Kenya’s economic rebound tied to COVID-19 vaccine access
The potential rebound of Kenya’s economy in 2021 has been tied down to the access of COVID-19 vaccines and their eventual distribution.
According to economic experts, the fast tracking of vaccinations to the masses will help instil confidence ending uncertainty that has persisted over the past nine months.
According to a new report by Allianz Research, the creation of herd immunity through the administration of vaccines to the majority of the global population will serve as a tail wind to economic recovery by October 2021.
Allianz SE Chief Economist Ludovic Subran says the creation of confidence is a pre-requisite to the restarting of social expenditures which he estimates to account for about one third of household total spending in the large economies of Sub-Saharan Africa (SSA).
“It all boils down to restarting life as people are used to especially on social expenditures such as leisure, travelling, buying a few more clothing items and furniture or homes,” he said.
“We believe the restarting of confidence is very important for tourism, the service industry and informal sector workers.”
The access and distribution of vaccines in developing and emerging markets is however likely to be marred by delays as concerns on infrastructure, costs and vaccine protectionism by the developed world emerge.
For instance, the bulk of around six billion doses ordered by pharmaceuticals has been gobbled up by developed economies as the rest of the world lags behind.
Even if doses were available today, Institute of Economic Affairs (IEA) Chief Executive Officer Kwame Owino argues the inefficiency of public infrastructure to aid in distribution would be a telling factor.
“Whether the public infrastructure to deploy the solution effectively is available or not, will be evident in Kenya in a short while. My guess is that even if the vaccine were made available in sufficient quantities, the inherent weaknesses in the public sector’s management and priorities will show,” he stated in a note published on December 14.
Further, Mr Owino highlighted the intrigues involved in the Kenya’s timely access to the vaccine resources underscoring cost constraints and fear over hoarding of medicines.
“Public attention now moves to what options the government for Kenya has to ensure that vaccines are procured from the pharmaceutical firms that have developed them. There is justifiable worry that affordability of the vaccines will be an issue for both African and other low income countries. Access to vaccines could be constrained further by hoarding of medicines required for bringing the Covid-19 emergency under control,” he added.
On his part, Chief Economist and Mentoria Consulting Ken Gichinga has called for global linkages in between Kenya and the rest of the world in fast tracking access and distribution of vaccines.
“We do have the brains in our doctors and world class institutions such as the Kenya Medical Research Institute (KEMRI) but lack in global partnerships,” he said.
“As much as people are up and about indicating resumption in economic activity, the administration of vaccines is still essential in instilling confidence. Vaccines would for instance guide the end of containment measures which would allow a full resumption in the operations of businesses such as bars and restaurants.
Kenya will be seeking to rise from the ashes of economic devastation that characterised 2020 in the New Year.
For instance, Kenya’s GDP contracted for the first time since September of 2008 on the back of economic restricting COVID-19 measures as output shrunk by 5.7 per cent between April and June.
Data from the Kenya National Bureau of Statistics (KNBS) covering the second quarter meanwhile revealed the doubling of the rate of unemployment to 10.4 from 5.2 per cent with the economy shedding 1.7 million jobs in the period.
Most recently, statistics from the World Bank showed Kenya’s national poverty rate had increased by four percent with two million more Kenyans sliding into poverty.
To get its hands on vaccines Kenya has since joined the COVAX an accelerator program led by the World Health Organisation (WHO) which is aimed at speeding up the search for an effective vaccine for all countries.
The program further supports the building of manufacturing capabilities, buying supply ahead of time with a goal of having two billion vaccine doses distributed fairly by the end of 2021.
Additionally, Kenya has been participating in clinical trials for potential vaccines including the Oxford University/AstraZeneca vaccine and most recently the Sanofi/GlaxoSmithKline vaccine.
Earlier this week, the Ministry of Health revealed it hopes to receive the first consignment of the Oxford University-AstraZeneca vaccine in the first quarter of 2021.
Kenya has opted for the Oxford backed vaccine due to its relative costs of access and distribution.