South Africa has netted a $480 million (R7.6 billion) loan from the World Bank for its COVID-19 Emergency Response Project, a joint statement from the National Treasury and the Bank said on Monday (13 June).
This follows a request by the government for assistance in financing vaccine procurement contracts. “Specifically, this project will retroactively finance the procurement of 47 million COVID-19 vaccine doses by the government of South Africa,” the two entities said.
South Africa has endured the worst impact of COVID-19 in Africa and is emerging from its fifth wave of the pandemic. The new loan will help it “create the fiscal space needed to strengthen its health system and ensure financial and institutional sustainability.”
South Africa welcomes World Bank loan
National Treasury’s Acting Director-General, Ismail Momoniat, welcomed the World Bank loan.
“The loan forms part of government efforts to reduce debt service costs by making use of cheaper sources of funding through multilateral development banks, whilst supporting the health system to respond to COVID-19 through the roll-out of vaccines, critical research, and treatment measures,” he explained.
World Bank Country Director for South Africa, Marie Françoise Marie Nelly, added, “This support aims to put the country on a more resilient and inclusive growth path by boosting South Africa’s COVID-19 vaccination efforts with the goal of vaccinating up to 70 percent of the country’s target population.”
So far, South Africa has administered 36.4 million COVID-19 vaccine doses. Approximately 50.3 percent of adults and 29.9 percent of 12 to 17-year-olds have been vaccinated as of 13 June 2022, according to the government’s COVID-19 information portal.
This isn’t the first COVID-19 loan to South Africa from the global institution. In January this year, it approved a $750 million (around R11.4 billion at the time) loan to aid the country’s economic recovery.
In 2020, the International Monetary Fund (IMF) also granted South Africa a $4.3 billion loan (approximately R70 billion at the time). The African Development Bank (ADB) approved a further $288 million (R5 billion at the time) loan, also in 2020.
This was followed by two loans of $1 billion each from the New Development Bank (NDB) in April and June 2021, respectively. The NDB is affiliated to the Brazil, Russia, India, China and South Africa (BRICS) formation.
The World Bank has provided a total of $20 billion so far to support vaccine procurement around the world.
“The financing is helping 96 operations (including MPA- Vaccine operations) in 73 countries, more than half of which are located in Africa, by supporting countries’ vaccination programs,” it said.