Government considering increased borrowing and involving private sector to fund vaccines
The government will have to consider all options to fund the Covid-19 vaccine, including increasing public borrowing and involving the private sector.
President Cyril Ramaphosa told the ANC national executive committee (NEC) lekgotla on Friday that the cost of purchasing the vaccine was a major challenge.
He said besides increasing government debt, there has been engagement with the private sector on how it can help with the funding of the vaccine.
The available options, Ramaphosa said, are that the private sector contribute to a pooled fund that could be used for the vaccine or undertake to fund, and most probably administer, the vaccination of its employees.
It has been estimated that at least R20bn would be required to achieve herd immunity which means vaccinating at least 40 million of the country’s population.
“We are also engaged in discussions with the private sector for companies to make a further contribution, either into a pooled fund or where employers are able to cover the cost of vaccination for their workforce,” Ramaphosa said in his opening remarks.
“Many of them have also shown a willingness not only to help with the vaccination initiative of their employees but also people living in surrounding communities. Some of these companies are in the mining industry.”
Medical aids have already agreed to cover their members when the vaccine finally reaches the country’s shores.
Business Unity SA CEO Cas Coovadia confirmed the discussions with the government to TimesLIVE, but could not provide further details.
He said the discussions were still in the early stages but that they were expecting to reach an agreement by Wednesday.
“Those talks are ongoing, we haven’t reached finality on any of that. We only started sort of co-ordinating in business about 10 days ago after we met the president,” Coovadia said.
He said he was not at liberty to discuss details of the talks to avoid confusing the public.
“There’s enough confusion around vaccines anyway, so talking in general doesn’t help. Let’s sit down with government, which we will do in the middle of next week, and then we’ve got to talk to the public about exactly what is happening,” he said.
He added that they would be able to talk about it “by [the] middle of next week, by Wednesday or so”.
Ramaphosa told the NEC lekgotla that though resources in the country were constrained, the funding of the vaccine could not be deferred as the cost in human life and to the economy would be far greater.
“Our first, and primary, source of vaccine funding is the fiscus. This is a public good that is vital to the wellbeing of all our people, and it is therefore correct that public funding should be used, even if this means increasing public borrowing,” Ramaphosa said.
“Comrade Tito [Mboweni, the finance minister] will later outline challenges in this regard, but funds will be there to save the lives of our people.”
Ramaphosa said the vaccine would have to cover everyone in the country’s borders, including foreign nationals.
“We should remember that the vaccine programme needs to reach everyone within the borders of our country, whether they are South Africans or not. This is not only a matter of basic human rights, but it is also necessary if we are to achieve the necessary level of population immunity,” he said.
He urged those in attendance at the NEC lekgotla to refrain from remarks that might suggest that only South Africans were targeted in the vaccine rollout.
“So we need to be careful not to talk about vaccinating South Africans only, and the continent is looking to us whether we will focus on our country alone,” he said.