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The Citizen
3 days ago
- Health
- The Citizen
Reality check for the working class: who really pays for NHI?
Both the poor and the wealthy will have to pay for NHI. It will not be as free as government makes it out to be. Do you think the working class will not pay for the National Health Insurance (NHI)? As government presses ahead with implementing the controversial fund, a difficult question needs to be asked: who will pay the real price? Contrary to popular belief, it is not the wealthy elite who will be hardest hit but South Africa's working class, Thoneshan Naidoo CEO of the Health Funders Association (HFA), warns. 'Medical scheme members are often painted as a privileged minority but the truth is very different. Of the 9.1 million South Africans on medical schemes, more than 6 million (68%) are black and up to 83% of employed members earn under R37 500 per month. 'They are teachers, nurses, police officers, civil servants and union members, the engine of South Africa's economy. These South Africans make extraordinary sacrifices to secure access to healthcare. Medical schemes are not luxury products and working families are stretching their disposable income to protect themselves and their families. 'Of the 9.1 million beneficiaries, 4.1 million are employed and form a critical part of the country's taxpayer base. In fact, medical scheme members pay an estimated 74% of South Africa's personal income tax, amounting to nearly R443 billion in government revenue. These same members also contribute significantly to VAT and other taxes.' ALSO READ: Experts warn NHI is economic suicide Free NHI at the point of service, but who pays? Government promises that the NHI will provide comprehensive, high-quality care for all – free at the point of service. But at what cost? According to an economic feasibility study by Genesis Analytics, achieving this vision would require personal income taxes to more than double. Taxes would have to increase to 2.2 times the current average rate and healthcare would consume 33% of the national budget. In less efficient scenarios this could mean tripling taxes and health expenditure consuming up to 44% of the budget. Naidoo says this is based on the unrealistic assumption that tax increases would be entirely directed to healthcare and that there would be no additional allocations for other urgent social needs such as education, social grants and service delivery. Even under a shared resources scenario, Naidoo warns that where total healthcare spending remains at today's R532 billion, personal income taxes would still have to increase by almost 50%, while taxpayers would receive substantially less. Benefit levels would be 43% to 65% lower than the promised comprehensive scenario, he says. 'In short, taxpayers would pay more and get less – less than they currently receive if they are medical scheme members and much less than what has been promised for the scope of NHI services.' ALSO READ: Health funders also heading to court about NHI Act What about section 33 of the NHI Act that prohibits medical aid? A lot has been said about section 33 of the NHI Act that the president signed last year. This section prohibits medical schemes from covering any service that the NHI claims to offer. Naidoo says this means that even if you have the means and willingness to buy private cover, you will be barred from doing so if the service is theoretically offered by the NHI. 'Rather than universal access, this is universal restriction and the result is likely to be delays, rationing and deteriorating health outcomes, with no alternative safety net.' And who will bear the brunt? The working class, Naidoo says. He warns that the NHI Act risks collapsing the very system that currently supports our healthcare infrastructure. 'For the 3.4 million low and middle-income medical scheme members, the impact will be devastating. The NHI Act's funding model is built on their shoulders through higher taxes, the removal of the medical tax credit and reduced access to care.' Healthcare cannot be viewed in isolation from the broader economy, Naidoo says. 'Draining all available funding into a single centralised system without the infrastructure or capacity to deliver, jeopardises not only health outcomes but also jobs, investment and growth.' ALSO READ: NHI regulations 'prematurely' published with legislation not proclaimed yet 43% reduction in medical care for scheme members under NHI He points out that even in the best case shared resources scenario modelled by Genesis, medical scheme beneficiaries would see a 43% reduction in access to care. 'Combined with the ban on supplementary cover, the state will actively prevent people from protecting their own families.' Naidoo cautions that healthcare rationing will become the norm. 'This is not speculation. It is already happening. Public hospitals face routine medicine stockouts, long surgery waitlists and severe staff shortages. In Gauteng, thousands of cancer patients were denied timely radiation therapy, with devastating consequences. When care is rationed, lives are lost.' Section 33 of the NHI Act risks deepening these crises, he says. 