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Treasury worried about NHI funds not being used as planned, MPs hear

Aug 27 2019 12:44 

Lameez Omarjee, Fin24



Only R200m has been spent on the National Health Insurance programme so far this year, some R215.1m below projected NHI spending by this time, according to National Treasury.

Officials from Treasury’s public finance department on Tuesday briefed the Standing Committee on Appropriations on its first quarter expenditure report for the 2019/20 financial year.

The department of health has a total appropriation of R51bn. Members of Parliament heard that spending on the NHI was currently at R200m, or 9.5% of the R2.1bn budgeted for the full 2019/20 financial year. This is some R215.1m below projected NHI spending for this time of the year. 

Treasury said it was particularly concerned that funds meant to “strengthen health systems for the NHI roll-out” are not being used as planned. “The situation is not improving in the current year compared to the first quarter of 2018/19,” a Treasury reported shared with MPs report read.

“The items showing low spending are from the National Health Insurance indirect grant,” said Treasury. It does, however, expect spending on the programme to increase in the next quarter, specifically for a medicines stock surveillance system what has already been ordered. 

Can SA afford it? 

On Monday Nedbank economist Busisiwe Radebe told delegates at the 2019 Tax Indaba in Sandton that South Africa cannot afford to implement NHI, saying SA’s struggling economy was not in a position to afford the insurance plan’s multi-billion rand roll-out.  According to the 2017 NHI White Paper, the policy will cost the state R256bn in the 2025/2026 financial year at 2010 prices.

Minister of Health Zweli Mkhize, meanwhile, said on Monday it was a “fallacy to postulate that the NHI will bankrupt the country”.

“The NHI Fund will be administered by qualified and competent professionals carefully selected and appropriately trained to run an efficient operation,” he told the annual Hospital Association of Southern Africa conference in Cape Town.