The bleak state of South Africa’s public finances, grimly portrayed in Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS), shows why the government’s National Health Insurance (NHI) scheme is ‘unfeasible’.

So says the Institute of Race Relations (IRR).

In a statement, the IRR’s Campaign Manager Mlondi Mdluli says: ‘Against this background, it is obvious that the implementation of the National Health Insurance (NHI) will only further strain the country’s already weak fiscal position. Therefore, its implementation should be rejected.’

Adds Mdluli: ‘It is more concerning that even though Minister Godongwana pointed out that the budget deficit had grown by R54.7 billion, there was no mention of the costs of the NHI, which will have greater impact on the country’s already weak fiscus. The escalation of the monthly budget deficit to R143.8 billion in July was a clear indication that South Africa is headed for a very tough period. The continuous increase in the government deficit is the main reason the country finds itself in the debt crisis that it is in.’

The IRR notes that Minister Godongwana pointed out in his address that the government would have to borrow an average of R553 billion per year over the medium term, and that the debt interest costs were now in the region of R385 billion.

This follows the warning from the International Monetary Fund that South Africa’s interest bill on its growing public debt could triple the size of its health budget within five years, and it projects that the cost of the government’s debt will rise from 19% to 27% by 2028.

Concludes Mdluli: ‘In the coming days, the IRR will write to National Treasury and the Department of Health to request a breakdown of the costs of the NHI. The government has stated on numerous occasions that taxpayers will bear the responsibility of financing the unfeasible NHI. Therefore, it must come clean on the costs associated with it. The IRR will continue to use all the resources at its disposal to ensure that the NHI is not implemented.’