Brief background
Growing demand for care services, combined with persistent underinvestment in care infrastructure, has created significant care gaps in many countries. Governments have a central role in investing in the direct provision of care services, including healthcare, long-term care, early childhood care and education, and primary and secondary education, to ensure that care is accessible, affordable and of adequate quality (UN Women and ILO, 2024). In South Africa, public investment in the care economy is primarily channelled through the education, health and social protection sectors, which constitute the largest components of government expenditure. These sectors account for the largest share of the 2025/26 National Budget and, together with community development and employment programmes, are projected to comprise 61% of consolidated non-interest expenditure over the medium term (OECD, 2025).
This is despite the government’s continued commitment to fiscal consolidation, reflected in planned reductions in non-interest spending of R5.2 billion in 2026/27 and R14.2 billion in 2027/28 relative to 2025, to maintain primary surpluses in the National Budget and stabilise the debt-to-GDP ratio (IEJ, 2026). At the same time, debt-service costs are projected to reach R389.6 billion in 2025/26 (5.2 % of GDP), equivalent to 22 cents of every rand collected in revenue, and are expected to exceed spending on health, basic education and social development over the medium term (Government of South Africa, 2026). This growing interest burden limits the fiscal space available to expand care services and infrastructure, highlighting the tension between debt stabilisation and the public investment needed to address South Africa’s care deficits.
While public investment remains essential, evidence increasingly points to the need for coordinated approaches that involve governments, private-sector providers, civil society organisations, and development finance institutions to expand access to quality care services (World Bank, 2024). Development finance institutions (DFIs) play a major role in mobilising public and private sector investments in developing countries to promote investments that deliver both development impact and a market-based return. They offer technical assistance to their investees in promoting enabling care-related workplace policies and practices, as well as in their actual implementation (Trujano and Le’vesque, 2022). These options include supporting a company’s in-house childcare facility, collaborating with various employers and third-party providers to establish childcare centres, and offering childcare vouchers or subsidies.
Multilateral DFIs have supported the expansion of care services through direct investments in private providers of childcare, elder care, and disability care, particularly in Europe. However, similar investments in developing countries have been far less common. In addition to building infrastructure and providing services, DFIs have allocated grant funding for vocational training programs aimed at enhancing the care workforce. This includes elder care models implemented in the Philippines and China (Trujano and Le’vesque, 2022). Nonetheless, there are various obstacles to greater DFI involvement in care provision (Trujano and Le’vesque, 2022). This includes the lack of reliable information on care providers’ financing needs and investment opportunities in the care economy, the ‘fragmented’ nature of care businesses, which makes it difficult for them to absorb larger funding from DFIs, and the involvement of DFIs as investors in infrastructure projects at a later stage of the project’s life cycle, which limits their influence on early project design.
Public development banks (PDBs), which control over 10% of global public and private investment, are uniquely positioned to provide long-term, large-scale financing to develop robust care infrastructure and services (2025 AIIB and UN Women). PDBs are increasingly financing care-related infrastructure and services through a range of innovative financing mechanisms that bring together public investment, the private sector, and the social sector to strengthen care systems, expand access to quality services, promote women’s economic participation, and generate employment in the care sector.
Examples include support for childcare facilities for healthcare workers through public–private partnerships (PPPs) and donor funding (EBRD in Türkiye), investments in public health infrastructure and services to improve health outcomes and productivity (AIIB in Indonesia), financing childcare and education facilities through municipal PPPs to enhance women’s labour force participation (BDMG in Brazil), and investment loans to expand affordable eldercare infrastructure while creating formal care jobs and reducing unpaid care burdens (EIB in Spain). Other approaches include funding integrated rehabilitation, inclusion, and empowerment centres for children, persons with disabilities, women, and older persons through collaboration with subnational governments (BANOBRAS in Mexico), as well as financing affordable healthcare infrastructure through empowerment-focused frameworks that support participation by women-owned and BBBEE enterprises (DBSA in South Africa) (2025 AIIB and UN Women).
