Finance Minister Enoch Godongwana is going to have a difficult week ahead. It will depend on how he balances the government’s budget for the year to the rest of South Africa’s economic interests. At risk of a tax on sugar that those involved in that industry say will kill jobs. These Agriculture workers want the finance minister to abolish the levy. SA Canegrowers noted that the Health Promotion Levy (also called the sugar tax) has been a significant blow to the country’s rural economies. Sugar is a luxury good and is among the root causes of obesity in the country. Subsidising healthier agricultural food products such as fruit and vegetables could help improve the country’s health standards.
The association (SA Canegrowers) argues that since its introduction in 2018, the levy has led to widespread job losses, economic strain, and uncertainty for those reliant on the sugar industry. SA Canegrowers, representing 24,000 small-scale and 1,200 large-scale sugarcane growers, is urging Godongwana to scrap the tax altogether. Higgins Mdluli, Chairman of SA Canegrowers, has been vocal in highlighting the detrimental effects of this policy. In a direct appeal to Minister Godongwana, Mdluli has outlined the devastating impact of the sugar tax, which was initially introduced to curb sugar consumption and promote health. “There is little to no conclusive evidence that it has had any meaningful effect on reducing obesity or diabetes,” said Mdluli. “Instead, what is clear is the economic damage it has caused.
“A study conducted by Nedlac revealed that in the first year alone, the tax resulted in over 16,000 job losses and wiped out R2 billion in income.
South Africa needs to have a rethink about its agriculture industry. The problem lies not only with the practicality of the tax itself but with improving the availability of healthy foods. The tax is not combatting the risk of obesity and diabetes which is prevalent among children. A better way to handle this situation would be to utilize agricultural resources to South Africa’s advantage. Food security must come first. The prevalence of sugar cane fields is prevalent because it was cheaper to grow before the Sugar Tax was passed. The transition in improving overall South African health over the tax needs to be counteracted by subsidizing healthier foods such as fruits like pairs, apples, bananas and vegetables like cabbage, celery, carrots and cucumbers.
The government should lower the tax to a certain extent and consider subsidies for healthy foods. Reversal in policy as regards the sugar tax and a further examination into what causes obesity and diabetes needs to be taken into account. Meanwhile there has been an outpouring of outrage over the new tax increases proposed by Godongwana.
All eyes will be on Enoch Godongwana ahead of the annual budget speech. The Finance Minister will deliver the 2025 Budget Speech in the National Assembly on Wednesday, 19 February 2025. With various factors that could potentially impact Godongwana’s decision, South Africans have weighed in on what they expect and what needs to change. Speaking to Briefly News, economy expert Suvira Singh noted that since Donald Trump’s election, there has been a lot of volatility and uncertainty that made it difficult to deduce concise conclusions until the US president either did or didn’t do certain things he promised. South Africans weigh in on upcoming budget speech Social media users had their say on the speech, highlighting what they hoped the government would focus on.
Mabetoa Paulus Mauntalala said: “Fruitless and wasteful expenditure reduction is the only thing that can save billions and hold comrades accountable for their mismanagement of funds.”
South Africans are bitter over the mismanagement of the country’s finances. Godongwana has to make a tough sell for his legislation in this budget speech. The Minister puts the annual budget together according to the prospects of the economy and the expectations and wishes of the president. Now frustrations are building up over the state of the economy and the weakening of trade ties with the United States of President Donald Trump. The rise in unemployment and the mismanagement of government expenditure as well as an expanded cabinet’s salaries have added to the discontent. Since President Cyril Ramaphosa now heads a coalition government, he needs to consider some cut backs on how much the executive and legislative branches spend in terms of their own personal incomes from the treasury.
South Africa is at a critical juncture as regards to the economy. This upcoming budget speech will be its make or break. This will be true of the Government of National Unity. Its formulation will determine how finances in this democratic set up will be handled.
Article written by:
Yacoob Cassim
Journalist at Radio Al Ansaar
