Slow Covid-19 vaccine roll-out hobbles growth in South Africa

ANALYSTS have warned that South Africa’s delayed vaccine roll-out could halt the country’s economic recovery in spite of the government imposing stricter restrictions to curb further spread of Covid-19 infections.

Investec chief economist Annabel Bishop said the slow roll-out had reduced the positive sentiment towards the economic outlook and vaccine rollout that had been growing this year.

Bishop said while this and the last month had seen a quickening in the roll-out, the pace was still too slow and South Africa risked substantially more Covid-19 deaths. “The extremely slow roll-out of vaccines means that the country will most likely not reach two-thirds immunity by year end as originally planned,” Bishop said.

“Globally, economic recovery remains strong, as are vaccine rollouts in key economies. (But) South Africa’s weak electricity supply and the weak vaccine roll-out negatively affect investor sentiment.”

There has been an increase in the number of new Covid-19 cases, with the seven-day rolling average close to the peaks of the first and second waves.

On Tuesday, President Cyril Ramaphosa moved the country to an alert level 3 lockdown, with restrictions on alcohol sales and reduced number of people at gatherings.

Ramaphosa said the country needed to revert back to and put emphasis on non-pharmaceutical interventions such as mask wearing, social distancing and sanitising to curb the further spread of the pandemic.

New Covid-19 cases are on a rapid rise amid the third wave of infections, especially in Gauteng, Northern Cape, Free State and North West.

And only 1.7 million people in the country have been inoculated as the pace of vaccine roll-out has proved too slow due to challenges from international deliveries.

The Department of Health has failed to expedite the process to meet the original planned schedule as deaths were also rising at an alarming rate, putting the expected 4.2 percent growth in jeopardy.

The disposal of 2 million contaminated Johnson & Johnson vaccine doses comes as another blow to the country’s ambitious roll-out programme.

Aspen Pharmaceuticals has promised to beef up its capacity to start working on a new batch of J&J vaccines this week, to deliver 300 000 doses in a few days, and more than one million in two weeks.

Old Mutual Wealth Investment strategist Izak Odendaal said there simply were not enough vaccines in South Africa yet.

Odendaal said apart from power cuts, the biggest obstacles to economic growth over the next few months were the third wave of Covid-19 cases, possibly followed by a fourth wave.

“Confirmed daily new Covid-19 cases are now rising at an average of 5 000, making the vaccine roll-out all the more urgent,” he said.

“Studies from the IMF and others show that the economic impact of Covid-19 worldwide was due roughly 50-50 to government-imposed restrictions on the one hand, and the voluntary actions of consumers to avoid the virus on the other.”