Debt, health and HIV spending after the COVID-19 crisis: Assessing alternatives for relief mechanisms and additional financing through a cross-country macroeconomic study

This study addresses the following policy questions: What forms of debt relief and additional financing are most effective in mitigating the fiscal impact of the COVID-19 pandemic in countries that are at risk of or facing debt distress? What would the subsequent impact be on government health and HIV financing up until 2030? To answer these questions, five debt relief and additional financing options are hypothetically applied to seven Sub-Saharan African countries using a macro-fiscal programming framework and debt scenario modelling. Aggregate impacts demonstrate that, on average, the COVID-19 period has had a significant impact on government health and HIV-related expenditure. Each of the five presented options studied are shown to have an iteratively greater impact in mitigating the effects of the pandemic on government health and HIV-related expenditure. However, none of the debt relief and additional financing options succeed in offsetting the loss of health and HIV fiscal space that has occurred during the COVID-19 pandemic. Adequate solutions to make up for this shortfall require the consideration of options beyond the current policy dialogue.