ECS3707
Assignment 5
Semester 2 2025
Due October 2025
, ECS3707
Assignment 5
Semester 2 2025
Due October 2025
Development Economics
1.1 What is the main development challenge South Africa is facing, and how are
poor healthcare and education outcomes connected to slow economic growth?
South Africa is caught in a double bind: weak human capital outcomes in health and
education, and sluggish economic growth. The two problems reinforce each other.
On the education side, the World Bank’s Human Capital Index (HCI) scores South Africa
at about 0.40–0.43. This means that children born today will only achieve around 40%
of their full productivity potential given the current state of schooling and health (World
Bank Human Capital Project, 2020/2024). PIRLS 2021 revealed that only 19% of Grade
4 learners can read for meaning in any language, with the country’s reading scores
falling sharply from 2016 to 2021. Years of schooling are not translating into meaningful
learning.
Health outcomes are equally concerning. South Africa loses an estimated 26.6 million
disability-adjusted life years (DALYs) annually, mainly from HIV, TB, maternal
conditions, and growing non-communicable diseases (Senkubuge et al., 2021;
GBD/Lancet). These burdens lower life expectancy, reduce workforce participation, and
create long-term fiscal strain.
Meanwhile, economic growth has stalled. Over the last decade, GDP growth averaged
only 0.7% annually, far below population growth of around 1.2%, which means incomes
per person have stagnated (World Bank, 2025).
Assignment 5
Semester 2 2025
Due October 2025
, ECS3707
Assignment 5
Semester 2 2025
Due October 2025
Development Economics
1.1 What is the main development challenge South Africa is facing, and how are
poor healthcare and education outcomes connected to slow economic growth?
South Africa is caught in a double bind: weak human capital outcomes in health and
education, and sluggish economic growth. The two problems reinforce each other.
On the education side, the World Bank’s Human Capital Index (HCI) scores South Africa
at about 0.40–0.43. This means that children born today will only achieve around 40%
of their full productivity potential given the current state of schooling and health (World
Bank Human Capital Project, 2020/2024). PIRLS 2021 revealed that only 19% of Grade
4 learners can read for meaning in any language, with the country’s reading scores
falling sharply from 2016 to 2021. Years of schooling are not translating into meaningful
learning.
Health outcomes are equally concerning. South Africa loses an estimated 26.6 million
disability-adjusted life years (DALYs) annually, mainly from HIV, TB, maternal
conditions, and growing non-communicable diseases (Senkubuge et al., 2021;
GBD/Lancet). These burdens lower life expectancy, reduce workforce participation, and
create long-term fiscal strain.
Meanwhile, economic growth has stalled. Over the last decade, GDP growth averaged
only 0.7% annually, far below population growth of around 1.2%, which means incomes
per person have stagnated (World Bank, 2025).
