Bill & Melinda Gates Foundation Expands Commitment to Global COVID-19 Response

 The additional funding brings foundation commitment to more than $250 million to support development of diagnostics, therapeutics, and vaccines; help strengthen African and South Asian health systems; and help mitigate the social and economic impacts of the virus

The Bill & Melinda Gates Foundation has announced an expansion of its funding for the global response to COVID-19. The increase includes an additional $150 million of grant funding plus a commitment to leverage the resources of the foundation’s Strategic Investment Fund, which could be deployed to catalyze the rapid procurement of essential medical supplies and help life sciences companies secure financing to produce COVID-19 products. In announcing the funding, the foundation called on world leaders to unite in a global response to COVID-19 to ensure equitable access to diagnostics, treatments, and vaccines. 

“It is increasingly clear that the world’s response to this pandemic will not be effective unless it is also equitable,” said Gates Foundation co-chair Melinda Gates. “We have a responsibility to meet this global crisis with global solidarity. In addition to contributing to the development of diagnostics, therapeutics, and vaccines, these funds will support efforts against COVID-19 in low-and-middle-income countries, where local leaders and healthcare workers are doing heroic work to protect vulnerable communities and slow the spread of the disease.”

The foundation’s new $150 million commitment will fund the development of diagnostics, therapeutics, and vaccines, as well as new efforts to provide partners in Africa and South Asia with resources to scale their COVID-19 detection, treatment, and isolation efforts.  

The foundation will also leverage a portion of its $2.5 billion Strategic Investment Fund, which uses a suite of financial tools to address market failures and incentivize private enterprise to develop affordable and accessible health products. These funds, which can include equity investments, loans, and volume guarantees, will be used to help health systems in low- and middle-income countries (LMICs) facilitate the rapid procurement of personal protective equipment for health care workers, COVID-19 diagnostics, oxygen therapeutics, and other essential medical supplies. Any financial returns generated by the Strategic Investment Fund are re-invested in Gates Foundation philanthropic programs. 

The funding announced today builds on the $100 million the foundation has committed to date to support the global response, as well as $5 million in resources to support public health agencies and frontline response organizations in the greater Seattle region. Initial foundation funding has helped to kick-start the search for COVID-19 diagnostics, therapeutics, and vaccines; enhanced virus detection capacity in Africa; and contributed to the response in China. The foundation has also directed its programmatic technical expertise to support multilateral, national, and sub-national responses to the pandemic.  

“COVID-19 doesn’t obey border laws. Even if most countries succeed in slowing the disease over the next few months, the virus could return if the pandemic remains severe enough elsewhere,” said foundation co-chair Bill Gates. “The world community must understand that so long as COVID-19 is somewhere, we need to act as if it were everywhere. Beating this pandemic will require an unprecedented level of international funding and cooperation.” 

While there is not yet global consensus on the total resources required to turn back COVID-19, the figure is more than any one contributor will bear. A coordinated, international effort bringing together all sectors will be required to mobilize the billions in funding needed in the months ahead. Institutions such as the Coalition for Epidemic Preparedness Innovations (CEPI) and Gavi, The Vaccine Alliance are in place to coordinate the development and delivery of COVID-19 vaccines, but they require an influx of new resources to do so. Other organizations such as the World Health Organization (WHO), national governments, and private companies will need to be involved in funding the at-risk manufacturing of vaccine candidates and deciding how to ensure equitable access to essential products for populations worldwide. 

“This pandemic has unleashed an extraordinary philanthropic response. While significant, it is still only one small part of what must be a coordinated effort to beat this global crisis,” said foundation CEO Mark Suzman. “Philanthropy cannot—and should not—supplant the public and private sectors. What philanthropy is good at is testing out ideas that might not otherwise get tried, so governments and businesses can then take on the successful ones. With all sectors working together, we can avoid the worst-case scenarios of human, economic, and social costs.”

In announcing its new $150 million commitment, the foundation identified four priority areas for investment:

Accelerating Virus Detection 

The foundation will provide partners in sub-Saharan Africa and South Asia with funding to scale their COVID-19 detection, treatment, and isolation efforts. In some countries, this will include leveraging emergency operations centers normally deployed to support polio eradication and malaria elimination efforts toward COVID-19 detection.  

Protecting the Most Vulnerable  

Foundation funding will help partners in sub-Saharan Africa and South Asia pilot different approaches to physical distancing and infection suppression in settings where stay-at-home policies and other physical distancing strategies may not be practical. The goal will be to identify infection suppression strategies that can be effectively sustained over time with minimal social and economic disruption. A key focus will be building on lessons learned from two decades of experience in implementing infectious disease prevention programs, specifically the importance of community-designed and community-led engagement efforts. 

