Africa’s COVID-19 Budget Crunch
The coronavirus will challenge African economies already saddled with debt, shrinking budget revenue, and compromised health systems. A continent-wide approach that applies lessons learned in Liberia during the Ebola outbreak and elsewhere during the current pandemic will be needed to prevent fiscal ruin.
PRETORIA – As COVID-19 crisscrosses Africa, and policymakers are implementing emergency responses, World Health Organization Director-General Tedros Adhanom Ghebreyesus has issued a clarion call to African governments: “In other countries,” he said in March, “we have seen how the virus actually accelerates after a certain tipping point, so the best advice for Africa is to prepare for the worst and prepare today.”
But even viable efforts to mitigate the crisis will press many African countries’ already-strained budgets to the breaking point – or beyond. As it is, Sub-Saharan African countries allocate an average of only 7% of their general government budget to health, compared to 15% for OECD countries. The cumulative effect of low spending has left many of these countries with precarious health systems that struggle to provide ordinary services, let alone respond to a pandemic.
Under-investment is the main reason Africa’s health systems are weak. But lack of fiscal space for emergencies like the pandemic – due to unsustainable levels of debt and shrinking savings – makes matters worse. And governments are also reluctant to make hard decisions that may require reallocating budgets and reversing wage increases for public-sector employees.