R9bn set aside for vaccine roll-out in SA

A total of R9 billion of the country’s budget will be going to the free Covid-19 vaccination programme in the medium-term, with the roll-out expected to gather pace in the second half of the year.

This brings the vaccine rollout costs to a total of R10.3 billion for the current year as R1.3 billion had already been allocated.

The 2021 Budget Review by National Treasury yesterday said the vaccination programme would support economic recovery and global trade as the pandemic contracted GDP growth in 2020 by 7.2%.

The vaccinations will be provided free of charge, targeting 67% of the population over the next 12 months in line with the need and roll-out schedule. This has will lead to a projected GDP growth of 3.3% for 2021.

“A successful vaccine roll-out is likely to boost domestic economic growth, enabling renewed trade and releasing pent-up demand. Conversely, a slow, stuttering rollout poses the most significant threat to economic recovery.”

Funding for purchasing and roll-out of the vaccine will be drawn from the national budget. Additional funding will come from the Covid-19 component of the HIV, tuberculosis, malaria and community outreach grant introduced in last year’s June special adjustments budget.

Since the vaccine is procured by the state on behalf of the public and private sectors, revenue will be returned to the fiscus when the private sector buys the vaccines from government.

How the vaccine money will be spent:

▶ The health department – R6.5 billion will be allocated to procure and distribute the vaccine.

▶ Provincial health departments – R2.4 billion to administer the vaccine.

▶ The SA Medical Research Council – R100 million for research.

▶ Government Communication and Information System – R50 million for a vaccine communications campaigns.

As final costs of the vaccine are uncertain, government will allocate an additional R9 billion from the contingency reserve. “Given uncertainty around final costs, an estimated R9 billion could be drawn on from the contingency reserve and emergency allocations, bringing total potential funding for the vaccination programme to about R19.3 billion.”

A succesful roll-out is likely to boost domestic economic growth, enabling renewed trade.

Budget Review by National Treasury