Economists question govt's failure to plan for COVID-19 vaccine funding

Government has already come under fire for not engaging early enough with vaccine suppliers or planning the roll-out of its vaccination campaign properly.

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CAPE TOWN - Economists are questioning the government’s lack of foresight and planning in ensuring that there are funds to pay for the COVID-19 vaccines.

Government has already come under fire for not engaging early enough with vaccine suppliers or planning the roll-out of its vaccination campaign properly.

National Treasury has warned that South Africans may have to “bite the bullet” and possibly pay more taxes to fund the vaccine.

READ: Ramaphosa: Treasury will make sure money is available for COVID-19 vaccine

Other options are borrowing, which will deepen the deficit, or more cuts to government spending, which could put proper service delivery in the balance.

But economists are asking why the government did not plan ahead when it knew vaccines would become available.

South Africans will have to wait until Finance Minister Tito Mboweni tables his 2021 budget in February before they know for sure what option the government has decided on to fund the vaccines it needs.

The government has an ambitious plan to vaccinate two-thirds of the population to achieve herd immunity against the virus.

ALSO READ: Economists warn govt against further tax hikes to pay for COVID-19 vaccines

But neither Mboweni’s emergency budget in June nor his adjusted budget in October dealt with how this would be funded. Treasury Director-General Dondo Mogajane told 702 that the vaccines would be paid for as
soon as they’re available, but where the funds would come from was still open to debate.

Economist Thabi Leoka: "It’s just astonishing that we spent most of whole last year going through this pandemic, trying to understand it, reprioritising the budget... we had three budgets last year and a lot of that reprioritisation went to health and in any of the discussions, I cannot believe that funding for the vaccine was not top of mind and that reprioritisation did not factor in the funding of the vaccine."

Economist Mike Schussler agreed: “We knew a vaccine was coming, we may not have known when – and that’s what I don’t understand... the Department of Health should have made Treasury aware of that.”

As the government manoeuvres its way through the funding and logistics quagmire in providing the vaccine, ratings agencies will be watching closely to see how it manages the crisis.

WATCH: SA's vaccine strategy: what you need to know

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