South Africa’s health takes center stage, as Nigeria & Ghana roll out more policies

Welcome back to the Vault.

This week we are discussing:

• South Africa’s Health Insurance Act
• Federal Court’s affirmation for Customer Due Diligence Regulation
• Organ transplant policy introduction in Nigeria
• CNG policy incentives in Nigeria
• Ghana’s National Roaming Policy

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South Africa’s ambitious Health Insurance Act raises concerns

Only a few days before the South African national elections (which will hold on 29th May 2024), the President of South Africa, Cyril Ramaphosa has signed into law, a new Health Insurance Act, that seeks to provide universal health care to everyone in South Africa.

The National Health Insurance Bill was initially passed by the nation’s National Assembly in June 2023 but only assented to by Mr Ramaphosa on 15th May 2024 – two weeks before the elections, sparking accusations from the opposition that the President has instituted a program that is fiscally unsustainable but was approved to score political points in a bid by the ruling African National Congress (ANC) to sway votes in the coming elections and mitigate its political decline. The ANC is projected to lose its majority in parliament for the first time since it secured power following the end of apartheid.

• Presently, only 16% of South Africans have access to private health insurance.
• 84% of South Africans depend on the government for provision of healthcare but fiscal constraints pose a key challenge. The public healthcare system is currently oversubscribed, understaffed, and underfunded.
• The government believes that the private and public sectors require reform to ensure that quality of health is improved. The intention, therefore, is to pool funds from both sectors into one fund in the hope that such move will lead to better quality of services, and, in turn, improved health outcomes.

Persons to be covered under the Act, include citizens of South Africa, permanent residents, refugees, inmates and some foreign nationals. Asylum seekers and illegal immigrants will only be eligible for notifiable conditions and emergency medical services. All children are covered for all benefits subscribed by the fund.

While implementation will occur in phases and is expected to be completed by 2026, critics insist that the scheme lacks a cogent and sustainable funding plan, will further strain public finances, restrict patient choice, undermine the quality of medical services and push the best doctors away from the country.

Federal Court affirms CBN’s policy on social media accounts for KYC

Last year, the Central Bank of Nigeria (CBN) introduced Customer Due Diligence Regulations to enhance compliance with existing anti-money laundering, as well as counter-terrorism financing legislation.

One of the key requirements that caused controversy was the CBN’s request for financial institutions (such as banks) to collect and verify customers’ social media handles as part of their Know-Your-Customer procedures – a requirement that was soon challenged in court on grounds of potential privacy violations. The Federal High Court in Lagos upheld the regulation last week, ruling that the request for social media handles did not amount to a breach of privacy.

As the legal challenge has been dispensed with, the following concerns remain –

• the requirement for collection and verification of customers’ social media handles by banks imposes additional a burden on the banks;
• a customer’s social media interactions could potentially determine or influence his / her suitability, since collection of the social media information is part of KYC requirements that serves to determine whether a bank can do business with a prospective customer or continue operations with an existing customer;
• customers that do not operate any social media account (e.g. the elderly or illiterate persons) would be negatively impacted since there is no law that requires customers to operate a social media account. It is also unclear what would happen in the case of existing bank accounts of persons without social media accounts;
• the policy inadvertently places a further hurdle to financial inclusion, since the unbanked population are comprised of persons that are unlikely to operate social media accounts; and
• knowing that Nigeria’s security agencies can secure the social media information from the banks (or via the CBN), the fear of monitoring could stifle free speech typically exercised on social media platforms.

Still on Nigeria

New policy guidelines on Organ Transplant

The Ministry of Health and Social Welfare has notified stakeholders of the Nigerian government’s intention to release new national guidelines on organ donation and transplantation in the country.  The guidelines are a response to the rising cases of untoward activities in connection with organ transplant in Nigeria and are intended to regulate the practices of operators in the sector.

The Transplant Association of Nigeria has also asked the government to invest in medical infrastructure locally to address organ transplant tourism. Nigeria faces challenges due to inadequate infrastructure and equipment with an insufficient number of kidney transplant centres in the country.

CNG policy incentives

Nigeria’s federal government has announced plans to introduce measures to incentivise importation and investment in vehicles with Compressed Natural Gas (“CNG”) and kits. One of such incentives would be exemption from customs duties for importation of CNG vehicles, as well as associated kits. Other related incentives will apply to manufacturers and importers of CNG vehicles.

The Nigerian government aims to achieve conversion of one million vehicles out of ten million petrol-consuming vehicles in the country by 2027, which is estimated to save Nigeria between US$2.5 – US$3.5 billion a year.

National Roaming Policy introduced in Ghana to improve connectivity

Ghana’s Minister of Communication and Digitization has announced that the government has commenced the implementation of the National Roaming Policy. Under this policy, network providers will be able to use each other’s infrastructure where necessary.

The goals of the policy are to enhance network connectivity for consumers and increase network access across the country and increase the number of cell sites by 1,006 to boost connectivity and digital services nationwide.

• Currently, 20% of Ghanaians lack access to the internet due to a network connectivity gap.
• For investors and businesses, the increase in connectivity will provide a platform to expand digital services and product offerings to a broader section of the population, especially in complementary product lines such as digital financial services and mobile money.
• Overall, the policy will foster digital inclusion in Ghana.

Data Vault: Health Expenditure in South Africa

Still on the South African health sector, here is some data on the current health financing landscape: 60% of total health spending comes from the government, while out-of-pocket accounts for just 5.5%.

South Africa Health Spendings

Source: WHO, Global Health Expenditure Database

What we are also following

We’re also tracking some events in the news, and how they may affect the decisions of policymakers.

Nigeria | Student loan program commences

The student loan program will begin on May 24, 2024. This program was established by the Access to Higher Education Act, signed by President Bola Tinubu in April, to ensure students from low-income households can pursue university education with the support of government student loans.

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