South Africa: Taking From Peter to Pay Paul - a Walk Through the Government's Special COVID-19 Budget

analysis

On 24 June, Finance Minister Tito Mboweni tabled a supplementary budget in response to the president's call for a fiscal package to support national Covid-19 interventions. But although this was aimed at alleviating a health crisis, the budget is, ironically, not good for the nation's health services.

Public finances in South Africa were already in a critical state before the Covid-19 pandemic , but a new level of instability has now been reached, according to the National Treasury as outlined in its Covid-19 2020 supplementary budget documents. This is further substantiated by the fact that the current cost of servicing debts equates to 12% of total spending, which is equivalent to the amount that is being spent on healthcare services.

In April 2020, President Cyril Ramaphosa assured the nation that an additional R20-billion would be diverted to the health response. However, the Budget Justice Coalition has pointed out how, in the supplementary budget, the R21.5-billion package directed at healthcare is not made up of new funds, but will rather come from a combination of reprioritisation and new funds.

Only R2.9-billion of the R21.5-billion is extra funding from the treasury. This, while the provinces are...

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