Vaccines, Energy Top South African President’s Priority List

JOHANNESBURG (Capital Markets in Africa) — South African President Cyril Ramaphosa pledged to intensify efforts to rebuild an economy shattered by the onset of the coronavirus, with vaccine procurement and enhanced energy security among his top priorities.

The government has secured 9 million single-shot vaccines from Johnson & Johnson, with 80,000 expected to arrive next week and 500,000 over the next four weeks, Ramaphosa said in a state-of-the-nation address on Thursday. Talks are ongoing to secure sufficient supply to inoculate two-thirds of the nation’s 60 million people, with 12 million doses already pinned down from the Covax initiative and 20 million from Pfizer Inc. that will begin arriving at the end of the first quarter, he said.

“Fundamental to our nation’s recovery is an unrelenting and comprehensive response to overcome the coronavirus,” Ramaphosa said. “We must undertake a massive vaccination program to save lives and dramatically reduce infections.”

A patient registers her details at a mobile Covid-19 testing station in the Dunkeld suburb of Johannesburg, South Africa, on Feb. 10.

South Africa has detected almost 1.5 million Covid-19 infections, the most in Africa and more than 47,000 of those diagnosed with the disease have died. The government’s plans to begin dispensing vaccines developed by AstraZeneca Plc and the University of Oxford were derailed when a small study showed they had limited efficacy against a new variant of the virus first identified in the country late last year. That prompted it to pivot to the J&J shots.

A series of restrictions aimed at preventing the spread of the pandemic, including travel curbs and alcohol-sales bans, has devastated Africa’s most-industrialized economy, with the central bank estimating that it contracted 7.1% last year. Ramaphosa unveiled a recovery plan in October that targets an average annual economic growth rate of 3% over the next decade and focuses on creating jobs for the one-third of the labor force that’s unemployed.

“As a result of the relief measures that we implemented and the phased reopening of the economy, we expect to see a strong recovery in employment by the end of 2020,” Ramaphosa said.
While business groups say Ramaphosa has yet to deliver on promised reforms to make it easier to do business and inspire confidence, the president said his initiatives were beginning to show results. An infrastructure investment plan worth 340 billion rands ($23 billion) has been developed with energy, water, transport, and telecommunications projects in the pipeline and under development, and a 100 billion-rand infrastructure fund is in full operation, he said.

Renewable Energy
Ramaphosa also reiterated undertakings made in his keynote address last year to address energy shortages and reduce the nation’s reliance on debt-stricken state power utility Eskom Holdings SOC Ltd. They include getting private companies to supply additional renewable energy to the grid.

The winners of contracts to supply 2,000 megawatts of emergency power will be announced soon and requests for proposals to supply 2,600 megawatts from solar and wind projects will be issued over the next few weeks, with another bidding round planned in August, according to the president. Licensing requirements will be reviewed in the next three months to make it easier for businesses to produce electricity for their own use, he said.

Eskom, which provides about 95% of South Africa’s electricity, isn’t generating enough income to cover its costs and can’t generate enough energy from its old and poorly maintained power plants to meet demand. The utility estimates there will be a supply shortfall of between 4,000 and 6,000 megawatts over the next five years unless additional capacity is added, Ramaphosa said.

Other highlights:
The government will extend a 350-rand grant for the unemployed by three months.
The government will continue to subsidize wages for industries that have not been able to operate due to lockdown rules until mid-March.
A new agency will be set up to fast-track land reform.

There will be standardized governance, financial management, and operational performance framework for all state-owned companies.

Source: Bloomberg Business News