World Bank approves low-interest loan of almost R8bn for SA’s Covid-19 vaccine programme

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The World Bank has approved a €454.4 million (~R7.6 billion) low-interest loan to help fund South Africa’s purchase of vaccines.

The government had asked for assistance in financing vaccine procurement. This loan will now retroactively be used to finance the country’s acquisition of 47 million Covid-19 vaccine doses.

As of Monday, more than 36.4 million doses of Covid-19 vaccines have been administered, Just over 50% of the country's adults, and 29.9% of 12 to 17-year-olds have been vaccinated.

The Treasury and the World Bank said in joint statement that more can be done to increase vaccine coverage and boost South Africa’s economic recovery.

"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," acting Treasury director-general Ismail Momoniat said in the statement.

Treasury and the World Bank said the loan "contributes to the government’s fiscal relief package while reinforcing South Africa’s decisions on how best to provide relief to the economy and those worst affected by the crisis".

"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% of the country’s target population," said Marie Françoise Marie Nelly, the World Bank’s country director for South Africa.

"This project builds on our new World Bank Group country partnership framework 2022 – 2026, jointly developed with the government in July 2021 to help stimulate investment and job creation."

READ | SA to get $750 million World Bank loan to boost economic recovery

In January, the World Bank approved South Africa’s request for a $750 million (about R11.4 billion at the time) loan to support the country’s implementation of its economic reconstruction and recovery plan in the wake of Covid-19.

And in 2020, the International Monetary Fund granted SA a $4.3 billion (around R70 billion at the time) loan to support job creation and protection for businesses impacted by the Covid-19 pandemic.

This was followed by a $1 billion (R14.5 billion at the time) loan from the New Development Bank (NDB) in 2021. The NDB is a development finance institution established by Brazil, Russia, India, China and SA as part of the BRICS grouping. 

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