IMF seeks to ‘end pandemic’ with $50bn financing for vaccinations

The International Monetary Fund (IMF) has published a proposal to “end the pandemic” with $50 billion in financing for vaccinations, the organisation said in an note on Friday.

The proposal’s total cost would include grants, national government resources, and concessional financing, the note said.

The note explains that there are three broad elements:

(1) Vaccinating of at least 40 per cent of the global population by end-2021 and at least 60 per cent by the first half of 2022. To do so will require additional upfront grants to COVAX, donating surplus doses and free cross-border flows of raw materials and finished vaccines.

(2) Insuring against downside risks such as new variants that may necessitate booster shots. This means investing in additional vaccine production capacity by 1 billion doses, scaling up genomic surveillance and supply-chain surveillance, and contingency plans to handle virus mutations or supply shocks.

(3) Managing the interim period where vaccine supply is limited with widespread testing and tracing, therapeutic and public health measures, and, at the same time, ramping up preparations for vaccine deployment together with any approved dose-stretching strategies.

There is a strong case for grant financing of at least $35 billion. The good news is G20 governments have already identified as important to address the $22 billion grant funding gap noted by the Access to COVID-19 Tools (ACT) Accelerator. This leaves an estimated $13 billion in additional grant contributions needed.

The remainder of the overall financing plan—around $15 billion—could come from national governments, potentially supported by COVID-19 financing facilities created by multilateral development banks.

“Many countries have stepped up in the global fight against the pandemic, as have institutions such as the World Health Organization, the World Bank, Gavi (the Global Alliance for Vaccines and Immunization), the African Union, and others.

Yet, more than a year into the Covid-19 crisis, new cases worldwide are higher than ever. Urgent action is needed to arrest the rising human toll and economic strain, the note said.

As the IMF has warned, economic recoveries are diverging dangerously. The disparities will widen further between wealthy countries that have widespread access to vaccines, diagnostics, and therapeutics, and poorer countries still struggling to inoculate frontline healthcare workers. As of the end of April 2021, less than two per cent of Africa’s population had been vaccinated. By contrast, over 40 per cent of the population in the United States and over 20 per cent in Europe had received at least one dose of the vaccine.

Saving lives and livelihoods should need no justification, but a faster end to the pandemic could also inject the equivalent of $9 trillion into the global economy by 2025 due to a faster resumption of economic activity. Advanced economies, likely to spend the most in this effort, would see the highest return on public investment in modern history—capturing 40 percent of the cumulative $9 trillion in global GDP gains and roughly $1 trillion in additional tax revenues, the IMF said.

The world does not have to live through the pain of another record surge of COVID-19 cases. With strong global action now and with very little in terms of financing relative to the outsized benefits, we can durably exit this health crisis.