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Government expenditure on the procurement and rollout of the Covid19 vaccine got a shot in the arm on Wednesday with a R9 billion injection from National Treasury
This is in addition to an initial amount of R1.3 billion already allocated for its current budgetary year, taking the government's current allocation to R10.3 billion.
Tabling his medium-term budget policy framework in Parliament, Finance Minister Tito Mboweni said the budget framework provides the funding for the government's vaccination campaign.
"This campaign allows us to emerge from the restrictions that we have experienced economic activity. And now, as we gradually fight this (by) introducing vaccines, we should be able to return, in time, to full economic activity," Mboweni said.
He said the contingency reserve was also been increased from R5 billion to R12 billion to provide for any further vaccines purchases or emergencies.
Treasury said that as the country begins to roll out a massive vaccination programme, GDP is projected to grow by a rate of 3.3% in 2021.
According to the Budget Review, Treasury said the COVID-19 shock is estimated to have led to a 7.2% contraction in GDP growth in 2020.
"The economy has started to recover in response to improved global conditions and the easing of lockdown restrictions and in the months ahead, a mass vaccine rollout will support a full reopening of the economy."
"GDP growth of 3.3% is projected for 2021, moderating to an average of 1.9% in 2022 and 2023."
Mboweni said Treasury crafted a fiscal framework that extends support to the economy and public health services while ensuring the sustainability of public health finances in the medium term and according to him, "the first reason for hope."
"With this framework, we are on track to achieve our goal of closing the main budget primary deficit. We shall a primary surplus on the main budget in 2024/25. This will be an important achievement and will coincide with the end of the 6th Parliament."
(Additional reporting: Moneyweb.co.za)
