ECS3707 Assignment 5
(COMPLETE ANSWERS)
Semester 2 2025 - DUE 8
October 2025
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,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
, Based on the provided text, the development economic challenge facing South Africa can be
contextualized as a deep-seated human capital crisis exacerbated by stagnant economic
growth and extreme inequality.
Contextualization of the Development Economic Challenge
South Africa's challenge is characterized by a failure to effectively translate significant public
investment into improved human capital outcomes, which in turn hampers the economic growth
necessary to absorb a rapidly growing population and reduce historical inequalities.
1. Human Capital Crisis and Inefficiency: The core issue is the poor state of human
capital (knowledge, skills, and good health).
o The Utilization-adjusted Human Capital Index (U-HCI) of 0.18 reveals that
children born today will only be 18% as productive in adulthood as they could
have been, largely due to poor health and education outcomes, and high
unemployment.
o Despite high public spending on education (6.1% of GDP) and health ( of GDP),
outcomes are worse than in many similar-income countries, suggesting a critical
problem with the efficiency and efficacy of spending.
o The health sector shows "deep inefficiencies," evidenced by the DALY loss
equivalent to 41% of GDP in 2019.
o Critical health indicators are alarming: 4 out of 100 children die before age five,
32% of 15-year-olds won't survive to age 60, and 27% of children under five
are stunted, risking lifelong cognitive and physical limitations.
o The education system is similarly failing, with a child only expecting to complete
9.3 years of schooling by age 18, far short of the expected 13 years, indicating a
large learning gap.
2. Stagnant Economic Growth and Population Disparity: The economy is not growing
fast enough to improve living standards or create opportunities.
o GDP growth (0.6% in 2024) has significantly lagged the annual population
growth rate (1.5% to 2%).
o This disparity means the economy isn't expanding fast enough to absorb new job
seekers, leading to stagnant or declining per capita income, which hinders
improvements in living standards.
3. Inequality and Systemic Challenges: High inequality is deeply embedded in both the
education and healthcare systems.
o The coexistence of a strong private healthcare sector alongside a struggling
public system creates vast disparities in access and quality of care, compounded
by systemic problems like poor governance, inadequate infrastructure, and a
shortage of skilled professionals in the public sector.
Summarise the Dual Challenges and Explain Their Interconnection
(COMPLETE ANSWERS)
Semester 2 2025 - DUE 8
October 2025
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,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
, Based on the provided text, the development economic challenge facing South Africa can be
contextualized as a deep-seated human capital crisis exacerbated by stagnant economic
growth and extreme inequality.
Contextualization of the Development Economic Challenge
South Africa's challenge is characterized by a failure to effectively translate significant public
investment into improved human capital outcomes, which in turn hampers the economic growth
necessary to absorb a rapidly growing population and reduce historical inequalities.
1. Human Capital Crisis and Inefficiency: The core issue is the poor state of human
capital (knowledge, skills, and good health).
o The Utilization-adjusted Human Capital Index (U-HCI) of 0.18 reveals that
children born today will only be 18% as productive in adulthood as they could
have been, largely due to poor health and education outcomes, and high
unemployment.
o Despite high public spending on education (6.1% of GDP) and health ( of GDP),
outcomes are worse than in many similar-income countries, suggesting a critical
problem with the efficiency and efficacy of spending.
o The health sector shows "deep inefficiencies," evidenced by the DALY loss
equivalent to 41% of GDP in 2019.
o Critical health indicators are alarming: 4 out of 100 children die before age five,
32% of 15-year-olds won't survive to age 60, and 27% of children under five
are stunted, risking lifelong cognitive and physical limitations.
o The education system is similarly failing, with a child only expecting to complete
9.3 years of schooling by age 18, far short of the expected 13 years, indicating a
large learning gap.
2. Stagnant Economic Growth and Population Disparity: The economy is not growing
fast enough to improve living standards or create opportunities.
o GDP growth (0.6% in 2024) has significantly lagged the annual population
growth rate (1.5% to 2%).
o This disparity means the economy isn't expanding fast enough to absorb new job
seekers, leading to stagnant or declining per capita income, which hinders
improvements in living standards.
3. Inequality and Systemic Challenges: High inequality is deeply embedded in both the
education and healthcare systems.
o The coexistence of a strong private healthcare sector alongside a struggling
public system creates vast disparities in access and quality of care, compounded
by systemic problems like poor governance, inadequate infrastructure, and a
shortage of skilled professionals in the public sector.
Summarise the Dual Challenges and Explain Their Interconnection