'It removes a vital layer of protection for millions. Blocking people from using their own resources to access care is not equity, but rather forced dependency.' However, there is a better way: reform, not ruin, Naidoo says. 'South Africa's constitution guarantees everyone the right to access healthcare. Our courts have recognised the vital role medical schemes play in realising this right. That does not mean collapsing what works, it means improving what does not.' ALSO READ: DTIC plan to implement only some Health Market Inquiry recommendations 'illegal'? Health Market Inquiry Medical schemes are not perfect and reform is essential. Fortunately, Naidoo says, the blueprint exists. The Health Market Inquiry, initiated by the Competition Commission, laid out clear steps to improve affordability, transparency and efficiency in the private sector that include: A supply side (healthcare providers and facilities) regulator for health to oversee negotiated fair reimbursement levels; A risk adjustment mechanism, where medical schemes with higher-than-average risk profiles receive funds through an appropriate mechanism from those with lower-than-average risk profiles, to level the playing field; Standardised benefit packages; Better governance structures to ensure efficient use of resources. ALSO READ: Implementing recommendations of Health Market Inquiry good idea – experts These steps will ensure more and better medical care for all Implementing these reforms in a holistic and integrated manner would strengthen the role of medical schemes in a fairer, more accountable health system without tearing down what is working for millions, Naidoo says. 'Most importantly, these improvements could be implemented now, without the massive fiscal burden of a centralised NHI that requires impossible tax increases. The Health Funders Association proposed an alternative, a hybrid multi-fund model that preserves the public private mix, ensures income cross subsidisation and gradually expands coverage. 'This model is based on the NHI Fund working with medical schemes to expand access to healthcare and incorporates key Competition Commission recommendations and would protect the vulnerable while preserving choice and quality. 'South Africa can achieve universal health coverage without banning the opportunity to purchase supplementary cover, overtaxing workers or dismantling functioning systems. The working class has more than paid its share. The question South Africa must ask now is whether government will listen and build a better system or press ahead regardless of the cost.'
Business Insider
09-06-2025
- Business
- Business Insider
You can't deliver what you can't store: Africa's warehousing gap
The latest growth figures from Africa are encouraging. Africa's digital payments market is expected to reach $1.5 trillion by 2030 according to a Mastercard-commissioned report by Genesis Analytics. Some optimistic projections suggest that the digital economy on the continent could hit $1 trillion in the next five years. This is driven by mobile adoption, fintech, e-commerce, and the young generation of consumers, acquainted with digital tools from an early age. Already, 646 million people are online across Africa. All these create great opportunities for an e-commerce boom to happen in the decade ahead. But is it achievable? It's easy to scale on paper, but much harder in reality. The truth is that African e-commerce scales faster than warehousing is being developed. While the delivery process starts from the warehouse, there's still a gap between the delivery speed customers expect and what they actually receive. Growing demand for delivery and weak warehousing infrastructure are already two of the biggest industry challenges, and the problem is expected to worsen in the coming years. While e-commerce-generated demand can be scaled easily, warehousing infrastructure is too slow to keep the same pace. warehousing infrastructure today Imagine how many flexible delivery routes and warehouse points you'll find in a place like Lagos, Nigeria – then compare that to somewhere like Nguru, a suburban town. Add up the delivery speed, infrastructure reliability, access to logistics partners, and overall costs – and the gap becomes clear. While it's no wonder that warehousing infrastructure differs in large cities and regions, it's not just about the network of storage points but how efficiently they operate and support last mile delivery. In many cases, warehouses have insufficient equipment, staff, or transport access, and that slows down everything. Let's look at the numbers: According to Knight Frank 's "Africa Industrial Market Dashboard H1 2024" report, demand for warehouse space across Africa jumped by 18% owing to the expansion of the agricultural sector and e-commerce steady growth. Automation is still rare and unsystematic. According to IVHU Africa, only about 15% of warehouses in Africa use any form of automation, like conveyor belts or smart storage systems. Most processes are still manual, and there's a lack of automation, which