Sakeliga's NHI Legal Battle has garnered attention. The business lobby group Sakeliga has become the latest organisation to mount a legal challenge against South Africa's contentious National Health Insurance (NHI) Act.
They filed papers at the Pretoria High Court to have it declared unconstitutional and invalid. The focus of Sakeliga's NHI Legal Battle is to highlight the impracticalities and financial havoc it could wreak.
The organisation argues that the plan for universal health coverage is profoundly impractical and financially ruinous for the country's already strained economy.
"Unthinkable" Tax Hikes Required to Fund NHI
In its application submitted on Wednesday, Sakeliga presented research. It indicates that the successful implementation of the NHI would demand an extra R500 billion in state funding each year. The group's NHI Legal Battle claims this would necessitate an "unthinkable" 30% increase in income tax.
Sakeliga argued that after seeing the public’s fierce resistance to a small VAT increase in the 2025 budget, the government cannot feasibly implement the tax hikes required to fund the NHI.
The comments refer to the recent political difficulties faced by the government of national unity over the 2025 budget. Disagreements over Finance Minister Enoch Godongwana's proposed VAT increase led to delays in the implementation process. Eventually, a half-percentage-point rise was passed.
A Recipe for Fiscal Collapse?
Sakeliga contends there is no viable funding model for the NHI. The group's NHI Legal Battle warned that if the government attempted to finance the scheme through existing tax revenues and borrowing, it would lead to disastrous consequences.
“It would have to make damaging cuts to other public services and spending obligations. Additionally, it would increase government borrowing from unsustainable levels, risking fiscal collapse and serious economic damage,” the organisation explained.
They highlighted South Africa’s slow economic growth, limited healthcare resources, and a history of "severe, ongoing governance failures" as key reasons why the NHI is unsuitable for the nation.
Constitutional Grounds for the Challenge
At the heart of Sakeliga’s legal argument is the claim that the NHI Act violates section 27 of the Constitution. This section guarantees the right to access healthcare services. It obliges the state "to take reasonable legislative measures, within its available resources, to achieve the progressive realisation" of this right.
Sakeliga asserts that the act is irrational, as the state fundamentally lacks the "available resources" to implement it. Furthermore, they argue that rather than progressively realising the right to healthcare, the NHI would lead to an overall decline in the quality and availability of health services for the public.
The group has requested that the court set aside the act in its entirety. Alternatively, they want any parts deemed unconstitutional to be struck down.
A Growing Chorus of Opposition
Sakeliga's NHI Legal Battle is now the seventh major organisation to take legal action against the NHI Act. This occurred after President Cyril Ramaphosa signed it into law in May 2024.
It joins a broad coalition of opponents, including the trade union Solidarity, medical scheme administrators, and various associations representing doctors and specialists. Although the act is officially in effect, its implementation has been stalled. This is pending the outcome of these significant legal challenges.
The respondents named in Sakeliga's court application include the ministers of health and finance. Additionally, it includes the President, the Speaker of Parliament, and the National Council of Provinces.