Macroeconomic Volatility in Eastern and Southern Africa
Protecting Children from Rising Risks
Highlights
This report analyzes the latest available economic growth, jobs, price and government spending projections to understand how rising macroeconomic volatility will impact children in Eastern and Southern Africa during 2023. It also presents a methodology to better assess child vulnerability risk across countries and offers ideas on how governments and development partners can safeguard child well-being in the face of widespread shocks.
In 2020, the region experienced the biggest economic contraction ever recorded, which reduced the already limited incomes of vulnerable families. The economic rebound then turned out to be short-lived and highly disappointing, just as the conflict in Eastern Europe accelerated a cost-of-living crisis. Rising prices also forced central banks to raise interest rates. These factors will work together to further constrain economic growth and job opportunities in 2023 just as dwindling fiscal space will make budget cuts and regressive revenue generation measures commonplace in most places. The combination of slowing growth, worsening labour market conditions, rising inflation, higher debt servicing costs and fiscal consolidation will hurt child well-being through lower household income and purchasing power as well as reduced access to social services. Even more worrisome is that macroeconomic forces are only set of shockwaves that will impact children in 2023, as most families will also continue coping with political instability, climate events and health emergencies.
To trigger early action and protect children, governments and development partners should include macroeconomic indicators as part of standard risk assessment exercises. This pinpoints countries where children are exposed to extreme vulnerabilities due to macroeconomic channels (Angola, Botswana, Comoros, Eswatini, Malawi, Rwanda, Zambia) as well as where macroeconomic volatility adds even greater danger to contexts already dealing with humanitarian situations (Kenya, Madagascar, South Sudan, Zimbabwe).
In addition to better monitoring, governments should: (i) maximize funding for social sectors; (ii) ensure that children’s services are protected from budget cuts; and (iii) expand social protection programs. To complement national actions, development partners, including UNICEF, should: (i) increase funding to governments for social services; (ii) support finance and social sector ministries to better plan and spend available resources; and (iii) provide direct cash assistance to vulnerable families.
