Development Initiatives has produced a short briefing paper in advance of the 2015 Financing for Development negotiations in New York to provide evidence on the coverage and financing of this critical focus area for investments to end poverty and to inform decision making.
Key findings include:
- All countries in the world now have at least one example of a targeted social protection programme, but schemes aimed at the most vulnerable in LDCs are only reaching 20% of those living in extreme poverty (below PPP$1.25 a day).
- Even where the extreme poor benefit from transfers, the level of transfer is much less than is needed to sustainably lift the poor out of extreme poverty. In sub-Saharan Africa the transfer is 10% of what is needed.
- The cost of providing the level of transfer needed to close the extreme poverty gap in LDCs is US$49 per person – taking into account start-up costs, administration costs and leakage. This compares with latest estimates of US$60 for education and US$86 for health sustainable development goals.
- Current expenditure on all forms of social protection programmes is US$10 per person in LDCs. Even if LDCs increased their tax/GDP ratio to 20% and allocated 10% to targeted social protection programmes spending would only be US$16 per person, emphasising the importance of external assistance to support such programmes.
- Current donor funding on all forms of social-protection-related programmes in LDCs is US$3.7 billion – an average of US$4 per person compared to US$33 per person external financing requirement. Current financing gap to achieve social protection coverage in LDCs at the scale that is needed to eliminate extreme poverty is 88% of the total external finance required, leaving 12% funded. Recent estimates suggest the gap for education is 67% and for health is 50%.
- The increase in official development assistance (ODA) required to meet financing needs is equivalent to 0.1% of OECD GNI.