A larger fund allocation to health and the extension of the Social Relief Grant are among the key announcements that came out of the Medium Term Budget Speech (MTBS) delivered by Finance Minister Enoch Godongwana in Cape Town on Wednesday.

The additional spending is possible due to a higher tax revenue estimate for 2022/2023. According to the policy statement, the debt-to-GDP ratio will stabilise at 71.4% in 2022/23. This is two years earlier than previously forecast. The Treasury, in the 2022 Budget, had expected the debt-to-GDP ratio to steady at 75.1% by 2024/25.

“This means that we are proposing that no budget reductions are implemented in the 2023 Budget,” Godongwana said.

Over the next two years, R66.9 billion will be split between health, education and the provision of free basic services by the local government. The COVID-19 social relief grant was extended for another year until March 2024.

MTBS on the SRD grant

The SRD grant was introduced in May 2020 as a temporary measure to assist the most vulnerable affected by lockdown measures. It has been extended several times since then. 

“Discussions on the future of the grant are on-going and involve very difficult trade-offs and financing decisions. Despite the provision made in this budget, I want to reiterate that any permanent extension or replacement will require permanent increases in revenue, reductions in spending elsewhere, or a combination of the two,” said the minister.

Other highlights related to health is that the annual target for the number of health facilities reporting stock availability at the national surveillance centres was exceeded. This is due to more sites that store medicines –  particularly general practitioners, pharmacies and medical depots – providing data.  

The minister also highlighted that 2022 Adjusted Estimates of National Expenditure showed that 70 percent of adults aged 50 and older have received at least one COVID‐19 vaccine dose. This is lower than 5 per cent lower than the annual target of 75 percent. 

Coverage among adults aged between 35 and 49 is  lower at 55 per cent. Demand for COVID‐19 vaccinations has declined considerably since the beginning of  the year. The department has warned  it may miss the annual target.   

Quality Improvement Plan for Health

The national quality improvement programme (NQIP) was implemented in 227 primary health care facilities and 153 hospitals. This is above the annual target as provincial health departments implemented  the programme in more facilities than planned.  

The NQIP was created to address deficiencies in the current health system. This required the development of a detailed and adequately funded quality improvement plan. It aims to support provinces to move from a mindset of compliance to a new mindset of continuous improvement in order to improve patient outcomes. 

“This MTBPS reminds us of the urgent need to pursue the reform of our economy in a consistent manner, with the freedom of our people in mind. We should not take lightly the link that Former President Nelson Mandela and many other leaders after him drew between a thriving economy, and a fair and just society. This the golden thread that runs through our Constitution and this Medium-Term Budget Policy Statement. We should keep sight of this goal and the balancing act it entails as we do our work.” – Health-e News