Search Climate Insights Directory

The document finds that African LICs' economic responses to COVID-19 were modest and suboptimal compared to developed nations, primarily due to pre-pandemic structural weaknesses such as high debt, inflation, and limited fiscal space. While expansionary monetary policy was the most common tool, fiscal stimulus was generally low (1% to 2% of GDP), with exceptions like Senegal, Niger, and Mozambique. The brief highlights a significant financing gap in donor support and argues that recovery requires a shift toward data-driven policy, increased digital and financial inclusion, and the independence of monetary and debt management authorities.

The document examines the two-wave economic impact of COVID-19 in Africa, highlighting the first wave's disruption of trade, commodity prices, and remittances, and the second wave's risk of sovereign credit downgrades and debt defaults. It argues that limited fiscal space and high debt-to-GDP ratios leave many African nations unable to fund recovery, suggesting that central banks use monetised interventions and governments leverage digital technologies to maintain financial stability.

The document examines how the COVID-19 pandemic exacerbated existing debt distress in Africa, where average debt-to-GDP ratios rose from 60% to 70%. It critiques the G20/Paris Debt Service Suspension Initiative (DSSI) for its limited scope, noting that private creditors and multilateral development banks (MDBs) have largely refused to participate. The brief highlights the role of credit rating agencies in discouraging participation due to fears of downgrades and argues that many nations face solvency crises rather than temporary liquidity issues. It recommends extending the DSSI, reallocating IMF Special Drawing Rights, and establishing a permanent UN-led forum for debt monitoring and restructuring.

Nigeria's response to Covid-19 was characterized by low reported death rates, potentially due to limited testing capacity, and a reliance on lockdowns that exacerbated poverty for low-income earners. The pandemic exposed critical weaknesses in the national health system, which had received funding below the 15% Abuja Declaration target, and highlighted the economic risk of the country's heavy dependence on oil revenue. To mitigate economic contraction, the government adjusted its oil benchmark price, secured a $3.4 billion IMF loan, and implemented various tax reliefs and intervention funds for small businesses and the healthcare sector.

The report argues that existing village-level evaluation tools in Indonesia, such as the Village Development Index (IDM), are inadequate for measuring and rewarding environmental sustainability. To address this, the Climate Policy Initiative (CPI) proposes the 'IDM+', which adds 10 ecological indicators covering land-use, natural resource management, and climate actions. Using Berau Regency in East Kalimantan as a case study, the report demonstrates how this index can underpin Ecological Fiscal Transfers (EFTs) to reward high-performing villages. It recommends a mixed fiscal approach—combining reformulated Village Fund Allocations (ADD) with targeted financial assistance—to incentivize green growth while supporting low-performing villages.

The paper evaluates the 2008–09 green stimulus, finding that while it supported GDP and job creation in economies like the US, China, South Korea, and the EU, it failed to create a long-term low-carbon trajectory due to a lack of structural reforms and the persistence of fossil fuel subsidies.

The report argues that traditional mining taxation, heavily reliant on corporate income tax and royalties, is insufficient for developing countries due to profit shifting and outdated paradigms. It highlights new pressures, including the transition to low-carbon minerals, disruptive automation technologies that reduce local employment and payroll taxes, and the financial burdens of climate change. The document proposes a three-step roadmap—understanding current roles, crowdsourcing innovative ideas, and researching these options—to create a handbook of improved mining revenue collection strategies.

The guide argues that traditional mining tax regimes, primarily based on corporate income tax and royalties, are outdated and vulnerable to profit shifting. It highlights how the energy transition, disruptive technologies like AI and automation, and climate change are altering the economic landscape of the extractive sector. The document proposes a three-step dialogue process involving governments, industry, and civil society to identify innovative fiscal reforms that ensure sustainable and equitable revenue collection for resource-rich developing nations.

The document examines how Covid-19 triggered financial instability in Africa through capital outflows, falling commodity prices, and sovereign credit downgrades, while recommending the development of local capital markets and continental policy coordination to enhance resilience.

The report assesses the impact of COVID-19 on South Africa's economy, forecasting significant job losses and wage declines. Using a 10% contraction in final demand as a median scenario, it estimates 1.77 million jobs are at risk, with the most severe impacts falling on low-skilled, informal, and poverty-stricken workers. The analysis highlights that the service sector and agriculture are hardest hit due to their reliance on consumption spending. The authors argue that the government's R500 billion rescue package is insufficient and poorly implemented, recommending a net new expenditure of at least R500 billion, expanded social protection, and targeted support for the informal sector and primary industries.

The Institute for Economic Justice (IEJ) proposes a managed reopening of South Africa's economy that prioritizes worker safety, social protections, and state-led economic transformation. Key recommendations include democratizing workplace health and safety, expanding income support through a universal Basic Income Guarantee, improving public health and education infrastructure, and implementing a proportionate fiscal stimulus to reverse austerity measures.

