The Treasury is considering requests for additional funding from the health department and SA Medical Research Council (MRC) to offset US President Donald Trump’s cuts, finance minister Enoch Godongwana said on Wednesday.
This includes a R1.3bn budget request from the health department, which Business Day understands includes a plan for each province.
“We will need to decide how to process it — either through section 16 emergency allocations or through new allocations,” the Treasury’s chief director for health and social development, Mark Blecher, said shortly before the minister tabled his budget in parliament. Blecher was referring to section 16 of the Public Finance Management Act, which enables the Treasury to make allocations outside the usual budget process, as it did during the coronavirus pandemic.
Trump has dealt a huge financial blow to SA’s HIV/Aids programmes, universities and research organisations since he assumed office in February.
Most of the non-governmental organisations (NGOs) funded by the US President’s Emergency Plan for Aids Relief (Pepfar) have been forced to close, terminating their services and retrenching thousands of staff across SA. Thousands of patients who were receiving specialised services from these organisations are now dependent on overburdened public healthcare facilities.
It was not immediately clear why the health department’s request to the Treasuary, made earlier this week, is so much lower than the amount that had been expected from Pepfar for the current fiscal year. Health minister Aaron Motsoaledi told parliament in February that SA expected R6.3bn from Pepfar for the 2025/26 fiscal year.
Godongwana speculated that the health department might expect to make savings on salaries as Pepfar rates were higher than those set by the public service and administration department. The health minister’s presentation showed that in the 2023/24 fiscal year, R4.64bn of the total R7.5bn Pepfar funding went on the salaries of 200 staff members in the national health department and 15,154 in the provinces.
SA’s top universities and research organisations have also been left reeling by the Trump administration, which has cancelled hundreds of grants and failed to renew others.
Two large donors had offered to support the MRC and universities affected by the cuts but were asking the government to provide co-funding, said Blecher.
Business Day previously reported that the MRC had increased its initial request for emergency funding from R150m to R400m after the potential donors indicated they were willing to help. It has been co-ordinating the response from the biomedical research sector and is also involved in an assessment of the impact of Trump’s cuts to the broader science system recently established by science and innovation minister Blade Nzimande. In early May it estimated the US withdrawal of support had left a $109m (R2bn) funding gap.
Blecher said the Treasury was considering the submissions from the national health department and the MRC and would make a final decision “in the period ahead”.
The Treasury’s latest iteration of the budget reduces the provisional additional allocations to health’s baseline announced in March. The budget cuts back on spending plans because the Treasury’s plans to raise additional revenue with a VAT hike were rejected.
The Treasury said the cuts would not affect plans to hire 800 unemployed doctors and other healthcare professionals.
A total of R8.2bn has been pared from the R28.9bn provisional additional allocation for health announced in March, which now falls to about R20.8bn. The money is provisional because it is contingent on provinces meeting certain targets.
The portion set aside for hiring extra staff remained unchanged, said acting director-general for the budget office Marumo Maake.
Consolidated health expenditure is thus lower than that planned in March, but still grows at a rate marginally higher than the Treasury’s projected average inflation rate for the period.
Consolidated health expenditure increases from a revised estimate of R277.2bn in 2024/25 to R296.1bn in 2025/26. It then rises to R310.7bn in 2026/27 and R325.8bn in the outer year. This provides an average growth rate of 5.5% over the medium term, compared to the Treasury’s projected 4.4% increase in inflation over the period.
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