slows down everything. Infrastructure issues raise costs. Gaps in roads, power, and internet make trade in Africa up to 50% more expensive than the global average, says UNCTAD. Warehousing infrastructure varies across Africa's major cities and regions. The difference is easy to see: cities like Nairobi and Lagos have top logistics areas that are almost full. But in many towns and rural areas, there's still not enough proper storage space. This gap makes supply chains slower, making it harder for small businesses to grow and reach new customers. Rental prices also tend to differ depending on the region. In the first half of 2024, demand for warehouse space in Africa went up by 18%. Now, warehouses in cities like Johannesburg, Nairobi, and Lagos are almost full, with around 85% occupied. Because of the shortage, rental prices have gone up: $6 per square meter in Nairobi, $5.50 in Johannesburg, and $5 in Lagos. This makes it harder for businesses to find affordable, high-quality storage. Below is a table showing the latest prime warehouse rents in major African cities to give a clearer picture of how costs compare across the region. As demand continues to grow and supply remains limited, closing the infrastructure gap will be critical for Africa's further e-commerce and trade growth. it means for SMEs: Jiji's perspective At Jiji, we see the situation from the inside – and for small and medium-sized businesses, poor warehousing infrastructure leads to real, everyday challenges. First, it's hard to keep goods in proper condition when there's limited access to clean, secure, and climate-controlled storage. This leads to higher risks of damage or loss, especially for items like electronics, beauty products, or perishables. Second, faster warehouse turnover is becoming more important as online demand grows. Sellers who can move stock quickly are better positioned to respond to customer needs and take advantage of rising interest in everyday categories like home goods and fashion. As the market becomes more dynamic, improving stock flow is a key opportunity, not just a challenge. Third, scaling becomes a major barrier. Without reliable storage and supply chain support, many small sellers simply can't grow beyond a local level – even if they have the demand and product quality. From Jiji's experience, one thing is clear: for many of our active sellers, logistics is still a major barrier to growth. Sellers in major cities tend to grow faster thanks to better access to warehousing, delivery services, and fulfillment partners. In metropolitan areas, it's also easier to solve last mile delivery – there are more couriers, and higher delivery volumes help create competitive pricing. But in rural or less developed areas, the infrastructure simply isn't there, making deliveries more difficult compared to urban locations. the infrastructure challenges So, how do we close the infrastructure gap? It starts with stronger collaboration between logistics companies and the tech sector – both have a vital role to play in building smarter, more flexible systems that meet the needs of today's fast-growing digital economy. We're already seeing progress. In West Africa, key markets like Nigeria and Ghana are seeing more private investment in last mile delivery and cross-border coordination. East Africa is further ahead in digital tools and regional collaboration, which improve efficiency and expand reach. Logistics companies, for their part, can help by offering affordable, reliable storage and delivery solutions – especially in areas that lack infrastructure. Small businesses need storage options that are flexible and easy to scale. Shared storage spaces or pay-as-you-go models can help them grow without spending too much. E-commerce market players can help improve the logistics in Africa, as online search and home delivery are becoming increasingly popular across the continent, especially in large cities like Lagos. As more people order online, delivery volumes grow, helping lower costs and improve efficiency. The logistics market is still fragmented and largely informal, but step by step, delivery is becoming the new normal for everyday shopping. 'We know the logistics gap won't close quickly, especially with demand growing this fast,' says Anton Volyanskyi, CEO of Jiji. 'But platforms like Jiji can help move things in the right direction – by supporting sellers, growing local trade, and highlighting where improvements are needed most.' sum it all up E-commerce in Africa is growing fast – and it's no longer just about connecting buyers and sellers through an app. Behind every transaction is a system that needs strong logistics and smart infrastructure. We're already seeing positive changes in the market. More people are shopping online for everyday items like home goods, clothing, and personal care products – and they expect fast, reliable delivery. As demand grows, delivery volumes rise, which helps make logistics more affordable and efficient. Improving warehousing and delivery networks will help meet this growing demand and support the next wave of growth in Africa's consumer market.
