Finance to allocate Tk10,000cr in budget for vaccination

The finance ministry is going to allocate Tk10,000 crore in the new fiscal budget to vaccinate 10 crore people against Covid-19 by June next year.

The same amount was allocated for the current financial year also, but more than two-thirds remained unspent due to failure in purchasing vaccines.

If sufficient vaccines are available in the fiscal 2021-22, the finance ministry will spend more from the Tk24,000 crore budget support pledged by development partners.

Besides, if needed, the government will pay for vaccines from the ongoing development projects worth Tk8,500 crore funded by development agencies, including the World Bank.

The Finance Division has advised the health ministry to buy Covid vaccines directly from the manufacturing companies – not through any third party.

The advice comes in the context of not getting the Oxford-AstraZeneca vaccines as per agreement with the Serum Institute of India through Beximco Pharmaceuticals. In addition, the government had to pay Beximco Pharma a commission of $1 per dose. In the case of 20 crore doses, if the commission is paid at this rate, the additional cost will be around Tk1,700 crore.

A senior finance ministry official involved in budgeting told The Business Standard that the government targets to vaccinate all adults in the country within the next financial year. This will require about 20 crore doses of vaccine. The jabs cost $5-10 per dose in the international market.

According to preliminary estimates, it may cost around Tk12,000 crore to buy 20 crore doses of vaccine, the official said.

"At the moment, there is no possibility of getting a vaccine from the United States – its neighbour Canada is also not getting the required vaccine from the US. So, Bangladesh is currently relying on vaccines from China and Russia. If the vaccine is available from the United States in the future, it will be bought," he added.

The official said the main theme of the next budget is "Priority of livelihood and future Bangladesh". In other words, the next budget aims to revive the country's economy by protecting people's lives through implementing large-scale vaccination programmes. In addition, cash assistance and OMS facilities for the destitute and unemployed poor will continue.

According to the finance ministry, about Tk2,800 crore has been spent in the current financial year's budget out of the Tk10,000 crore allocation to address the crisis and purchase vaccines. Of this, about Tk1,500 crore has been paid in advance to Serum Institute for 3 crore doses of vaccines, out of which Bangladesh has so far received only 70 lakh doses.

The Ministry of Health has procured medical equipment worth around Tk300 crore from this fund to deal with Covid-19. In addition, during the ongoing lockdown, 35 lakh unemployed and poor families have been given cash assistance of Tk2,500 from this fund as an Eid gift from the premier where Tk1,000 crore was spent.

The government is trying to buy Russia's Sputnik V and the vaccines of China's Sinopharm on an emergency basis as it has not received the vaccine from the Serum Institute as per the agreement. However, Chinese Ambassador to Dhaka Li Jiming said it would take a few months for Bangladesh to get the Sinopharm vaccine after delivering the vaccine to countries ordered earlier.

In this context, Bangladesh sees the possibility of getting Russia's Sputnik V in the fastest time. The country has demanded $9.5 per dose of vaccine.

However, as the Russian vaccine is still not approved by the World Health Organisation, the World Bank has raised an objection to paying for it from an ongoing development project the lender is funding. If the vaccine is available by next June, the ministry of finance will pay for it from the bulk allocation of the current financial year.

According to finance ministry officials, Tk12,000 crore budget support has been received from the World Bank, the International Monetary Fund, the Asian Development Bank, and the Asian Infrastructure Investment Bank for the current financial year. These development partners have assured of doubling the amount of budget support in the next financial year.

So, there will be no shortage of money to buy the vaccine. If needed, the cost of the vaccine will be provided from the budget support for the next financial year.

For the next financial year, the World Bank will provide $550 million budget support, ADB $1,000 million, The France Development Agency $200 million, JICA $300 million, European Investment Bank $300 million, AIIB $300 million and Korean International Cooperation Agency will give $25 million.

Finance ministry officials said the budget support is actually an easy loan. The average interest rate on these loans is 2% and the government can spend the money on any work as per its requirement. Therefore, there is no accountability to the lending agencies.