National Health Insurance Scheme may Push S. Africa into Recession

South Africa’s economy is in danger of being pushed into recession because of a proposed National Health Insurance (NHI) scheme. The plan aims to cure a health system in shambles. It is, however, in danger of shaping up to be the most expensive government programme since the end of apartheid. NHI finance schemes will be worked out over the next several months, but economists commonly agree that tax payers will be hard-pressed to fund the ambitious programme. This is so because it comes during a time when people are losing jobs in a stagnant economy.

"If it was to happen under current economic conditions, you would run the risk of tipping the economy into recession as you try to implement the programme," said Kevin Lings, chief economist at Stanlib.

The government estimates a fully implemented scheme will cost 255 billion rand ($36 billion) by 2025, but the figure could be much higher given the shortage of skilled staff, dysfunctional facilities and failing infrastructure.

Source-Medindia