South Africa's ANC committed to coalition despite budget disagreements

By Nellie Peyton

JOHANNESBURG (Reuters) -The African National Congress remains committed to South Africa's multiparty government, it said on Tuesday, after its main coalition partner, the Democratic Alliance, voted against the budget and went to court to try to block it.

The deepening schism between the ANC and DA - South Africa's biggest and second-biggest parties - threatens to sink the country's first attempt at coalition rule in its 30-year democratic era and has left investors rattled.

The ANC and DA held separate meetings of their top officials on Monday to discuss how to move on from last week's fractious budget vote, which followed weeks of failed negotiations over the bill.

The DA had pushed for a bigger say in economic policymaking during the talks after not getting its way in earlier disagreements over health insurance and education laws.

The ANC, however, did not cede to the DA's demands and instead secured the backing of a small party outside the coalition to pass the budget's first piece of legislation.

ANC Secretary General Fikile Mbalula told a press conference that the DA had acted as an opposition force by seeking to block several high-profile legislative projects.

"This dishonesty undermines the very essence of collective governance," he said.

But he stopped short of saying the ANC wanted to force the DA out of government and said the ANC would continue talks with the DA.

"We remain committed to the (coalition government) as a tactical element," Mbalula said. "We remain committed, but its integrity cannot be compromised."

Mbalula said that, in addition to the DA, the ANC would talk to its other coalition partners and parties outside the government to try to resolve any remaining disagreements over the budget, whose most contentious element is a plan to increase value-added tax.

DA leader John Steenhuisen said in a statement on Tuesday that his party wanted to discuss power-sharing with the ANC, which he called a natural consequence of the 2024 election in which no single party secured a majority.

"The electorate sent a clear message: single party rule is over, and no one party gets to dictate our policy direction," he said.

The prospect that the pro-business DA could exit the coalition with the former liberation movement of Nelson Mandela and a host of other smaller parties has contributed to a steep fall in the rand in recent days.

(Additional reporting by Bhargav Acharya and Sfundo Parakozov; Writing by Alexander Winning; Editing by Joe Bavier)