Business to help state vaccine rollout
The more than R10bn allocated to the vaccine rollout in this week’s budget should remove the need for business to come up with funding, as well as put to bed the notion of a vaccine tax to pay for it.
But business leaders made it clear this week that the private sector was working hard to help the government to roll out the programme — and stood ready to provide the resources needed to make it happen as speedily as possible.
They emphasised too that they will follow the government’s lead — and its planned three phases of the vaccine programme — rather than try to jump the queue for their own employees or members.
Finance minister Tito Mboweni said the budget provided for SA’s vaccination campaign, allowing the country to emerge from restrictions on economic activity.
His comments came after weeks of uncertainty about how the vaccine would be paid for after it emerged in December that the department of health had asked the Solidarity Fund to pay SA’s R250m deposit to the global Covax procurement platform, apparently because the government did not have the money.
This sparked talk that private funding might be sought to plug the gap, while regulations were tweaked to make medical schemes pay for vaccines for their own members, as a prescribed minimum benefit, as well as potentially to fund further doses for non-members through a single exit price mechanism.
The budget documents this week show that R9bn has been allocated from the budget, in addition to the R1.3bn already allocated in the current year for vaccine purchases.
Of this, R6.5bn goes to the health department to procure and distribute vaccines, with the rest going to vaccine research, provincial health departments and communications. And the total could go up to R19bn if needed, using money set aside in the contingency reserve.
Business for SA (B4SA) has estimated the vaccine rollout will cost between R11bn and R13bn all in. Said B4SA’s Martin Kingston: “... the actual cost will be reduced if the medical aids subsidise where appropriate”.
The Solidarity Fund was, however, still looking at how it could assist and planned to launch a vaccine fund that would raise donations and be able to intervene on an urgent basis if needed.
Discovery chair Adrian Gore said there now seemed to be enough funding for the public and private sectors to fund the vaccine rollout as required. In terms of the pace required, getting high-risk groups done before this winter would be a “big victory”, said Gore, who was appointed by health minister Zweli Mkhize last month to chair a vaccines acquisition task team to coordinate private sector vaccine financing, procurement, logistics and administration.
“That’s our hope and aspiration — and my sense is it is possible and doable if the co-ordination and management is tight.”
It’s been estimated that SA would at peak have to vaccinate 250,000 to 300,000 people a day, across public and private sectors — comparable to what the UK has been achieving — to reach its target of vaccinating two-thirds of the population by the year-end.
Gore said a consortium of private-sector players, including Discovery, was looking to create 50 vaccination centres that could inoculate 40,000 to 50,000 people a day and is working with the national health department and B4SA to finalise the collaboration. The challenge for now is the availability of the drugs, but “we should see an easing in the third and fourth quarters”, Gore said.
He was speaking after the release of Discovery’s financial results for the year to end-December, which showed the group increased operating profit by 19% to R4.5bn, with profit from its established businesses — such as Discovery Health and Discovery Life — increasing by 11%, while profits from its newer, emerging businesses jumped by 81%.
The emerging businesses include shortterm insurer Discovery Insure, the international Vitality Group and Ping An Health (in China).
Speaking after Anglo American reported a 41% decline in its profits to $2bn (about R30bn) in a “a year of two halves” that saw production drop sharply in the first half due mainly to the impact of Covid, CEO Mark Cutifani said he would like to see the vaccine rollout move a bit more quickly.
“We believe that as business we should be supporting the government, and if that means we pay for the vaccination of our people, their dependants, and even members of the local community, we’re OK with that. But what we do has to be done with the government and in terms of their priority-setting process,” he said.
“Sure, I’d like to get our own people vaccinated early in the process. But we will do this on the basis of solidarity. We want to be part of the solution, not fighting against it.” Anglo is offering help with vaccination in other countries in which it operates, such as Botswana.
The Minerals Council SA has estimated SA’s mining industry could vaccinate as many as 3-million people, including its approximately 450,000 employees, over two months using the existing health-care infrastructure on the mines.
Although strong commodity prices for platinum group metals, iron ore and gold miners helped drive the stronger-than-expected tax collections reported in this week’s budget, Cutifani said he was not sure he would call this a supercycle yet — but prospects were looking good for the next three to five years.
“We think underlying demand is pretty strong … and supply is quite constrained ... But we don’t want to see prices go too high because we don’t want to see demand destruction,” Cutifani said.