The policy brief critiques the South African government's 'risk-adjusted' strategy for reopening the economy during the COVID-19 pandemic, arguing that it prioritizes business profitability over worker safety and ignores the impact of deep social inequalities. The authors propose a 'well-being economy' framework that treats health and economic performance as intertwined. Key recommendations include democratizing the return to work through worker oversight, implementing a universal basic income guarantee, expanding social infrastructure in townships, and reversing austerity measures in the national budget to provide a genuine rescue package for the most vulnerable.

The Institute for Economic Justice (IEJ) and other experts contend that the South African government's Supplementary Covid-19 Budget is an austerity measure rather than a rescue package. They argue that the budget provides only R36-billion in new spending—less than 1% of GDP—compared to the promised R500-billion, and may involve cuts between R400-billion and R600-billion over the next few years. The authors claim this approach violates constitutional obligations to socio-economic rights and risks deepening the economic depression, potentially increasing the GDP drop from 10% to over 16%.

The Institute for Economic Justice argues that the South African Supplementary Budget of 24 June 2020 betrays the promised R500 billion COVID-19 rescue package. Instead of the promised amount, the budget provides a net increase to non-interest spending of R36 billion, representing less than 1% of GDP. The document details shortfalls across seven key areas: social security, job protection, health, wage support (TERS), municipal support, tax relief, and the credit guarantee scheme. It highlights that much of the R145 billion targeted for COVID-19 is funded through reprioritisations and the suspension of baseline allocations, while planning a further R230 billion reduction in spending over two years.

The policy brief argues that African governments should leverage the urgency of the COVID-19 crisis to implement lasting reforms that protect the continent's long-term growth trajectory. It outlines ten priorities divided into resource mobilization, governance, business environment, and digital innovation. Key recommendations include closing tax loopholes, streamlining government bureaucracy, improving the ease of doing business, and crowding in venture capital to support a tech-driven innovation ecosystem.

The paper contends that South Africa's current policy of austerity is economically destructive and proposes a R1 trillion fiscal stimulus over three years. It argues that the country has the fiscal space for expansion because its debt levels are comparable to emerging market peers and its productive capacity is underutilised. Using input-output modelling, the authors estimate an average fiscal multiplier of 1.68, suggesting that a stimulus of 10% of GDP (approximately R500 billion) could generate over R800 billion in economic expansion and nearly 3.5 million jobs. The proposed stimulus is guided by ten principles, including targeting high-multiplier sectors, reducing inequality, and ensuring environmental sustainability through a 'Green New Deal'. Financing is proposed through progressive taxation, rebuilding the capacity of the South African Revenue Service (SARS), leveraging Development Finance Institutions (DFIs), and reforming monetary policy.

The Institute for Economic Justice argues that South Africa's initial R41 billion COVID-19 rescue package is insufficient and proposes a more realistic injection of at least R310 billion, plus R100 billion in short-term financing. The proposal focuses on four main spending areas: health funding (R20 billion), income support (R211.5 billion), wage guarantees (R60 billion), and business support (R150 billion). To fund this, the IEJ suggests a combination of short-term borrowing, utilizing the Unemployment Insurance Fund (UIF) surplus, issuing 'social solidarity bonds', and implementing a solidarity tax on high earners. The plan also includes measures to stabilize the economy, such as managing capital flows and securing US Dollar swap lines.

The briefing warns that emergency government responses to the COVID-19 pandemic—such as lockdowns, medical supply requisitions, and export bans—create an unprecedented risk of investor-state dispute settlement (ISDS) claims under over 3,000 investment treaties. It highlights the unpredictability of arbitration tribunals and the high cost of defense, citing historical examples from Argentina and Egypt where states faced multi-billion dollar awards. The authors call for a coordinated global response, potentially through the UN or WTO, to suspend ISDS for pandemic measures or issue joint interpretations of the 'state of necessity' defense. As an interim measure, it suggests states may withdraw their consent to arbitration.

The document outlines how governments in developing countries can use fiscal policy to support the mining sector during the COVID-19 crisis. It identifies specific pandemic-driven impacts—such as mine closures, fluctuating commodity prices, and supply chain disruptions—and proposes targeted relief options including the deferral of social charges, VAT credits, and royalty exemptions. The guide emphasizes that aid should be conditional on job retention and transparency, while warning against broad corporate income tax exemptions.

A group of over 75 South African economists and analysts argues that current government responses to the COVID-19 pandemic are insufficient in scale. They propose a comprehensive set of measures including income transfers, payment holidays, expanded emergency loans, and increased health system funding to protect vulnerable populations and sustain businesses during the crisis.