The foundation is also considering gender equality issues in its response, and it will support research into the differential health, economic, and social impacts of the pandemic on women and girls in LMICs. This will help to inform the foundation’s short-, medium-, and long-term policy response to the pandemic and global policy responses. This effort will build on the foundation’s existing work to improve gender data by designing and implementing gender-specific metrics and surveys to capture data that reflects the experiences of women and girls. 

Minimizing Social and Economic Impact   

The foundation will provide non-medical funding to help LMICs strengthen social and economic support for people who are living in extreme poverty or who are at risk of falling back into extreme poverty due to the COVID-19 pandemic. Sub-Saharan Africa and South Asia together account for 85 percent of the 629 million people around the world who live on less than $1.90 per day, and past pandemics have had a disproportionate impact on people who cannot afford adequate nutrition, safe sanitation, and quality housing. People living in extreme poverty are also less likely to be able to practice physical distancing because they cannot afford to stop working. 

The foundation will work with partners to help expand access to social payment systems to communities that are most at risk of serious social and economic disruption due to public health measures undertaken to suppress COVID-19 transmission. 

Develop Products for a Sustained Response 

The foundation will continue to invest in efforts to accelerate the development of diagnostics, therapeutics, and vaccines for the COVID-19 response while working with governments, the private sector, and multilateral institutions to ensure scaled manufacturing and the equitable procurement and distribution of these products as they become available.

This work will include efforts to develop affordable and accessible point-of-care diagnostics, as well as support for the development of treatments and vaccines whose production can be quickly scaled once clinical trials have demonstrated their safety and efficacy. The foundation has committed to working with governments, CEPI, and the private sector to help provide financing for the at-risk enhancement of vaccine manufacturing capacity. This will allow the production of vaccine candidates so that global vaccine supply can be quickly scaled once clinical trial results are available. 

The foundation will work with national governments and international organizations such as the WHO; UNICEF; Gavi; and the Global Fund to Fight AIDS, Tuberculosis and Malaria to ensure that LMICs have equitable access to essential commodities and to ensure that supply and distribution chains are well prepared to facilitate their rapid and widespread delivery to Gavi- and Global Fund-eligible countries.  

Detailed summaries of previous commitments can be found at https://www.gatesfoundation.org/media-center/press-releases.

 

COVID-19: What will Africa look like in 2030 and 2063?

Banji Oyelaran-Oyeyinka Opinion

African leaders need to look in the mirror and ask where this continent will be in 2030 and 2063

