South Africa: half a billion euros in the budget for vaccination

#Other countries : South Africa, with its economy hard hit by the Covid, has made vaccination a priority in its annual budget presented to Parliament on Wednesday, a tightrope walk exercise consisting in fighting the pandemic while avoiding aggravating the disease indebtedness.

Finally, without his usual and symbolic aloe vera plant – able to survive in the midst of a drought – the Minister of Finance, Tito Mboweni, announced that the country will allocate 568 million euros to the vaccination program against the coronavirus.

The government plans to vaccinate two-thirds of its population of 59 million by the end of the year.

“This year, we are facing an exceptionally difficult balancing act,” admitted Mboweni. “On the one hand, there is a raging pandemic (…), on the other, a weak economy with massive unemployment”.

>>> READ ALSO: Covid-19: “120,000 dead” in South Africa, according to the first medical insurance company

Unemployment hit a record high in the country at the end of 2020, with 7.2 million South Africans jobless, or 32.5% of the population. It mainly affects young professionals between 25 and 34 years old, as well as 15-24 year olds.

In the morning, several demonstrations against unemployment took place in the country, at the call of the unions. In Cape Town, police fired tear gas to disperse demonstrators marching towards Parliament.

At Soweto hospital, around 100 people in red shirts danced and sang anti-apartheid songs, in solidarity with medical staff who were underpaid and exhausted by the health crisis.

– “Covid damage” –

An additional envelope of nearly 320 million euros has been announced, as part of a 5.6 billion plan to stimulate youth employment.

“The damage caused by Covid-19 is profound and we share the collective pain of many South Africans who have lost their jobs,” the minister said.

The fiscal situation of South Africa, officially the African country most affected by the pandemic with more than 1.5 million cases and nearly 49,500 deaths, was already fragile before the health crisis and has deteriorated sharply l ‘last year.

>>> READ ALSO: Covid-19: South Africa, first country in the world to use Johnson & Johnson’s vaccines

Public debt is expected to reach over 80% of GDP this year, according to forecasts.

“Our public finances are dangerously under pressure,” the minister warned. But the government is hoping that a mass vaccination will help boost growth to 3.3% this year, after a sharp 7.2% contraction in 2020.

Borrowing needs will however remain “much higher” at 28.2 billion euros per year, at least until 2024, he warned.

Significant tax increases were also announced to close “the biggest fiscal deficit on record”, especially on alcohol, fuel and tobacco.

A measure which will “increase the cost of living for all South Africans”, reacted the first opposition party, the Democratic Alliance (DA), in a statement.

– “State of disaster” –

South Africa quickly declared a “state of disaster” after the virus emerged in March on the continent. And the government has put in place one of the strictest lockdowns in the world.

The first vaccinations started last week, an immunization plan once again deemed “too slow, too little, too late” by the opposition.

But in trying to protect itself from the epidemic, the country has also closed itself to tourists and foreign capital.

In Africa, where the sudden stoppage of the global economy linked to the Covid-19 crisis hit the incomes of emerging countries hard, United Nations economists announced in 2020 a drop in foreign direct investment from 25% to 40%.

A significant withdrawal for South Africa, which derives 8% of its GDP from exports of minerals and metals.

The government is also facing growing needs from ailing state-owned companies, such as the utility company Eskom.

The efforts to reduce the wage bill of the civil service continue, also assured Tito Mboweni.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.