By Tafara Mtutu
It has been almost two years since Covid-19 was declared a global pandemic and almost a year since the first vaccine was approved by the World Health Organization (WHO). Today the world has a choice of several vaccines, but the pandemic remains a critical issue. Among the many issues hindering the resolute victory of the global community against Covid-19 is the lack of equity in vaccines.
Vaccine equity refers to the equitable distribution of Covid-19 vaccines in all countries, regardless of their economic, developmental or social status. This mandate was undertaken by WHO, the United Nations Children’s Fund (Unicef) and GAVI, The Vaccine Alliance, who jointly run Covax, a facility intended to accelerate the development, production and equitable access to tests, treatments and vaccines.
Despite the efforts of the Covax facility, vaccine inequality has grown since the start of large-scale distribution of approved vaccines.
According to data from the United Nations Development Program, the total number of Covid-19 vaccines administered per 100 people in high-income and upper-middle-income countries is estimated at 133 and 126, respectively.
At the other end of the spectrum are lower-middle-income and low-income countries, whose total number of Covid-19 vaccines administered per 100 people currently averages 53 and four, respectively.
Among the many reasons for this vaccine inequality are issues related to (i) affordability, (ii) production facilities, (iii) poor governance, and (iv) storage by richer countries.
GAVI data shows that the average cost per dose of the Covid-19 vaccine ranges between US $ 2 and US $ 40. The figures are higher if we include an estimated distribution cost of $ 3.70 per person vaccinated with two doses. The figures indicate a high financial burden considering that the average annual health expenditure per capita in low-income countries is $ 41.
Availability of vaccines in low- and lower-middle-income countries is further hampered by the lack of production facilities in Africa. The African continent, whose economies dominate the WHO’s lists of lower middle-income and low-income countries, is lagging behind in the race for herd immunity.
Currently, the continent has fully vaccinated less than 5% of its total population of 1.3 billion while Europe (50%), North America (44%), Asia (32%) and South America (33%) have a much higher vaccine population rate.
This is largely because the continent only manufactures 1% of the vaccines that have been administered in Africa so far. Only six countries on the continent – Egypt, Morocco, Algeria, Nigeria, South Africa and Senegal – have manufacturing facilities with a targeted annual production capacity of two billion doses at from 2023 and beyond.
However, most of these facilities package imported vaccine substances instead of manufacturing the drugs and still depend on foreign manufacturers for vaccine supply. Added to this is the poor governance when it comes to the Covid-19 related funds that have been disbursed to developing and low-income countries in Africa.
Authorities in Malawi have arrested 64 people for Covid-19 embezzlement. The state-run Kenya Medical Supplies Agency (Kemsa) is embroiled in allegations of misappropriation of US $ 400 million intended to purchase medical supplies needed to fight Covid-19.
In South Africa, cases of overpricing and abuse of Covid-19 funds have flooded the internet. Among the many cases brought to light is the Digital Vibes scandal which involved the misuse of US $ 10 million of Covid-19 funds.
An audit of the use of South Africa’s Covid-19 relief funds also found that in some cases personal protective equipment (PPE) was purchased five times more than the price advised by the National Treasury.
In 2020, four Ugandan government officials were arrested after being accused of inflating the prices of Covid-19 relief food, resulting in a loss of US $ 528,000 for the government.
Many other similar cases of poor governance related to Covid-19 funds have been documented in Nigeria, Zimbabwe and Somalia with obvious impact on the distribution of vaccines, PPE and medical equipment in these countries.
Developed countries such as Britain, France, Germany and the United States have also shown financial strength by ordering and stocking vaccines, some before they proved effective against the virus. .
As a result, when these vaccines are finally approved and ready to be purchased by governments and other humanitarian agencies for low-income countries, there is a queue with high-income countries leading the way.
According to the WHO, low-income countries would add $ 38 billion to their 2021 GDP forecasts if they had the same immunization rates as high-income countries.
Additionally, the continued lockdowns that have been turned on and off in various low-income countries could perpetuate these economic losses as industries and offices are downsized due to restrictions on movement.
In some cases, the loss of critical and knowledgeable professionals in various fields due to Covid-19 will also impact the overall economic recovery of affected countries.
Zimbabwe has fully immunized over 2.6 million of its citizens, or 17.2 people per 100 people. The statistics are commendable for a low-income country, and we attribute this to the efforts of the government and several private actors.
However, we note that the risks of another wave remain likely given the resurgence of Covid-19 cases and deaths in many developed and developing countries, which have been aggressive in the fight against Covid-19.
For investors keen to protect their portfolio against such risks, we recommend taking long positions in defensive Zimbabwe Stock Exchange stocks such as Delta, Innscor, Meikles and OK Zimbabwe.
These stocks often produce, manufacture or sell goods with a very short shelf life, regardless of the prevailing economic constraints. These companies also have the ability to pass the effects of inflation on to the consumer with minimal damage to margins.
- Mtutu is a Research Analyst at Morgan & Co. – [email protected] or +263 774 795 854.