Appropriation Bill: DoH & DLRRD briefing; with Ministers and Deputy Minister

Meeting report

DALRRD: Minister's overview

Ms Thokozo Didiza, Minister of Agriculture, Land Reform and Rural Development (DALRRD), said the Department had been reconfigured. This process had brought together the Department of Land Reform and Rural Development and the Department of Agriculture, Forestry and Fisheries, although the functions of Forestry and Fisheries had been transferred to the Department of Environmental Affairs (DEA).

The redesign of a fit for purpose structure was being undertaken. This was following the outcome of the Presidential Panel on Land Reform and Agriculture. The panel carried out an independent analysis and made recommendations for the agricultural reform process, reflecting on successes and failures. The panel affirmed that South Africa needed to focus on land reform and rural development, but more efficiently than it had done in the past, as the existing inequalities in land ownership needed to be addressed. Black South Africans remained on the margins of these activities.

An approach to face these challenges head-on also meant that DALRRD needed to acquire more land for redistribution purposes and strengthen the tenure rights and security for all citizens. There had been some level of progress in the redistribution and restitution in the three pillars in land reform, though with tenure they had not managed to achieve the desired improvement or progress.

Notably, the panel had decried the fact that there was no dedicated fund for land reform, as this would assist, in their view, the better resourcing of land reform in general. Along with the Inter-Ministerial Committee for Land and Agriculture, they were still exploring the idea of a land reform fund as suggested to government by the panel. Blended finance for agricultural development was a method being assessed, along with the feasibility study. In March 2021, with the Industrial Development Corporation (IDC), the first leg of this was launched.

The high-level panel had been critical of land reform. There were shortcomings in land administration and poor settlement support for the process, particularly to beneficiaries who had newly received land. The medium-term strategic framework (MTSF), strategic plan and annual performance plan (APP) had given this background. The disruption of the COVID-19 Pandemic meant that the DALRRD had to look at how to build back better, with their vision anchored and focused on the aforementioned reports.

Following the tabling of the national budget in February 2021, DALRRD had to reflect on how they could do more with less while delivering on their mandate to:

Address unequal land ownership through land reform;
Accelerate restitution, particularly with older claims launched between 1995 and 1998;
Address needs for agricultural settlement and development;
Build inclusively for sustainable food security;
Contribute to vibrant and resilient rural communities;
Strengthen regulatory systems and exports; and
Increase agriculture infrastructure, including land and water access.

The DALRRD was well aware that land reform was not just about agriculture, but also human settlements and other industrial needs. Spatial patterns in South Africa also needed to be addressed from apartheid spatial planning. The key question was whether the budget provided to DALRRD was sufficient to fulfil their mandate. The answer was no. Government constraints were prevalent, even before the COVID-19 pandemic. One of these interventions was to work with the private sector. DALRRD needed to revisit their provincial office mandate, particularly those involved with the DALRRD footprint, to remove duplications between the two groups, as these were concurrent functions with agriculture. Previous efforts by the national DALRRD had depleted meagre national resources.

There had been interventions during the COVID-19 pandemic, which Minister Didiza described. In order for DALRRD to cushion farmers, they had requested the reprioritisation of funds from their budget to assist with personal protective equipment (PPE) during Lockdown Level 5. Smallholders with an income of R20 000 to R1 million were also assisted with production input vouchers for feed and medicine and other inputs. Commercial farmers were assisted with handling of their loans, particularly those with the Land Bank. These interventions had had a positive impact. There were challenges, as reported by the Auditor-General (AG).

Progress was also made on restitution in 2020. DALRRD was able to finalise approximately 385 land claims, which amounted to the transfer of 65 100 hectares of land. For redistribution, they acquired approximately 22 000 hectares for those who needed it. Challenges on land reform were attributed to inadequate financing. The land administration and lease management was another challenge, along with a lack in capacity for support to land owners. Citrus and grain exports were doing well. Poultry and chicken exports were gaining ground, though concerns remained on biosecurity. There had been outbreaks of Foot and Mouth Disease (FMD), particularly in Limpopo, Mpumalanga and KwaZulu-Natal. African Swine fever in a number of provinces in 2020 was another challenge. The brown locust, particularly in the Northern Cape, remained a challenge especially as it spread to the residential areas of Kimberly. Avian flu was in three provinces. Patterns of drought persisted, and had negative impacts on rural farming communities.