Nonetheless, PDBs often face competing priorities for infrastructure investment. This is made worse by the lack of data, particularly the quantification and justification of the economic benefits of investment in care infrastructure. Further, the informal or unpaid nature of care understates the actual demand for care infrastructure, and the lack of tools and sectoral approaches to making the economic case for prioritising care limits the resources allocated to care infrastructure projects. Many PDBs do not fully integrate gender and care considerations into their project planning and financing strategies, nor do they have sufficient approaches to address social norms and cultural barriers (2025 AIIB and UN Women).
The IFC (2026) views the private sector as a key actor in the care economy ecosystem that can play an important role in addressing growing care deficits through investment, innovation, service provision, and financing. Private-sector engagement spans a wide range of care services, including private hospitals and clinics, Early Childhood Development (ECD) centres, retirement villages, assisted-living facilities, and home-based care providers. Small and Medium Enterprises (SMEs), including small Early Childhood Care and Education (ECCE) centres, home-based crèches, cleaning and domestic service enterprises, meal preparation services and community transport services, are another important component of the care ecosystem as recognised by ILO (2026). This is largely true for the ECCE system in South Africa, where 43% of childcare centres are unregistered, while 16% are in the process of registration, thereby disqualifying them from receiving the R23-per-child-per-day nutrition grant subsidy (Sello et al., 2024). A significant majority of these centres operate for nine or more hours starting in the early morning and offer after-care services to school-going children, with some open exclusively during school holidays. More importantly, a substantial portion (56%) of these centres operate without charging any fees (ibid.).
However, the current financing model, with low supply-side subsidies and onerous, stringent registration eligibility criteria, has overexposed the ECCE sector to demand-side shocks, with its sustainability relying on significant co-payments from caregivers. This is particularly challenging in low-income communities, where many households are unable to afford the required co-payments, undermining the viability of a substantial proportion of informal and unregistered care providers (Wills, Kotze and Kika-Mistry, 2020).
Problem statement: Despite the growing recognition that care can be financed and delivered through a variety of public, private, social, and blended models, there is limited evidence on how these models operate in the South African context, their relative strengths and weaknesses, their accessibility to underserved populations, and their potential for scaling. While international experience provides examples of financing and provision models involving governments, development finance institutions, public development banks, private providers, social economy actors, and SMEs, no comprehensive South African study has systematically assessed these approaches, the barriers they face, and their implications for expanding access to quality care services and infrastructure. This limits the ability of policymakers, financiers, and care-sector stakeholders to identify effective financing strategies and investment opportunities to address the country’s growing care deficits while promoting decent work and women’s economic empowerment.
Purpose of the activity/output
The study seeks to generate evidence on the feasibility, opportunities, and limitations of different care financing and provision models in South Africa for universally accessible care regimes. The findings will inform policy development, investment strategies, and stakeholder engagement to expand access to quality care services, strengthen care infrastructure, support care enterprises, and identify innovative financing mechanisms that contribute to women’s economic empowerment and inclusive economic development.
Main research question: What financing and investment models can be used to expand universal, equitable and sustainable access to quality care services in South Africa, and what are their respective opportunities, limitations, and implications for access, quality, gender equality, and economic development?
