COVID-19: Upending Investments in Human Capital Across Eastern and Southern Africa

Working paper

Highlights

This working paper discusses the impacts of COVID-19 on public investments in human capital in the Eastern and Southern Africa (ESA) region. It is based on a review of economic outlook reports and forecasts as well as new projections of social sector spending trends in 2020 and 2021. The main objective is to stimulate discussion among UNICEF country offices, governments, and development partners on appropriate fiscal policy and budgetary responses to safeguard the situation of children.

Key findings include:

  • The economic contraction induced by COVID-19 is projected to result in at least US$35 billion in lost tax revenue in 2020 among the 21 countries in the region, which amounts to US$66 per person, on average.
  • Total domestic health expenditure in ESA is expected to increase by an average of 10 per cent in 2020, while total social protection spending will rise by 63 per cent, and sanitation and hygiene by 49 per cent on average. In contrast, education spending is likely to decline by 7 per cent, on average.
  • External resource flows to the region, especially concessional finance and grants to the poorest countries, are a far cry from the immense financing needs.
  • A debt crisis is taking hold of the region, with average external debt stocks alone projected to increase from 50 per cent of gross domestic product (GDP) in 2018 to 65 per cent in 2021.
  • Budget cuts – more commonly known as austerity measures – are the next major macroeconomic shock confronting children.
     

The paper concludes by making a case for governments and development partners to do everything in their power to protect spending on human capital sectors both during the emergency response and during the forthcoming period of austerity, which includes specific recommendations.

Report cover
Author
UNICEF
Publication date
Languages
English

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