DALRRD appreciated the donation of R7 billion from the Finance Minister to the Land Development Bank, though they felt it was important to re-orient the bank on their development mandate in the Land Bank Act (2002). A further reduction would erode the capacity needed to support agriculture. DALRRD was thus of the view that it was necessary to examine their support for the Agricultural Research Council (ARC).

DALRRD budget issues

Mr Ramasodi Mooketsa, Director-General (DG), DALRRD, took Members through the remaining contents of the presentation.

Overall, the budget allocation was R16.920 billion, of which 52% was to be spent on land reform and development as per Programme Three. A key challenge was the huge property portfolio, with very little allocation for rates and taxes. DALRRD was struggling to cover the rates. The long term budget reduction of R1.4 billion had resulted in APP targets being revised and reduced.

Discussion

Mr O Mathafa (ANC) referred to the Minister’s initial input on the role of the private sector in growing the country, and asked if the Minister was aware the Afrikaner-Africa Initiative (AAI). This group was of the view that the Land Bank would collapse. What was DALLRD’s view? Would they be willing to be amenable to this organisation’s view?

He agreed that the budget was constrained, and finances needed to be cut, though there were certain efforts that did not require funds. For example, what was DALRRD doing to cut red tape and assist small-medium farmers to enter into the agricultural mainstream? If it had a target of small-medium scale farmers that wanted to commercialise, where was this process? In the budget cuts, the most cuts would be to the detriment of new entrants to the market. The ones trying to enter into the sector were black, women and individuals with disabilities. If budget cuts limited state capacity, how would they partner with the private sector, so that this was not a hammer blow to previously disadvantaged groups?

Regarding staff morale and management commitment to government priorities, an emerging farmer and others on the ground had complained that there had been no follow-up on their meeting, though the Member of the Executive Council (MEC) had responded speedily when approached by Mr Mathafa. How were the 1 300 vacancies in the DALRRD distributed?

Ms D Peters (ANC) asked about the support DALRRD was expected to give to emerging farmers. How much was spent on skills development and transfer in support of emerging farmers? Were there sector-specific programmes? In the Ministers’ view, were emerging farmers aware of their responsibility for food production, so that their land allocations were not wasted? During the public participation inputs, were the parcels of land that were productive protected against encroachment? They needed to invest in land recovery for agricultural production. Were they making sure farmers have access to water? There were incidents where farmers sold their plots to the government, though without water rights. This had been reported in the Pretoria, Tshwane and Rustenburg areas.

Regarding land availability, DALRRD took very long to process applications from emerging farmers. She appealed to the Minister to take up the cause of access to land, particularly for women. The length of time that DALRRD took to process applications with the Land Bank was unacceptable -- for example, Monate Dairy had waited 18 months. She had seen women sitting on the side of the road with bags of potatoes, which went to prove their limited resources – where was the access to markets and mentoring? Another concern was stakeholder participation. Was there capacity in DALLRD for this? There was little room too for women to be decision makers and to enter the farming space. Black emerging farmers who might have worked in government or studied agriculture, should be provided with an enabling environment.

Mr Mathafa asked if there was a project or programme that DALRRD could share that was in line with the legacy they wanted to leave.

The Chairperson said what was clear was that they needed more time with DALRRD. It was important to understand the exact challenges and work together. There was an allocation for the head office in Pretoria. What was the reason for this? Was it an opportune time to start such programmes, especially since they were struggling with rates and related costs at other buildings?

He also asked about the history of spending in the DALRRD. Where did they underspend, and why? What could they expect in the following financial year? The Committee was of the view that the permanent solution was to get the economy going. What role did DALRRD see itself playing in that regard? They wanted to see efforts that dealt with localisation and promoting exports, for example. South Africa was the most unequal society in the world, and since DALRRD was appropriating funds, they needed to help emerging farmers to access the market. The government was the biggest consumer of goods and services and could help these farmers with selling their produce.

