Social protection financing in the wake of COVID-19 and beyond


Many countries are currently introducing extensive (and expensive) interventions to tackle the socioeconomic consequences that the actions taken to avoid the spread of COVID-19 have for a large segment of their population. Besides economic policies such as tax deferrals and low or no interest credit, social protection programmes such as cash transfers are a major part of the response. Social protection expenditures are on the rise and additional financing is urgently needed to create and sustain fiscal space.

At the same time, the actions taken to avoid COVID-19 spreading will have far-reaching negative consequences for economic growth globally and nationally - and in turn will lead to decreased government revenues, such as tax revenues and social security contributions. Therefore, the COVID-19 crisis puts an additional pressure on social protection financing in the longer term and calls for national as well as global solutions to ensure the sustainability of SP programmes and systems.

The scale of the challenge is daunting: UNCTAD estimates that developing countries require a $2.5 trillion international COVID-19 package, including $500 billion for health and social relief largely in the form of grants. UN Secretary General Guterres has called on rich countries to step up to this challenge. Discussions and work are ongoing on mobilizing funding using instruments such as concessional lending, SDR allocations, central bank swaps, debt relief or grants. Since the looming economic crisis is fundamentally one of solvency, not liquidity, substantial debt relief and grants may be required, in particular for countries already in debt distress.

The webinar discussed the following questions:

  • Which financing mechanisms can be and are currently used by countries to create fiscal space to flexibly extend social protection schemes and systems as a reaction to the COVID-19 crisis? 
  • Do we have the right instruments to address international financing needs? How can the international community mobilize funding, in particular grants?
  • What are the lessons learnt for future crises to ensure that financing is available for a rapid extension of social protection schemes and systems?
  • How can social protection financing be sustained beyond COVID-19 in low- and middle-income countries?


Delphine Juliette Prady, Economist at the Fiscal Affairs Department, IMF


Mark Blecher and Lindi Mzankomo, National Treasury of South Africa


Martina Bergthaller, Social Policy Specialist



This was the ninth webinar of the “Social protection responses to COVID-19” webinar series. The series is a joint effort initiated by the IPC-IGGIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), and the Australia Government's Department of Foreign Affairs and Trade (DFAT) collaboration with the platform, and in cooperation with partners from different organisations. Join our online community ''Social protection responses to COVID-19 [Task force]'' to learn more about the initiative and the future webinars.