The high price of dying in Africa

The high price of dying in Africa
Posted by:
Economist.com | NEW YORK June 05,2009
Categories:
Development economics
I RECENTLY attended a discussion on economic development where an economist from Ghana remarked that a major policy challenge in Africa was funerals. Funerals are major social events in parts of Africa—he claimed it is where people fall in love and relax after a hard week of work. The problem is that they are very expensive. And the high cost of laying someone to rest is undermining efforts to promote saving in African countries.
A new paper by Anne Case and Alicia Menendez considers funeral costs in South Africa. Traditionally, funerals for the very young have been modest affairs and funerals for the old have been covered by insurance. But the AIDS crisis has led to many more deaths among those aged 20 to 34. For this group no custom existed and elaborate and expensive funerals became the norm.
The authors found that, on average, funerals for adults in South Africa now cost 3400 rand ($420). That amounts to 40% of average annual household expenditure. They also found evidence that the financial strain of funerals lowers school attendance among children in the household. None of this is good for South Africa's struggling economy, which contracted at an annualised rate of 6.4% in the first quarter. One hopes the government's post-death policies are bolder than its pre-death efforts.