DALRRD's response

Land Bank
Minister Didiza responded on the private sector role and the Land Bank. She asserted that the DALRRD was very inclusive. They had worked with a range of stakeholders. As such, if the Afrikaner-Africa Conference approached and engaged DALRRD, they would work with them where they felt they had strengths and could contribute. Despite this, the Minister disagreed with the sentiments that the Land Bank could not be saved, especially because the Minister of Finance had made a contribution of R7 billion to it. She felt this was not in vain. They would find ways to secure the final allocations, because it was a critical institution. When the Land Bank experienced problems, it had a direct impact on the agricultural sector. She and Finance Minister Mboweni had had meetings with lenders to the Land Bank in an attempt to see how they could strengthen it.

Non-Financial Interventions
Environmental impact studies were a function of the Department of Environmental Affairs, though DALRRD had engaged them, particularly at Cabinet level, to see how best they could attend to issues delaying DALRRD’s systems. Water Affairs required a similar process. They were re-looking how they could address farmers' needs for water rights.

Emerging Farmer Support
There was a challenge of concurrence, where the functions of the DALRRD were shared both nationally and provincially. A look at the equitable share of provincial departments of agriculture showed there were 10 MECs where provincial functions were not capable of being fulfilled through transfers, nor completely through the national government, yet the funding came out of DALRRD’s budget, as noted by the Auditor-General. Veterinary services were an example of this schism between the national and provincial departments. At the national level, DALRRD needed to provide the necessary support in order not to negatively impact exports. Another programme in support of smallholder farmers was the Smallholder Horticulture and Animal Health Empowerment Programme, which provided training and production support. They had also held webinars across the nine provinces, reaching about 2 000 farmers and engaging on their needs. DALRRD would continue to utilise these methods, especially because of the challenges of COVID-19.

Land Administration Delays
DALRRD was looking at strengthening their system, though they acknowledged that accessing land by farmers took time. Land and beneficiary policies said that it was only those working directly for the state that were not beneficiaries of this policy. Those who were married to them could apply and be assessed in their individual right.

Mr Mooketsa said their national development plan (NDP) target was an additional 500 hectares of water for irrigation. They were also overseeing the building of two dams in Clanwilliam and Umzimvubu, which they were looking at with the Department of Water and Sanitation (DWS). The timelines had been reduced, and through their irrigation strategy, they were ensuring efficiency – especially because agriculture used 60% of the water in the country. DALRRD was signing a memorandum of understanding (MOU) with the Department of Defence and the Department of Correctional Services. They needed to ensure consistency of supply from the small-holder farmers. The comprehensive agricultural support programme was key.

DALRRD was leading a cannabis masterplan, where hemp would be provided by October.

Mr Mathafa was correct on the issues of vacancies impacting staff morale. From a departmental level, they had a ‘fit for purpose structure.' DALRRD was also working to ensure they filled vacancies in top-level and critical posts.

The Chairperson thanked DALRRD for their engagement, excused the delegation from the meeting and invited the DOH team to proceed.

Department of Health 2021 appropriations

Dr Zweli Mkhize, Minister of Health, said Department of Health (DOH) would attempt to address issues raised by the Standing Committee. There was a prevalent and pre-existing issue of under-funding to the DOH, coupled with budget cuts in the new financial year. However, they needed to expand considerably to provide quality universal healthcare. The current budget reductions across departments had their own impacts, and much investment was needed, especially as they went towards capacitating National Health Insurance (NHI). They would give an indication of their progress as well as the implication of budget cuts. They were working towards expanding the NHI, and funds were allocated with the Deputy-Director General.

The DOH had learnt many lessons in responding to COVID-19, which would be used in rolling out the NHI between the public and private sectors. Its greatest needs were around funding and progress with infrastructure. The Minister felt there needed to be much more innovative approaches in response to this challenge. The second issue was one of vacancies, not just at the national DOH, but also across the provinces. This was an issue that required financing. The presentation would also include the financial allocations for the vaccine rollout, and would conclude with a request for financial support on rollovers.