[ABIDJAN, Ivory Coast] The COVID-19 pandemic, one of the world’s most significant events, has resulted in cessation of economic activities that will lead to a significant decline in GDP, an unprecedented social disruption, and the loss of millions of jobs. According to estimates by the African Development Bank, the contraction of the region’s economies will cost Sub-Saharan Africa between $35 billion and $100 billion due to an output decline and a steep fall in commodity prices, especially the crash of oil prices. More fundamentally, the pandemic has brutally exposed the hollowness of African economies on two fronts: the fragility and weakness of Africa’s health and pharmaceutical sectors and the lack of industrial capabilities. The two are complementary. This is because Africa is almost 100 percent dependent on imports for the supply of medicines. According to a recent McKinsey (2019) study, China and India supply 70 percent of Sub-Saharan Africa’s demand for medicine, worth $14 billion. China’s and India’s markets are worth $120 billion and $33 billion respectively. Consider a hypothetic situation where both India and China are unable or unwilling to supply the African market? Africa surely faces a health hazard. The root of Africa’s underdeveloped industrial and health sectors can be encapsulated in three ways. First, some African policy makers simply think that poor countries do not need to industrialize. This group believes the “no-industrial policy” advocates who engage in rhetoric that does not fit the facts. The histories of both Western societies, and contemporary lessons from East Asia, run contrary to that stance. Clearly, governments have an important role to play in the nature and direction of industrialization. Progressive governments throughout history understand that the faster the rate of growth in manufacturing, the faster the growth of Gross Domestic Product (GDP). From the Economist magazine five years ago: “BY MAKING things and selling them to foreigners, China has transformed itself—and the world economy with it. In 1990 it produced less than 3% of global manufacturing output by value; its share now is nearly a quarter. China produces about 80% of the world’s air-conditioners, 70% of its mobile phones and 60% of its shoes. Today, China is the world’s leader in manufacturing and produces almost half of the world’s steel.” The keyword is “making”. Two, rich countries therefore became rich by manufacturing and exporting to others, including high-quality goods and services. Poor African countries remain poor because they continue to produce raw materials for rich countries. For example, 70% of global trade in agriculture is in semi-processed and processed products. Africa is largely absent in this market while the region remains an exporter of raw materials to Asia and the West. Lastly, African countries are repeatedly told that they cannot compete based on scale economy, and as well, price and quality competitiveness because China will outcompete them. For this reason, they should jettison the idea of local production of drugs, food and the most basic things. The question is: How did Vietnam, with a population of 95 million, emerge from a brutal 20-year war and lift more than 45 million people out of poverty between 2002 and 2018 and develop a manufacturing base that spans textiles, agriculture, furniture, plastics, paper, tourism and telecommunications? It has emerged as a manufacturing powerhouse, becoming the world’s third-largest exporter of textiles and garments (after China and Bangladesh). Vietnam currently exports over 10 million tonnes of rice, coming third after India and China. How is it that Bangladesh, a country far poorer than many African countries, is able to manufacture 97% of all its drugs demand, yet it is next door to India, a powerhouse of drug manufacturing? The COVID-19 pandemic has exposed Africa. African leaders need to look in the mirror and ask where this continent will be in 2030 and 2063. Africa must adopt progressive industrial policies that create inclusive, prosperous and sustainable societies. What then should be done? A three-pronged approached is urgently needed. First, Africa needs a strong regional coordination mechanism to consolidate small uncompetitive firms operating in small atomistic market structures. With a consumer base of 1.3 billion and $3.3 trillion market under the African Continental Free Trade Area (AfCFTA), the continent has no choice but to bring together its fragmented markets. Second, Africa needs to build better institutions, strengthen weak ones and introduce the ones missing. No better wake-up call is required than the present pandemic. Third, one important institution that has been abruptly disrupted is the supply chain for medicines and food, for example. Logistics for transporting capital and consumer goods across the region need predictable structures. Building or strengthening supply chains involve fostering and providing regulations for long-term agreements and competences that leverage both private and public institutional challenges such as customs regulations. Finally, development finance institutions (DFIs) such as the African Development Bank are mandated to, and are currently, trying to fill the gaps left by private financial institutions. There is an opportunity to Africa to rethink and reengineer its future. The Africa of tomorrow must look inwards for its solutions. - whether in feeding its own people, build industrial powerhouses led by African champions. The African Development Bank stands ready to help target and push for deeper economic transformation. Africa needs to execute structurally transformative projects that generate positive externalities and social returns. Keep our eyes on the days after. Professor Banji Oyelaran-Oyeyinka, is the Senior Special Adviser on Industrialization to the President of the African Development Bank. He is a fellow of the Nigerian Academy of Engineering and Professorial Fellow, United Nations University. His recent book is “Resurgent Africa: Structural Transformation and Sustainable Development”, UK: Anthem Press, 2020.

The pandemic is no time for fiscal distancing

Opinion

Akinwumi A. Adesina

The African Development Bank estimates that Covid-19 could cost Africa a GDP loss between $22.1 billion and $88.3 billion in the worst case scenario

