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ECS3707 Assignment 5
(COMPLETE ANSWERS)
Semester 2 2025 - DUE 8
October 2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
ECS3707 Assignment 5 (COMPLETE
ANSWERS) Semester 2 2025 - DUE 8 October
2025
Course
Development Economics (ECS3707)
Institution
University Of South Africa (Unisa)
Book
Development Economics
ECS3707 Assignment 5 (COMPLETE ANSWERS) Semester 2 2025 - DUE 8
October 2025; 100% TRUSTED Complete, trusted solutions and explanations.
Ensure your success with us.
Scenario: Human capital (knowledge, skills, and good health) empowers
people to achieve their potential and drives economic growth. South Africa
faces a dual challenge; high inequality in both education and healthcare
systems, and persistently slow productivity growth and income inequality. In
2019, South Africa’s DALY (Disability-Adjusted Life Year) loss was equivalent
to 41% of GDP, revealing deep inefficiencies in the health sector (Senkubuge
et al., 2021). Moreover, non-communicable diseases (NCDs) account for over
30% of disability-adjusted life years in South Africa. (Koch, 2024).
Additionally, South Africa's population is growing at a rate of around 1,5% to
2% annually, in contrast the GDP grew by 0,6% in 2024 compared with 2023
(Stats SA, 2025). In essence, the disparity between economic growth and
population growth creates significant challenges for South Africa, hindering
its ability to improve the well-being of its citizens. South Africa's healthcare
system faces numerous challenges, including inadequate access, particularly
in rural areas, and a significant burden of disease. These issues are
compounded by systemic problems like poor governance, inadequate
infrastructure, and a shortage of skilled healthcare professionals, particularly
in the public sector. The coexistence of a strong private healthcare sector
alongside a struggling public system creates further disparities in access and
quality of care (World Bank, 2023) . For instance, the Human Capital Index
(HCI) which is a framework for understanding how a nation's people can
contribute to its future economic prosperity. It is a measurement developed
by the World Bank to assess the potential of a country's human capital
(World Bank, 2018). It quantifies the expected productivity of a child born
today, considering health and education factors, by the time they reach 18.
The HCI is a valuable tool for governments and societies to understand how
investments in human capital can boost a nation's economic and social
development . The Utilization-adjusted Human Capital Index (U-HCI) scales
,down the HCI by considering how many adults are not employed. The U-HCI
for South Africa is 0,18. Thus, children born today will be 18% as productive
in adulthood as they could have been if they had access to full health and
education, and they became fully employed adults. The U-HCI for girls is
even lower at 0,17 (World Bank, 2020). Thus, children born today will be 18%
as productive in adulthood as they could have been if they had access to full
health and education, and they became fully employed adults. In essence,
South Africa's Human Capital Index underscores the urgent need for targeted
interventions to improve health and education outcomes, ultimately
unlocking the country's full human potential. Four out of 100 children die
before the age of five ; and an average of 32% of 15-year-olds will not
survive until age 60. In addition, 27% of children below the age of five are
stunted and so are at risk of cognitive and physical limitations that can last a
lifetime. These indicators are much worse than in many countries at the
similar income level. Furthermore, the learning gap in South Africa is large. A
child who starts school at four years old can expect to complete 9,3 years of
schooling by their 18th birthday (the expected years of schooling should be
13). Public spending on education is high, accounting for 6,1% of gross
domestic product (GDP) in 2017; similarly, about 8% of GDP is invested in
health, and about 5% of GDP is spent on social assistance, including various
youth employment initiatives (World Bank, 2023). Many countries spend less
but achieve much higher HCI, signalling that South Africa needs to take a
hard look at efficiency 5 and efficacy of its spending. It could achieve much
more without significantly increasing spending (Dulvy, et al., 2024). South
Africa’s, economic growth has indeed lagged population growth in recent
years, leading to challenges in improving living standards and creating
sufficient opportunities for the population. This means the economy isn't
expanding fast enough to absorb new job seekers or provide a significant
increase in per capita income (World Bank, 2023). Simultaneously, despite
significant public spending on health and education, the outcomes are not
commensurate with the investment, suggesting inefficiencies and a need for
better resource allocation. Because the economy isn't growing as quickly as
the population, per capita income (income per person) has been stagnant or
even declining. This means that on average, people are not seeing
significant increases in their wealth or access to resources. In South Africa, a
slower economic growth rate compared to population growth creates
significant challenges for social security and healthcare. This disparity puts
strain on public resources, potentially leading to increased poverty,
inequality, and reduced access to essential services like healthcare.