DOH funding challenges

Mr Ian van der Merwe, Chief Financial Officer, DOH, took Members through the presentation.
 
There had been a considerable regression in the public share acquisition of health insurance -- this while there had been a 12.1% growth in the uninsured national population. The highest population growth was experienced in Gauteng and the Western Cape, which together by 2030 would represent 40% of South Africa’s total population, and was negatively impacted by current healthcare provision. The DOH was experiencing significant financial constraints.
There had been a budget cut of R24 billion, which would either be pooled from wage freezes or the provision of goods and services. The DOH continued to request adequate funding for COVID-19 recruitment.
The COVID-19 vaccine rollout funding allocation stood at R5.95 billion from the DOH, plus R4 billion from National Treasury (NT) in the 2021/2022 financial year. The DOH had set aside R3 billion for 2022/2023. It was engaging the NT in weekly meetings, particularly around the predicted shortfall of R4.8 billion on the COVID-19 vaccine rollout. It had received some refunds for the AstraZeneca vaccines. Much hope was placed in the NHI to address COVID-19.
There were two apps in particular which were described as ‘good investments’ to be taken forward -- Covid Connect and Covid Alert SA.
The Health Facilities Revitalisation Grant (HFRG) framework had changed significantly in the past two years, to make provision for maintenance of existing facilities, instead of focusing on new facilities. The DOH faced challenges with the risk of a loss of assets, and community engagements.
Section 16 of the Public Finance Management Act (PFMA) had been invoked in securing R1.1 billion for vaccine manufacturer payments. The AstraZeneca payment had been delayed, because the documents had been signed on the last day of the previous financial year.
There was a 27% vacancy in administrative roles -- 87 positions out of over 300 total positions.

The DOH concluded by requesting support from the Standing Committee on Appropriations. They made a rollover request for vaccines (R614 million), logistics (R3.7 million), and information technology (R39. 2 million). It had put in a bid from the national stimulus package for Port Health Services (R123 million).

Discussion

Mr Mathafa referred to budget reductions. In DOH’s view, which areas were of most concern and how were they likely to impact on its mandate? How would they introduce mitigating measures? R468 million had been reduced from training in the human resources (HR) grant, and this would have a negative impact on skilling and re-skilling. What measures were there to mitigate this? There were issues of accruals, which had been causing headlines for months. The Standing Committee had identified this as a priority, especially because of its impact on the budget. In 2011, accruals were at R2 billion. Was the DOH able to provide a cumulative figure up to 2021? This request was based on understanding whether there were emerging trends – the Committee wanted to know if there was any improvement on this issue. Finally, he asked for an indication of the provinces and hospitals that were contributing the highest to medical claims. What was being done about the systems and individuals contributing the most to these claims? Had any money been retrieved from unscrupulous and fraudulent health claims, particularly where those who were trusted with public resources were proven to have abused this? Had any lessons been learnt through the vaccine expenditure rollout?

Ms Peters thanked the Minster Mkhize for his consistency in responding to the Standing Committee on Appropriation. She recalled a lasting childhood memory of a nurse telling her that if she was ever very sick and could not get immediate help and feared she would die, she should ‘go to a public facility.’ On 27 April, she had visited Kimberly Hospital, which was clean and staff were attentive. This was attributed to COVID-19 compliance by the doctors and nurses. This proved there were lessons from the implementation of COVID-19 protocols, which had made hospitals truly adhere to the Patients’ Rights Charter. The Robert Mangaliso Sobukwe Hospital in Kimberley was the only provincial hospital in the Northern Cape, and the only referral facility for all the districts. If this facility could be elevated to adherence and compliance in the face of a pandemic, they were en route to implementing other measures and developments.

Ms Peters congratulated the DOH on the speed of the vaccine rollout, especially with online registrations. She was concerned, however, about the rural community, including the aged and disabled, who did not have access to online registration. She had asked people in rural areas, after getting her injection, and was disturbed to hear how they struggled with digital access. If the DOH did not focus on penetrating rural areas, these locations would struggle with getting people vaccinated. The reality was that COVID-19 was still upon them, the flu season was approaching, and they had water availability issues. She questioned why there was not a door-to-door effort, particularly for those who did not have cellphones.

