By Neelam Rahim

The World Bank has approved a €454.4 million (~R7.6 billion) low-interest loan to help fund South Africa’s purchase of vaccines.

Approved by the Bank’s Group Board of Executive Directors on Monday, the loan comes following a request by the government of South Africa for assistance in financing vaccine procurement contracts.

In a joint statement, the Treasury and the World Bank said that more could be done to increase vaccine coverage and boost South Africa’s economic recovery.

They said: “South Africa is the epicentre of the Covid-19 pandemic in Africa, with the highest cumulative numbers of infections and deaths. By supporting the country’s Covid-19 vaccination program, the project will help the government better cope with the pandemic, as the country experiences its fifth wave, and support the GoSA to create the fiscal space needed to strengthen its health system and ensure financial and institutional sustainability”.

Treasury and the World Bank also said the 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”.

“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,” said Marie Françoise Marie Nelly, the World Bank’s country director for South Africa.”

“This project builds on our new World Bank Group country partnership framework 2022 – 2026, jointly developed with the government in July 2021 to help stimulate investment and job creation.”

Investec Chief Economist Annabel Bishop told SABC News that there’s no reason to worry as this is a positive step.

“It allows us funding for vaccines as well as moving forward, that’s what the World Bank “intends for us to use it for’ and as a consequence, for that, we get the preferential interest rate that we would not get elsewhere,” says Annabel.