R9 billion of the country’s budget will be going toward funding the free Covid-19 vaccination programme in the medium term, with the rollout 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 an additional R1.3 billion was allocated in the current financial year.
According to the budget review by Finance Minister Tito Mboweni and the National Treasury, the vaccination programme will support economic recovery and global trade as the Covid-19 pandemic contracted GDP growth in 2020 by 7.2%.
The long-awaited vaccinations will be provided free of charge, targeting 67% of the population over the next 12 months, in line with the need and rollout schedule.
“A successful vaccine rollout 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.”
Where the funds come from
Funding for purchasing and rollout 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 both 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
- National Department of Health – R6.5 billion will be allocated to procure and distribute the vaccine.
- Provincial health departments – R2.4 billion to administer the vaccine.
The South African Medical Research Council – R100 million for vaccine research.
- Government Communication and Information System (GCIS) – R50 million for a vaccine communications campaign.
What’s the back-up plan?
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.”
“Although government will conduct a mass vaccination campaign, the threat of resurgent waves of infection lingers, and the roll-out is only expected to gather pace in the second half of 2021,” said the budget review.