She said the medication delivery system, particularly for chronically ill people, had improved in the COVID-19 time, and was restoring the dignity of people. She suggested there should be an increase of doctors at primary healthcare facilities, as this would increase efficiency. They needed doctors that provided primary health care (PHC) and also worked in the hospitals – though this workload might be too hard on them. In the Northern Cape, for example, there were about 2 000 nurses. Was it possible to truly render a service with 2 000 nurses? They either needed to increase their training capacity, or be able to recruit more. The current recruiting from agencies was insufficient, because these nurses were supposed to be retired.

Were they still on track with the rollout of the NHI? What would it take for the Minister to ensure the NHI Policy Practitioner position, which had been vacant for four years, would be filled or reviewed? If they could not find the skill they deemed necessary, why did they not recruit on the continent or internationally?

Ms Peters continued by asking the Minister about the COVID-19 status in India. There had been concerns about reactions to the Indian variant, which were not the same as when the South African variant had been discovered. Why was this? Was it a BRICS (Brazil-Russia-India-China-SA) matter? Was there a bilateral engagement agreement? What about the impact on health services and port services? People who came from outside would be first received by Port Health, and it had been recorded that cases were recorded in Durban where ships carrying Indian nationals had brought increasing numbers of Covid-19 cases to ports of entry. Why did the National Coronavirus Command Council (NCCC) not include this in their restrictions?

Were private undertakers and mortuary services being trained and supported by the DOH to manage COVID-19 deaths? At the beginning of the COVID-19 pandemic in South Africa, there had been issues of tents, but now there was no register or indication of COVID-19 related deaths/corpses. There needed to be support, monitoring and training for this. Sometimes families had unrealistic demands, but they could not overlook the protocols in the middle of a pandemic because of the pain they were going through, as this created new pain.

Mr X Qayiso (ANC) congratulated the DOH for their success thus far with management of the COVID-19 outbreak. Health was a critical factor for economic growth. A healthy society meant an active, productive population. Thus, the reprioritisation developments should remain prioritised without tampering. The time was also ripe to test the capacity and feasibility of the NHI as a major implement.
He asked about corruption as an area of cost, as this had not featured in the presentation. To what extent had the DOH moved to recover lost funds? Corruption was a cost in itself, so when they spoke about recovery, they also needed progress on dealing with corruption.

He compared the 313 staff position decrease since 2014 with the increase of over 63% in the compensation of employees (CoE), and said this seemed paradoxical. He asked for an explanation.

What lessons had the DOH learned with the vaccine rollout, so that the Standing Committee could intervene?

There was a huge figure (R13bn) on medical legal accruals, which was concerning for the Standing Committee. They preferred that this figure be broken down, with a summary up until 2021. Comparing the DOH to other national health departments, South Africa had a higher-than-average situation with disease. What was the cause of this?

There was an element of research that was required when it came to COVID-19 management. Had any budget been allocated for this? State-owned pharmaceutical companies were another example of developments which created the space for DOH to look for budget to ensure South Africa could manage, produce and run its own vaccine rollout. Until then, South Africa would be able to get only what they were offered, and not have a say. What was the DOH’s interest in pharmaceutical establishments? Was there any endeavour in this regard?

Ms N Hlonyana (EFF) asked about the vaccine rollout. What was the rand cost of vaccinating one person? Was there any other way to reduce the R39.2 million in financial support that was requested for IT, perhaps by working with other departments, such as the Department of Communication and Digital Technology (DCDT)? How much had been set aside for the Compensation Fund for those affected by the vaccine?

The Chairperson said there was no doubt the government’s intervention to save people’s lives would result in success in comparison to other countries, both emerging and developed, that had failed. The challenge was not to drop their guard. What could be attributed to the rising number of infections in the Free State, Northern Cape and North-West? What was happening with the Sputnik vaccine and others?

