Nepal to rely mostly on foreign aid to buy Covid-19 vaccines for its people, officials sayRs48 billion has been estimated for vaccines. Government, however, says it won’t have a resource crunch for midterm elections, which will cost it as much as Rs 20 billion.
The Covid-19 pandemic has hurt the economy and government revenue has taken a hit resulting in a resource crunch.
Prime Minister KP Sharma Oli has, in the meantime, announced midterm elections which will require additional funds. But the government is struggling to generate resources to procure Covid-19 vaccines for Nepali citizens and is lobbying with donors for funds.
“We are generating the maximum amount required for purchasing coronavirus vaccines from multilateral and bilateral donors,” said Finance Secretary Sishir Dhungana.
Multilateral donors such as the World Bank and the Asian Development Bank will be pouring a significant chunk of the resources required to procure the vaccines, according to Dhungana.
Bilateral aid agencies such as Swiss Agency for International Development, Department for International Development of the United Kingdom, GIZ, an aid agency of Germany, and Japan International Cooperation Agency have also pledged financial support to Nepal’s bid to procure Covid-19 vaccines, he told the Post.
Officials at the ministry, including Dhungana, however, refused to divulge the exact amount of financial support it expects to get from donors.
On Thursday, Nepal received one million doses of the vaccine from India as a grant. Each person has to receive two doses of the vaccine within 21 days to protect against the coronavirus.
According to the Ministry of Health, the country needs Rs48 billion for inoculating 52 percent of its population of around 30 million. Of Nepal’s total population, only 72 percent will have to be vaccinated as the existing vaccines have not been tested on children up to 14 years of age, and this segment of the population will not be vaccinated.
The World Health Organization’s COVAX facility will provide vaccines for 20 percent of the population free of cost.
Officials at the Health Ministry said on Thursday that the government would soon procure additional four million doses of Covid-19 vaccine, most probably from India. Different modalities are being worked out, including procuring the jabs at a subsidised rate, under a government-to-government deal or direct deal with the manufacturer.
Besides, the World Bank in October last year approved $12 billion for developing countries—particularly low and middle income ones—to finance the purchase and distribution of Covid-19 vaccines, tests, and treatments.
In December last year, the Asian Development Bank launched a $9 billion vaccine initiative—the Asia Pacific Vaccine Access Facility—offering rapid and equitable support to its developing members as they procure and deliver effective and safe Covid-19 vaccines.
Shree Krishna Nepal, chief of the international economic cooperation coordination division at the ministry, said the ministry was finalising the project document regarding taking aid from the two multilateral donors from their Covid-19 vaccination facilities.
“If domestic resources are required for meeting the resource gap, the government will inject its funds,” Dhungana said.
Securing resources for the vaccines has become a priority for the government. On December 13, it published a notice seeking contributions from businesses, philanthropic organisations and donor agencies to procure vaccines.
“As it takes a huge amount of resources for giving Covid-19 vaccines to targeted groups free of cost, business enterprises, philanthropic organisations and foreign aid agencies are requested to deposit donations to vaccine funds created by the government,” the notice read.
Reacting to the announcement, doctors had said it is the government’s moral and legal responsibility to vaccinate Nepalis and save their lives.
On the other hand, the government is saying there would be no shortage of resources for the polls announced for April 30 and May 10.
During a recent meeting with security agencies at the Ministry of Home Affairs, Finance Minister Bishnu Poudel said there would be no shortage of resources for the elections.
He has asked security agencies to submit their budget requirements considering the expenditure in the past elections and austerity measures to be taken. In the general elections of 2017, around Rs10 billion was spent for security arrangements.
This was in addition to the Rs8 billion that the Election Commission required to hold the polls.
Understandably, the government’s priorities have not gone down well among observers.
“The government should have first focussed on generating resources for vaccines instead of elections,” said economist Keshav Acharya. “But, it is saying there is no money for the vaccine and seeking donations while promising enough resources for the elections that may or may not be held.”
The constitutionality of the December 20 dissolution of the House of Representatives and the announcement of snap polls is being decided by the Supreme Court.
“Ensuring resources for Covid-19 vaccines either through domestic or external resources should be the first priority,” said Rameshore Khanal, former finance secretary. “The government should not hesitate to take foreign aid if it is available. But it should not shy away from spending domestic resources on vaccines to ensure their early availability.”
It is not that the government coffers are empty.
According to the Financial Comptroller General’s Office, the agency that keeps record of the government’s incomes and expenditures, there is currently Rs73 billion in the government’s treasury.
As of January 18, the government had collected revenues of Rs426.67 billion, compared to Rs435 billion received during the same period in the fiscal year 2019-20. The government’s expenditure as of January 18 stood at Rs413 billion.
But with capital expenditure remaining very low at 16 percent, the government treasury has savings of Rs73 billion and this includes external and internal loans, according to the Financial Comptroller General.
But this amount has to be spent on budgeted programmes which leaves the government without adequate resources for the Covid-19 vaccines, according to the office.
“The government currently has adequate resources in its treasury but they need to be spent for implementing various budgeted programmes for which the budget has been assured,” said Bhesh Prasad Bhurtel, deputy financial comptroller general at the Financial Comptroller General Office.
The government in the last fiscal year had created a fund for Covid-19 prevention, control and treatment.
A total of Rs1.78 billion, including the unspent amount, had been transferred from the last fiscal year but with Rs1.4 billion of that spent already, there is just Rs384.47 million left in it, according to the Financial Comptroller General Office.