15 million more people fell into extreme poverty since Covid – UN report

In January 2020, the World Health Organisation (WHO) confirmed the global spread of the novel coronavirus (COVID-19).

In its latest Report on Least Developed Countries, the UN says at least 15 million more people in LDCs have fallen into extreme poverty since the pandemic.

The report noted that the fiscal space which is a government’s capacity to absorb drops in public revenue has been squeezed by global crises like COVID-19 in these countries. This limits their ability to implement development policies and forces tough choices such as choosing between paying their external debt or investing in health, education and climate action.

The decline of fiscal space in LDCs is evident in key indicators such as the debt-to-GDP ratio which grew from 45.5 percent in 2019 to 55.4 percent in 2022 (the highest since 2005) according to the report.

To manage the situation, these LDCs have borrowed and spent more to strengthen social safety nets and economic support.

“Their dependence on volatile commodities such as oil, copper and cotton, contributes to the problem. Between 2019 and 2021, a staggering 74% of LDCs relied on these raw materials for at least 60% of their merchandise export earnings. When prices drop, their fiscal space shrinks drastically,” parts of the report stated.

The UN is therefore urging bold action from the international community to ensure these countries have better access to affordable, long-term international financing, especially from public sources.

LDCs must also enhance domestic resource mobilization, the report further noted.

Least Developed countries are developing countries listed by the UN that exhibit the lowest indicators of socioeconomic development.

These countries, 46 in total include Afghanistan, Angola, Bangladesh, Burkina Faso, Benin, Lesotho, and Ethiopia among others.

The United Nation’s Least Developed Countries Report explores LDC-specific development challenges annually.