South Africa announced plans on Wednesday to allocate $688 million for vaccines and over $750 million to boost youth employment in a bid to tackle the economic devastation caused by the coronavirus pandemic.
“This campaign allows us to emerge from the restrictions that we have experienced to economic activity,” said Finance Minister Tito Mboweni in an annual national budget speech to parliament.
Money is particularly short for the South African government as last year, GDP growth contracted 7.2% and the country was already in the grips of a recession before the pandemic hit.
But the finance minister said the economy would rebound 3.4% this year.
“This year we face an exceptionally difficult balancing act,” the Treasury said.
“On one side is a raging pandemic … on the other side is a weak economy, with massive unemployment, that is burdened by ailing state-owned companies, the highest budget deficit in our history and rapidly growing public debt.”
Significant tax hikes were announced to bridge “the largest tax shortfall on record” and fund a 1.35 trillion rand ($93 billion) budget for 2021-22.
“We are allocating more than 10 billion rand ($688 million) for the purchase and delivery of vaccines over the next two years,” Mboweni announced.
South African unemployment soared to 32.5 percent in the fourth quarter of last year, the highest level since the data was first recorded in 2008.
While youth unemployment is at more than 60 percent after two months of national lockdown and border closures.
South Africa has been the country worst hit by the pandemic on the continent with more than 1.5 million cases and almost 50,000 deaths since the outbreak started.
Last week South Africa launched the first phase of its vaccination campaign in which it is inoculating an estimated 500,000 front-line health care workers with the Johnson & Johnson vaccine.
Mboweni normally delivers his national budget speech alongside a potted aloe vera plant, highly resistant to drought, as a symbol of South Africa’s economic resilience. However the plant was not there this year.