024 election, in which ANC support collapsed from 57% to just over 40%.
Even accounting for some DA concessions, from the ANC's Tuesday offer, it seemed like in the end the majority party was not willing to give their coalition partner a sniff of anything important.
Document 1: Friday, 28 March 2025
Shortly after lunch, the ANC told the DA that the majority party in government does not wish to strike a deal with the latter to enable the government of national unity (GNU) to pass the Budget in Parliament. It was clear the ANC was shopping around for another partner - and the EFF was named as an option.
It was astonishing to the DA's negotiators. They sent the ANC a document with a range of proposals on Monday, 17 March 2025, five days after Finance Minister Enoch Godongwana tabled the second Budget.
But the ANC sat on it for 11 days, between 17 and 28 March, without engaging on it, or attempting to negotiate.
And now they simply told the DA, "No".
The news sent the markets into a panic, and the rand immediately responded to fears of an ANC-EFF tie-up, shedding 1% in afternoon trade.
The DA's document set out a range of reforms that the ANC had to agree to before the DA was willing to support an increase of 0.5 percentage points in the VAT rate and get the Budget across the line.
These included several economic reform interventions, such as specific dates for the concessioning of railways and harbours, the devolution of rail to provinces, equity alternatives in the ICT sector, the elimination of certain tariffs, and amendments to procurement legislation.
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There were also quite a few contentious and big-ticket matters: NHI, the Expropriations Act, and importantly, proposals around the joint review of economic policy. Plus, of course, a spending review.
It was a comprehensive proposal, containing an analysis of South Africa's current economic position as well as what the DA saw as impediments to growth.
In the introduction, the authors firmly argue that the GNU found itself at an impasse because of the ANC's refusal to compromise "in any meaningful way". The ANC "has not accepted any policy positions that are not ANC policy positions, and it has not engaged in creative problem-solving with the DA".
It implores the majority party to accept "the principle of compromise" and to commit to "a credible growth plan" to ensure accelerated economic growth. But, the DA said, "working together, we have it within our gift to return South Africa to rapid economic growth and make the GNU a resounding success".
Document 2: Saturday, 29 March 2025
Following the upheaval in the market, the ANC responded to the DA's document using the backchannel that has operated between the parties since the GNU was negotiated in June 2024.
And their offer was suddenly generous and detailed.
There was general agreement about the DA's specific proposals for economic reform interventions, such as rail, port, energy, digital transformation and the ICT sector, infrastructure, and procurement. Some technical questions remained, but in general the parties seemed to be as close as they ever were.
The offer also included three major concessions from the ANC: the DA would have direct co-management responsibilities - actual executive power - over Operation Vulindlela, in the spending review and in a regulatory review to reduce the difficulty of doing business.
Co-charing the day-to-day operations of Operation Vulindlela, specifically, would give the DA enormous influence over government and economic reform. "OV", as the project is called, is a joint effort by the Presidency and National Treasury to clear bureaucratic blockages and is principally responsible for the partnerships between the public and private sector in energy, logistics and criminal justice reform. The second phase of Operation Vulindlela is also the cornerstone of President Cyril Ramaphosa's reform programme.
However, there were three major points of concern for the DA.
Document 3: Sunday, 30 March 2025
The DA replied to the ANC's Saturday document shortly before 13:00.
The first issue for the DA was the ANC's counterproposal on the National Health Insurance (NHI) scheme. The party wanted a proposed advisory board to include members from the private healthcare sector, and clarity on the board's scope of reference. But more importantly, the DA required direct involvement as part of the GNU in the NHI process.
It is not enough that a committee reports to the President with no involvement from the DA in the GNU. To be very clear: the DA will never, ever agree to the establishment of an NHI that has a monopoly on any benefits.
The second was the ANC's counterproposal on the formulation of economic policy. The majority party said policy reform would be led by the Presidency and National Treasury, "with political leadership provided by the parties to the GNU".
This was not "remotely" good enough for the DA.
There needs to be a forum in which the DA-in-Government can engage the ANC-in-Government in a constructive, creative discussion and negotiation on economic policy. We cannot accept that this is simply left to two ANC-run ministries.
And thirdly, the DA objected to the ANC's counterproposal that a regulatory review to reduce the difficulty of doing business being done solely by the Department of Trade, Industry, and Competition. Parks Tau, the minister, "has consistently dismissed policy proposals from the (DA) Deputy Minister and displays a hostile attitude to the DA more generally," the party's response said. The review should be carried out by both the department, and National Treasury.
Document 4: Monday 31 March, and Tuesday, 1 April 2025
The backchannel between the two parties discussed the latest iteration of the document, and there was agreement that they were "almost 98% there." Of course, there were some details to finalise, but it seemed like the GNU would hold, and the Budget would pass.
But then things shifted.
