Foreign aid cuts under the Trump administration have left South Africa over $430 million short of its budget, the country’s finance minister said on Wednesday.
Enoch Godongwana presented a new budget to parliament—one without the value-added tax increase that caused public pushback—and said that without the revenue from said tax, the country would be in the red, the Associated Press reported. The finance minister spoke shortly before the contentious meeting between President Cyril Ramaphosa and the US president at the White House.
Funding to South Africa largely went to HIV clinics, as the country has one of the highest HIV-positive rates in the world. Earlier this year, the Trump administration pulled around $436 million in HIV treatment funding and prevention in South Africa, which was funded through USAID.
Godongwana said the budget is prioritizing what is most important and is deferring other programs until “our resources allow.”
“The spending pressures that may require funding later this year include, among others, the withdrawal of the presidential emergency plan for AIDS relief called PEPFAR funding, particularly which was through the USA,” he said. “We’ve not made provision for the allocation for that now.”
In the last budget, South Africa set aside 28.9 billion rand ($1.6 billion) for health spending. This year’s allocation has dropped to 20.7 billion rand ($1.1 billion). The reduced funding is intended to support about 4,700 existing health jobs, hire 800 newly qualified doctors after their community service, and help cover shortages in medical supplies, services, and outstanding payments.
Enoch Godongwana presented a new budget to parliament—one without the value-added tax increase that caused public pushback—and said that without the revenue from said tax, the country would be in the red, the Associated Press reported. The finance minister spoke shortly before the contentious meeting between President Cyril Ramaphosa and the US president at the White House.
Funding to South Africa largely went to HIV clinics, as the country has one of the highest HIV-positive rates in the world. Earlier this year, the Trump administration pulled around $436 million in HIV treatment funding and prevention in South Africa, which was funded through USAID.
Godongwana said the budget is prioritizing what is most important and is deferring other programs until “our resources allow.”
“The spending pressures that may require funding later this year include, among others, the withdrawal of the presidential emergency plan for AIDS relief called PEPFAR funding, particularly which was through the USA,” he said. “We’ve not made provision for the allocation for that now.”
In the last budget, South Africa set aside 28.9 billion rand ($1.6 billion) for health spending. This year’s allocation has dropped to 20.7 billion rand ($1.1 billion). The reduced funding is intended to support about 4,700 existing health jobs, hire 800 newly qualified doctors after their community service, and help cover shortages in medical supplies, services, and outstanding payments.
The country has been plagued by issues for years, including criminality, the inability to maintain its power grid, and health-related crises. In 2023, the country could not meet the energy threshold needed to keep the lights on for millions of South Africans.
In order to prevent the collapse of the country's power grid, state-run power company Eskom scheduled load sheddings that last up to 12 hours a day. In South Africa, the scheduled power outages have been going on for 16 years and, according to NPR, President Cyril Ramaphosa and "the ruling African National Congress Party has done very little to prevent its imminent collapse."