Zawya
27-03-2025
- Business
- Zawya
Africa's digital future: Mastercard's $1.5tln vision for growth
Africa's digital payments economy is on a rapid growth trajectory, with a Mastercard-commissioned report by Genesis Analytics projecting the sector to reach $1.5tn by 2030. As digital transformation accelerates across the continent, strategic investments, public-private partnerships, and financial innovation are shaping the future of commerce, inclusion, and economic development. By fostering collaboration with key stakeholders, Mastercard aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy. Driving Africa's digital growth Mastercard's investments will focus on three key areas to further accelerate digital adoption and financial inclusion: - Enabling Africa's Micro, Small and Medium Businesses (MSMEs) - Empowering Africa's fintech sector - Scaling remittances and cross-border payments 'Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead. Mastercard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future,' said Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at Mastercard. Africa's digital transformation is underpinned by rapid advancements in internet penetration and financial inclusion, two of the fastest-growing enablers of digital payments across the continent. According to the report, internet penetration in Africa is projected to grow at a compound annual rate of 20%, while financial inclusion is set to expand at 6% per year. These trends signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region. 'For over five decades, Mastercard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development. With Africa projected to host nine of the world's 20 fastest-growing economies, we are focused on leveraging our expertise and technologies to support the continent's continued digital transformation. Our investments today will help build a more resilient economy for the future,' said Mark Elliott, division president, Africa, Mastercard. 1. Enabling Africa's Micro, Small and Medium Businesses Recognising that MSMEs account for over 50% of Africa's GDP, Mastercard continues to provide digital solutions that empower small businesses and drive economic expansion. This commitment is reinforced by the Mobilizing Access to the Digital Economy (MADE) Alliance: Africa, in partnership with the African Development Bank Group. The initiative aims to extend digital access to critical services for 100 million individuals and businesses over the next decade. As part of its broader goal to bring users onto Community Pass, Mastercard has set a target to register 15 million users in Africa within five years. Community Pass is a social enterprise initiative that digitises and connects remote, and rural communities to governments, NGOs, and private-sector services. To further fuel the potential of Africa's MSMEs, Mastercard will accelerate easy access to its proprietary solutions such as Tap on Phone and SME-in-a-Box. The technology company will also continue to enable access to finance through its Track Micro Credit Program, which has already benefited thousands of micro merchants. Furthermore, African entrepreneurs will continue to gain knowledge on how to thrive as business owners through free learning resources such as The Entrepreneur's Odyssey and Mastercard Trust Center. 2. Empowering Africa's fintech sector Africa's fintech ecosystem is a key driver of digital transformation and economic progress. Nearly half of all fintech firms on the continent have been founded in the last six years, collectively raising $6bn in equity financing since 2000. Mastercard is partnering with banks, telcos, and other service providers across Africa and internationally to help accelerate fintech growth and expansion in new markets. For example, Mastercard's partnership with M-Pesa in Kenya and MTN Group Fintech has enabled millions of unbanked individuals to access digital financial services through mobile money platforms. Similarly, Mastercard's collaboration with digital wallet providers and e-commerce platforms has facilitated the integration of payment solutions into digital ecosystems, enabling seamless transactions for consumers and merchants alike. For example, Mastercard's global Fintech Express program provides fintech companies with an end-to-end experience for card issuance. By combining its identity, biometric, AI and open banking capabilities, Mastercard helps protect consumers across the spectrum of internet and payments scams. 3. Scaling remittances and cross-border payments Seamless cross-border transactions are essential for Africa's economic mobility. According to the World Bank, Africa received approximately $100bn in remittances in 2023, accounting for about 6% of the continent's GDP. Mastercard is playing a key role in enabling the infusion of funds into local economies. Through a single, secure point of access, Mastercard Cross-Border Services allow people and businesses to remit money securely, and with certainty. Local partnerships such as the recent agreements with Africa's Access Bank and Equity Bank, are enabling Mastercard to make cross-border payments more simple, convenient, and accessible. Furthermore, they are enabling customers in multiple markets to make cross-border payments globally via bank accounts, mobile wallets, cards, and cash. Said Elliott, "Mastercard remains committed to driving Africa's digital growth through investment, innovation, and partnerships. By enhancing financial inclusion, expanding digital transactions, and strengthening cross-border connectivity, the company is helping to build a more inclusive and resilient digital economy for the African future." All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
Web Release
26-03-2025
- Business
- Web Release
Digital payments economy in Africa expected to reach $1.5 trillion by 2030 according to new report
