Covid-19, Reviving multilateralism

Covid-19 vaccines and official development assistance

By Haje Schütte, Senior Counsellor and Head, Financing for Sustainable Development Division, Development Co-operation Directorate, OECD

When scientists announced the discovery of a Covid-19 vaccine, the world sighed with relief. But soon after, many people around the globe discovered that others would get access to jabs faster than them. The sad term ‘vaccine inequality’ was coined. Only 6% of people are fully vaccinated in low-income countries today. In a bid to fill the gaps and curb the pandemic, there were calls for high-income countries to share and donate vaccine doses to developing countries, in particular through the COVAX Facility – the multilateral mechanism for providing developing countries with vaccines.

In response, Development Assistance Committee (DAC) member countries began donating vaccine doses in excess of their domestic supply. As those donations were a form of aid in-kind, they were eligible to be counted as Official Development Assistance (ODA). To value donations of excess COVID-19 vaccine doses as ODA in 2021, the vast majority of the DAC countries agreed to apply a price of USD 6.72 per vaccine dose – the weighted average price of vaccines aligned with COVAX – with necessary safeguards.

In many cases, the USD 6.72 average price will be an under-estimate of real costs incurred by DAC countries (as they will have donated a mix of vaccines, including higher-priced ones) and will therefore serve as a powerful safeguard against ODA inflation. If donor countries donated mostly lower-price vaccines, they will adjust their figures not to overstate their ODA. In all cases, when preliminary ODA data are published in April 2022, vaccine spending will be clearly identified. Each donor can therefore be held accountable for its reporting.

This agreement was included in guidance for donors, which also states that expired doses are not eligible as ODA. As a default, donated doses are required to have a shelf life of minimum ten weeks upon arrival in country. The OECD also recommends that vaccine donations be reported separately in countries’ ODA statistics to allow public scrutiny of this data.

Ultimately, it is up to DAC countries to decide whether they report certain costs, such as donations of excess vaccines, as ODA. Vaccine donations are not the only Covid-19 related item that could be reported as ODA. The list also includes:

  • Investments in partner countries’ health systems: support to health administrations, hospitals, laboratories, etc.;
  • activities related to Covid-19 control: information, education, communication, testing of the population in developing countries, prevention, treatment, care, and vaccination campaigns;
  • humanitarian response to mitigate the impact of Covid-19 and to help protect and rebuild the livelihoods of poor women and men.

The situation around the Covid19 pandemic keeps evolving and the discussion on the valuation of vaccine donations in ODA is ongoing. The DAC will now discuss the issue of counting and pricing them in 2022 ODA, for the next cycle of reporting.

The OECD will publish the preliminary figures for ODA in 2021 on its website on April 12, 2022.