Target Audience
- Authorities in charge of how care is financed: National Treasury, DFIs such as the Development Bank of South Africa (DBSA), Industrial Development Corporation, National Empowerment Fund, impact investors, Pension funds and institutional investors, Philanthropic foundations and donors, Private equity and venture capital, Care providers and entrepreneurs
- Departments championing care programs and policies, such as the National Care Policy: the Department of Women, Youth and Persons with Disabilities (DWYPD), Department of Social Development (DSD)
- Departments that purchase care services: DSD, Department of Health (DoH), Department of Basic Education (DoE), Department of Small Business Development (DSBD)
- Policymakers from relevant Ministries and departments in South Africa, such as, the Department of Trade, Industry and Competition (DTIC), and in South Africa, and private investors
Outputs/Activities
| Sn. | Activities | Outputs/ Deliverables |
| 1 | Conduct an inception phase report, including refinement of the methodology, development of the work plan, stakeholder mapping, and preparation of research tools. | Inception report |
| 2 | Undertake a literature review and stakeholder consultations to identify care financing models, investment approaches, opportunities and challenges in South Africa and selected international case studies. | Literature review and stakeholder consultation findings |
| 3 | Conduct a thematic and comparative analysis of evidence to compare financing models, investment approaches, implementation arrangements, enabling factors, constraints and lessons across South Africa and selected international case studies, and assess their relevance for the South African context. | Comparative analysis and synthesis of findings |
| 4 | Interpretation and recommendation: develop financing pathways by assessing the applicability, feasibility, and scalability of different financing models for the South African context. | Preliminary findings and recommendations report and presentation |
| 5 | Validation and stakeholder consultation workshop to get feedback from relevant stakeholders on the findings of the study | Presentation on the findings |
| 6 | Prepare and finalise the study report, including practical recommendations to inform the Draft National Care Strategy and future financing and investment in the care economy in South Africa | Final report, including an Executive Summary and all supporting annexes. |
Throughout the assignment, the consultant will meet the project staff every two weeks to provide progress updates.
Method
The research will adopt an exploratory mixed-methods design, combining a desk-based review of international and domestic literature with key informant interviews to identify, analyse and assess financing models for care services and infrastructure across the public, private, philanthropic and development finance sectors.
International case studies will be examined to understand how different financing instruments, including public expenditure, subsidies, PPPs, blended finance, development finance, impact investing, enterprise finance and innovative financing mechanisms, have been designed, implemented and adapted across different contexts. The analysis will assess each model’s effectiveness in expanding universal, equitable and sustainable access to quality care services, while considering its implications for quality, inclusion, gender equality and long-term sustainability. These findings will be analysed alongside South Africa’s policy, fiscal, regulatory and institutional landscape to assess their applicability, feasibility and scalability within the local context.
The study will be informed by interviews with key stakeholders involved in financing, regulating and delivering care services, including government departments, public development banks, development finance institutions, commercial financial institutions, private investors, philanthropic organisations, care providers, business associations and selected experts. Rather than prescribing a single financing solution, the study will identify a portfolio of financing pathways suited to different care services and provider models. The analysis will consider issues of financial sustainability, equity, accessibility, scalability, investment readiness, institutional capacity and implementation feasibility.
Connection with the project
As both a standalone study and a contribution to the situational analysis underpinning South Africa’s draft National Care Strategy, the research aims to generate practical recommendations to inform financing and investment decisions and to support the development of an integrated and sustainable care financing framework for South Africa.
Integration of gender issues
The study integrates gender throughout its analysis by examining how financing decisions can transform the gendered organisation of care, expand equitable access to quality care services, strengthen women’s economic empowerment through investment in care enterprises and decent work, and support the redistribution of unpaid care responsibilities across households, markets and the state.
Budget
R113,000
Production Schedule
| Timeline | Deliverable |
| 1–16 October 2026 | Inception report |
| 26 October –27 November 2026 | Literature review and stakeholder consultation findings |
| 1 December– 18 December 2026 | Comparative analysis and synthesis of findings |
| 11 January 2027 | Presentation and Draft report |
| 18 January 2027 | Validation workshop |
| 1 Feb 2027 | Final report, Executive Summary and supporting annexes |
Throughout the assignment, the consultant will meet the project staff every two weeks to provide progress updates.
Request for Proposal
- The following should be submitted to Morongwa Kekana at morongwa.kekana@iej.org.za at the Institute for Economic Justice by 01 September.
CV illustrating relevant expertise - A research abstract (maximum 1 page) outlining the proposed approach to the study, including a brief description of the methodology, the proposed data collection and analysis methods, and illustrative examples of key literature and documents to be reviewed, as well as the key stakeholders to be consulted.
- Sample of writing