Finance

Rather fix hospitals than implement NHI – Finance Minister

Enoch Godongwana

South Africa’s Finance Minister, Enoch Godongwana, said he would rather invest money in improving government-run hospitals and healthcare infrastructure than implement the National Health Insurance (NHI) Bill.

Godongwana said at News24’s On The Record Summit that the country needs universal health coverage in some form, but it needs a sustainable funding source, which it currently lacks. 

“I am not worried about the number of people who are going to public hospitals. They do it today already. The system is already under pressure now.”

However, the NHI may not be the best solution to this problem, said Godongwana. 

“The mechanics of it are difficult. If you ask me, I would rather we invest more in upgrading our hospitals and our infrastructure to make them more attractive to everybody.”

“In that sense, you can make private provision of healthcare irrelevant. For now, we have not done that,” Godongwana said. 

The minister said he is still unsure how the NHI will work as the Bill passed by the National Assembly “is missing a lot of things”. In particular, it is missing a source of funding that is sustainable.

This has created tension between the National Treasury and the Health Department, said Godongwana.

Furthermore, public servants are also expressing their displeasure. “I know, for example, the police do not want to lose their medical through Polmed,” the minister said. 

South Africa’s government is on the edge of a fiscal cliff, with its deficit growing and an unsustainable debt burden. 

The National Treasury revealed last week that South Africa recorded its largest budget deficit since at least 2004, sending the rand crashing and lowering demand for government bonds.

Data released by the National Treasury showed that the budget moved to a deficit of R143.8 billion for July.

It is the largest deficit since 2004 and wider than the R115.5 billion forecast by economists. There was a surplus of R36.7 billion in June.

South Africa’s current debt-to-gross domestic product (GDP) ratio is 73%. In nominal terms, the country owes around R5 trillion.

The situation is set to become much worse as the country’s fiscal deficit this year will be around 6% of GDP.

“My task is a difficult one,” Godongwana admitted. “In the context of an election, no one wants to raise taxes, but everyone wants to increase spending to buy vote. You cannot have both.”

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