QUESTIONS 1.1 Contextualise the development economic challenge South
Africa is facing. Summarise the dual challenges facing South Africa; poor
healthcare/education outcomes and slow economic growth; and explain how
they are interconnected. 15
1.1 Contextualising South Africa’s Development Economic Challenge
, South Africa faces a multifaceted developmental challenge rooted in the interplay between
weak human capital formation and slow economic growth. Human capital—comprising
education, skills, and health—is a key driver of productivity, innovation, and long-term
economic prosperity. However, South Africa’s human capital outcomes reveal systemic
inefficiencies that constrain the country’s ability to unlock its full developmental potential.
Despite being one of the largest economies in Africa, South Africa continues to experience
persistent inequality, low productivity, and limited social mobility, primarily due to poor
healthcare and education outcomes coupled with sluggish economic growth.
Dual Challenges: Poor Health/Education Outcomes and Slow Economic Growth
1. Poor Healthcare and Education Outcomes
South Africa’s healthcare and education systems reflect deep structural inequalities inherited
from its socio-economic history.
According to the World Bank (2023), the country spends approximately 8% of GDP on
health and 6.1% on education, yet outcomes remain disproportionately low compared to
global peers with similar income levels.
The Human Capital Index (HCI) and Utilization-adjusted HCI (U-HCI) reveal that
children born today in South Africa will only be 18% as productive as they could have
been with full access to quality health, education, and employment opportunities (World
Bank, 2020).
Alarmingly, 27% of children under five are stunted, four out of 100 die before the
age of five, and 32% of 15-year-olds will not survive to age 60, indicating severe health
deficiencies and a high burden of disease, especially non-communicable diseases
(NCDs), which account for over 30% of disability-adjusted life years (Koch, 2024).
In education, children complete on average 9.3 years of schooling by age 18 instead of
the expected 13 years, signifying a substantial learning deficit. These indicators
collectively weaken South Africa’s future workforce potential and productivity.
2. Slow Economic Growth and Rising Inequality
Parallel to poor human capital outcomes, South Africa’s economy has been growing slower
than its population.
While the population grows at 1.5–2% annually, the GDP grew only by 0.6% in 2024
compared to 2023 (Stats SA, 2025).
This imbalance results in declining per capita income, limited job creation, and
increasing dependency on social welfare systems.
The stagnation undermines household incomes and exacerbates inequality, as economic
opportunities fail to match demographic expansion.
ECS3707 Assignment 5
(COMPLETE ANSWERS)
Semester 2 2025 - DUE 8
October 2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
ECS3707 Assignment 5 (COMPLETE
ANSWERS) Semester 2 2025 - DUE 8 October
2025
Course
Development Economics (ECS3707)
Institution
University Of South Africa (Unisa)
Book
Development Economics
ECS3707 Assignment 5 (COMPLETE ANSWERS) Semester 2 2025 - DUE 8
October 2025; 100% TRUSTED Complete, trusted solutions and explanations.
Ensure your success with us.
Scenario: Human capital (knowledge, skills, and good health) empowers
people to achieve their potential and drives economic growth. South Africa
faces a dual challenge; high inequality in both education and healthcare
systems, and persistently slow productivity growth and income inequality. In
2019, South Africa’s DALY (Disability-Adjusted Life Year) loss was equivalent
to 41% of GDP, revealing deep inefficiencies in the health sector (Senkubuge
et al., 2021). Moreover, non-communicable diseases (NCDs) account for over
30% of disability-adjusted life years in South Africa. (Koch, 2024).
Additionally, South Africa's population is growing at a rate of around 1,5% to
2% annually, in contrast the GDP grew by 0,6% in 2024 compared with 2023
(Stats SA, 2025). In essence, the disparity between economic growth and
population growth creates significant challenges for South Africa, hindering
its ability to improve the well-being of its citizens. South Africa's healthcare
system faces numerous challenges, including inadequate access, particularly
in rural areas, and a significant burden of disease. These issues are
compounded by systemic problems like poor governance, inadequate
infrastructure, and a shortage of skilled healthcare professionals, particularly
in the public sector. The coexistence of a strong private healthcare sector
alongside a struggling public system creates further disparities in access and
quality of care (World Bank, 2023) . For instance, the Human Capital Index
(HCI) which is a framework for understanding how a nation's people can
contribute to its future economic prosperity. It is a measurement developed
by the World Bank to assess the potential of a country's human capital
(World Bank, 2018). It quantifies the expected productivity of a child born
today, considering health and education factors, by the time they reach 18.
