BLSA CEO’s letter
11 January 2021
In my last letter of 2020, I looked forward to a year in which we finally overcome the pandemic thanks to the vaccine. I had written earlier that it was critical for South Africa to ensure it is among the first countries to get the vaccine.
Well, a lot has happened on this front over the festive season. While many were taking a well-earned break, it became clear that government had not yet done the basics in developing a vaccine strategy. Offers of cost-price vaccines from major manufacturers had gone unanswered.
Despite South Africa’s Aspen Pharmacare having secured a contract to make 300-million doses of the Johnson & Johnson vaccine, the government had ordered none. Unlike many other developed and developing countries, South Africa had not negotiated any “advance market commitments” with manufacturers to buy vaccines conditional on their successful approval following trials.
The only commitment government had made was to the global Covax initiative to support developing countries with vaccine access, which would provide vaccines to cover only 10% of the population. But then we missed the first payment on that scheme.
By the first week of January, the embarrassing lack of vaccine strategy had become clear and both government and private sector were shocked into action. This week government announced it had secured 1.5-million doses of the AstraZeneca vaccine from Indian producers.
That is a start, but it is far from enough. The order will cover our 750,000 frontline health workers, but to get to the level of immunity needed for life to go back to normal we need to vaccinate upwards of 36-million people (60% of the adult population). So we have a great deal further to go in the procurement effort to get there.
Some have suggested our slow development of a vaccine strategy is because it is unaffordable. This is obviously wrong. The cost to the economy of not vaccinating is what is unaffordable. Government tax revenue in the current financial year (to February 2021) is projected to be R300bn lower than it had budgeted for originally.
That is because of the pandemic. Every day we lose in bringing this to an end means substantial costs to the country. A full vaccine programme has been projected to cost around R12bn, including the logistics of distribution. That is a straightforward investment with a high positive yield.
The real problem here is a management one. Our whole response to the pandemic has been fundamentally short-termist. That is understandable – we have been firefighting. But we seem to have ignored that while we are confronting the urgent and immediate challenges in dealing with the pandemic, we must simultaneously be applying ourselves to the medium and long-term implications. A vaccine strategy should have been worked out six months ago.
Budgets should have been set and procurement negotiations begun. The cost to the economy is going to be substantial because we failed to do that.
Short termism has also characterised our general economic policy response. Short term measures like the UIF TERS scheme, social grants and tax payment holidays were introduced, but it took many months for an economic recovery package to emerge. That will only be worthwhile if it is implemented rapidly and we must plan for the new impact of the second wave and measures taken to get it under control.
This year we must put the pandemic behind us. But we need a comprehensive strategy that empowers the right people to develop both the short- and longer-term measures to do that. It must include a comprehensive vaccination programme, but also the economic recovery steps we must take to deal with the economic fallout – not only in the short term, but also as we focus on rebuilding the economy and bringing back the 1.8-million jobs that have been lost. We can see the end of this crisis on the horizon – but we still have much work to do to get there.
Last year was exhausting on many fronts. We have certainly needed the break. BLSA reflected on the year and the spirit with which South Africans pulled together to respond to it. Have a read here. At BLSA we are invigorated to tackle this year’s challenges in the same spirit. I am looking forward to working with all of you to make it happen.
Less able to rest were South Africa’s lawyers and judges. An important case was decided the week before Christmas, confirming that the government is right not to implement civil servant salary increases this year. BLSA welcomed the decision which will help in the effort to stabilise government’s financial position.
This is a weekly newsletter from BLSA CEO Busi Mavuso.
