HEALTHCARE | 05 OCTOBER 2021 Vaccinating for Economic Recovery and Growth Absa | Corporate and Investment Banking > Insights and Events > Vaccinating for Economic Recovery and Growth Liza Eustace Head: Healthcare, Construction and Hospitality SHARE Eustace shares her insights on the importance of getting the country and the continent vaccinated against COVID19 in order to help boost economic recovery and growth. The ability to roll out credible, sustainable and high-volume Covid-19 vaccination programs will likely be the single biggest driver of economic recovery in Africa over the next 24 months. Economies that fail to execute on this will be left behind as global trading resumes. Africa is a net importer of goods and services, therefore with the closing of borders and a vaccination rate of < 2% of Africa’s 1.2 billion population, it will leave the continent well behind the rest of the world. The cost will be devastating. We therefore need to increase our efforts in the most collaborative way. The devastation to numerous sectors within our economy is motivation enough to do the right thing. Tourism has been one of the hardest hit and understandably continues to increase the burden of unemployment which is now closer to 35% and climbing. In the recent British and Irish Lions tour, the hospitality sector has lost out to approximately 30 000 traveling fans and an estimated R6 billion in economic activity associated with the tour. As the majority of our hotels sit empty and restaurants and bars are subject to unpredictable closure periods, it’s hard to believe that we will ever return to a life without social distancing and masks. But there is hope. After spending a week interviewing senior management from an array of key stakeholders in the vaccine rollout, I was left with a feeling of optimism and clarity on what is required to overcome this pandemic. With continued efforts around collaborative partnerships, there has never been a better time to take advantage of key lessons learnt. What have these been? Local manufacture Local manufacture and procurement should be at the centre of our future to ensure economic recovery and the meeting of healthcare challenges going forward. While the healthcare sector has very much been perceived as a defensive sector for all stakeholders, the events of 2020 and 2021 have provided a platform to re-imagine healthcare in emerging markets. Lack of manufacturing capacity has sorely hampered the African continent’s response to the Covid-19 pandemic and has resulted in Africa being at the mercy of the rest of the world when it has come to the supply of Protective Personal Equipment (“PPE”), medical devices and more recently for the supply of vaccines. Whilst the South African (“SA”) vaccine rollout was slow to start, hampered by some initial supply challenges, the country is now considered one of the fastest measured on a weekly basis. To reach optimal vaccination levels, about 300K vaccines need to be administered per day, a target we are fast approaching. Across the rest of Africa, the African Vaccine Acquisition Task Team (“AVATT”), set up by President Cyril Ramaphosa, has played a meaningful role in supporting Africa CDC’s objective to ensure that at least 60% of Africans are vaccinated. There is no doubt that the partnership created between JSE-listed pharmaceutical group Aspen Pharmaceutical Group and Johnson and Johnson has significantly fast tracked this delivery of vaccines into Africa with a single-dose injection, well suited for the continent. This has been followed by the recent announcement from The Biovac Institute and Pfizer to produce at least 100 million doses per annum. It was easier to import vaccines in the past as demand and economies of scale were not sufficient to manufacture our own vaccines. Covid-19 has provided economies of scale to start manufacturing, and whilst contract manufacturing is not the endgame, it is a necessary first step in the right direction. It is no secret that there is a race to manufacture SA’s own vaccine and players like Aspen and Biovac will be well placed to lead in this space, creating a blue-print for the rest of Africa. Whilst the supply side is being geared up, just as critical is to ensure a sustainable and predictable demand from the continent, enabling a more cost-effective entry point. According to the CEO of Imperial Logistics, it is currently about 10x more expensive to deliver vaccines within Africa versus the rest of the world. Containment of costs can be achieved through increased use of data and technology – to digitally integrate and improve infrastructure & development and through the facilitation of The African Continental Free Trade Area (“AfCFTA”) that started trading in January 2021. In addition, long term support from governments will significantly improve healthcare and vaccine accessibility. Establishment of a supply chain network within Africa for storage and distribution will also need to be considered