CAPE TOWN (Reuters) – South Africa could spend up to 19.3 billion rand (1.33 billion US dollars) in the next three years to vaccinate most of its population, the Treasury Department said on Wednesday in a “difficult balancing act” with, which should contain COVID-19 while avoiding a debt spiral.
FILE PHOTO: A South African health worker receives vaccination against Johnson and Johnson coronavirus disease (COVID-19) at Khayelitsha Hospital near Cape Town, South Africa, Feb.17, 2021. Gianluigi Guercia / Pool via REUTERS / File Photo
The budgetary position of South Africa, the African country hardest hit by the pandemic, was already weak before the coronavirus crisis and, according to the 2021 budget presented to parliament, deteriorated sharply last year.
The budget deficit is expected to more than double to 14% of gross domestic product (GDP) in the 2020/21 financial year, after 5.7% in the previous year.
The Treasury Department said a mass vaccination program would help boost GDP growth to 3.3% this year after falling sharply by 7.2% in 2020.
“This year we are facing an extremely difficult balancing act,” said the Ministry of Finance.
“On the one hand there is a raging pandemic … on the other hand there is a weak economy with massive unemployment, which is burdened by ailing state-owned companies, the highest budget deficit in our history and a rapidly growing national debt.”
The budget is 1.3 billion rand for vaccine purchases in the current fiscal year ending next month, while the medium term is 9 billion rand for launch.
“Given the uncertainty about the final cost, an estimated R 9 billion could be withdrawn from the contingency reserve and emergency grants, bringing the total potential funding for the vaccination program to approximately R 19.3 billion,” the Treasury Department said.
Africa’s most advanced economy is battling a more contagious variant of the coronavirus but has lagged richer nations in launching its vaccination campaign.
However, there are plans to step up the vaccination program after the first doses of the Johnson & Johnson vaccine were given last week as part of a research study.
The government plans to vaccinate 40 million people, or two-thirds of the population.
Reporting by Olivia Kumwenda-Mtambo, Mfuneko Toyana and Wendell Roelf; Adaptation by Joe Bavier