The Committee welcomed the opening of the Aspen Eastern Cape production of Johnson and Johnson COVID-19 vaccines. Developments at the DOH needed to be permanent and replicable for sustainable development. Government was one of the biggest buyers of pharmaceutical products. Were there similar areas where the process of vaccine procurement could happen locally? Exports could enhance the national economy. From a budget perspective, they wanted to see the development of internal capacity by supporting local business and endeavours, instead of giving the work to other countries.

The lack of market for emerging farmers was a concern discussed with the previous department. The DOH had also referred to their role in buying from emerging farmers. Was this a consideration? Were there any constraints?

Had there been any under-spending at the DOH? If so, what was the reason, and how would they correct this? Regarding rollovers, what had the reaction from the NT been thus far? What would happen with facilities built to address COVID-19 patients? Were the buildings being repurposed? If so, for what?

DOH's response

Mr van der Merwe said that medical legal claims at one stage had stood at R2 billion. The introduction of training grants had come over the previous two financial years. Though the DOH redistributed funds where provinces were under-spending, the reductions had been forced on the DOH by the NT.

Staff decrease
The DOH had noted in their analysis that CoE had grown as a percentage of total budget. This was a direct factor related to the real decrease in budgets over time. The Northern Cape, for example, had serious budget decreases in total, but the COE, as a fixed cost, had stayed the same, which pushed up the percentage. This ultimately meant that less finance would be spent on non-negotiables, such as goods and services.

Accruals
Though there would always be accruals, they needed to be managed and controlled, and this was the issue. Accruals of 30 days were acceptable, but the DOH’s accruals were running at more than that. If the Standing Committee agreed, he would commit himself to doing an analysis of the accrual position per province.

IT costs
IT costs were incurred for the system and the ongoing support for it. The cost was also derived from what they would spend, regardless of the hospital patient registration systems.

Under-expenditure
It was true that there had been some under-expenditure on goods and services, where programmes had been put on hold because of the COVID-19 lockdown. The biggest of these was the rollout request for vaccine rollout, which was the greatest factor of the DOH’s under-spending in the past financial year. That being said, they had spent 91% of their total budget.

Dr Sandile Buthelezi, Director- General, DOH, said that delivering health services was an intensive exercise. Staff shortages therefore impacted the DOH’s ability to meet their mandate – especially in rural areas. If it was unable to appoint nurses and doctors, they could not carry out on their departmental responsibility. Without money, it was difficult. They had partners and donors, but this was short-lived. There were also special programmes, such as the Presidential Stimulus Package, which the DOH was using. They needed a longer-term solution for closing gaps. When it came to training, they needed to produce their own skills for the country. Specialists, for example, were mostly in the private sector.

Infrastructure
Infrastructure was another challenge where the DOH had huge backlogs. They were trying to develop mechanisms for capacitation, such as working with the private sector. For the private sector to invest, however, they needed to see a huge improvement in the fiscal outcomes for infrastructure.

Medical legal claims and accruals
The COVID-19 Vaccine Injury No-Fault Compensation Scheme had been developed as one of the requirements of the vaccine roll-out. An advantage of this was that if properly utilised, the scheme could be used in future for medical legal claims for better management in South Africa. This was about protecting the people while protecting the fiscus. The DOH had channelled much investment into this system, and Dr Buthelezi asserted it was one of the best systems it had produced. The many functionalities of the system meant that the DOH could improve their patient record system. People could be registered, SMSs could be sent, and reporting on adverse events could take place. This would also help with the billing interface and linking people to the no-fault compensation scheme.

NHI
Though COVID-19 had deterred progress on the NHI, the Portfolio Committee (PC) on Health had resumed hearings in that week, and progress was being made. A Deputy Director-General (DDG) had been appointed to fast track the work in progress.

Vacancies
There were a number of vacancies. Two factors in particular contributed to this. The first was the huge budget cut. The DOH was reviewing their structure and had just had a workshop  with the Department of Public Service and Administration (DPSA) to ensure their structure was fit for purpose. They needed to configure their structure in a supportive way.

