South Africa needs R2.82bn to plug the US funding gap in fight against HIV, TB — for now

24 Apr 2025

The Health Department is convinced that all US government funding for HIV and TB projects in South Africa will end by September 30. It has calculated that it needs R2.82-billion to plug the gap for the rest of the financial year. But these funds have yet to be raised, and the stakes are high.

The Health Department made this calculation after the Trump administration cut more than half of such support to the country in February.

The government’s financial year runs from April 1 to March 31.

“Without such replacement funds, we won’t be able to sustain our HIV programme,” warns the department’s deputy director-general for the country’s National Health Insurance (NHI) scheme, Nicholas Crisp.

But these funds have yet to be raised, and the stakes are high: between 150,000 and 295,000 new HIV infections – in addition to about 130,000 annual new HIV infections – over the next four years, according to a Wits modelling study commissioned by the department.

And up to a 38% increase in Aids-related deaths.

That’s unless the Trump administration refunds all projects that were stopped, or the government takes over all the projects.

Crisp, who led the calculations, says the R2.82-billion is based on salary data of the 24,264 full-time and part-time employees of current and previously US-government funded HIV and TB organisations. The Health Department asked the President’s Emergency Plan for Aids Relief (Pepfar), the US government fund that supported the projects, for the figures so they could work out how much money they would need to appoint formerly Pepfar-sponsored workers.

Why USAID projects left a gap

Pepfar supported South Africa’s efforts to fight HIV and TB for the current US financial year – 1 October 2024 to 30 September 2025 – to the tune of $439,537,828 (about R8.3-billion at the current exchange rate).

The money was sent to the country via either the US Agency for International Aid, USAID or the Centers for Disease Control and Prevention (CDC). Most of the funds went to nonprofit organisations helping the government to reach their HIV and TB goals, although private companies, public institutions, the Basic Education Department and the national and provincial health departments were also awarded grants.

Crisp says Pepfar data shows about 57% of funds spent on salaries and consulting fees were channelled through USAID and 43% via the CDC.

The staff complement of Pepfar-funded organisations came to 13,741 health workers (8,493 full-time; 5,248 part-time) who were funded via USAID and 10,523 (7,046 full-time; 3,477 part-time) whose salaries were paid via the CDC – for a total of 24,264 workers.

Most of the workers are data capturers (12.5%), lay counsellors (11.1%), professional nurses (9.6%), middle managers (6.4%) and youth workers (6.2%).

In total, there were 39 prime partners, who often received large chunks of money that were then subgranted to smaller organisations to carry out work on the ground, and 150 “implementing partners”, who either received smaller direct grants or subgrants.

On 26 February, however, the Trump administration ended all Pepfar-funded projects in South Africa that received their money through USAID, as part of a global foreign aid cut.

The few USAID projects in the country that didn’t receive termination letters never received funds to continue their activities, Bhekisisa has learnt, and have mostly also closed their programmes.

Crisp says the available data shows that of the total Pepfar budget for South Africa (for all costs, not just salaries) for this financial year of R8.3-billion, about R4.45-billion was received via USAID.

On the other hand, projects funded through the CDC have been allowed to continue with their full budgets after a US federal court ordered the Trump administration to do so, but they only have funds until 30 September.

According to the US government, there are 21 CDC-funded organisations that are still operating with Pepfar funds in South Africa. See the list of CDC organisations provided by the US government.

Will funding for South Africa continue after 30 September?

What happens after 30 September will depend on how the US Congress votes on the budget President Donald Trump submits, explains a former Pepfar staff head, Jirair Ratevosian.

Ratevosian, an associate research scientist at Yale University, says a process known as “passback”, during which agencies and government departments, such as the state department under which USAID falls, advocate for budgets, started this week.

A leaked White House document, which The New York Times has seen and reported on this week, proposes that Pepfar continues to exist for the 2026 financial year in the US with a budget of $2.9-billion – but that it mainly focuses on HIV treatment and not prevention.

“That might seem like a substantial amount in isolation, but it represents a 40% reduction from the current budget,” Ratevosian warns, “so if Congress votes to put through the Trump budget as is, more than half of programmes will undoubtedly be cut. And we don’t yet know if rules for what can and what can’t get funded will get even stricter.”

Trump also announced a 90-day review of foreign aid on 20 January, the day he was inaugurated. That review technically ends on Sunday, 20 April; the president would need to announce the way forward.

But many people are confused. Local CDC-funded organisations say they have no idea, and neither do their contracting officers from the US government, if the review is still ongoing.

Ratevosian, however, says he suspects there could be an announcement by Friday: “This is an important week in Congress, with a lot of back and forth between the budget office and other offices within the state department, which seems to suggest there could be some of kind of conclusion announced as to where foreign aid is headed.”

How did the Health Department come to R2.82-billion?

But Crisp says the Health Department is operating with the assumption that all Pepfar funds for South Africa will stop and that the government should take over the responsibility for every service that is, and was, being supported by America’s Aids fund. “There are instructions from the US government not to approve new projects,” he says.

And even though the department and local Pepfar staff meet biweekly, there’s nothing they can do to stop potential cuts. Sources say local Pepfar staff are mostly bypassed with decisions made in Washington, DC. For example, local contracting officers’ approvals for limited waivers for South African projects were overruled by the state department terminating the projects, regardless.

The R2.82-billion that the department says it needs would cover 12 months of most USAID workers’ salaries and six months (1 October to 31 March) of CDC projects’, if workers were to be phased into the public primary healthcare system. The amount comes to 63% of the actual salaries paid for by Pepfar as the department has worked in savings, says Crisp.

