The District Health Programme Grant is a mechanism for funding the country’s public health efforts, particularly relating to HIV, TB, and other communicable diseases. (Photo: Shutterstock)Comment & Analysis
19th February 2026 | Russell Rensburg
District managers in South Africa’s public healthcare system currently have to juggle funding from multiple government budget lines, each with different strings attached. To improve district health services, we urgently need to simplify and integrate these funding flows, argues Russell Rensburg.
In his State of the Nation Address this year, for the first time in a long time, President Cyril Ramaphosa focused on the broader determinants of health, delivering the strongest message yet around the importance of prevention.
This included signalling reforms around the taxation and regulation of alcohol as well as announcing broad initiatives to improve child health through good nutrition.
And his announcement that government will be rolling out the HIV prevention injection, lenacapavir, means that South Africa stands at the cusp of a massive healthcare transition. The six-monthly injection will be a game-changer in the country’s ongoing fight against HIV.
His efforts must be applauded.
But to deliver on this, Ramaphosa will need a functioning district healthcare system. The challenge, however, is that the district healthcare system often functions in name, but not in practice. This disconnect is mostly due to how district-level services – and healthcare in general – is funded.
In short, we ask for integrated healthcare services in a system built on siloed funding streams. We task district managers with coordinating care, but the budgets they depend on are split across the provincial equitable share, multiple conditional grants, and hospital-level allocations.
Health is funded from national revenue through two streams: the national department of health and the provincial equitable share. The equitable share, which funds healthcare and education, is calculated using several factors including population size, use of services and potential unmet and future needs. The allocations are unconditional allowing provinces to determine all the allocations relative to provincial realities, cost pressures and needs. With national funding, 85% is transferred to provinces through defined use conditional grants to fund strategic priorities. The challenge is that in recent years these grants have become transfers to provinces with poorly managed conditionalities resulted in fragmented healthcare.
One way to fix these challenges is to consolidate all district health funding — including district hospitals — into a single, nationally coordinated expanded District Health Programme Grant. This reform would align the system with the National Health Act, strengthen accountability, and prepare us for the healthcare transitions ahead.
This shift is not about centralising services. It is about aligning authority with responsibility, and aligning money with the legal design of the health system. Provinces would remain responsible for service delivery. But national government — as required by the Act — would finally have a coherent instrument to guide, monitor, and support the district health system.
A fragmented system
Twenty-three years ago, the National Health Act set out a detailed framework for how healthcare should be structured in the country. Health policy norms and standards are set nationally. Provinces are responsible for coordinating and providing technical and operational support to districts. Crucially, the act locates the delivery of health services within the district health system, which is mandated to plan, coordinate and deliver comprehensive primary healthcare services closest to where people live.
Where the National Health Act falls short, is in providing guidance on how these powers and responsibilities would be financed.
Currently, district health services are funded through three streams:
- The provincial equitable share, allocated nationally to each province based on population size and demand for health services. This covers most primary healthcare services and all district hospitals.
- The District Health Programme Grant, which focuses on HIV, TB, community outreach, and some primary healthcare enablers.
- And thirdly, a patchwork of other conditional grants for training, infrastructure, oncology, and digital systems.
The challenge with this approach is that each of these funding streams has its own rules, reporting requirements, and political histories. None of them were designed to work together.
Making the case for consolidation
Twenty odd years ago, the case for split funding streams made more sense. In the early 2000s, South Africa faced an overwhelming HIV epidemic. We needed targeted programmes, ringfenced funds, and rapid scale-up. Conditional grants was an instrument, that in a specific context, helped save millions of lives. But this instrument has now hardened into permanent architecture. And unfortunately, it is not fit for today’s health challenges.
South Africa is at a critical moment. The population is ageing, rates of non-communicable diseases like diabetes and hypertension are rising, HIV and TB require lifelong, coordinated management, and the pace of technology is rapidly reshaping healthcare.
The system that was built 20 years ago simply cannot carry us through the next 20 years.
At the same time, South Africa’s health budget is tightening. Despite a small increase in last year’s budget, the trend over the last decade or so is clearly toward having to do more with less.
We cannot expect the system to meet these growing demands while the foundational governance and funding architecture is no longer fit for purpose.
How it could work
Under an expanded District Health Programme Grant, national government – as the law mandates – would set the healthcare package, standards, indicators, and information requirements. Provinces would continue to run services, hire staff, manage facilities, and account for performance in line with the provisions of the National Health Act. And districts would finally have a budget that reflects their actual responsibilities.
In simple terms, this means that the expanded district health programme will be structured as a conditional grant. It will be informed by a nationally defined package of district health services, developed in consultation with provinces. Provincial allocations will be informed by strategic priorities and service needs such as essential health services, reproductive, maternal and child health services, as well as infectious diseases and non-communicable diseases. The National Department of Health will be responsible for managing the grant conditions with stronger accountability mechanisms to ensure alignment with strategic aims and constitutional responsibilities. Provinces will continue to control human resources, service delivery networks and district variations. This is what the National Health Act intended.
This is the model used by many countries that have successfully strengthened district health systems: national sets the rules and maintains oversight, while provinces or local governments handle delivery.
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As already noted, South Africa does have the legal architecture for this. We just don’t have the financial mechanisms in place to match it.
In practical terms, such reforms will mean that for the first time, a district could budget for clinics, ward‑based outreach teams, HIV and TB services, chronic disease management, district hospitals, laboratory and pharmacy systems, emergency medical services linkages, and digital and information systems.
The artificial lines between primary healthcare and district hospitals would disappear. The system would fund itself as the Act intended, as one. District hospitals would no longer be expected to manage pressures created by primary healthcare gaps they have no control over.
There are several other benefits, such as improved accountability, an easier adaptation to demographic and epidemiological transitions, and more efficient use of limited budgets. These ultimately all develop a realistic pathway to universal health coverage.
A governance correction, not a revolution
There may be concerns that consolidating funding into a single grant means taking power away from provinces. The reality, however, is that this reform would restore coherence, not remove authority.
South Africa has spent decades speaking about equity. This is a practical way to make equity real.
When we underfund the district health system in structure, we undercut the very people who rely on it most. These are rural communities, working class households, and people managing chronic and infectious diseases who require continuity of care, not bureaucratic fragmentation.
A unified District Health Programme Grant will not solve every problem in our health system. But without it, we will continue asking a fragmented system to produce cohesive outcomes, and blaming managers and health workers when it inevitably cannot.
It is time to give the district health system the financial foundation it has always needed. Only then can we build the health system people in South Africa deserve.
*Rensburg is director of the Rural Health Advocacy Project and project director for the TB Accountability Consortium.
Note: Spotlight aims to deepen public understanding of important health issues by publishing a variety of views on its opinion pages. The views expressed in this article are not necessarily shared by the Spotlight editors.