India's COVID-19 outbreak
There had been work on the genomic sequencing team, checking the kind of strains entering the country. It was not only particular to India -- variants of concern were also coming from the United Kingdom and other countries -- so one should not solely point out India. Through the National Coronavirus Command Council (NCCC) and the Ministerial Advisory Committee, the DOH had introduced additional measures at ports of entry for people coming into South Africa. Previously, only a Polymerase Chain Reaction (PCR) test not older than 72 hours was required. Now, those entering from countries of concern were subject to mandatory testing, with subsequent processes after testing.

Private mortuaries
Through the DOH’s environmental health services, they worked closely with mortuaries and training had been carried out. There were also certificates of compliance for private mortuaries, though the mortuaries had been against this, as featured in the media. Dr Buthelezi had personally met with these groups with the Department of Home Affairs (DHA) regarding this.

Sputnik and other vaccine registrations (Cuba and China)
The Standing Committee was aware that the responsibility for the registration of any medicines or health products was with the South African Health Products Regulatory Authority (SAHPRA). The DOH was working with SAHPRA, and there had been a number of meetings with ambassadors of different countries, as they wanted to diversify South Africa’s vaccine menu. In the previous week, SAHPRA had presented their progress inter-ministerially. The Sputnik and Sinovac vaccines would hopefully provide the outstanding information soon so that they could be registered in South Africa. The Minister of Health had stated that the DOH was committed to buying extra doses from these manufacturers.

Local vaccine production
The Department of Science and Innovation (DSI) was leading efforts to develop different streams for vaccine efforts, based on what was possible in the country. They could provide a report on this work stream -- for example, in the way Aspen would produce Johnson and Johnson vaccines. Much commitment was required from the government, not just to provide for South Africa, but the entire continent.

Increasing COVID-19 infection rates
There had been particular concerns in the previous week about the climbing infection rates in Gauteng, the Free State, North-West and the Northern Cape. All these provinces were on an upward trajectory. Analysis from the Free State showed clusters in schools. Clusters were the most problematic. The Northern Cape infection rates showed they had lingered with infections – they had not left the second wave.

Individual vaccination costs
Dr Anban Pillay, Deputy Director General: Health and Compliance, DOH, said that no patient should pay for the vaccination when they received it – the vaccination should be free at the point of care and funded by the government. Those on medical schemes would be provided for by the scheme. In these cases, the cost of the Pfizer vaccine was R354 per dose, plus R80 to the vaccine administrator -- usually a pharmacy or general practitioner (GP). This was paid directly to the service provider in each case, though the person that went to a health facility, public or private, would not pay. The vaccine was made free at those points.

Dr Joe Phaahla, Deputy Minister of Health, said the Central Chronic Medicine Dispensing and Distribution (CCMDD) programme had seen the dispensation and delivery of chronic medicines directly to clients. Their target was to increase this outreach, especially because the need for people to come to facilities was reduced when they delivered, and this also helped to alleviate facility congestion.

Employees and compensation paradox
Part of the increase in COE cost was due to overall budget growth, which was not at all close to the COE increase. Over time, the DOH had negotiated and provided favourable compensation to employees, but it was now starting to crowd out other services and they could not ignore this. Even when the economy grew, some benefits, such as allowances, would need to be reviewed.

Vaccine Rollout
Spending on vaccines was an investment in the future, and Dr Phaala was pleased that citizens were beginning to recognise this. The reduced spread of the virus, more expanded health facilities and more people getting back to work, was a direct effect of the vaccine rollout. This was not just an investment in health, but in economic growth.

Minister Mkhize said that the Department was reviewing its organogram, and some vacancies were not frozen, but in the process of being filled. It was a matter of having an organogram that was taking a while to be approved.

Medical legal claims
The DOH had a team analysing claims, and they wanted to reduce them significantly, particularly the unnecessary fraudulent, corrupt, and repeated claims. They had also obtained a court ruling which allowed them to factor in the cost of government provision. Ultimately, they were looking for a fund and legislation that would cap the cost of the claims and allow easy movement and access to the fund in the case of movement and normal practice without meeting lawyers, which came at a huge cost. The areas with the most problems were obstetrics and gynaecological problems, with deliveries leading to long-term brain damage to children. These were the most challenging matters.