alongside manufacturing, despite the enormous capability that already exists across logistic companies. Public-Private Partnerships (“PPPs”) The vaccine roll out has proven the ability of public and private sector to successfully collaborate, spearheaded by Business for South Africa (“B4SA”). PPPs must continue to manifest themselves in something resembling more business as usual than an exceptional occurrence driven by a crisis. If this can happen, the rollout of NHI may become something easier to imagine, notwithstanding the financial implications that remain unsolved. An improving PPP regime could assist in remediating many of the gaps that exist today: increasing front line workers (both doctors and nurses), access the uninsured market (in conjunction with work being done in the insurance sector through data mining, technology, and telemedicine) and lastly by bolstering the healthcare system through leadership and best practise management. Importantly, through PPPs such as The Biovac Institute, we can create sustainable business models that meet the requirements of the country to respond to future pandemics. What is clear from the events of the last 18 months is that a well-run and capacitated public sector is an essential part of the healthcare ecosystem, but the private sector has the skills, capital and reach to be able to rapidly bring projects online. Health Illiteracy Get vaccinated because the cost of not doing so, is simply too high. The facts speak for themselves. The vaccines work and they are safe. In the US, reports by Andy Slavitt (former adviser to the Biden administration on Covid-19) suggest that 98-99% of the deaths are from unvaccinated patients. Closer to home, the infection and death rates in front line workers has dramatically decreased in the third wave versus the first, whilst our ICU and high-care beds are home to the unvaccinated. There is a consensus amongst the healthcare players that the economy is falling prey to those that are health illiterate and do not understand the importance of being vaccinated and / or are afraid of what the vaccine does to your body. And perhaps there is merit to this, given the lack of effective health campaigns and consistent messaging available to the public. The population has been subjected to information overload, misinformation, and fearmongering. Therefore, creating awareness through education and empowering patients with the facts and knowledge that vaccines are safe, is key to getting more people vaccinated. Unless we break the chain of transmission, the virus will continue to mutate and we run the risk of current vaccines not being effective as a result. As our children remain unvaccinated, we need to safeguard them, at the very least, from future unknown variants and known effects of “long-Covid”. In addition to this, an unvaccinated population will continue to put strain on the hospital systems where utilisation levels in critical clinical pathways such as oncology has seen a dramatic decline as a result. The long-term impact of this and what we know to be “long-Covid” will ultimately increase the cost of insurance as recovery is protracted. Whilst the current reserves within the insurance industry can offset healthcare cost increases over a certain period, we need to protect our health more strategically to adequately curb these increases. The events of the last 18 months have proven that the healthcare sector is a dynamic one. The industry has responded in a collaborative manner, paving the way for a more independent and sustainable future. There are plans to produce our own vaccines across the continent, bolstering local manufacturing and procurement, whilst placing more confidence in a more cohesive public-private partnership. As an organisation which specialises in the funding of companies across multiple industries, we look forward to applying our experience and delivering innovative initiatives to raise awareness, encourage the right dialogue and ultimately support and grow the economies across the continent. Liza EustaceHead: Healthcare, Construction and Hospitality https://cib.absa.africa/wp-content/uploads/2020/07/file_example_MP3_700KB.mp3 Related Articles EVENTS Macro Conference 2021 We are proud to bring you the fifth edition of our annual Macro Conference, designed to challenge and inspire your thinking. With this conference, we aim to help clients “take a step back” from day-to-day information and focus on the bigger strategic picture as influenced by developments in the macro-environment. EVENTS Absa Cape Epic That time of the year has come. It’s time for The Absa Cape Epic and your opportunity to explore and traverse the exquisite Western Cape from the best seat in the house; the back of a bike. This year’s race promises a fusion of rugged, scenic and unchartered territories. Over 600 kilometres of cycling, only the brave and passionate will cross the finish line. 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