The HCI is a valuable tool for governments and societies to understand how
investments in human capital can boost a nation's economic and social
development . The Utilization-adjusted Human Capital Index (U-HCI) scales
,down the HCI by considering how many adults are not employed. The U-HCI
for South Africa is 0,18. Thus, children born today will be 18% as productive
in adulthood as they could have been if they had access to full health and
education, and they became fully employed adults. The U-HCI for girls is
even lower at 0,17 (World Bank, 2020). Thus, children born today will be 18%
as productive in adulthood as they could have been if they had access to full
health and education, and they became fully employed adults. In essence,
South Africa's Human Capital Index underscores the urgent need for targeted
interventions to improve health and education outcomes, ultimately
unlocking the country's full human potential. Four out of 100 children die
before the age of five ; and an average of 32% of 15-year-olds will not
survive until age 60. In addition, 27% of children below the age of five are
stunted and so are at risk of cognitive and physical limitations that can last a
lifetime. These indicators are much worse than in many countries at the
similar income level. Furthermore, the learning gap in South Africa is large. A
child who starts school at four years old can expect to complete 9,3 years of
schooling by their 18th birthday (the expected years of schooling should be
13). Public spending on education is high, accounting for 6,1% of gross
domestic product (GDP) in 2017; similarly, about 8% of GDP is invested in
health, and about 5% of GDP is spent on social assistance, including various
youth employment initiatives (World Bank, 2023). Many countries spend less
but achieve much higher HCI, signalling that South Africa needs to take a
hard look at efficiency 5 and efficacy of its spending. It could achieve much
more without significantly increasing spending (Dulvy, et al., 2024). South
Africa’s, economic growth has indeed lagged population growth in recent
years, leading to challenges in improving living standards and creating
sufficient opportunities for the population. This means the economy isn't
expanding fast enough to absorb new job seekers or provide a significant
increase in per capita income (World Bank, 2023). Simultaneously, despite
significant public spending on health and education, the outcomes are not
commensurate with the investment, suggesting inefficiencies and a need for
better resource allocation. Because the economy isn't growing as quickly as
the population, per capita income (income per person) has been stagnant or
even declining. This means that on average, people are not seeing
significant increases in their wealth or access to resources. In South Africa, a
slower economic growth rate compared to population growth creates
significant challenges for social security and healthcare. This disparity puts
strain on public resources, potentially leading to increased poverty,
inequality, and reduced access to essential services like healthcare.
QUESTIONS 1.1 Contextualise the development economic challenge South
Africa is facing. Summarise the dual challenges facing South Africa; poor
healthcare/education outcomes and slow economic growth; and explain how
they are interconnected. 15
1.1 Contextualising South Africa’s Development Economic Challenge
, South Africa faces a multifaceted developmental challenge rooted in the interplay between
weak human capital formation and slow economic growth. Human capital—comprising
education, skills, and health—is a key driver of productivity, innovation, and long-term
economic prosperity. However, South Africa’s human capital outcomes reveal systemic
inefficiencies that constrain the country’s ability to unlock its full developmental potential.
Despite being one of the largest economies in Africa, South Africa continues to experience
persistent inequality, low productivity, and limited social mobility, primarily due to poor
healthcare and education outcomes coupled with sluggish economic growth.
Dual Challenges: Poor Health/Education Outcomes and Slow Economic Growth
1. Poor Healthcare and Education Outcomes
South Africa’s healthcare and education systems reflect deep structural inequalities inherited
from its socio-economic history.
According to the World Bank (2023), the country spends approximately 8% of GDP on
health and 6.1% on education, yet outcomes remain disproportionately low compared to
global peers with similar income levels.
The Human Capital Index (HCI) and Utilization-adjusted HCI (U-HCI) reveal that
children born today in South Africa will only be 18% as productive as they could have
been with full access to quality health, education, and employment opportunities (World
Bank, 2020).
Alarmingly, 27% of children under five are stunted, four out of 100 die before the
age of five, and 32% of 15-year-olds will not survive to age 60, indicating severe health
deficiencies and a high burden of disease, especially non-communicable diseases
(NCDs), which account for over 30% of disability-adjusted life years (Koch, 2024).
In education, children complete on average 9.3 years of schooling by age 18 instead of
the expected 13 years, signifying a substantial learning deficit. These indicators
collectively weaken South Africa’s future workforce potential and productivity.
2. Slow Economic Growth and Rising Inequality
Parallel to poor human capital outcomes, South Africa’s economy has been growing slower
than its population.
While the population grows at 1.5–2% annually, the GDP grew only by 0.6% in 2024
compared to 2023 (Stats SA, 2025).
This imbalance results in declining per capita income, limited job creation, and
increasing dependency on social welfare systems.
The stagnation undermines household incomes and exacerbates inequality, as economic
opportunities fail to match demographic expansion.
