Pakistan will require to increase annual spending on education by about 5.7 percent of GDP, 6 percent on healthcare, invest around $24.5 billion on electricity access, and $76 billion on the road network to meet the Sustainable Development Goals (SDGs) target by 2030, says the International Monetary Fund (IMF).
IMF in a working paper, “Pakistan: Spending Needs for Reaching the Sustainable Development Goals (SDGs)”, stated that to achieve the SDGs in critical sectors would require additional annual spending of 16.1 percent of GDP in 2030 from the public and private sectors combined.
Pakistan has made progress in some areas; its current performance in critical SDG sectors lags that of its peers. Pakistan’s current performance in education, health, electricity, and water and sanitation—as measured by the SDG indices of each sector—is below the median for Emerging Market and Developing Economies (EMDEs). Pakistan’s performance in education and water and sanitation is also below the median for countries with GDP per capita below $3,000. In a context of rapid population growth, Pakistan needs to redouble its efforts to make further progress towards meeting the SDGs, it added.
The weak performance in education is mainly driven by a low level of spending, but there is also room to increase spending efficiency. Annual total (public and private) education spending would need to increase by about 5.7 percent of GDP (from 3.9 percent in 2018 to 9.6 percent in 2030) to meet the SDG targets.
Spending on healthcare is low and there is room to improve efficiency. Pakistan spends only 3 percent of GDP on healthcare, below its peers which spend around 5.5 to 7.5 percent of GDP. While spending efficiency is better than in other countries with GDP per capita below $3,000, there is still room to improve efficiency as Pakistan remains far from the health efficiency frontier.
Pakistan will need to almost triple its healthcare spending in terms of GDP—from the current 2.8 percent to 8.2 percent by 2030— to meet the SDG targets and perform at a commensurate level with high-performing peer countries. This will require increasing public healthcare spending almost five-fold in terms of GDP, from 0.9 percent in 2018 to 4.3 in 2030.
“Spending needs to meet SDG targets in water and sanitation are sizable. To achieve universal coverage by 2030, Pakistan would need to expand access to safely managed water and sanitation facilities to an additional 168 million and 184 million people, respectively. It would also need to expand access to basic handwashing facilities with soap and water to 131 million people. This will require investing an aggregate amount of $55 billion by 2030, equivalent to spending 2 percent of GDP every year from 2020 to 2030,” added IMF.
Electricity access is still limited, with 77 percent of the population having access to on-grid electricity, slightly below the average for EMDEs, but above the average for countries with a GDP per capita below $3,000. About 32,300 villages—accounting for 8.8 million households—remain without grid access.
Total electricity consumption is expected to increase by 78 percent between 2019 and 2030, reflecting population growth as well as higher per capita consumption, due to the expansion of the electricity grid to achieve universal coverage and economic growth. To keep up with this higher consumption, Pakistan will need to invest an aggregate amount of $24.5 billion by 2030, equivalent to spending 0.7 percent of GDP every year from 2020 to 2030. This estimate considers the total investment needed and it does not take into account any planned investment.
IMF further added that the road length in Pakistan has not increased during the last two decades and road density lags its peers. Spending requirements to expand the road network and improve connectivity are sizeable. Increasing rural access from the current 61 percent to 75 percent by 2030 will require about 94,146 additional kilometers of all-season roads—a 36 percent increase in road length.
This will require investing an aggregate amount of $76 billion by 2030, equivalent to spending 2.3 percent of GDP every year from 2020 to 2030.