ISLAMABAD: Ministry of Finance’s (MoF’s) reluctance to provide required foreign exchange for procurement of Covid-19 vaccines has reportedly aggravated the situation in the country, well-informed sources told Business Recorder.
On June 9, 2021, National Disaster Management Authority (NDMA) briefed the Economic Coordination Committee (ECC) of the cabinet about vaccine availability. The ECC was requested to approve $1.1 billion and balance of $30 million available with Ministry of National Health Services, Regulation & Coordination and placed at the disposal of National Disaster Management Authority in its National Disaster Management Fund (NDMF) for ensuring timely procurement of vaccine to ensure effective national response to Covid-19 pandemic.
The matter was discussed at length by the ECC. Chairman NDMA stated that there was a shortfall of funds for June 2021 due to revised vaccination targets by the NCOC amounting to $ 50 million. Therefore, it was decided by the Cabinet Committee on Procurement of Covid Vaccine in its 9th meeting held on June 2, 2021 that funds may be allocated to NDMA for vaccine procurement till December 2021 amounting to $ 1.1 billion including the shortfall for June 2021. Consequently, it was proposed that funds to the tune of $ 1.1 billion and a balance amount of $ 30 million available with MoNHSR&C may be approved and placed at the disposal of NDMA in its National Disaster Management Fund.
The Finance Division noted on June 8, 2021 that on an earlier summary of NDMA of May 7, 2021, Finance Division had supported fund allocation of $ 130 million (Rs 20 billion) for the month of June 2021. For additional needs, the Finance Division advised NDMA to explore external financing to be arranged by the Economic Affairs Division (EAD), including reimbursement options. However, in a summary of June 3, 2021, NDMA stated that a shortfall has occurred for the funds for June 2021 which amounts to US$50 million, making the total requirement for June 2021 at US$180 million. Therefore, in view of the urgency, the Finance Division agreed to an additional Technical Supplementary Grant of US$ 50 million (Rs 7.8 billion) as a shortfall for the month of June 2021 for procurement of vaccines subject to observance of approved responsibilities and codal formalities. With reference to the US$ 1.1 billion requirement for next financial year, the Finance Division supported the point of view of EAD in line with agreed arrangement subject to fulfillment of codal formalities.
The Governor SBP observed that NDMA should generate the demand for foreign exchange in such a manner which should not give a shock to the foreign exchange rate. This measure would ensure stability in the rupee exchange rate. The Chairman ECC/Finance Minister endorsed his views and observed that requirement for procurement of vaccine was beyond any question in view of the Covid situation.
The sources said a decision was required on whether the need was to be met from current or development budget. Finance Division argued that donor funding needed to be considered as it would release the pressure on the foreign exchange reserves. The matter of funding modalities as well as transparency requirements were to be decided through consultations among the Ministry of National Health Services, Regulations and Coordination, NDMA, EAD and the Finance Division.
On June 18, 2021, Finance Minister Shaukat Tarin, held a special meeting with the Minister for Planning, Development and Special Initiatives Asad Umar and Federal Minister for Economic Affairs Division Omar Ayub Khan along with Special Assistant to the Prime Minister on National Health Services, Regulations and Coordination Dr. Faisal Sultan to review the Covid -19 vaccine availability situation in the country.
Minister Planning, in his position as Chairman NCOC, briefed the meeting that the NCOC forum reviews the situation on a weekly basis and makes all possible efforts in collaboration with the relevant stakeholders that the vaccine supply chain is not disrupted. He said that almost every country is securing supplies in advance, which builds pressure to make immediate payments.
The Finance Minister was also briefed by EAD on the availability of credit lines with our development partners for vaccine procurement. The Finance Minister said that providing safety to our citizens through timely vaccine procurement is foremost priority of the government. He directed EAD to start the process of availing the credit lines with our development partners for ensuring timely payments to the vendors as no compromise will be made on the health of Pakistanis. The Finance Minister also directed Finance Division to ensure timely disbursement of funds as per supplies schedules.
Copyright Business Recorder, 2021