Governments budgets and financing for children’s wellbeing during Covid-19

Schoolgirl

A schoolgirl displays a picture during a lesson in class.

Photo credit: Save the Children

What you need to know:

  • All countries must act collectively to provide protection for the most vulnerable people on the planet, especially children.
  • Governments can invest in sustainable school infrastructure through partnerships with education stakeholders.

Africa Platform for Social Protection (APSP) in collaboration with Save the Children International – East and Southern Africa office has developed a technical brief on government budgets and financing for children’s wellbeing during Covid-19 in East and Southern Africa.

This is aimed at informing policy makers and programme implementers in the two regions on good practices that are being implemented in the region that can be replicated. Governments in Sub-Saharan Africa do not have the resources to adequately protect their populations from global shocks and emergencies.  

For instance, an assessment of pre-Covid budgets showed that governments in East and Southern Africa countries such as Somalia, South Sudan, Uganda, Malawi and Zimbabwe would be unable to provide basic life-saving health services to their populations were a major health crisis to strike.

The onset of the Covid-19 pandemic and the fiscal implications of the crisis, therefore, compounded an already difficult fiscal situation due to business closures and lockdowns. Yet, governments had to initiate budget reallocations, reprioritisation, and also develop stimulus packages in response to the pandemic.

To fund these stimulus packages, countries in the region had to acquire loans and grants from international financial institutions, the donor community and private sector firms. To further mitigate a worsening financial situation, many governments had to seek debt relief through a debt relief mechanism established in May 2020, whose goal was to suspend debt service payments until December 2021.  

To provide additional financial relief, the International Monetary Fund (IMF) extended special drawing rights which could play a key role in the recovery or strengthening of child-sensitive social protection programmes. 

Government expenditure responses 

With assistance from various development partners including donors and international financing institutions such as the World Bank, governments in the East and Southern Africa region came up with stimulus packages that addressed needs of various sections of the society. Governments were also able to initiate or expand social protection programmes targeting children as one of the vulnerable population groups.

According to IMF (2020), countries in East and Southern Africa allocated additional spending in the health sector, non-health sector, and accelerated spending or deferred revenue. It also allocated liquidity support i.e. equity injections, loans, asset purchase, or debt assumptions offered as a share of GDP.

Apart from South Africa, Djibouti, Kenya, and Ethiopia made substantial additional spending at least 1.5% of GDP of fiscal measures in response to the Covid-19 pandemic. Kenya’s funds were from austerity measures effected at both national and county government levels in response to the pandemic.

Except for Ethiopia, which allocated an extra 0.5% of GDP to bolster health spending, most of the additional expenditure was in the non-health sectors. Simultaneously, Ethiopia and Uganda offered substantial liquidity support (i.e. equity injections, loans, asset purchase, or debt assumptions at 0.6% of GDP.

South Africa and South Sudan offered substantial liquidity support in the form of equity injections, loans, asset purchase, or debt assumptions. Uganda offered substantial liquidity support that is, equity injections, loans, asset purchase, or debt assumptions at 0.6 percent of GDP. 

In the context of government budgets and public expenditure on social protection programmes designed to address child vulnerability caused by Covid-19, some of the interventions implemented in 2020 were achieved through significant budget reallocations that will negatively affect children in the future.

For example, in South Africa, the basic education budget was reduced by about $130 million which was re-appropriated to address Covid-19 issues in schools. While the changes are understandable, the department of basic education will have to find a way of reintroducing much-needed infrastructure spending, especially in schools with poor water and sanitation facilities. 

In Rwanda, budget allocations to complement child-focused social protection initiatives such as early childhood development, nutrition, child rights protection registered an increase from $17.7 million in 2019/20 to $22.1 million in 2020/21. As a share of the total social protection budget, the child-focused social protection budget has increased from 10.3% to 11.2 % in 2020/21.  

As for Malawi, the government’s stimulus plan called for $213 million in spending, including USD20m in spending on healthcare and targeted social assistance programmes. This plan included hiring 2,000 additional healthcare workers, and cash transfers for child protection.  

In Somalia, the pandemic changed capital spending priorities. The country made considerable increases in employee compensation and inter-governmental transfers and social benefits. The social benefit budget increased from $25 million in 2020 to at least $90 million in 2021.

Photo credit: Save the Children

Many interventions in the East and Southern Africa countries did not specify duration. For instance, only 15 social protection emergency schemes specified duration. Out of these, 33% will last for six months, 20% are a one-off intervention, 20% will last for three months, and another 20% are unlimited or lasting for at least one year.

Additionally, countries in East and Southern Africa faced a constrained fiscal space with regard to the ability to initiate or expand social protection programmes. As such, a substantial proportion of interventions were financed by donors.

Furthermore, there was significant off-budget support for social protection. For example, in countries such as South Sudan, at least 77% of the nearly $370.4 million earmarked for various education-related interventions between 2017-2024 will be spent off-budget.

However, this massive reliance on development partners does not guarantee the sustainability of social protection programmes. For example, some Covid-19 emergency social protection interventions were closed within 6 months, while others are expected to wind up within one year of commencement. 

Similarly, given the fact that covid-19 is a virus that does not respect boundaries, countries in East and Southern Africa should have a uniform response. The lack of coordination has meant that countries that have been successful in their interventions are at risk of getting infections from those whose interventions have been less successful.

Overall, investment in social protection interventions through government budgets and public expenditure has been low. Across all low- and middle-income countries in the East and Southern Africa region that have introduced emergency social protection measures in response to covid-19, the average investment is just 0.46% of GDP. 

Recommendations

Whilst social protection is the responsibility of national governments, the international community, especially countries with the strongest economies, have a responsibility to support the realization of the human right to social protection. Therefore, all countries must act collectively to provide protection for the most vulnerable people on the planet, especially children.

As the east and southern Africa region braces to face deadlier waves of the pandemic, more resources will be required. A multi-stakeholder approach will be the most effective in ensuring adequate resources to tackle the scourge. 

Since governments in East and Southern Africa have relatively few resources at their disposal, they ought to channel funds towards social protection programmes such as food-for-work for parents and guardians, and those schemes that promote broadening of livelihood incomes. Additionally, governments can invest in sustainable school infrastructure through partnerships with education stakeholders including the private sector. 

While international development partners play a key role in social protection financing, the reliance of the East and Southern Africa region on aid to support social protection can lead to dependency, and deny these governments the incentive to enhance their capacities for domestic revenue mobilisation. 

Governments in the region should aim for universal social protection and universal child benefits through national policies and programmes that protect all people throughout their lives against poverty and risks to their livelihoods. Such programmes could include non-contributory schemes that guarantee a basic level of income and access to health care for all. 

The states should also allocate adequate resources for social protection measures that address crisis-related needs, especially social transfer programmes. Such schemes address the immediate needs of existing and new groups of poor and vulnerable people.  

Additionally, states should ensure coordination amongst institutions such as civil protection units, ministries and agencies and development partners to eradicate duplication of social protection interventions. 

Finally, the international community should provide financing support to the poorest countries to help them create fiscal space for increased public spending for social protection through multilateral development co-operation as well as national and regional multi-sectoral partnerships.

This should entail the increase of budgets for social protection by 2% of GDP on average, thereby closing existing financing gaps and ensuring a minimum income package for children, elderly people, mothers and people with disabilities. This support should include extending debt relief mechanisms.

Sponsored by the Africa Platform for Social Protection in collaboration with Save the Children.

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