The National Health Insurance (NHI) will only further damage local and international investor sentiment and business confidence.

The government has many plans and ideas but it has been seen so many times that it does not work and that it has rather destructive consequences. It appears that the government is scrambling to give shape to various ideas and legislation in the run-up to next year’s election.

Thys van Zyl, head of product development at Everest Wealth, points out that South Africans have already been severely punished financially this year by the government’s various missteps and the political and economic uncertainty continues in the midst of many crises.

“It has already been pointed out that there is no money for the NHI and that it is not implementable. There is reason to be concerned about the NHI due to the lack of trust in the government and the numerous examples of the large-scale failure of projects undertaken by the government due to mismanagement.”

According to Van Zyl, the other major concern is the possibility that the NHI could lead to unprecedented levels of corruption.

“The country has already ended up on the grey list because not enough is being done to prevent corruption and money laundering. South Africa is therefore considered a high-risk country for investors and the NHI may discourage further investment in the healthcare system and may also lead to an exodus of skills which will further damage the economy.”

With the government’s list of failures only growing, more and more basic services in South Africa are being privatized as the state continues to decay. This privatization may be South Africa’s biggest economic lifeline and now the government wants to undo it with something like the NHI.

“Where the government fails, the private sector intervenes with alternative solutions. There is more and more emphasis on the private sector’s involvement in the economy and this holds a promising prospect. But now the government wants to come and take over something that was built by the private sector because they failed to do it themselves.”

Although many believe that there is no reason to panic at this stage, given the government’s failure to carry things through in the midst of fierce opposition and legal challenges, there should not be a false sense of reassurance but rather a readiness to thwart government’s plans, concludes Van Zyl.