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Kenya eyes Sh10bn World Bank loan for Covid vaccines


Economy

Kenya eyes Sh10bn World Bank loan for Covid vaccines


COUNTY-VACCINE

Health Cabinet Secretary Mutahi Kagwe (centre) briefs media on the rollout of the Covid-19 vaccine to counties outside the offices of the Council of Governors on March 10, 2021. NMG PHOTO

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Summary

  • The money will buy 11 million doses of the Oxford-AstraZeneca jab that will be used to vaccinate five million persons.
  • The Treasury failed to allocate Sh4.5 billion needed for the next phase of Covid-19 vaccination starting July, raising the risk that targeted Kenyans could miss out on the jab against the infectious disease.
  • This has forced the Kenya to seek help from the World Bank in an economy faced with deteriorating cash-flow situation that is marked by falling revenues and worsening debt service obligations.

Kenya has returned to the World Bank for a Sh10 billion loan to help purchase Covid-19 vaccines following a financing shortfall that threatens the country’s inoculation plan against the infectious virus.

The money will buy 11 million doses of the Oxford-AstraZeneca jab that will be used to vaccinate five million persons.

The Treasury failed to allocate Sh4.5 billion needed for the next phase of Covid-19 vaccination starting July, raising the risk that targeted Kenyans could miss out on the jab against the infectious disease.

This has forced the Kenya to seek help from the World Bank in an economy faced with deteriorating cash-flow situation that is marked by falling revenues and worsening debt service obligations.

“We are engaging the World Bank for a credit facility of Sh10 billion. The process is ongoing at the National Treasury,” Health chief administrative secretary Mercy Mwangangi told Parliament yesterday.

Kenya requires Sh34 billion to ship in 36 million doses of Covid-19 vaccines by June next year when it expects to have 16 million people inoculated.

Donors will provide Sh20 billion, leaving Kenya to seek Sh14 billion from taxes and donors like the World Bank.

The country last week received 1.02 million vaccine doses, enough for slightly over 500,000 people requiring two doses eight to 12 weeks apart.

This would cover health and care-home workers, with the other top priority being teachers and security and immigration personnel.

The second phase of vaccination would involve 9.7 million people — comprising all those aged above 50 years and those aged above 18 years with underlying medical conditions — between July this year and June next year.

The third phase, to unfold concurrently with the second, will be aimed at 4.9 million people, including those living in congested areas and seen as particularly vulnerable.

Kenya is already in talks with the World Bank for the first tranche of Sh5 billion needed in the fiscal year starting July.

Treasury Principal Secretary Julius Muia said yesterday that the Sh5 billion loan is part of the country’s Sh14 billion share for vaccines purchase.

“We need to bear in mind that the Sh34 billion cost is for a three-year period. The vaccines currently being administered are under the Sh20 billion grant secured,” Dr Muia said.

The Covid-19 pandemic has battered Kenya’s tax revenue collection at a time when more of its debts are falling due and as it is still grappling with gaping fiscal deficits.

Revenue collection underperformed by Sh109.9 billion in the first six months of the financial year to December, amid the coronavirus-related disruptions.

The Ministry of Health has warned the country will not hit the 60 percent of the population that the World Health Organisation (WHO) says should be vaccinated to curb the spread of the disease.

Dr Mwangangi linked the forecast shortfall to the production constraints of the vaccines due to high demand and financing hitches.

Kenya had by yesterday recorded 110,356 infections and 1,898 deaths, with the ministry of Health warning of a spike in infections amid the threat of third wave.

COVAX, which is led by the GAVI vaccines alliance along with the WHO and other partners, aims to deliver over 1.3 billion doses to 92 lower- and middle-income countries, covering up to 20 percent of their populations.

Backers of the initiative hope to level a playing field that has seen wealthier nations quickly vaccinate millions, ahead of poorer regions.

Only a few African nations have started inoculating citizens with vaccines acquired outside of COVAX. Kenya will share the cost of importing the vaccines with GAVI, underlining the need for the Treasury allocation for the doses.

Kenya will offer the Covid-19 vaccine shots free of charge to its citizens, but will pay $7.70 (Sh845.50) per shot of the vaccines as negotiated under the COVAX facility.



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