Africa's digital payments economy is set to grow from strength to strength according to a Mastercard-commissioned report by Genesis Analytics stating that the digital payments economy is expected to reach $1.5 trillion by 2030. As a longstanding technology partner to Africa, Mastercard continues to strengthen its commitment to the continent's digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth. By fostering collaboration with key stakeholders, Mastercard aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy. Driving Africa's digital growth Mastercard's investments will focus on three key areas to further accelerate digital adoption and financial inclusion: Enabling Africa's Micro, Small and Medium Businesses (MSMEs) Empowering Africa's fintech sector Scaling remittances and cross-border payments 'Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead. Mastercard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future,' said Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at Mastercard. Africa's digital transformation is underpinned by rapid advancements in internet penetration and financial inclusion, two of the fastest-growing enablers of digital payments across the continent. According to the report, internet penetration in Africa is projected to grow at a compound annual rate of 20%, while financial inclusion is set to expand at 6% per year?. These trends signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region. 'For over five decades, Mastercard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development. With Africa projected to host nine of the world's 20 fastest-growing economies, we are focused on leveraging our expertise and technologies to support the continent's continued digital transformation. Our investments today will help build a more resilient economy for the future,' said Mark Elliott, division president, Africa, Mastercard. Enabling Africa's Micro, Small and Medium Businesses (MSMEs) Recognizing that MSMEs account for over 50% of Africa's GDP, Mastercard continues to provide digital solutions that empower small businesses and drive economic expansion. This commitment is reinforced by the Mobilizing Access to the Digital Economy (MADE) Alliance: Africa, in partnership with the African Development Bank Group. The initiative aims to extend digital access to critical services for 100 million individuals and businesses over the next decade. As part of its broader goal to bring users onto Community Pass, Mastercard has set a target to register 15 million users in Africa within five years. Community Pass is a social enterprise initiative that digitizes and connects remote, and rural communities to governments, NGOs, and private sector services. To further fuel the potential of Africa's MSMEs, Mastercard will accelerate easy access to its proprietary solutions such as Tap on Phone and SME-in-a-Box . The technology company will also continue to enable access to finance through its Track Micro Credit Program , which has already benefited thousands of micro merchants. Furthermore, African entrepreneurs will continue to gain knowledge on how to thrive as business owners through free learning resources such as The Entrepreneur's Odyssey and Mastercard Trust Center . Empowering Africa's fintech sector Africa's fintech ecosystem is a key driver of digital transformation and economic progress. Nearly half of all fintech firms on the continent have been founded in the last six years, collectively raising $6 billion in equity financing since 2000. Mastercard is partnering with banks, telcos, and other service providers across Africa and internationally to help accelerate fintech growth and expansion in new markets. For example, Mastercard's partnership with M-Pesa in Kenya and MTN Group Fintech has enabled millions of unbanked individuals to access digital financial services through mobile money platforms. Similarly, Mastercard's collaboration with digital wallet providers and e-commerce platforms has facilitated the integration of payment solutions into digital ecosystems, enabling seamless transactions for consumers and merchants alike. For example, Mastercard's global Fintech Express program provides fintech companies with an end-to-end experience for card issuance. By combining its identity, biometric, AI and open banking capabilities, Mastercard helps protect consumers across the spectrum of internet and payments scams. Scaling remittances and cross-border payments Seamless cross-border transactions are essential for Africa's economic mobility. According to the World Bank, Africa received approximately $100 billion in remittances in 2023, accounting for about 6% of the continent's GDP. Mastercard is playing a key role in enabling the infusion of funds into local economies. Through a single, secure point of access, Mastercard Cross – Border Services allow people and businesses to remit money securely, and with certainty. Local partnerships such as the recent agreements with Africa's Access Bank and Equity Bank, are enabling Mastercard to make cross-border payments more simple, convenient, and accessible. Furthermore, they are enabling customers in multiple markets to make cross-border payments globally via bank accounts, mobile wallets, cards, and cash. Mastercard remains committed to driving Africa's digital growth through investment, innovation, and partnerships. By enhancing financial inclusion, expanding digital transactions, and strengthening cross-border connectivity, the company is helping to build a more inclusive and resilient digital economy for the African future. Source: AETOSWire
Zawya
26-03-2025
- Business
- Zawya
Digital payments economy in Africa expected to reach $1.5trln by 2030: report
JOHANNESBURG, South Africa – Africa's digital payments economy is set to grow from strength to strength according to a Mastercard-commissioned report by Genesis Analytics stating that the digital payments' economy is expected to reach $1.5 trillion by 2030. 'Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead. Mastercard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future,' said Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at Mastercard. Africa's digital transformation is underpinned by rapid advancements in internet penetration and financial inclusion, two of the fastest-growing enablers of digital payments across the continent. According to the report, internet penetration in Africa is projected to grow at a compound annual rate of 20%, while financial inclusion is set to expand at 6% per year. These trends signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region. For driving Africa's digital growth, Mastercard's investments will focus on three key areas to further accelerate digital adoption and financial inclusion: 1. Enabling Africa's Micro, Small and Medium Businesses (MSMEs) 2. Empowering Africa's fintech sector 3. Scaling remittances and cross-border payments TF
