The Looming Debt Crisis in Eastern and Southern Africa
What it means for social sector investments and children
About
This working paper discusses the impact of worsening debt levels due to COVID-19 on child well-being in Eastern and Southern Africa. Specifically, it investigates the implications of the changing size and composition of debt on social sector spending. The paper shows that COVID-19 has sparked an accelerated build-up of government debt across the region, from around 60 percent of GDP in 2018 to 70 percent in 2021, on average. Rising debt repayment costs are likely to impact levels of social spending. Austerity measures that are being adopted by some governments in response to debt distress also pose grave dangers to vulnerable households. The paper calls for bold and decisive actions at national and international levels to avert a regional debt crisis and sustain critical investments in human capital.
September 2021
