The Government of Pakistan has permitted the commercial sales of Covid-19 vaccines and the first batch of Sputnik V is expected to arrive in March, said International Monetary Fund (IMF).
The International Monetary Fund (IMF) in its updated report ‘Policy Actions Taken by Countries’, reviewed the various steps that Pakistan has taken to deal with the COVID-19 crisis and stated that the authorities are working on mobilizing funds from the World Bank (WB) and the Asian Development Bank (ADB) for the direct purchase of additional vaccines for an amount of $250 million.
Pakistan kickstarted its vaccination drive in early February after receiving the first batch of 0.5 million doses of the Sinopharm vaccine donated by China. Additionally, another 0.6 million doses of the vaccine are expected to be delivered by the end of the month.
The United Nation’s COVAX Facility, which is aimed at covering priority groups (around 20 percent of the population), has confirmed that Pakistan will receive 17.2 million doses of the Oxford-AstraZeneca vaccine in the first half of 2021, including 6 to 7 million doses by March 2021.
The government has approved the Sputnik V vaccine and is also in discussions with several of the vaccine manufacturers, including talks with Pfizer for an expression of interest placed in the second week of February.
The report by the IMF detailed that the ADB is mobilizing $199 million for the vaccination of 13.47 million people (priority population), with additional funding of $8 million for syringes, safety boxes, and operational and supply chain management. Additionally, cold chain support from the ADB has also been secured, while an application has been submitted to Gavi to cover the shortage of walk-in cold rooms and refrigerators.
The majority of Pakistan’s schools and educational institutes resumed normal opening hours in February 2021, with the exception of a few major cities. The restrictions on the duration and capacity limits of commercial and business activities were lifted in the last week of February. Moreover, permission to reopen wedding halls, cinemas, and shrines in mid-March has also been granted.
The report further stated that the State Bank of Pakistan (SBP) has expanded the scope of the existing refinancing facilities and introduced three new ones to:
- Support hospitals and medical centers to purchase COVID-19-related equipment (43 hospitals, Rs. 10.1 billion, to date);
- Stimulate investments in new manufacturing plants and machinery, as well as the modernization and expansion of existing projects (487 new projects, Rs. 430 billion, to date); and,
- Incentivize businesses to avoid the laying off of their workers during the pandemic (2,958 firms, Rs. 238 billion, to date).
These facilities have been extended beyond their original deadlines of June 2020 to September or December 2020.
The SBP has introduced temporary regulatory measures to maintain the soundness of the banking system and to sustain economic activity. These include:
- Reducing the capital conservation buffer by 100 basis points to 1.5 percent;
- Increasing the regulatory limit on the extension of credit to SMEs by 44 percent to Rs. 180 million;
- Relaxing the debt burden ratio for consumer loans from 50 percent to 60 percent;
- Allowing banks to defer clients’ payment of principal on loan obligations by one year (Rs. 659 billion being deferred to date);
- Relaxing regulatory criteria for restructured loans for borrowers who require relief beyond the extension of principal repayment for one year; and,
- Suspending bank dividends for the first two quarters of 2020 to shore up capital.
The SBP has also introduced mandatory targets for banks to ensure loans for construction activities accounting for at least five percent of the private sector portfolios by December 2021.