NHI
The DOH was working on the basis that public (state) facilities would be the health provider of choice because of quality, and not because people had no other options. The Department wanted to be proud when grandmothers told their daughters to go to public hospitals for care. Service excellence needed to be their pride. They were still moving towards the NHI, and would be filling the vacant posts.

Vaccine rollout and rural healthcare
The concerns around the provision of vaccines and access in rural areas were valid. They did not want to run into logistical issues, such as transport for repeated doses and tracing those in unreachable areas. They were going to use Johnson & Johnson vaccines for rural areas within the next few days. Community healthcare workers would be going into the communities to encourage registration. The establishment of proper primary healthcare through the NHI was their goal. They would prioritise care for the rural communities so they did not need to a far off hospital.

India COVID-19 outbreak
The situation in India was concerning. Large crowds and super spreader activities, including religious and political activities, were causes of the outbreak, and the DOH was trying to avoid this in South Africa. India also had a variant which had been introduced to South Africa, so the DOH’s mainstay prevention measure of masks, social distancing and sanitising remained important. The DOH was following developments in India, especially as to whether the vaccine would create immunity to it. It seemed the Indian variant was susceptible to most of the vaccines. Minister Mkhize therefore hoped that South Africa’s vaccine rollout would not be frustrated by the Indian variant. The Department had not acted immediately because South Africa did not have direct flights from India, but had rather increased its surveillance at the ports of entry. They had been able to spot a number of crew members who had passed through India, who were being tested at seaports and airports. If they found someone who tested positive, they did genomic sequencing. The reality was that all countries posing a risk to South Africa needed to be evaluated, not just India.

Citizens' role appreciated
Minister Mkhize went on to thank South Africans for their role in fighting COVID-19, as well as the guidance from the President, the government and various sectors of society. In addition, the DOH saluted health workers for their courage and determination to save people's lives. Though they had wanted all health workers to be vaccinated by 21 May, it was clear after contact with health worker groups that they would need more time. Health workers needed to be confident of their protection, as COVID-19 numbers were on the rise. He had been in contact with the Secretary-General of the Nursing Association, who had indicated they were doing everything to encourage members to get vaccinated, though it was clear they needed more time.

Corruption
The DOH had introduced a concerted effort towards fighting corruption, and they would be able to look at reports in concrete terms in future.

Vaccine manufacturing
Vaccine manufacturing was a priority, and work was being done by outside groups to ensure that facilities were capacitated. The DOH endorsed strong action not just with vaccine manufacturing, but also pharmaceutical manufacturing (PPE’s etc). Vaccination costs were less for Johnson and Johnson, and double the price for the Pfizer vaccine. The basic cost was R150 plus R70 for administration (R220). If the same procedure happened again, this would be the same cost twice, but excluded logistics costs.

Former Chief Justice Sandile Ngcobo had been appointed to head the No-Fault Compensation Fund, so work was on course to take this through. The DOH shared the Standing Committee’s concerns about rising infections in the Free State, North-West, Northern Cape and Gauteng. This was a slow spread due to clusters and sheer proximity.

Minister Mkhize had been in touch with the ambassadors with regards to the Sputnik and Sinovac Vaccines, asking them to get in touch with the mother-manufacturers. What was missing in the supply process needed to be provided.

Job creation and economic growth was a tricky area, because the state had huge potential for procurement. The DOH therefore needed to focus on increasing purchases from local manufacturers. There were issues of competition which came along with this. Competitive bids sometimes resulted in manufacturers from outside South Africa winning the bid. All of these factors were relevant when focusing on local farmers and manufacturers. The DOH did not procure directly from farmers, for example, because it had service providers which supplied food. It would focus on the issue of local service providers, while prioritising quality and cost-benefit analysis.

He said the DOH appreciated the support of the Standing Committee.

The Chairperson thanked the Minister, along with frontline workers for their efforts. He commended the DOH as a department that always heeded the call to engage with the Standing Committee.

The meeting was adjourned.