Egypt: Local vaccine production can save tourism

By Sherif Tarek
Posted on Thursday, 6 May 2021 19:11, updated on Monday, 24 May 2021 11:40

A health worker shows a bottle of vaccine against the coronavirus disease (COVID-19) in Cairo, Egypt March 4, 2021. REUTERS/Mohamed Abd El Ghany

With only less than 1% of its population vaccinated against Covid-19, Egypt is quickly entering its third wave with new restrictions being rolled out. But relying on local vaccine production rather than the beleaguered COVAX initiatives could be its remedy. 

Covid-19 vaccinations in Egypt have been one of the slowest in the MENA region — and the world — failing to curb a rampant spread of infections in recent weeks. Yet recent agreements to domestically manufacture coronavirus vaccines might signal a turnaround for the north African nation.

As part of the COVAX agreement — backed by UNICEF, WHO et al. to provide African nations with doses — Egypt has thus far received around 854,000 AstraZeneca doses. China sent 600,000 of its Sinopharm vaccine, along with a gift shipment from the UAE of  50,000 Sinopharm doses. All in all, 1.5 million vaccines, for a population of just over 100 million people.

Through the agreement, Egypt is to receive 40 million doses from COVAX, all from the British-Swedish AstraZeneca. The latter’s blood clotting side effects, as rare as they may be, have greatly dissuaded Egyptians from being inoculated: online applications for a jab just exceeded 2m this week.

Egypt has thus only vaccinated less than a 1% of its population, as the multi-variant virus picks up pace in the most populous Arab country, fuelled by customary social gatherings during the current Muslim month of Ramadan.

Hope in domestic production

A boost in domestic production coupled with further procurement of vaccine supplies should expedite the vaccination programme and “allow for a further easing of restrictions over the second half of the year that supports a return of domestic demand, boosting the economic recovery,” James Swanston, a MENA economist at the London-based Capital Economics, tells The Africa Report.

Current shortages in supplies, partially caused by India’s decision to halt vaccine exports to deal with its ongoing Covid-19 crisis, have left the COVAX initiative hanging in the balance, making local production even more crucial for Egypt.

Those late in the vaccination roll-out means they will ultimately be detached from the international community when it comes to travelling. -Ahmed El Safty

The state-run Holding Company for Biological Products and Vaccines (VACSERA) has signed two agreements with Chinese biopharmaceutical company Sinovac to manufacture and pack doses of its vaccine.

VACSERA is set to produce 5m doses of the Sinovac vaccine within the next couple of months, according to health minister Hala Zayed, and up to 60m doses by the end of this year. An unidentified share of doses will be allocated for local use, while the rest will be exported to African countries.

Additionally, Egyptian pharmaceutical company Minapharm reached an agreement in April with the Russian Direct Investment Fund (RDIF) to manufacture more than 40m doses of Russia’s Sputnik V vaccine for global distribution, with the rollout scheduled for the third quarter of 2021.

Exporting hub?

“The deals to produce Sinovac and Sputnik V vaccines domestically will certainly help to boost Egypt’s role as a hub for exporting doses to the rest of the MENA and Africa,” Swanston says. “However, it is still unclear what the timeline and distribution plans of the output with regards to whether most doses will be retained for the domestic programme or exported.”

Ahmed El Safty, an Egyptian economist, and head of the Cairo-based Delta Research Center, echoes similar sentiments, adding that what could limit this potential is the fact that neither of the two vaccines which Egypt will manufacture are likely to be globally recognised.

“In the west, current discussions are being held about allowing vaccinated people to travel, but namely those who have been vaccinated with accredited ones,” says Safty, noting that both Sinovac and Sputnik V are not on that list. This will narrow down possible export destinations to developing countries, he adds.

Egypt is one of five African countries capable of producing coronavirus vaccines, alongside Morocco, Senegal, South Africa, and Tunisia, according to a March report by the WHO regional office for Africa.

‘Most vulnerable sectors’

Apart from potentially creating a vaccine export hub, locally produced shots could be key to revitalising its most vulnerable sector: hospitality.

“Sectors most vulnerable in Egypt’s economy to the slow vaccine rollout are those which are affected the most by Covid-19 restrictions being in place,” says Swanston.

This includes “…wholesale and retail trade, tourism, hotels and restaurants, arts and recreation, and some food sectors as they are most likely to be either closed completely…due to travel bans in the tourism sector – or operating at reduced capacity to adhere to social distancing,” he says.

“We [capital economists] estimate that the sum of these sectors is equivalent to around 25% of Egypt’s overall GDP,” says Swanston.

For the time being, Egypt does not envision imposing strict restrictions that could instantly cripple its economic recovery, except in upper Egypt where the virus has spread more rapidly than elsewhere in the country.

Safe vs non-safe countries

But the Egyptian economy is anything but sheltered from damage, says Safty.

The full extent of the slow vaccination rollout on Egypt’s tourism will probably be more evident in the longer term, and in the future, it could lead to a major problem, he says.

“The trend that is likely to emerge as more vaccinations take place is the creation of countries deemed ‘safe’ to travel to,” he tells The Africa Report, “so those late in the vaccination roll-out means they will ultimately be detached from the international community when it comes to travelling.”

In short, he is warning of delayed tourism rebound due to delayed vaccinations.

Tourism is one of Egypt’s key sources of foreign currency, used constantly to buy foodstuffs and fulfill international obligations, such as paying foreign debt. The sector had picked up in recent years following the revolution in 2011 and then again in 2013, just before it was dealt another blow by the pandemic-induced travel bans.

In 2020, Egypt received 3.7m tourists, marking more than a 70% drop in the number of visitors recorded previously.

In April, Russia and Egypt agreed to resume all flights between both countries for the first time since the infamous 2015 Russian plane crash over central Sinai, for which IS claimed responsibility. With Russians constituting one of its largest single tourist groups, Egypt hopes the decision will revitalise tourism when it comes into effect, likely in the second half of May.

But such a lifeline may have a meagre effect, Swanston says.

“The resumption of international tourism from Russia is only likely to provide a small boost to the tourism sector,” he says. “In Egypt, the number of new cases has been rising fairly quickly. That may raise concerns over tourism resuming and added to that the slow vaccine rollout, may make officials in Russia and elsewhere wary of re-opening travel borders with Egypt at the risk of re-importing Covid-19 to their own country.”

Bottom line

Producing local vaccinations could have the added benefit of not only boosting the slow vaccination roll-out, but also stamping Egypt as a ‘safe’ country open for tourism in time for the summer season.

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