Finance Minister Tito Mboweni prior to delivering his Budget Speech on Wednesday 24 February 2021. The minister focused on the financial implications of fighting the scourge of Covid-19 and South Africa's ballooning debt. (Photo: Leila Dougan) By Prinesha Naidoo
Feb 24, 2021, 2:02 PM - Updated on Feb 24, 2021, 2:02 PM
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An allocation of 10.3 billion rand ($708 million) has been made to buy and dispense the shots through March 2024, the Treasury said Wednesday in the 2021 Budget Review. A further 9 billion rand could be drawn from contingency reserves and emergency allocations if needed as the final costs remain uncertain, it said.
“Since the state is procuring vaccines on behalf of both the public and private sectors, some revenue will be returned to the fiscus when private providers buy vaccines from the state,” the Treasury said.
The pandemic has ravaged Africa’s most-industrialized economy, with gross domestic product expected to have contracted the most in almost nine decades last year as restrictions to limit the disease’s spread curbed output. More than 1.5 million infections have been confirmed in the country so far, and almost 50,000 of those diagnosed with the disease have died.
While the economy is forecast to expand 3.3% this year, the combined effect of the deep shock caused by the virus and lingering structural constraints to growth mean real GDP won’t return to pre-pandemic levels until the end of 2023, the Treasury said. It warned that the growth rate could be as low as 1.6% this year if the vaccine rollout doesn’t slow the pandemic’s spread and there are more waves of infections that necessitate stricter lockdown measures.
South Africa started its inoculation program on Feb. 17, with healthcare workers receiving the first single-shot doses developed by Johnson & Johnson. The government aims to inoculate two-thirds of the population by year-end and says it has secured sufficient vaccines to meet that goal.