13 March 2025

COMMENT

NATIONAL BUDGET SPEECH 2025

Economic Growth
The economic growth projection of 1.9% for 2025 indicates the South African economy is still constraint. We need to see economic reforms aggressively implemented by local governments to experience exponential growth at a macro level.

Infrastructure Spending
The provision of infrastructure spending amounting to more than R1 trillion over the next three years is a step in the right direction. Infrastructure is the foundation of development, without which all other aspirations could be undermined. Lack of maintenance and upgrades has the potential to slow down and even reverse socio-economic development in South Africa. As organised business, we seek clarity as to what projects will be addressed under this provision. As the province of KwaZulu-Natal particularly the city of eThekwini, we have had a challenge with our infrastructure post the July unrest and the floods and this is an ongoing critical concern.

VAT
The VAT increase of 0.5% in 2025/26 and another proposed increase of 0.5% in 2026/27 is a concern. An increase in VAT will lead to an increase in costs for goods and services both directly and indirectly, leaving consumers with less disposable income and decreased buying power, negatively impacting the economy. Furthermore, VAT decreases the competitiveness of businesses, but has a particularly negative impact on small businesses, because their customers tend to be more price-sensitive making it difficult to pass the increase on and retain customers. An increase in VAT also negatively impacts SMME cashflow, because SMME’s must pay upfront for goods and services. We believe the VAT increase has the potential to be regressive rather than progressive.

Fuel Levy
Not increasing fuel levy will indeed prove beneficial for businesses, especially in an already constrained economic environment. We believe this will help to raise fuel costs as well as price inflation of goods and services across the country especially as we witnessed a marginal increase in VAT.

In conclusion, the delivery of the National Budget on the 12th of March indicates that negotiation and consensus building is going to be a major determining factor in developing economic reforms and policy under the Government of National Unity.

About the Durban Chamber of Commerce and Industry NPC
Founded in 1856, the Durban Chamber of Commerce and Industry NPC is the largest member-based metropolitan chamber in Southern Africa. We represent approximately 3,000 businesses in eThekwini and beyond, ranging from multinationals to corporates and SMMEs. Since 2019, we also represent 54,000 informal sector businesses through their business associations. Policy and advocacy are at the heart of our work and we assist members with securing trade and investment opportunities locally and internationally, providing business advisory services (CIPC, Certificate of Origin, ITC checks, HR consultancy and more) across a broad spectrum of sectors, engaging thought leadership through forum webinars and other networking events, sharing business information through digital platforms, and also sourcing business insights through occasional questionnaires. The Durban Chamber advocates and influences policy decisions that affect the interests of business (tax legislation, import and export regulations and more), offering member benefits and providing information relevant to business decision-making. As a business-based and member-focused organisation, our strategic purpose is to help create a conducive economic and business environment to facilitate and promote economic growth in the region in partnership with key stakeholders.

For more info, contact the Durban Chamber on 031 335 1000 or info@durbanchamber.co.za
Our website is www.durbanchamber.co.za

NOTE TO EDITORS:

Comment attribution: Ms Palesa Phili, CEO, The Durban Chamber of Commerce and Industry NPC

Media contacts:

Durban Chamber of Commerce and Industry NPC
Ms Zanele Khomo
Chief Growth Officer
T: +27 31 335 1000
E: khomoz@durbanchamber.co.za