“Because several different projects worked in the same districts, doing more or less the same work, there were many managers, whose salaries made up a large proportion of salary costs in such districts,” he explains. “So we modelled our calculations on cutting down on managers. If we incorporate health workers into our primary healthcare system, fewer managers would be required, as they wouldn’t all be working for different projects.

“Duplication, such as too many of the same type of workers, for instance, data capturers, in the same subdistricts, have also been addressed.”

This had resulted in cost savings of 37% which would translate to R1.632-billion.

Which provinces have been hit hardest?

Because of the ending of USAID projects, Pepfar now supports projects in less than half (12) of the 27 health districts with high HIV infection rates in which they used to. See the health districts in which Pepfar still funds projects.

The four provinces that have been hit the hardest, because they had received almost all their Pepfar funding through USAID, are: Limpopo (97.2%), Mpumalanga (93.5%, the Free State (87.3%) and the Western Cape (93.5%).

But Crisp warns that it would be unwise to incorporate all Pepfar-project staff into the public health sector straight away, since some programmes are successful because nonprofits are sometimes trusted more than the government by groups, such as transgender people, sex workers and injecting drug users, groups that have a higher chance of getting HIV. “It may work better to look at a model where former NGO workers are ‘absorbed’ into primary healthcare services in a year plus from now, once the programme is fully integrated into the provincial district health services.”

The impact of cuts on the Health Department

Crisp warns that Pepfar cuts have left the Health Department “extremely vulnerable” because it has lost two-thirds of the staff who manage “key functions”.

For years, the department has been working on digitising the public health information system. One of its most important projects, on which the roll-out of the NHI depends, is developing an “electronic medical record for each person, on which all that person’s health data will be stored. The Council for Scientific and Industrial Research (CSIR) works with the department on this and 82 of the 102 CSIR staff are funded through the CDC. The CDC also pays for hardware. The funding for digital health projects is R258-million for the current financial year, which could now potentially be stopped for the year thereafter,” says Crisp.

The Health Department also gets R35-million from Pepfar to pay the salaries of 34 people, and two logistics companies, which manage and roll out a chronic medicine programme known as CCMDD, for about 3.3 million people who collect their HIV and other medicine from pick-up-points close to their homes. “Without this programme, all of these people will collect their medicine from hospitals and clinics, which will create long waiting lines and frustrate patients to the extent that they will no longer go to collect their medicines,” Crisp explains.

Last, the department receives R47.4-million to manage parts of the demand generation and analysis needed in managing the tenders for 1,300 medicines and other pharmaceutical products. The process of selecting medicines and monitoring supplier and stock relies on a team employed by an NGO.

Crisp cautions: “Without the 40 people who provide the services that should essentially be full-time Health Department jobs, and which will be core functions in the NHI, the whole pharmaceutical supply system will be compromised.”

Where will the money come from – and what’s the timeline?

The Health Department knows that funds to fill the Pepfar funding gap won’t come from one source only, says Crisp. “Not a single donor has R8-billion to give to us annually, and neither does the government.”

He says that, so far, the department has received R1-billion worth of additional antiretroviral drugs (ARVs) from the Global Fund for HIV, TB and Malaria, to treat people with HIV. “That means the department can buy fewer ARVs themselves and then, instead, use the money to contract formerly Pepfar-funded NGOs to do some work, but tender processes will, unfortunately, complicate processes because tenders take so long to award.”

The department has proposed to Treasury that it grants the department an exemption to allow it to contract all or some of the more than 30 Pepfar prime partners to help run the country’s HIV programme “through the transition to becoming self-sufficient”.

Crisp says the idea is to create a simple service level agreement that will be used for all partners and for Treasury to create a conditional grant or earmarked allocation for this purpose that will be managed by the department.

He says the Health Department has spoken to Treasury about “a budget over and above” its already allocated budget. Two of the ways the department is looking to make this happen is to have an “adjustment appropriation” in September (mid-year) or to obtain emergency funding through section 16 of the Public Finance Management Act.

But Crisp says Treasury has not yet agreed to funding.

“The fiscal position is very tight so the Treasury is wanting extremely detailed plans for any additional funds. The problem is that the situation is very fluid, was centrally funded by Pepfar, and is likely to keep changing as the departments learn what is essential. The national Health Department believes that a centrally managed ‘top-up fund’ from emergency funding through section 16 of the Public Finance Management Act could work.”

Another plan the department, embassies, philanthropic foundations and businesses are working on is the establishment of a “trust fund”, similar to the Solidarity Fund during the Covid pandemic, to which many organisations contribute. The idea would be to have private funding available that can be used at short notice and without government bureaucracy to address emergencies, Crisp says.

So far, a working group has been created, which has met at least twice. “We understand that there are now more parties involved and that they are still discussing what is possible by way of support.”

But the department remains in a dilemma: it doesn’t yet have any large financial commitment for the R2.8-billion it needs.

Crisp warns: “The risk is that without the additional funding to plug essential gaps some services will be terminated or scaled down.

“If patients who are familiar with a particular programme are left guessing they may abandon treatment and not move elsewhere. That would be bad because it makes them vulnerable and may create opportunities for drug resistance and for new HIV infections to increase again, working against all the progress we’ve made over the past two decades.” DM

This story was produced by the Bhekisisa Centre for Health Journalism. Sign up for the newsletter.

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