SADC countries to reduce public spending by US$ 30.2 billion
Poverty and extreme inequality worsen in southern Africa as COVID-19 battered countries embark on a dangerous austerity path plans underway to reduce public spending by US$30.2 billion in 2022-26.
This was revealed during the launch of Oxfam, Norwegian Church Aid and Development Finance Inter1 on The Crisis of extreme Inequality in Southern African Development Community (SADC); fighting austerity on the COVID-19 report on Tuesday in Cape Town, South Africa.
The COVID-19 pandemic has worsened the extreme inequality in SADC countries and pushed millions into poverty, reveals a new analysis from Oxfam, Norwegian Church Aid (NCA) and Development Finance Inter1 (DFI).
The Commitment to Reducing Inequality Index (CRI) report shows that the fifteen SADC member states lost about US$80 billion in 2020 due to lower-than-expected growth. which is equivalent to around US$220 for every SADC citizen.
This analysis estimates that this economic crisis could take more than a decade to reverse, erasing all hope of countries meeting their 1 development plan targets to reduce poverty and inequality by 2030.
The Organizations say that if countries act decisively now against inequality, with policies aimed to help support citizens with public services and support, the impact of the crisis could be reversed in just three years.
Tthe report finds that SADC countries have responded with belt-tightening measures that are likely to do more harm to people than good.
"The poorest in our societies are bearing the brunt of COVID-19 and are now facing the extra cost of austerity policies.
Governments have a choice and must act now to reverse damage of the pandemic, increase social spending and tackle the inequality crisis,” Senior Programme Officer in Norwegian Church Aid, Felix Ngosa.
As many as 35.5 million people in SADC countries lost their jobs in 2020 due to the pandemic, down by 26 percent in 2019 employment numbers.
This wealth concentration by a small group of people has left a majority struggling to meet their most basic needs, such as quality education, healthcare and decent jobs.
“The findings of this analysis are shocking, but they confirm the reality of many countries in this natural resource-rich but poor and unequal region,” Oxfam in Southern Africa Programme Director, Dailes Judge stated.
“The inequalities in most countries in the region are major drivers of reduced economic growth and weakened essential services such as quality healthcare and education,” she said.
“Sadly, a majority of the people feeling the sting are the poor – those living in vulnerable conditions with little or no assets. Women- headed households represent a distressingly large proportion of those struggling and suffering,” she said.
“The combination of budget cuts, rising debt and a slow recovery due to global vaccine inequity risks raising the SADC inequality crisis to new heights,” Development Finance Inter1 Director, Mathew Martin added.
“Recovering from the pandemic, offers SADC governments a once in a generation opportunity to do what their citizens want to increase taxes on the wealthy and large corporations, to boost public spending especially on healthcare, education and social protection, and to boost workers’ rights in order to tackle joblessness and precarious work. With external support, for instance through debt relief and aid, SADC governments could reduce inequality drastically and eliminate extreme poverty by 2030,” he said.