NHI doubts after R2 billion Tembisa Hospital looting spree
Criminal syndicates in South Africa spent ill-gotten gains from looting a state-run hospital on trophy assets, including properties in exclusive locales, Lamborghinis, a Bentley and a luxury boat, a probe showed.
At least three major syndicates and several smaller groups co-ordinated with provincial government officials and health-care workers to loot more than R2 billion from Tembisa Hospital, north of Johannesburg, according to an interim report by the Special Investigating Unit.
They bypassed procurement processes, won contracts using fraudulent documents and received payments for goods that in many cases weren’t supplied, the investigation by the anti-corruption body showed.
“This staggering sum, intended for the provision of health care to the most vulnerable, was instead ruthlessly siphoned off through a complex web of fraud and corruption, representing an egregious betrayal of the nation’s trust,” the SIU said.
The report highlights yet another example of widespread graft in Africa’s most industrialized economy that’s hobbled key institutions and weighed on the delivery of basic services from electricity to water.
It also raises concerns about the government’s plan to implement national health insurance, which intends to provide citizens universal access to care through a centrally managed state fund that buys services from public and private providers.
The probe follows the 2021 assassination of Babita Deokaran, a Gauteng Department of Health worker and whistleblower who flagged millions of rands in suspicious payments at Tembisa Hospital.
In addition to the criminal syndicates, the SIU has since identified at least 15 current and former officials implicated in corruption, money laundering, collusion and bid rigging for the appointment of service providers at the facility, it said.
“In essence, officials were active participants in malpractice or turned a blind eye, effectively allowing the public purse to be looted through a combination of maladministration and collusion with third parties,” the SIU said.
The agency expects to complete a full investigation by November 2027. In the meantime, it has referred matters to the National Prosecuting Authority, the South African Health Products Regulatory Authority and Gauteng Department of Health for action.
It also plans to institute civil proceedings against those implicated in the graft and to recover monies, including through freezing and recovering assets from service providers and officials.
NHI corruption concerns
While the Tembisa Hospital corruption is just one facility being investigated, it feeds into wider concerns around the looting of state funds through the healthcare stream.
This is especially pertinent given the ANC’s push for the implementation of National Health Insurance (NHI) in the country, which would give state actors access to hundreds of billions of rands in funds.
Under the NHI, the state, through the NHI Fund, becomes the sole purchaser of medical care in the country.
The extent of the NHI Fund is not yet known, but estimates run anywhere from R250 billion to over R1 trillion, depending on level of cover offered. NHI covereage is not yet known.
One of the biggest criticisms levelled against the scheme—outside of it being unworkable and effectively destroying private healthcare funding—is that it will be exposed to corruption and abuse.
The South African government has an extremely poor track record when it comes to handling public funds, evidenced by the looting of state utilities like Eskom and Transnet, state capture, and the looting of the R500 billion Covid relief funds.
After signing the NHI Act into law in May 2024, ahead of the national elections, president Cyril Ramaphosa tried to assure the nation that this time would be different.
He said that the government had learned from the past and has put mechanisms in place to ensure that the NHI funds won’t be looted.
The NHI laws make provisions to handle any persons or organisations that try to defraud the system, which could result in R100,000 fines or five years in jail if convicted.
The health ministry has been at pains to assure the public that the NHI funds will be handled appropriately, saying things like it is ‘too soon’ to call the NHI corrupt before it has even had a chance to operate.
It is worth noting that South Africa already has mechanisms to deal with looters and corruption, but this did not prevent almost every single major national company or fund run by the state from nearly collapsing due to corruption and financial mismanagement in some way.
(Reporting by Bloomberg with additional reporting by BusinessTech)
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