‘There’s more to the NHI than just talking about adding money’, says National Treasury

The National Treasury says the establishment of the National Health Insurance (NHI) fund will take at least two to three years to complete.

Treasury officials shared this update on Friday while briefing Parliament’s Standing Committee on Finance and Select Committee on Finance.

National Treasury on NHI

In the joint meeting, Treasury’s head of budget, Edgar Sishi, informed MPs that much of the NHI funding would come from indirect grants.

South Africa has allocated R2.5 billion per year for indirect health spending under the NHI over the 2025 Medium-Term Expenditure Framework (MTEF).

Meanwhile, the direct NHI grant is expected to be around R460 million annually.

“So there’s more to the NHI than just talking about adding money. Indeed, it’s actually about coordinating the existing public sector health function more than anything else and those processes will take time.

“With that as a background, we do have an indirect grant for NHI that is in the baseline and an indirect NHI grant over the MTEF to strengthen public healthcare system in preparation for the NHI,” Sishi said.

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Treasury’s presentation outlined that the direct grant is allocated to the National Department of Health’s preparations for implementing the NHI.

This includes testing new reforms, enhancing primary healthcare services, and aligning infrastructure with national and provincial policy directives.

Moreover, the indirect funding will support two key projects: health facility revitalisation and health systems development.

“Patient information systems, as one of the key focus areas of this grant, is allocated R112.5 million in 2024/25 to continue its work on implementing patient information systems.

“For general practitioner contracting, the department is allocated R103 million to develop and test strategic purchasing,” a slide of the presentation reads.

Watch the meeting below:

NHI fund

Treasury also reminded the joint committee that significant work remains to be undertaken by the Health Department to ensure the successful and effective implementation of the NHI.

The finance department further noted that the NHI Act still needs to be promulgated and that NHI regulations must be published for public comment.

READ MORE: NHI Act: unanswered questions call for transparency

Additionally, the establishment of the NHI Fund as a formal entity was expected to take at least two to three years to complete.

“The NHI is quite clear that a public entity must be created. It’s also quite clear that there must be a consolidated and coordination of funds that currently sit in provinces,” Sishi continued.

“A lot of work needs to be done on allocating health functions across the spheres and potential function shifts.”

PIC money to fund NHI?

The question of funding the NHI remains critical and unresolved.

Proposals have emerged suggesting the use of Public Investment Corporation (PIC) funds to finance public health infrastructure in preparation for the scheme.

Health Minister Aaron Motsoaledi recently raised the idea, questioning why the PIC, a government-owned asset management firm with R2.7 trillion in assets, should not help fund the NHI.

“Private hospitals get money from PIC to build private hospitals and buy equipment for them in exchange for equity.

“I have been knocking at the door of Treasury for the past 10 years asking for the same.

“Why can’t I use PIC money to build public hospitals?” Motsoaledi said at an event hosted by the Kgalema Motlanthe Foundation on 26 October.

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