SA has set an ambitious growth target of as much as 5.4% in its draft five-year strategic growth blueprint that notably stripped out the polarising National Health Insurance (NHI) scheme.
In a last-minute dash, the cabinet convened an urgent meeting on Wednesday to finalise the plan, which all parties have agreed to but have to officially sign as President Cyril Ramaphosa prepares for the state of the nation address and finance minister Enoch Godongwana gears up to deliver this year’s budget in two weeks.
The draft medium-term development plan (MTDP) targeted GDP growth ranging from 2% to 5.4% by 2029, assuming that over the next five years the government will implement accelerated reforms while addressing infrastructure and fiscal pressures.
“It has been agreed by all members of cabinet, but there are a few minor details that still need to be sorted out before it can be approved,” a source close to the discussions said.
Business Day understands that Ramaphosa’s state of the nation address, the first since the establishment of the government of national unity (GNU) in 2024, is expected to expand on the next phase of reforms which will be implemented by Operation Vulindlela. He will also reflect on the way forward within the GNU.
The MTDP stripped out the NHI scheme, DA leader John Steenhuisen told Business Day, confirming a News24 report that the DA and ANC had struck an informal agreement about protecting the private healthcare sector in the rollout of NHI.
The exclusion of the biggest health reform in post-apartheid SA, which has polarised policymakers, economists and ordinary people, means the ANC dream of universal healthcare will remain elusive.
For the DA, the omission is a victory as it has been one of its vocal opponents, arguing that in its current format it risked tanking the multibillion-rand private healthcare sector and infringing on the constitution.
“There was a very clear target in the MTDP which said at the end of the five-year period all medical funds would be collapsed into a single fund. That has now been removed from the draft MTDP as a project. That is in black and white,” Steenhuisen said. “The ministerial advisory committee is going to look at the modalities and funding models of NHI without crashing medical aids over the next five years.”
Economists and other financial professionals, some of whom support the broader idea behind the scheme, have warned that the NHI is a sinkhole for the economy.
Budget shortfall
In his budget speech later this month, Godongwana is expected to show a wider budget shortfall and debt-to-GDP ratio of closer to 80% — almost twice the recommended cap by the IMF and virtually closing the door on rolling out NHI any time soon.
“How are you going to implement the collapse of private medical aid if you have no budget to put towards developing a single fund? It’s not possible,” Steenhuisen said.
The DA leader added that the ministerial advisory committee would involve players in the private sector as well as healthcare officials, representatives of the healthcare industry and the ministry. “The MTDP is a document that guides government processes and procedures over the next five years. If something is not in line with the MTDP, it cannot find its way into the budget and it cannot be implemented,” he said.
SA’s biggest medical scheme administrator Discovery Health welcomed the “constructive” discussion between the GNU partners on NHI.
“We recognise that, while significant progress has been made, there is still substantial and important ground to cover in ensuring a sustainable and effective NHI,” Discovery Health CEO Ron Whelan said.
“Discovery remains of the view that a workable NHI is of vital importance to the country and this cannot be achieved without private sector collaboration. We are working closely with all stakeholders — both within the private sector and the government — to contribute towards an outcome that serves the best interests of all South Africans,” he said.
Board of Healthcare Funders (BHF) MD Katlego Mothudi said the organisation viewed the comments by a presidency official and Steenhuisen in a positive light, but they carried no legal weight and would not influence its litigation against the National Health Insurance Act.
The BHF is an industry association for medical schemes and administrators and was one of the first organisations to take legal action after the act was signed into law in May 2024.
Ramaphosa’s state of the nation address will highlight what he sees as the government’s achievements and its challenges and interventions for the coming financial year.
Significant events this year will include SA’s presidency of the Group of 20 (G20) and its hosting of the G20 summit in Johannesburg in November.
SA has been in the international spotlight in recent weeks after the diplomatic fallout with Rwanda and the deaths of 14 of its soldiers in the Democratic Republic of Congo (DRC).
SA was also falsely accused by US President Donald Trump of confiscating land under the recently adopted Expropriation Act. Ramaphosa and international relations & co-operations minister Ronald Lamola were quick to reject Trump’s claims that land would be confiscated by the state.
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