The effect of the Covid-19 vaccines on the world economy: Will SA stay behind?
By Dr Chris Harmse
Various reports emerged over the last two weeks on the possible effects of the application of Covid-19 vaccines across the world.
The World Economic Forum had just published a report on the massive positive economic effect that an equal access to Covid-19 vaccines could have on the world economy.
Most developed countries already started with inoculations and some developing countries in East Asia that had signed agreements with vaccine makers.(https://www.weforum.org/agenda/2020/12/who-covid-vaccines-equitable-access/)
Most of the East Asian countries however will only start to roll out the vaccines for application during the second quarter of 2021. These countries however had managed to contain or even stop the further spread of the Covid-19 virus and that economic growth is expected to surge strongly again in these countries in 2021 .
The World Economic Forum reported that if the 10 major economies in the world have equal access to Covid-19 vaccines their economies could be $466 billion better off by 2025. This is 12 times higher than the $38 billion estimated cost of the
“Access to Covid-19 Tools (ACT) Accelerator. The ACT-Accelerator is a collaboration launched in April by the World Health Organization (WHO) and its partners to support the development and equitable distribution of Covid-19 tests, treatments and vaccines.”
The report also emphasizes that if low-and lower-middle income countries like South Africa do not get access to the vaccines, the Covid-19 pandemic will cause “cause significant economic damage for all economies and put “decades of economic progress” at risk.
What about South Africa as the biggest spreader and infected country in Africa. On 3 January 2021 South Africa had 1 100 748 infections. This was 39 of the total of 2 830 462 infections in Africa.
President Cyril Ramaphosa had indicated in his latest Covid-19 lock down regulations speech that vaccine treatment will only start in the second quarter of 2021.
In a turn-around speech Minister of Health Dr Zweli Mkhize yesterday arguably after public interest pressure, announced that South Africa is on track for Covid-19 vaccinations to start in February 2021 and to vaccinate 67 percent of the population by the end of 2021.
The Minster said that the rollout will be led nationally with a one-procurement approach, with the private sector assisting with the implementation of the programme.
This means that the medical aid schemes will definitely be involved especially on the financing and application side. We hope that this time Covid-19 capture will not appear and that the vaccination will be done to all South Africans.
One must give this programme the support that is needed. One hopes that the Minister of Finance Mr Mboweni, in his budget speech in six weeks’ time will outlay the financing of the programme and even make money available for 100 percent vaccination within the next financial year.
The Minister must abstain from any further bail outs for Eskom, the SAA or SABC for that matter as the vaccination of everyone in the country remains crucial and it is the right thing to do.
We will have to inoculate as many people as possible as soon as possible. The country cannot afford a third or fourth wave of the virus with any more lock downs.
Dr Chris Harmse is an Economist at CH Economics
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