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South Africa's 2025 Budget: Balancing VAT Hike with Healthcare Investment
Time to read: 01:56
Published: 12 March 2025
Nonetheless, Finance Minister Enoch Godongwana announced a significant allocation of R941.5 billion over the medium-term expenditure framework (MTEF) period to support equitable public health services, including free primary healthcare.
The latest budget will see the current 2024-25 health budget grow from R277 billion to R329 billion by 2027-28. This funding is part of the national and provincial governments' three-year spending plans, with the health budget projected to grow by 5.9% annually, matching that of basic education.
Around 44.7% of the health allocation will fund district health services, focusing on primary healthcare facilities like clinics and community health centres, which play a key role in disease prevention and community outreach. Nearly 98% of this budget will go to provincial governments, totalling approximately R922.7 billion. Significant portions have been allocated to district health services (R132.1bn), central hospital services (R58.3bn), and other health services (R47.5bn).
Despite the funding, there was no mention of a solution for the funding gap caused by the US government's cessation of financial support for HIV/AIDS and other health programmes.
Prior to the budget, Godongwana stated that of the 275,000 people working on HIV, TB, and STI programmes, only 15,000 were reliant on the US President’s Emergency Plan for AIDS Relief (Pepfar). The South African Department of Health will be expected to cover this shortfall, with plans for budget adjustments expected by month-end.
Infrastructure development also remains a focus, with R37.4 billion allocated over the MTEF period for health infrastructure projects, including upgrades at the Siloam District Hospital in Limpopo and the Tygerberg Hospital in Cape Town under a public-private partnership in 2027-28.
The National Health Insurance (NHI) initiative was perhaps the biggest damp squid of tnight, with R8.5 billion in indirect grants and R1.4 billion in direct grants allocated over the MTEF period. Additional investments will support the development of a patient information system, a centralised chronic medicine dispensing and distribution system, and a facility medicine stock surveillance system.
This story was compiled from various sources including:
12 March 2025 | Daily Investor | R10 billion for NHI in South Africa
12 March 2025 | M& G | No allocations for Pepfar in health budget
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