A significant portion of South Africa’s health expenditure goes towards paying wages and services. This was a key focus in the budget speech delivered by finance minister Enoch Godongwana on Wednesday.
“Last year alone, the public sector health system lost close to 9,000 health workers. We did not have the money to retain or replace them even after reprioritising funds budgeted for consumables and medicines,” Godongwana told Parliament.
This is a significant blow to a sector that provides vital services to over 80% of the population.
“R28.9 billion is added to the health budget, mainly to keep about 9 300 healthcare workers in our hospitals and clinics. It will also be used to employ 800 post-community service doctors, and to ensure that our pharmacies do not run out of medicines.”
Godongwana says health spending will increase from R277 billion in the 2024/25 financial year to R329 billion in the 2027/28 financial year.
A delicate balance
Dr Abieyuwa Ohonba, a health economist at the University of Johannesburg, warns that while it’s crucial to ensure healthcare workers are paid fairly, the wage bill can put a strain on the health budget.
“As more money goes towards salaries, there is less available for other important areas like medicine suppliers, infrastructure and expanding services.”
She says this can limit the ability to improve and grow the healthcare system which, in turn, makes it harder to meet the increasing demands of the population. At the same time, every effort must be made to ensure that the increased health spending reaches people and places that need it most – especially in rural and previously neglected areas.
“These investments are in line with the country’s most pressing health challenges, but balancing them all will require careful planning. What matters now is how these increased funds are put to work,” she says.
Cashflow crisis in provinces
Godongwana emphasised a major cash flow crisis within provincial health departments: they owe vendors R22 billion for service already provided.
“Let me dramatise this: you provide services, but the department does not have the money to pay you. They wait to pay you with funds from the new financial year, which means there is no money to pay for new work,” the minister explains.
“This means that the money allocated to health provinces ends up paying for previous services, creating a vicious cycle of budget shortfalls, unpaid invoices, and a crisis in cash flow planning. This undermines the predictability and stability of the health budget.”
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Godongwana says this situation is “untenable” and must be resolved. As such, provinces will receive R2.4 trillion over the next three years.
“This budget includes additional allocations to support critical provincial functions related to health and education. We trust that the allocations will be used for their intended purposes.” – Pull quote
Ohonba says strong monitoring and accountability will be key to making sure that these funds make a difference in improving healthcare and outcomes for everyone in South Africa.
What he didn’t say
A big omission from the speech was more information on how the government will plug the gap in the HIV programme left by the withdrawal of US funds through PEPFAR – President’s Emergency Plan for AIDS Relief.
But Russell Rensburg, Director of the Rural Health Advocacy Project says this was no surprise.
“RHAP has been part of negotiations on a sustainable transition and these discussions are ongoing,” he says.
Ohonba says without the USAID funding the government may have to redirect resources, potentially affecting other important services. PEPFAR funding covered 17% of the country’s HIV programme, paying the salaries of more than 15,000 people.
“HIV treatment and prevention could face disruptions, especially for vulnerable groups. Overall, losing this external support would create significant challenges for maintaining essential healthcare services.”
Another notable omission from Godongwana’s speech was the National Health Insurance, which is currently subject to multiple legal challenges. – Health-e News
