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International Monetary Fund. Fiscal Affairs Dept.
The mission estimates that making substantial progress in critical SDG sectors in Uganda would require additional annual spending of about 18.4 percent of gross domestic product (GDP) by 2030. Relative to low-income developing countries (LIDCs), additional spending in Uganda is higher in the social sectors and lower in the infrastructure sectors (Figure). Overall, Uganda’s additional spending is above the median LIDC and similar to the median Sub-Saharan African (SSA) country. (This analysis is an assessment of the spending to achieve a high performance in selected SDGs in Uganda and does not include an examination of options to finance the spending needs.) • Health—expanding the supply of medical staff. Total health care spending is low (4.2 percent of GDP) relative to peers, and there is substantial room to increase the efficiency of spending: health outcomes are below those of several other countries with similar spending. Overall, we estimate that total health care spending would have to gradually increase by an additional 7.4 percent of GDP in 2030 relative to today’s spending, to deliver superior health care outcomes. A major contributor to the additional cost is the need to substantially increase the supply of doctors—more than 16-fold—and to nearly triple the number of other health personnel. • Education—strengthening both quality and quantity of services. Uganda’s young population—60 percent are school-aged, a higher share than in the East African Community (EAC) and LIDC peers—combined with a relatively low enrollment rate, means that the country needs to invest in getting its children into schools. However, just as important is improving the currently low level of educational quality. Toward this goal, class sizes need to fall by hiring more teachers, thus bringing the student-teacher ratio down from 28 to 19. Public spending, currently well below LIDC and EAC averages, would need to triple as a share of GDP to help deliver on these goals. We estimate that Uganda’s total expenditures on education would need to increase by an additional 6.7 percent of GDP from its current level of 7.1 percent of GDP. • Water and sanitation—aiming at safely managed water and sanitation for all. Uganda is below regional and income-group peers in water and sanitation standards. In particular, while there has been progress in water provision, sanitation services have hardly improved in the past two decades, and its provision is lower than most countries in the subregion. Closing the water and sanitation gaps will require an additional annual spending of 1.1 percent of GDP, including maintenance costs to counteract depreciation. The bulk of the cost burden comes from safely managed water in rural areas, given the relatively high unit cost of such facilities and the large rural population unserved by this type of facility. • Electricity—investing in transmission and distribution networks to increase access. The vast majority of Uganda’s electricity is generated by renewable energy (hydropower). Overall electricity consumption per capita, at 83kilowatt-hour (kWh), strongly lags LIDCs and is below what would be expected given its level of GDP per capita. Transmission and distribution networks need to catch up with installed capacity, which, at 1,347 megawatts (MW), is far ahead of peak demand at 793 MW. We estimate that expanding current access, serving the future population through 2030, and increasing consumption in line with economic growth, will require annual investments reaching 0.4 percent of GDP in 2030. • Roads—gradually increasing rural access. Raising access to roads from its current level of 53 percent of the rural population to 75 percent by 2030 will require about 20.4 thousand additional kilometers of all-weather roads. While rural road access is higher than LIDCs, road quality lags subregional peers, thus the expansion of access will also need to include upgrading of roads in that are in poor condition. We estimate that this will require annual investments of 2.8 percent of GDP in 2030.
International Monetary Fund. Strategy, Policy, & Review Department
The global economy has been resilient and appears headed for a soft landing. Inflation continues to recede and risks have become more balanced globally. Nonetheless, medium-term growth prospects remain at the lowest level in decades and a smooth completion of the disinflation process should not be taken for granted. While the outlook for low-income developing countries (LIDCs) is improving, risks are tilted to the downside. The pace of convergence toward higher living standards has slowed, making it increasingly challenging to achieve the Sustainable Development Goals (SDGs). In the last mile of disinflation, central banks should ensure that inflation moves durably to target: they should neither ease policies prematurely nor delay too long and risk causing target undershoot. Fiscal policies need to rebuild budgetary room and ensure debt sustainability. Fostering faster productivity growth and facilitating the green transition are keys to improving long-term growth prospects. Multilateral cooperation is key to enhancing the resilience of the global economy in a more shock-prone world.
Rimjhim Aggarwal
,
Piergiorgio M Carapella
,
Tewodaj Mogues
, and
Julieth C Pico-Mejia
This paper evaluates the additional spending needed to meet core targets of selected Sustainable Development Goals (SDGs) while accounting for the associated cost to address climate risks. The SDGs under study are those related to human and physical capital development. An additional 3.8 percent of global GDP, or US$3.4 trillion, of public and private spending will be required by 2030 to achieve a strong performance in the selected SDGs while addressing associated climate risks. This includes an increase of 0.4 percent of global GDP (US$358 billion) compared to estimates that do not account for mitigation and adaptation needs within these sectors. LIDCs and SSA experience the highest climate-related cost augmentation relative to GDP, while EMEs (driven by large Asian emerging economies) bear the largest cost in absolute terms.
International Monetary Fund. African Dept.
This Selected Issues paper focuses on the costing and financing of social development goals (SDG) in Comoros. Comoros is committed to achieve SDGs, but progress has been limited. This paper uses two models—a costing model and a financing model—to illustrate the large costs of reaching some of the SDGs related to social, human capital and infrastructure by the target year of 2030 and to highlight particular cost drivers. The substantial cost of achieving SDG, 18.8 percent of 2030 gross domestic product, is due to the country’s very low starting point and the inherent difficulties associated with its small size. The persistently very weak domestic resources are another reason for the substantive cost of achieving SDGs. The ongoing commitments of the authorities in the Extended Credit Facility program, with a focus on enhancing domestic revenue mobilization is a key to achieve better outcomes in this area. The fiscal space generated by the program could be both used to restore debt sustainability and to accelerate the achievement of SDGs in Comoros.
Piergiorgio M Carapella
,
Ms. Tewodaj Mogues
,
Julieth C Pico-Mejia
, and
Mauricio Soto
This note provides a technical overview and description of the 3rd edition of the IMF SDG costing tool that estimates the additional spending needs to achieve a strong performance in selected SDGs for human capital development (health and education) and physical capital development (infrastructure), in particular, water and sanitation, electricity, and roads. The 3rd edition includes data and methodological updates to, but generally remains faithful to the original approach described in, Gaspar et al. (2019). Globally, additional spending needed to achieve a strong performance in the selected SDGs in 2030 amounts to US$3.0 trillion (3.4 percent of 2030 world GDP). Estimated at 16.1 percent of 2030 LIDC GDP, the average additional SDG cost of this income group is significantly higher than in EMEs, who face additional spending amounting to 4.8 percentage points of their GDP in 2030. In contrast to EMEs and LIDCs, the additional c