{"id":770500,"date":"2024-05-03T13:30:00","date_gmt":"2024-05-03T11:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=770500"},"modified":"2024-05-03T12:33:07","modified_gmt":"2024-05-03T10:33:07","slug":"nhi-is-a-material-risk-to-south-africa-analyst","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/770500\/nhi-is-a-material-risk-to-south-africa-analyst\/","title":{"rendered":"South Africa’s NHI disaster waiting to happen"},"content":{"rendered":"\n

Investec Healthcare Equity Analyst Letlotlo Lenake says that the NHI is completely unaffordable and presents a material risk for South Africa’s economy – especially with the foundational premise that 5 million taxpayers will foot the healthcare bill for over 60 million.<\/p>\n\n\n\n

As the ANC-led government and president Cyril Ramaphosa charge ahead with plans to sign the National Health Insurance Bill into law<\/strong><\/a>, Lanake said the response to the question of whether South Africa can afford the system is a “resounding no”.<\/p>\n\n\n\n

Speaking on the latest Investec Focus Podcast, No Ordinary Wednesday<\/strong><\/a>, the analyst said that the NHI Bill, as it currently stands, carries both quantitative and qualitative risks to the country.<\/p>\n\n\n\n

Quantitatively, the estimated costs of the NHI are unachievable with the country’s tax base, and qualitatively, the resultant impact on resources like doctors and healthcare professionals poses even greater risks to healthcare in the country.<\/p>\n\n\n

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Investec Healthcare Equity Analyst Letlotlo Lenake<\/figcaption><\/figure><\/div>\n\n\n

Lenake noted that the current annual estimates of the NHI\u2014around R256 billion a year\u2014are based on 10-year-old whitepapers and projections and haven’t been updated for inflation.<\/p>\n\n\n\n

“As a percentage of GDP, we’re looking at double digits<\/strong>. For an emerging economy, this is a significant amount to spend on healthcare,” he said.<\/p>\n\n\n\n

According to the bill, a big portion of the NHI Fund will be coming from taxes. Either through budget reprioritisation or a host of other taxes.<\/strong><\/a> This is simply something the South African taxpayer cannot bear.<\/p>\n\n\n\n

“If you take away medical aid tax credits, it adds quite significant costs on top of education and healthcare – it sends the wrong signals to an already small tax base,” he said.<\/p>\n\n\n\n

Lenake said that there are currently around 24 million registered taxpayers in South Africa, but only a fraction of that account for the bulk of taxes, probably around 5 million.<\/p>\n\n\n\n

Having 5 million taxpayers financing the healthcare needs of 60 million people does not make any sense<\/strong>, he said.<\/p>\n\n\n\n

“It is a resounding no that South Africa can afford this,” he said.<\/p>\n\n\n\n

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Government hits back at NHI critics<\/a><\/blockquote>