Disappointing vaccine developments mean that policymakers in Africa could be forced to keep restrictions on activity in place for longer, delaying economic recoveries and deepening scarring effects.
- Disappointing vaccine developments mean that policymakers in Africa could be forced to keep restrictions on activity in place for longer, delaying economic recoveries and deepening scarring effects.
- Many Sub-Saharan African economies have endured second waves of COVID-19 in recent months. New cases are rising sharply in Ghana, Ethiopia and Mozambique for instance. Meanwhile, South Africa, Nigeria and Kenya appear to have passed their second peaks. (See Chart 1.) As it stands, second waves have generally involved a larger caseload with peak new infections well above those in the corresponding first wave. More transmissible virus strains are probably behind the latest rise in cases, notably in South Africa.
- Apart from Mauritius, Seychelles and Guinea, vaccination campaigns have not started in the region. Countries participating in the Covax scheme – most Sub-Saharan African economies – are set to receive initial allocations around the end of February, with additional shipments in the first half of the year and before the end of 2021. Based on an interim distribution forecast, we estimate that less than 10% of populations would be covered by doses secured through the Covax facility by the end of this year.
- Governments can, of course, also tap into the African Union’s portfolio of about 670mn vaccine doses. First shipments under this arrangement are expected in late February. At this point, details about this operation are scarce apart from reports suggesting that sixteen (unknown) countries have expressed interest in securing a total of about 115mn doses.
- Few countries have bilateral deals with vaccine manufacturers. Aside from initial vaccine shipments in the coming weeks that are unlikely to cover much more than healthcare workers, wider roll-out will probably get underway only later in the year. The African Union targets immunising 60% of populations – around the threshold to reach herd immunity – in the next three years.
- Vaccination campaigns may be further delayed amid signs that vaccines may be less effective against new strains of COVID-19. After taking delivery of a first batch of AstraZeneca vaccines earlier in February, the authorities in South Africa announced over the weekend a halt to the roll-out to healthcare workers due to disappointing trial data. The jab seems to offer limited protection against mild to moderate cases caused by the South African virus mutation. Much of the Covax vaccine portfolio consists of AstraZeneca shots.
- At best, South Africa’s already delayed vaccine distribution plan will be set back by several weeks. The government appears to be pushing to purchase 20mn additional vaccine doses from Johnson&Johnson, on top of 9mn already secured, with an accelerated roll-out. Vaccinations using AstraZeneca doses will probably be postponed until efficacy against severe cases is shown (which was not studied in the latest trial). There are some positive signs from other vaccines using similar technology.
- In the meantime, containment measures will have to remain in place for a more protracted period. The likes of South Africa and Côte d’Ivoire have tightened restrictions to curb COVID-19 cases, although other countries have opted not to do so. Even so, activity appears to have been hit across the board – visits to retail outlets fell sharply in early 2021. (See Chart 2.) Additional fiscal support is unlikely, especially if debt relief initiatives fail to make much more headway and, as a result, economic scarring could deepen.
Chart 1: New Daily Cases (7-day moving average)
Chart 2: Africa* Retail & Recreation Visits (Google Mobility Data, % Relative to 3rd Jan-6th Feb. ‘20, 7d avg.)
Sources: CEIC, Refinitiv, Capital Economics
Sources: Google, Capital Economics
Virág Fórizs, Africa Economist, firstname.lastname@example.org