That evening, the ANC's leadership met to discuss the latest proposals and how events were unfolding. And what was supposed to be the finalising of an agreement between the parties turned into a messy conflict.
They were already in deep discussions with ActionSA, a party who only managed to secure 1.2% of the vote in 2024.
By 23:00 that night, the tone in the backchannel had changed, and the ANC informed the DA that Ramaphosa would contact John Steenhuisen, the DA's leader, on Tuesday.
The ANC, faced with a choice between the DA and ActionSA, chose the latter.
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After a phone call, the two leaders met at around 12:00 on Tuesday, 1 April 2025, where they discussed the possible arrangement between the two parties.
It was then that the ANC forwarded their fundamentally revised document to the DA for consideration, two hours before Parliament's joint finance committee was to meet. By then, the ANC had already struck a deal with ActionSA to support the passing of the fiscal framework in the committee and, by extension, to help the ANC in the following day's vote in the National Assembly, where a simple majority would be enough.
The ANC had gutted their own Saturday document. They removed any references to DA co-leadership of Operation Vulindlela, with reference to the spending review, and in relation to the regulatory review to reduce the difficulty of doing business. On Saturday, the ANC offered DA deputy ministers co-leadership positions in all three initiatives, on Tuesday those offers were all excised from the document.
It also, for the first time, referenced policy decisions "as decided during the 6th administration" (ie, before the 2024 election) and declared that they will be implemented - even though the ANC previously, for example, agreed that new policies would be developed (in conjunction with the DA).
The ANC also rejected the DA's attempts to convince it that the parties should collaborate on reviewing and determining a long-term economic growth plan. This, the ANC contended, would be left to the Presidency and National Treasury "and all of Government as provided for in the Medium-Term Development Plan…"
By Tuesday, references to the NHI and Expropriation Act (that the DA inserted on Sunday) fell away.
This was a crucial test. The ANC prefaced its Tuesday document to the DA.
Agreement on the fiscal framework and Budget is essential both to enable the continued functioning of government and to reinforce public confidence in the stability of the GNU and its ability to find common ground on matters of disagreement.
But by early evening, the die had effectively been cast.
The joint finance committee had passed the fiscal framework, including VAT increases, and the ANC-ActionSA friendship was sealed. The ANC were confident that despite the DA, EFF, MK and FF Plus's opposition, they would have enough votes in the National Assembly on Wednesday to ensure passage of the committee's report, and therefore the fiscal framework.
At a caucus meeting that night, safe in the knowledge that they had ActionSA's support and could therefore jettison the DA, Ramaphosa and Deputy President Paul Mashatile launched broadsides at their coalition partner. Mashatile, part of a Gauteng grouping inside the ANC leadership implacably opposed to cooperation in the DA, slammed the party and said the ANC could not continue with them. And Ramaphosa said the ANC had been repeatedly insulted by the DA and that they should be left to their own devices.
Document 5: Wednesday, 2 April 2025
The DA decided on Wednesday, 2 April 2025, to give the faltering political marriage with the ANC one last try.
It wrote a new document containing the party's introduction to the original proposal of 17 March 2025 atop the body of the ANC's proposals of 29 March 2025, with some minor amendments it felt were reasonable. Some three hours before the National Assembly would meet to discuss the fiscal framework, at 11:19, the ANC received the DA's final attempt at salvaging their political relationship.
In it the DA reiterated the need for compromise, and questioned whether the ANC were really interested in sharing power and "collaboratively co-governing" with the DA. It sought a "strategic partnership with the ANC" and, accepting that the ANC had twice as much support as the DA, was not in the business of trying to score "a tactical win".
Economic growth and reforms are at the centre of what the DA wants to achieve, but this needs to be accelerated. "Our purpose in the GNU is to shift the trajectory of our economy, and therefore, our country," the DA said.
The DA's Wednesday document is almost the same as the ANC's Saturday document, save for some minor amendments.
But the ANC was done with the DA. Ramaphosa notified Steenhuisen that it was too late to consider the document thoroughly, and that anyway, he would also have to consult other parties in the GNU. But he undertook to study it and call back the DA's leader.
Shortly after 18:00, the National Assembly passed the committee's report, and with it, the fiscal framework. The DA, EFF and MK opposed it. It was supported by among others the ANC, ActionSA, Rize Mzansi, BOSA and the IFP.
After the vote, ANC MPs sang and danced with joy in the aisles of the makeshift National Assembly across from the original, razed three years ago and still lying in ruins.
ANC MPs and leaders were jubilant. Many of them were never in support of working with the DA, anyway.
But the ANC's Tuesday document, which made it virtually impossible for the DA to agree, and Ramaphosa's willingness to let events slowly reach a point of no return, now means the current GNU is all but dead.
- Pieter du Toit is News24's assistant editor overseeing investigations, and a former parliamentary correspondent.
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