Health services suffer as budget is prioritised to deal with Covid-19
Repurposing of funds towards Covid-19 interventions means future financial years will be difficult, health department tells parliament
Basic health services such as testing for HIV/Aids and TB, maintenance, filling vacancies and the purchasing of new equipment were severely hampered in the last financial year as the national health department shifted its resources.
“The goods and services budget had a once-off allocation of about R4.3bn for the procurement of Covid-19 vaccines. We also have to fund the logistical part of the vaccines from this funding — and we have already put in a number of business cases to National Treasury to show the impact of this — as well as the additional funding that might be required during the financial year,” said the department’s chief financial officer, Ian van der Merwe.
He and other senior department officials, including deputy minister Joe Phaahla, appeared before parliament on Friday to present the annual performance plan and budget for the 2021/2022 financial year.
Van der Merwe said the repurposing of funds towards Covid-19 interventions meant future financial years would be difficult.
The budget for the 2021/2022 financial year is R62.5bn, and a reduction of about R16m over the next financial year will impact greatly on the department’s ability to appoint new staff members and retain existing staff, he said.
“Goods and services has an earmarked fund of about R4.7bn, which includes the Covid-19 vaccine funding, both for distribution and purchasing, and the Covax agreement of about R1.8bn. Close to R54bn of our budget goes towards assisting provinces with conditional grants,” he said.
Van der Merwe said due to economic pressures and managing Covid-19, there have been additional once-off allocations for Covid-19 in the current financial year and the last financial year, which added up to about R10bn.
The department had to take a reduction in the National Health Insurance (NHI) grants and fund technology related to the pandemic.
Funding for subsidies and NGOs was reduced by 3% and 13% respectively, while funding for IT has increased.
On the Covax component, Van der Merwe said there was an allocation of R1.8bn.
“We have taken a view, together with Treasury, that the R4.3bn and R1.8bn is what will be used for the vaccine purchases, and if needs be we will repurpose these further to that programme. As it stands, at the time of allocation of the funds, R1.8bn was allocated for the Covax programme.”
Discounting the funds allocated to Covid-19, Van Der Merwe said the reduction in the budget was about 16%.
“These reductions will obviously have an impact on our nationally managed programmes, especially infrastructure in provinces. We have taken a view that some of these programmes in terms of critical maintenance and projects that are within the tender stage and have not gone out to tender and those that can be postponed and are in the planning stage, we will have to postpone.”
KwaZulu-Natal, the Eastern Cape and, to some extent, Limpopo, would continue to get assistance with oncology programmes, he said.
“The unfortunate part of all these reductions is that it takes us back to about three of four previous financial years. If you look at the allocations three years ago, they are pretty much the same as the current allocations, which means we have negatively grown.”
Provincial budgets have also taken a knock and have had to reduce expenditure due to the pandemic.
'Unprecedented negative consequences'
MPs approved the department’s budget with caution and called for finance minister Tito Mboweni to appear before the committee to address challenges raised by health department.
ANC MP Tshilidzi Munyai welcomed the R10bn allocated to the procurement of vaccines: “This is a further immediate response towards the Covid-19 pandemic, which we all know has brought some unprecedented negative consequences.”
The EFF’s Naledi Chirwa, who was kicked out of the meeting due to her use of language, said the reprioritising of funds from vital programmes would come with regression.
“The regression in the department of health has been imminent, even before the Covid-19 pandemic. What this regression means, generally, is more infections, more deaths, more spread of HIV and TB because testing and the funding of these programmes are vital to curb the spread and ensure people have access to medication,” she said.
The DA’s Siviwe Gwarube said while she understood there was an overall reduction of about 3.4% from the budget due to the pandemic, she noted there was a high vacancy rate in the department.
Responding, director-general Dr Sandile Buthelezi said the budget cuts were a serious problem.
“We are trying to prioritise and see where we are going to cut. Unfortunately staffing is always the first one to take a hit, hence you’ll find there is a high number of vacant positions.”
On the vaccination programme, Buthelezi said the Johnson & Johnson (J&J) vaccine had been delayed because of a global audit currently underway.
“We were expecting to get the first delivery a week ago but that did not happen. The vaccines were already packed and ready for delivery in Gqeberha but they could not move until Johnson & Johnson globally gives the go ahead. But we still keep our targets and we want to be done with the 40 million by February 2022.”
Buthelezi said an agreement had been signed to get 31 million vaccines from J&J.
We hope after the rollout of the vaccination programme, we will be able to get back to focus on the core programme.Joe Phaahla, deputy minister of health
On Pfizer, he said there was a total of 20 million vaccines, meaning 10 million people will get vaccinated with the double-dose.
With the Covax facility, the government has signed 12 million doses for about six million South Africans, also a double-dose vaccine.
“We have already paid a deposit of $19.2m (about R271m) to the Covax facility. Negotiations are continuing.”
Phaahla cautioned that while the vaccination programme was under way, “we can’t say we are out of the woods yet”.
He urged South Africans to continue with non-pharmaceutical interventions as there were signs the number of infections was beginning to rise again.
“While this threat is looming, it is different to last year when we were only depending on non-pharmaceutical interventions. We now have vaccines which have proved to be safe and effective.
“We hope after the rollout of the vaccination programme, we will be able to get back to focus on the core programme, including the implementation of universal health coverage, hopefully supported by the passing of the NHI Bill, but on our side laying the foundation and framework for future implementation.”