The Macroeconomic and Social Investment Outlook for Children in Eastern and Southern Africa

Abstract

Child well-being is inextricably linked to the performance of the macroeconomy. Although not always explicit, there are very clear and powerful channels that need to be understood, monitored and linked to decision-making processes, including economic growth, labour markets, price levels and the fiscal balance. As the young and fast-growing population in the Eastern and Southern Africa region (ESAR) explodes from 540 million today to more than a billion in less than 30 years, the stakes for children have never been higher. And this is the main objective of the report: to understand whether macroeconomic forces will catalyse sustainable change for children – or not. When looking at recent trends and projections, optimism is hard to come by: * Economic growth is not nearly fast enough to propel incomes and poverty alleviation on a meaningful scale. * Labour markets are not providing the quality jobs needed by parents and young workers to improve their lives and the lives of children. * Rising prices are negatively influencing real economic output, the impact of government investment and household welfare. * Continuous budget deficits, rising debt and the changing foreign aid landscape limit available funding for children’s services. * The current levels, design and performance of social sector budgets prevent systems from delivering the services demanded by children and their families. However, many factors could influence the outlook. Economic growth could outperform expectations… Labour markets could rapidly expand and create formal sector opportunities for young and adult workers… Price levels could permanently stabilize… Domestic resource mobilization and other financing efforts could produce unprecedented returns… And social sector investment could suddenly grow in size and impact… Sound policies and favorable external conditions could help improve the macroeconomic trajectory for children, but achieving meaningful improvements in child well-being will largely be dictated by the investment choices of governments starting today. UNICEF country offices can play a critical role in influencing budgets for children as well as in protecting and promoting child well-being in response to different macroeconomic situations.