NHI reality check for South Africa’s government

Finance Minister Enoch Godongwana said the court battles raging over the National Health Insurance (NHI) Act in South Africa will only serve to delay the plan’s implementation.

The minister encouraged the parties involved to meet and craft a settlement so that the government can move ahead with the implementation of the NHI.

While Godongwana did not provide any details on how the NHI will be funded, he said South Africa’s fiscal trajectory has improved significantly and fiscal consolidation efforts are beginning to bear fruit.

These comments were made to the National Assembly during a recent debate on the 2025 Medium Term Budget Policy Statement (MTBPS).

Godongwana explained that implementing the NHI scheme is critical to ensuring South Africans’ need for self-sufficiency and the need to move with speed in addressing universal access to healthcare.

“Despite a series of court cases, I believe that we can find a solution. These will delay the implementation of the NHI,” he said.

“The interesting thing is that both protagonists in court proclaim that they support universal coverage and access.”

“It is my submission that these parties must meet and craft a settlement. We want to move ahead with the implementation of the NHI. These court cases are going to delay it for more years.”

Godongwana referred to healthcare as an economic right which must be progressively realised in terms of South Africa’s Constitution. “We are committed to translate this constitutional injunction into practice,” he said. 

The minister’s comments come as the NHI Act is facing severe legal scrutiny, with around seven cases currently ongoing opposing the legislation.

Several experts have argued that parts of the legislation are unconstitutional, claiming it could be interpreted as banning medical schemes and insurance companies from conducting business freely.

Other arguments have centred around the right to freedom of choice, as the NHI Act could be interpreted as infringing on this right by compelling South Africans to use public healthcare.

Other concerns include claims that Parliament failed to ensure meaningful public participation before passing the legislation and that weak governance could leave the system vulnerable to corruption.

The Health Department, under Health Minister Aaron Motsoadeli, has staunchly opposed these claims and continues to defend the legislation in court.

Funding concerns

Aside from concerns regarding the NHI Act’s legality, critics of the legislation have also raised concerns regarding its funding.

 The NHI’s funding has been a sticking point since the legislation was signed into law in 2024, with the government yet to release a detailed Money Bill or similar funding plan for the policy.

While Motsoaledi has made statements regarding the scrapping of medical aid tax credits to fund the scheme, a specific funding plan has yet to be released.

Momentum Health Solutions has estimated that it would cost between R900 billion and R1.3 trillion per year for the NHI to provide each South African with the same quality of care received under the private health system.

This is far more than the government currently spends on healthcare in South Africa, with the 2025 National Budget allocating R296.1 billion to health.

Godongwana did not address these concerns during the National Assembly debate but noted that, following the 2025 MTBS, South Africa is on a much-improved fiscal trajectory.

“We tabled the Medium Term Budget Policies that chart a path towards a better future for South Africa,” he said.

“It provides a fiscal strategy that reduces debt and its associated debt cost and therefore release resources to fund our developmental objectives.”

“It also supports intergenerational equity by, to some extent, removing the burden on future generations.”

He said the government’s efforts regarding fiscal consolidation are beginning to bear fruit and will support the country’s economic growth going forward.

South Africa has seen notable fiscal improvements over the past year, with the state set to achieve its third consecutive primary budget surplus in 2025/26.

In addition, the Treasury plans to stabilise South Africa’s debt-to-GDP ratio, which is expected to peak at 77.9% in the 2025/26 fiscal year and gradually decline in the coming years.

This will, in turn, reduce the government’s notable debt service costs, with the state currently spending around R1.2 billion a day on interest, and free up spending for more productive line items in the budget.