This study reviews the impact of public health spending on poverty, and, inequality, in South Africa, and examines how sector expenditures are distributed across socioeconomic groups, races, and regions. The report relied on the methodology known as Benefit Incidence Analysis, which measures how public services are targeted to specific groups among the population. The analysis convey that public health spending is largely dominated by high levels of health care, and suggests that most public health resources, benefit high income groups, while the poor lack coverage. It shows that severe inequities stem from improper budget allocations in the public health system, where the poorest provinces, cannot afford public health care, and particularly disadvantaged, are women and children. Ironically, areas with lower concentration rates, as well as lowest poverty rates, account for more than 40 percent of all public health resources. The report emphasizes the need to prioritize primary health care services within the health system in the country, and thus, reduce inequities and inefficiencies in public health spending. A revision for targeting mechanisms need to be devised to reach the poor, for, while over three quarters of the population have access to almost free public health facilities, the current fee structure requires reforms, to improve the poverty focus of the health system.