Nandago primes vaccination for economic recovery
• By Hilary Mare
ACHIEVING a high level of vaccine coverage is not only key to ending the pandemic but is also critical to getting economies across the world back onto an upward growth trajectory in the short term, Ruusa Nandago, FirstRand Namibia economist has said.
Reiterating that vaccine policy is economic policy, Nandago highlighted that this is because low vaccine coverage brings about risks of virus mutations and new variants which could lead to further variant-induced waves of infections.
“This was witnessed in Namibia during the devastating Delta third wave experienced in the June-July period of 2021. Furthermore, there remains a risk that new variants may become vaccine resistant, thus delaying the end of the pandemic and consequently limiting the potential for economic growth.
“The emergence of the Omicron variant reminds us that additional variants and further waves of infections bode ill for Namibian tourism as they trigger travel bans and red-listing which consequently leads to cancellations of flights, accommodation and tourist activities. Tourism, as we know, was a significant contributor to the country’s gross domestic product (GDP) before the onset of the pandemic.”
In addition to this, she said severe waves of Covid-19 could necessitate the re-introduction of strict regulations which limit movement.
“This, by implication, disrupts economic activity which has detrimental implications for other sectors in the economy, particularly those that are consumer facing. This start-and-stop approach to the economy could lead to a further deterioration in consumer and business confidence.
“Confidence levels are already at historical low levels as evidenced by data on credit extended to the private sector. Despite the national interest rate being at a historical low of 3.75 percent, growth credit extended to the private sector averaged only three percent in 2021, compared to its pre-pandemic average of seven percent,” further explained Nandago.
In 2021, the International Monetary Fund (IMF) proposed that the pandemic could end if 40 percent of the population got vaccinated by the end of 2021 and 70 percent by mid-2022.
While some countries have made significant progress towards achieving this target, there remains large variations in terms of vaccine coverage – with African countries recording the lowest vaccination rates. Namibia, in particular, lags far behind its own target of attained herd immunity by March 2022.
“Given the current levels of vaccination coverage, the expectation is that Namibia is not likely to reach herd immunity by the end of 2022. At the same time, economic growth during the first three quarters of 2021 averaged -0.5 percent, suggesting an extremely fragile economy. While sufficient vaccine coverage is not the panacea solution to the revival of economic growth, it creates the necessary conditions for the success of other long-standing reforms to be successful, such as creating a more conducive business environment and stabilising government finances,” Nandago further states further adding, “Gradual economic recovery is possible provided we double our efforts to encourage greater uptake of Covid-19 vaccines that do not only protect lives but will go a long way to safeguard livelihoods”.