Nairobi, 12 May 2022 (TDI): Southern African Development Community (SADC’s) poverty and extreme inequality analysis was released by Oxfam, Norwegian Church Aid (NCA), and Development Finance International (DFI).
The COVID-19 pandemic has exacerbated Southern Africa’s acute inequalities. The pandemic has pushed millions into poverty. According to the Commitment to Reducing Inequality Index (CRI) research, SADC member states lost nearly $80 billion in 2020.
This was owing to slower-than-expected growth, which amounted to about $220 per SADC resident. According to this analysis, the recovery from the current economic crisis could take more than a decade.
This could make it impossible for countries to reach their 2030 national development plan targets for reducing poverty and inequality. According to the organizations, countries must take immediate action to combat inequality.
They must put in place rules to provide residents with public services and assistance. In just three years, the crisis’ effects might be reversed.
The analysis, however, reveals that SADC countries have responded by tightening their belts. They are more likely to cause harm than benefit people.
“The poorest in our societies are bearing the brunt of COVID-19. They are now facing the extra cost of austerity policies. Governments have a choice and must act now to reverse the damage of the pandemic.
They must increase social spending and tackle the inequality crisis”, says Felix Ngosa, senior programme officer in Norwegian Church Aid.
As many as 35.5 million people in SADC countries lost their jobs in 2020 due to the pandemic.
On the basis of 2019 employment figures, this has decreased by 26%. The worst-affected countries were the Democratic Republic of Congo, Madagascar, and Tanzania. In each country, over five million jobs were lost.
SADC poverty and Inequality
The pandemic and its consequences have affected the majority of SADC citizens. For the region’s wealthiest citizens, although, the story is different.
During the two years of the epidemic, the six wealthiest men in SADC, four from South Africa and one each from Tanzania and Zimbabwe saw their fortunes rise from $18.1 billion to $27.7 billion.
In actual terms, that’s a 42 percent gain. This increase is more than enough to cover everyone in SADC’s COVID vaccination program (plus a booster). In eight SADC countries, the top 10% earn around or above 60% of national GDP.
According to the research, they also received 50% in the other seven. A small minority of people have concentrated their riches, leaving the majority struggling to meet their most basic needs. Quality education, healthcare, and respectable jobs are among them.
“The findings of this analysis are shocking, but they confirm the reality of many countries in this natural resource-rich but a poor and unequal region,” says Dailes Judge, Oxfam in Southern Africa Programme Director.
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.
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.”
With COVID-19 infections on the rise in 2021, most governments reversed crucial health, social protection, and economic measures implemented in 2020. They were replaced by policies of austerity.
This occurred amid rising debt burdens and a lack of external help for the country’s budgets. Governments have been under pressure to slash social spending due to rising debt service commitments.
Debt servicing was already at astronomical proportions prior to the epidemic. Domestic and external debt services accounted for nearly three times the amount spent on health by SADC nations.
In 2020–21, debt servicing accounted for 42.2 percent of government income on average. According to the research, many Southern African Development Community (SADC), member countries remain committed to tackling inequality.
They are, however, unable to compensate for the enormous inequality created by the market and exacerbated by the COVID-19 pandemic.
“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.” This was stated by Mathew Martin, Development Finance International Director.
“Recovering from the pandemic, however, 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.”