Why lenders should be united against Covid-19, push for vaccine rollout

By Grace Murage

Over a year since the start of the Covid-19 pandemic, countries across the globe are rallying to recover socially and economically from the crisis. However, true recovery requires sustained prevention and intervention measures, and this involves funding. Not all local governments can fight Covid-19 at pace, on their own. The right public-private sector partnerships can drive momentum and unlock funding channels at this critical moment in the pandemic. What is the role of lenders in the Covid-19 intervention and vaccine rollout?

In terms of financing the vaccine rollout, Development Finance Institutions (DFIs) have come to the fore. As an example, Afrexim, a key client of financial services provider, RMB, launched a $2bn guarantee facility for the procurement of vaccines across Africa. This is just the tip of the iceberg as the opportunity to address the financing gap in this area is huge.

There should be a balance. Banks can step in to support DFIs, but this will need to look slightly different to traditional commercial loan arrangements. That is why unconventional financing approaches will help finance worthy initiatives quickly and efficiently. It is acceptable to explore the option of sustainability bonds with some clients to help governments procure the much needed coronavirus vaccine. 

Lenders also have the resources and influence to assist the healthcare industry. Economic activity can only resume to what it was before with the lifting of restrictions on movement. This will only be possible once countries achieve herd immunity after vaccination. Yet, Africa is still lagging behind the rest of the world when it comes to vaccinations, registering only 1.5% of the total vaccines administered globally.

At RMB, a fund dubbed “SPIRE” played an instrumental role at the height of the pandemic, raising funds for Covid-19 mitigation efforts in South Africa. Now, the fund is partnering with South Africa’s Solidarity Fund to support the rollout of vaccines across the country including the setting up of maximum vaccination sites. This is something that the banking sector across Africa, in particular, should willingly embrace.

In Africa, the manufacturing of vaccines locally will dramatically increase the pace of rollouts across the continent. Rwanda is currently in talks with Pfizer and BioNTech to set up a manufacturing plant for local production of Covid-19 vaccines. Senegal is also in advanced talks with Belgian biotech group, Univercells, in a bid to produce vaccines locally from as early as next year. When these plans crystallise, they present an important opportunity for banks to assist with funding the infrastructure of vaccine manufacturing facilities.

There is a larger, overarching priority to consistently and constructively fund the healthcare sector on the continent. But as long as the above (pressing) financial interventions can be met, the future will be brilliant.

The Covid-19 pandemic has shown that we are only as strong as our healthcare systems. As funding institutions, we need to focus on strengthening healthcare systems, equipping hospitals with the right equipment, as well as supporting and financing local innovations such the local manufacturing of ventilators, hospital beds, and oxygen plants. 

While the African continent continues to face a raft of other communicable diseases over and above the Covid-19 pandemic, such as malaria, HIV, and TB, the financial services sector has an integral role to play in the fight against these diseases. It is about the right interventions. At the end of it all, it is important to bridge the gap between the public and private sector, assist countries to bolster their healthcare systems and position their economies for a hopeful future.

Writer is the regional head financial institutions – East and Southern Africa for RMB

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