Health Minister, Dr Aaron Motsoaledi. Picture: Gallo Images/Frennie Shivambu
Health Minister Aaron Motsoaledi has revealed that South Africa finances 90% of its antiretroviral (ARV) programme through its own fiscal resources, with only 10% of support coming from global funds.
The minister appeared before the Portfolio Committee on Health to discuss the potential impact of withdrawing Pepfar funding on South Africa’s health programmes.
According to Motsoaledi, the country currently manages 271,608 staff members across 27 districts, with the vast majority being government employees.
Motsoaledi said Pepfar currently contributes 17% of South Africa’s HIV response funding. This funding includes support for essential programs such as Pre-Exposure Prophylaxis (PrEP), community-led monitoring, and tuberculosis testing among high-risk groups.
“The total Pepfar investment amounts to R7.547 billion, with R4.639 billion allocated to staffing and R2.908 billion supporting operational costs, NGOs, and community programs like the DREAMS initiative (Determined, Resilient, Empowered, AIDS-free, Mentored and Safe).”
The funding structure for South Africa’s HIV response relies heavily on domestic resources, with the government providing 74% of overall funding, while international donors (including Pepfar at 17% and the Global Fund at 7%) contributing the remainder.
According to Director General Sandile Buthelezi, the global fund contribution amounts to approximately R466 million rand annually, totalling about R1.4 billion over a three-year cycle.
This represents the 10% external support for South Africa’s ARV programme.
This domestic commitment may help buffer some impacts of the Pepfar suspension, though significant service disruptions remain likely without alternative funding sources.
The US government has initiated a 90-day review period of Pepfar funding.
“The assessment by the US government, not us… they say they are going to assess whether the programme they are funding, not only in South Africa, all over the world, is in line with the values and the beliefs and objectives of the American people and American government,” Motsoaledi explained.
The minister revealed that initial discussions were held with US officials, as there is currently no American ambassador in South Africa, only a chargé d’affaires (ambassador’s deputy).
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Motsoaledi also revealed that certain restrictions have been placed on Pepfar funding use.
“American money cannot be used for abortions, whether legal or otherwise… you can’t perform surgical operations for transgender people… American money cannot be used for LGBTQI+,” he detailed.
Addressing questions about local ARV production, Motsoaledi provided a detailed historical account of attempts to establish domestic manufacturing.
Around 2007-2008, plans for a state-owned pharmaceutical company called Ketlaphela were initiated, but organisational challenges were faced due to concerns about conflicts of interest.
The minister revealed that in 2011-2012, producing ARVs locally would have required an additional 16 billion rand compared to importing from India.
“Minister Pravin Gordon then said, ‘No, we don’t have that amount of money.’ Remember when we started, we wanted only 3.5 billion. Today, we’re at 46.8 billion,” Motsoaledi explained.
He explained that India’s competitive advantage stems from lower labour costs and fewer regulatory requirements.
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“They don’t have labour costs or labour rights like the ones we’re having in our country, and many other things that have been demanded in the workplace by unions,” the minister stated.
He also highlighted that South Africa’s pharmaceutical companies must import Active Pharmaceutical Ingredients (APIs) from India and China, adding to production costs.
Motsoaledi emphasised that maintaining ARV treatment continuity remains paramount regardless of funding changes.
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“What we must guarantee is that nobody who’s on ARVs stops because if that happens, that’s going to be very, very dangerous to individuals and to the country,” he warned, explaining that treatment interruption could lead to drug resistance.
The minister highlighted broader healthcare spending inequalities in South Africa.
“We’re already spending 8.5 per cent of the GDP on health, which amounts to R570 billion,” he noted, adding that 51% of healthcare expenditure serves only 14-15% of the population with medical aid. In contrast, the remaining 49% must cover 86% of South Africans.
Comparing South Africa’s healthcare system to other nations, Motsoaledi stated: “China is still at six point something percent of their GDP on health, Brazil is still at seven point something, India is even low at three point something, but they’ve got better health outcomes than us because of the manner in which we distribute the money.”
Motsoaledi argued that implementing the National Health Insurance (NHI) system could reduce dependency on foreign funding.
“If we implement NHI the way we should and spend the money equitably, we won’t be in this position where we depend on other countries,” he stated.
Motsoaledi further compared South Africa’s situation to Brazil’s successful universal healthcare implementation, which started in 1990.
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