Pandemic bond: EA states to access up to $15m from World Bank

Monday June 1 2020

Covid-19 grants.

East African states will access up to $15 million each in grants from the World Bank to help them deal with the Covid-19 pandemic. PHOTO | FILE | NATION MEDIA GROUP 

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East African states will access up to $15 million each in grants from the World Bank once the global lender starts payouts from its controversial pandemic bonds, which are meant to support poor nations in the event of infectious disease outbreaks.

The World Bank declared that the Covid-19 pandemic, which has spread across the globe infecting nearly 5.9 million people and causing more than 361,000 deaths, has triggered payments from the bonds.

A total of $195.8 million from the bond, known as Pandemic Emergency Financing Facility (PEF) is due to be paid out to 64 of the world’s lowest income countries that are members of the World Bank’s International Development Association (IDA).

The payouts will be in addition to the $1.74 billion that the World Bank has already disbursed to Kenya, Ethiopia, Uganda, Somalia and Rwanda in the past three months in form of loans and grants, meant for Covid-19 response, budgetary support and for fighting the locust menace.

While the World Bank had not responded to The EastAfrican’s queries on disbursements for EAC States by the time of going to press, it says on its website that the PEF payments begin as soon as governments from each of the receiving countries submit authorised funding allocation requests.

“Specific funding allocations were determined by population size and reported cases, with a minimum of $1 million and maximum of $15 million going to each country, and a heavier weight given to countries classified as fragile or conflict-affected,” says the World Bank.


Tanzania, Kenya and Rwanda’s ministries of finance did not respond to our queries on whether they have applied for the pandemic bond grant, while Uganda’s commissioner for macroeconomic Policy in the Ministry of Finance, Planning and Economic Development, Albert Musisi, said Kampala is yet to apply for the funding.

Dr Musisi said Uganda has applied for a $300 million budget support loan from the World Bank to cater for additional financing needs in the healthcare sector and some vulnerable people deeply affected by the consequences of the Covid-19 pandemic in the country.

“This loan facility will be presented to Cabinet and Parliament for approval in coming weeks before the World Bank is asked to disburse the money,” said Dr Musisi.

Kenya has already received substantial support from the World Bank since the country announced its first Covid-19 case on March 13. This includes a $50 million disbursement in early April for immediate support, Covid surveillance and response, medical diagnostic services, quarantine, isolation and treatment centres among others.

The biggest financing has come in the form of a $1 billion budgetary support loan that was approved on May 20, and $43 million approved on May 21 to fight the desert locust invasion currently ravaging the region.

Somalia has so far received $137.5 million from the World Bank, to help fight locusts, Covid-19, floods and drought, while Rwanda has received a total of $114.25 million in Covid-19 response support.

Ethiopia has received $145.6 million, half in form of loans and half in grants, to fight the virus, mitigate against drought and locust menace.

The World bank has also loaned South Sudan $40 million to provide a safety net for vulnerable citizens, and $7.6 million to fight the virus.

While substantial support has flown in to East African economies, including from other sources such as the International Monetary Fund and the Africa Development Bank (AfDB), there remains concerns over the capacity of the various governments to account for the true scale of the outbreak, as well as to handle a large-scale outbreak.

These deficiencies were the reason for the setting up of the pandemic bond in 2016, largely due to the lessons learnt during the 2014 Ebola crisis in West Africa that exposed the difficulty of mobilising funds quickly enough from the global community to fight a pandemic.

It was set up to deal primarily with outbreaks of six viruses— flu, coronavirus, Crimean-Congo haemorrhagic fever, Rift Valley fever, Lassa fever and filovirus (Ebola).

The process of accessing the funds from the bond has however become a point of controversy, which partly explains why the East African countries are yet to get the money more than two months after reporting their first cases of the global virus.