SA Secures R7.6 Billion World Bank Loan For Covid-19 Response, Vaccines

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South Africa has secured a multi-billion rand loan from the World Bank for its Covid-19 response, the National Department of Health NDoH announced Tuesday.

“Today the World Bank Group Board of Executive Directors approved a 454.4 million euro (ZAR 7.6 billion or $480 million) loan for South Africa’s Covid-19 Emergency Response Project,” said the department.

The loan comes following a request by the Government of South Africa (GoSA) for assistance in financing vaccine procurement contracts.

South Africa has embarked on a robust vaccination program: As of June 13, 2022, over 36.4 million doses have been administered, with about 50.3% of adults and 29.9% of 12 to 17-year-old adolescents vaccinated.

Specifically, this project will retroactively finance the procurement of 47 million Covid-19 vaccine doses by the GoSA.

Ismail Momoniat, National Treasury Acting Director-General, South Africa, said: “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.”

In addition to providing vital support to South Africa’s health system, this new low-interest 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.

Marie Françoise Marie Nelly, World Bank Country Director for South Africa said: “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.

“This project builds on our new World Bank Group Country Partnership Framework (CPF) 2022 – 2026, jointly developed with the government in July 2021 to help stimulate investment and job creation.”

The loan complements the support by the International Monetary Fund, the African Development Bank, and the New Development Bank as part of South Africa’s broader financing strategy to access external financing from international financial institutions.