South Africa: World Bank approves R7.6 billion loan from South Africa for Covid-19 vaccines

The World Bank has approved a €454.4 million (R7.6 billion) loan to South Africa for the country’s COVID-19 emergency response project.

Approved on Monday by the Bank Group’s Board of Directors, the loan follows a request from the South African government for assistance in financing vaccine purchase contracts.

In a joint statement by the World Bank and the National Treasury, the entities said, in particular, that this project will retroactively finance the procurement of 47 million doses of COVID-19 vaccine by the GoSA.

They said: “South Africa is the epicenter of the COVID-19 pandemic in Africa, with the highest cumulative number of infections and deaths. By supporting the COVID-19 vaccination program of the country, the project will help the government better cope with the pandemic, as the country experiences its fifth wave, and help the GoSA create the fiscal space needed to strengthen its health system and ensure financial and institutional sustainability.”

The country’s robust immunization program delivered 36.4 million doses, with around 50.3 percent of adults and 29.9 percent of adolescents aged 12 to 17 vaccinated, as of June 13.

However, they said, more can be done to increase vaccination coverage, curb the spread of the virus and boost the country’s economic recovery.

Along with the Genomic Surveillance Project, the COVID-19 Emergency Response Project is part of the World Bank’s broader support to South Africa’s response to the pandemic.

The surveillance project aims to improve the ability to identify SARS-CoV-2 variants in South Africa and the Africa region.

The government welcomed the loan approval, saying it would support vaccination against COVID-19 as the spread of the virus continues to threaten South Africa’s citizens, health system and economic recovery.

The Treasury said the loan was part of the government’s efforts to reduce debt service costs by using cheaper sources of funding through multilateral development banks, while supporting the health system to respond to COVID. -19 through vaccine deployment, critical research and treatment measures,” says Ismail Momoniat, Acting Director General of the National Treasury.

As well as providing vital support to South Africa’s health system, this new low-interest loan contributes to the government’s fiscal relief program while reinforcing South Africa’s decisions on how best to relieve the economy and the people most affected by the crisis.

The loan complements support from 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.

As of May 16, 2022, the World Bank Group’s COVID-19 Response has deployed $20 billion to support vaccine procurement and deployment enabling affordable and equitable access to the COVID-19 vaccines needed to reverse the health impact , social and economic impact of the pandemic.

The funding is helping 96 operations (including MPA Vaccine operations) in 73 countries, more than half of which are located in Africa, by supporting countries’ immunization programs.

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