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Financing the reduction of extreme poverty post-Covid-19

Briefing/policy papers

Written by Marcus Manuel, Emma Samman, Martin Evans

Hero image description: An irrigation site in Tigray, Ethiopia Image credit:Nena Terrell/USAID Ethiopia Image license:Creative Commons

The Covid-19 pandemic has wiped out years of progress in ending extreme poverty: we forecast an additional 250 million people in extreme poverty by 2030 and expect that it will take 10 years of economic growth just to bring extreme poverty numbers back to where they were before the crisis. To reduce extreme poverty, many countries urgently need to step up public investments in education, health and nutrition, social protection, water, sanitation and hygiene – sectors that are also critical in developing resilience to future pandemics.

Middle-income countries (MICs) have 100 times more tax than low-income countries (LICs) and could raise a further $1,960 billion, which would cover most of the costs of ending poverty; LICs could only raise another $11 billion and still could not afford even half the costs. If donors better prioritised their aid and met the 0.7% aid target, all LICs could afford at least half the costs.

An irrigation site in Tigray, Ethiopia
Image credit:Nena Terrell/USAID Ethiopia ~ Image license:Creative Commons
Marcus Manuel, Liam Carson, Emma Samman and Martin Evans