JOHANNESBURG — Lawmakers in South Africa laid out plans to shore up the budgets for health and defense but also put up value added tax by 0.5%, a move that will raise the cost of living as consumers pay more for goods, including food, and services.
An additional 28.9 billion rand ($1.5 billion) was earmarked for health spending in the 2025 budget, Finance Minister Enoch Godongwana said, as the country scrambles to make up for cuts to aid from the U.S. under the Trump administration.
The extra money will pay the salaries of roughly 9,300 medical personnel in clinics and hospitals and about 800 newly qualified doctors.
Health spending overall is expected to grow from 277 billion rand in 2024/25 to 329 billion rand in 2027/28.
The increase comes amid concerns that South Africa’s health system, which cares for the world’s largest HIV population and has 5.5 million people on life-saving antiretroviral drugs, will be strained by cuts to USAID, the U.S. agency for international development.
In early February, President Donald Trump cancelled PEPFAR, the President’s Emergency Plan for AIDS Relief, which provides over $400 million annually to South Africa’s HIV programs and nongovernmental organizations.
Although 74% of South Africa’s HIV response is funded domestically, some services depend on U.S. government funding, which makes up around 17