South Africa plans to allocate an additional 28.9 billion rand ($1.5 billion) towards health spending in the 2025 budget, aiming to make up for cuts to aid from the US under the Trump administration. The extra funds will cover the salaries of over 9,300 medical personnel and 800 newly qualified doctors.
The country’s health system faces strain due to reduced US funding for HIV programs, with the current budget relying on a combination of domestic and international support. South Africa aims to increase its health spending from 277 billion rand in 2024/25 to 329 billion rand by 2027/28.
Meanwhile, defense spending is also set to rise by 5 billion rand ($271 million), reaffirming the country’s commitment to peacekeeping in eastern Congo. To fund these increased expenditures, the government plans to raise the value-added tax (VAT) rate by half a percentage point in 2025-2026 and another half a percentage point in the following year.
The VAT increase is expected to affect consumers, who will pay more for goods and services, including food and electricity. The finance minister acknowledges that the increased VAT may have a significant impact but argues it’s necessary to ensure the social wage and avoid further spending cuts.
Source: https://apnews.com/article/south-africa-trump-aid-freeze-budget-godongwana-199795bdb1aa44aefbc5469e798d7acc