[ABIDJAN, Ivory Coast]  These are very difficult days, as the world faces one of its worst challenges ever: the novel coronavirus pandemic. And it seems almost no nation is spared. As infection rates rise, so does panic across financial markets, as economies drastically slow down and supply chains are severely disrupted.  Extraordinary times call for extraordinary measures. As such, it can no longer be business as usual.  Each day, the situation evolves and requires constant reviews of precautionary measures and strategies. In the midst of all this, we must all worry about the ability of every nation to respond to this crisis. And we must ensure that developing nations are prepared to navigate these uncharted waters fully.  Akinwumi Adesina Pic: AfDB That's why I support the UN Secretary-General Antonio Guterres' urgent call for special resources for the world's developing countries.  In the face of this pandemic, we must put lives above resources and health above debt. Why? Because developing economies are the most vulnerable at this time. Our remedies must go beyond simply lending more. We must go the extra mile and provide countries with much-needed and urgent financial relief -- and that includes developing countries under sanctions.  According to the independent, global think tank ODI in its report on the impact of economic sanctions, for decades, sanctions have decimated investments in public health care systems in quite a number of countries. Today, the already stretched systems as noted in the 2019 Global Health Security Index will find it difficult to face up to a clear and present danger that now threatens our collective existence. Only those that are alive can pay back debts.   Sanctions work against economies but not against the virus. If countries that are under sanctions are unable to respond and provide critical care for their citizens or protect them, then the virus will soon "sanction" the world. In my Yoruba language, there is a saying. "Be careful when you throw stones in the open market. It may hit a member of your family."   That's why I also strongly support the call by the UN Secretary-General that debts of low-income countries be suspended in these fast-moving and uncertain times.  But I call for even bolder actions, and there are several reasons for doing so.  First, the economies of developing countries, despite years of great progress, remain extremely fragile and ill equipped to deal with this pandemic. They are more likely to be buried with the heavy fiscal pressure they now face with the coronavirus.  Second, many of the countries in Africa depend on commodities for export earnings. The collapse of oil prices has thrown African economies into distress. According the AFDB's 2020 Africa Economic Outlook, they simply are not able to meet budgets as planned under pre-coronavirus oil price benchmarks. The impact has been immediate in the oil and gas sector, as noted in a recent CNN news analysis. In the current environment, we can anticipate an acute shortage of buyers who, for understandable reasons, will reallocate resources to addressing the Covid-19 pandemic. African countries that depend on tourism receipts as a key source of revenue are also in a straightjacket.  Third, while rich countries have resources to spare, evidenced by trillions of dollars in fiscal stimulus, developing countries are hampered with bare-bones resources.  The fact is, if we do not collectively defeat the coronavirus in Africa, we will not defeat it anywhere else in the world. This is an existential challenge that requires all hands to be on deck. Today, more than ever, we must be our brothers and sisters' keepers.   Around the world, countries at more advanced stages in the outbreak are announcing liquidity relief, debt restructuring, forbearance on loan repayments, relaxation of standard regulations and initiatives. In the United States, packages of more than $2 trillion have already been announced, in addition to a reduction in Federal Reserve lending rates and liquidity support to keep markets operating. In Europe, the larger economies have announced stimulus measures in excess of 1 trillion Euros. Additionally, even larger packages are expected.  As developed countries put in place programs to compensate workers for lost wages for staying at home for social distancing, another problem has emerged -- fiscal distancing. Think for a moment what this means for Africa.  The African Development Bank estimates that Covid-19 could cost Africa a GDP loss between $22.1 billion, in the base case scenario, and $88.3 billion in the worst case scenario. This is equivalent to a projected GDP growth contraction of between 0.7 and 2.8 percentage points in 2020. It is even likely that Africa might fall into recession this year if the current situation persists. The Covid-19 shock will further squeeze fiscal space in the continent as deficits are estimated to widen by 3.5 to 4.9 percentage points, increasing Africa's financing gap by an additional $110 to $154 billion in 2020.  Our estimates indicate that Africa's total public debt could increase, under the base case scenario, from $1.86 trillion at the end of 2019 to over $2 trillion in 2020, compared to $1.9 trillion projected in a 'no pandemic' scenario. According to a March 2020 Bank report, these figures could reach $2.1 trillion in 2020 under the worst case scenario. This, therefore, is a time for bold actions. We should temporarily defer the debt owed to multilateral development banks and international financial institutions. This can be done by re-profiling loans to create fiscal space for countries to deal with this crisis.   That means that loan principals due to international financial institutions in 2020 could be deferred. I am calling for temporary forbearance, not forgiveness. What's good for bilateral and commercial debt must be good for multilateral debt. That way, we will avoid moral hazards, and rating agencies will be less inclined to penalize any institution on the potential risk to their Preferred Creditor Status.  The focus of the world should now be on helping everyone, as a risk to one is a risk to all. There is no coronavirus for developed countries and a coronavirus for developing and debt-stressed countries. We are all in this together.   Multilateral and bilateral financial institutions must work together with commercial creditors in Africa, especially to defer loan payments and give Africa the fiscal space it needs. We stand ready to support Africa in the short term and for the long haul. We are ready to deploy up to $50 billion over five years in projects to help with adjustment costs that Africa will face as it deals with the knock-on effects of Covid-19, long after the current storm subsides.  But more support will be needed. Let's lift all sanctions, for now. Even in wartime, ceasefires are called for humanitarian reasons. In such situations, there is a time to pause for relief materials to reach affected populations. The novel coronavirus is a war against all of us. All lives matter. For this reason, we must avoid fiscal distancing at this time. A stitch in time will save nine.   Social distancing is imperative now. Fiscal distancing is not.  *Akinwumi A. Adesina is President of the African Development Bank Group