Few countries can match Cabo Verde’s development progress over the past quarter of a century. Its Gross National Income per capita (GNI) grew six-fold. Extreme poverty fell by two-thirds from 30% in 2001 (when poverty measurement began) to 10% in 2015 (see first chart) which translates into an annual poverty reduction rate of 3.6%, outperforming any other African country during this period. Non-monetary poverty also dropped fast (see second chart). In many ways, Cabo Verde is a development star, and these achievements were made despite the disadvantage it faces as a small island economy in the middle of the Atlantic.
Public Sector and Governance
The Ghana government’s new Coordinated Program strives to create opportunities for all Ghanaians; safeguard the natural environment and ensure that it is resilient; deepen governance to fight corruption and enhance public accountability to maintain a stable, unified, and peaceful Ghana; and create a competitive business environment to build a strong and resilient economy.
Expanding the coverage of safety net programs in Africa represents a serious fiscal challenge. While there is substantial variation across countries, on average governments in Africa spend about 1.3% of gross domestic product (GDP) on social safety nets (see figure). This is lower than the spending on other sectors such as energy, health care, education, and, in some cases, the military. Crucially, this level of spending is inadequate to face the high chronic poverty rates and vulnerability to shocks households face in Africa.
The Nigerian government’s Infrastructure Concession Regulatory Commission has blazed an important trail, publishing details of 51 Federal Public Private Partnership (PPP) contracts—the culmination of a year’s work with the World Bank to ensure that all, non-confidential information is easily accessible to the public. We hope other countries will follow Nigeria’s trend-setting lead.
As international donors gather this week in Brussels to mobilize resources for Guinea-Bissau, the government and people of this West African nation appear ready for a fresh start.
Travelling across Africa these days you are likely to run into increasing numbers of mining, oil, and gas industry personnel engaged in exploration, drilling, and extraction across the continent. Although commodity prices are moderating, the discoveries being made in Africa offer the real prospect of significant revenue to many cash-poor, aid-dependent governments in the decade ahead. If you care about development, the question is whether these revenues will catalyze broad economic development and whether they will benefit the poor in Africa.
Co-authored with Luc Christiaensen and Aly Sanoh
For a decade and a half now, Africa has been growing robustly, and the region’s economic prospects remain good. In per capita terms, GDP has expanded at 2.4 percent per year, good for an average increase in GDP per capita of 50 percent since 1996.
But the averages also hide a substantial degree of variation. For example, GDP per capita in resource-rich countries grew 2.2 times faster during 1996-2011 than in resource-poor countries (Figure 1). Though not the only factor explaining improved performance—fast growth has also been recorded in a number of resource-poor countries such as Rwanda, Ethiopia and Mozambique (before its resource discoveries)—buoyant commodity prices and the expansion of mineral resource exploitation have undoubtedly played an important role in spurring growth in several of Africa’s countries. Even more, with only an expected 4 or 5 countries on the African continent without mineral exploitation by 2020, they will continue to do so in the future. Yet, despite the better growth performance, poverty declined substantially less in resource-rich countries.
If user fees for health have been so vilified (including in comments on this blog), why are we bringing the subject up again? Because new evidence calls into question the prevailing view, namely that removing user fees leads to: (i) increased use of health services and hence to (ii) improved health outcomes. Confirming (i), the recent literature shows that (ii) does not always follow.
Raising the price of a good or service has two effects: it reduces demand and increases supply. In the case of user fees for health, it was thought that paying for a service also makes people use it more appropriately (you don’t go to the doctor for minor ailments) and value it more than if they obtained it for free.
Speaking about the often unruly behavior of his talented young players, Arsene Wenger, the famous Arsenal coach, said: "Some are wrong because they are not strong enough to fight temptation and some are wrong because they don't know."