Following a request by the South African government for assistance in financing vaccine procurement contracts, the World Bank Group, on June 13, approved a R7.6-billion ($480-million) loan for South Africa’s Covid-19 Emergency Response Project.
The project will retroactively finance the procurement of 47-million Covid-19 vaccine doses by the South African government.
In addition to providing vital support to South Africa’s health system, the World Bank says the low-interest loan contributes to the government’s fiscal relief package, while reinforcing South Africa’s decisions on how best to provide relief to the economy and those worst affected by the crisis.
The loan complements support provided by the International Monetary Fund, the African Development Bank and the New Development Bank, as part of the South African government’s broader financing strategy to access external financing from international financial institutions.
By supporting the country’s Covid-19 vaccination programme, the project will help the government better cope with the pandemic, as the country recovers from a fifth wave of infections.
It will also support the government to create the fiscal space needed to strengthen its health system and ensure financial and institutional sustainability.
As of June 13, over 36.4-million doses of Covid-19 vaccinations have been administered, with about 50.3% of adults and 29.9% of those aged between 12 and 17 having been vaccinated.
However, the World Bank says more can be done to increase vaccine coverage, curb the spread of the virus and boost the country’s economic recovery.
Along with the Genomic Surveillance Project – which seeks to improve the capacity to identify variants of Covid-19 in South Africa and the Africa region, and the South Africa Covid-19 Response Development Policy Operation – which aims to protect the poor and vulnerable from the adverse socioeconomic impacts of the pandemic, the Covid-19 Emergency Response Project forms part of the World Bank’s expanded support for South Africa’s response to the pandemic.
National Treasury acting director-general Ismail Momoniat says the loan forms part of government’s efforts to reduce debt service costs by making use of cheaper sources of funding through multilateral development banks, while supporting the health system to respond to the pandemic through vaccine roll-out, critical research and treatment measures.
World Bank South Africa country director Marie Françoise Marie-Nelly says the bank’s support aims to put the country on a more resilient and inclusive growth path by boosting South Africa’s vaccination efforts with the goal of vaccinating up to 70% of the country’s target population.
“This project builds on our new World Bank Group Country Partnership Framework 2022 – 2026, jointly developed with the government in July 2021 to help stimulate investment and job creation,” she adds.
As of May 16, the World Bank has deployed $20-billion to support vaccine procurement and roll out enabling the affordable and equitable access to Covid-19 vaccines needed to reverse the pandemic’s health, social and economic impact.
The World Bank says its financing is helping 96 operations in 73 countries, more than half of which are located in Africa, by supporting countries’ vaccination programmes.