Another Health Sector Corruption Scandal Deepen Doubts About NHI’s Viability

On Monday, the South African government announced the arrest of three senior officials from the National Department of Health over alleged procurement fraud, worth over R1 million. Public funds meant for healthcare were diverted through an irregular contract that bypassed procurement procedures.

This has raised alarm bells that if National Health Insurance (NHI) moves forward, the state would control an even larger share of healthcare funds, and the risk of corruption would multiply. Under the NHI scheme, all private healthcare providers and medical aids would be nationalised, and all healthcare procurement for the entire country would come out of a single fund.

This R1 million fraud is not an isolated case within the taxpayer-funded healthcare sector. One does not have to look far to find more recent examples of endemic public sector corruption. In September 2025, the Special Investigating Unit (SIU) uncovered the misappropriation of R2 billion at Tembisa Hospital through fraudulent procurement schemes.

During the Covid‑19 pandemic, R332 million intended for personal protective equipment (PPE) was misappropriated through inflated contracts. This scandal highlighted how even during a national health crisis, public funds were stolen rather than used to protect healthcare workers and patients.

These are but two of the most recent examples of fraud and corruption within the public health system.

The repeated exposure of corruption in South Africa’s public health sector should raise alarms about the feasibility of NHI. The NHI proposal to centralise healthcare funding and procurement would place an enormous amount of money under state control. Given the government’s failure to protect existing healthcare funds, how can it be trusted to handle even larger sums? If the current system can’t safeguard R332 million or R2 billion, expanding state control of healthcare funds would exacerbate the problem, not solve it.

It is important to recognise who is currently paying the most for public services, including healthcare. A small percentage of the population, particularly high-income earners, contribute the majority of the tax revenue that funds these services. The majority of these individuals tend to not use public healthcare, preferring to use private providers, and paying for medical aid and private healthcare with their after-tax income. Yet, under NHI, the government would seek to take control of the private healthcare savings of these same individuals. The state seems unable to grasp the idea that should it implement NHI, these same high-tax individuals could simply leave the country, as opposed to meekly accepting state-mandated sub-par healthcare, thereby depriving the state of the fiscal capital required to fund public healthcare — or just about any other state service.