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Governance

What will 2013 look like for Kenya’s economy?

Wolfgang Fengler's picture

The dawn of a new year is a good time to reflect on the past year and look ahead. As it turns out, 2012 was a pretty average year for Kenya, mainly because the much anticipated national and regional elections, which will determine the course of the nation and its economy for years to come, were postponed to March next year.

Why do I say that 2012 was such a normal economic year for Kenya? Let’s rewind 12 months back. Kenya was facing major macroeconomic challenges: inflation stood at almost 20 per cent, the exchange rate was volatile and public debt increased markedly due to the weakening shilling. Economic pessimists predicted a global economic storm as the challenges in the euro-zone seemed unmanageable.

Mountains of gold: A blessing or a curse for Tanzania?

Jacques Morisset's picture

Let's think together: Every week the World Bank team in Tanzania wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a couple of questions. This post is also published in theTanzanian Newspaper The Citizen every Sunday.

Gold, gems, uranium, coal, iron, copper and nickel…Tanzania is rich in mineral resources. These 'treasures' have attracted considerable attention within the country and abroad. It is estimated that over 500,000 Tanzanians are employed in this sector, principally in traditional small scale activities.

The sector has also attracted enormous foreign direct investment. As a result, the mining sector has been one of the driving forces of the Tanzanian economy over several years as illustrated by the following statistics:

Data – The next frontier of Development

Wolfgang Fengler's picture

How is the digital tide taking care of the digital divide? Do you remember the digital divide? At the start of the new millennium, there was global concern that poor countries, especially in Africa, would be twice left out: economically and also technologically. Fortunately, the digital divide never became a global challenge. In fact, it is closing faster than anyone had imagined. In some parts of the developing world there are even budding signs of possible digital overtaking.

Kenya is one of few African countries driving in the fast lane. Over the past decade, it has experienced a sweeping “digital tide”. Today, Kenya will cross the 30 million threshold of active cell phone numbers, up 29,000 from 12 years ago! Almost everyone can now afford to buy a phone, which sell for as little as Ksh 500 (or US$5) on the flourishing second hand market.

Time for high quality education for all?

Waly Wane's picture

Let's think together: Every week the World Bank team in Tanzania wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a couple of questions. This post is also published in theTanzanian Newspaper The Citizen every Sunday.

Education is key. As foundations go, there is none more important than this one – in achieving progress as well as in sustaining it.

Since the introduction of free primary education in 2001, Tanzania has achieved significant progress in improving access to basic education. Primary school attendance of children aged 7 to 13 years increased from 54 percent in 1999 to almost 80 percent in 2010. Yet Tanzania also still has one of the lowest primary-to-secondary transition rates in sub-Saharan Africa (at just 41 percent in 2009), with girls being particularly disadvantaged. In addition, standardized assessments have revealed that the quality of education is insufficient to provide students with the most basic numeracy and literacy skills. In 2011, Tanzania scored much lower than Kenya or Uganda in these assessments.

Not only does Tanzania still lag in terms of educational outcomes compared to neighboring countries but also the quality of education varies tremendously depending on where you live in the country:

How can the mobile revolution lift up Tanzania’s poor?

Isis Gaddis's picture

Let's think together: Every week the World Bank team in Tanzania wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a couple of questions. This post is also published in the Tanzanian Newspaper The Citizen every Sunday.

Sub-Saharan Africa has experienced a boom in mobile phone users over the past decade. The total number of cell phone subscriptions on the continent increased from just over 11 million in 2000 to 463 million in 2011 and is expected to grow even further. This technology not only affects day-to-day life and communication, but has the potential to boost economic development directly and indirectly.

In creating jobs, for instance, mobile phone technology has contributed towards the reduction of poverty. But more important are its indirect effects on the economy such as the increased connectivity of firms and micro-enterprises which increases their access to information and facilitates the movement of money through mobile transfers.

Africa's MICs

Wolfgang Fengler's picture

Hardly a week goes by without an African investors’ conference or growth summit. Portuguese professionals are looking for opportunities in Angola. Silicon Valley companies are coming to Kenya to learn about its homegrown ICT revolution. This is not an irrational fad. Since the turn of the century, Africa’s growth has been robust (averaging 5-6 percent GDP growth a year), making important contributions to poverty reduction. The current boom is underpinned by sound macro policies and political stability. Unlike in some rich countries, public debt levels in most of Africa are sustainable.

One way to track Africa’s progress is by charting the number of countries that have achieved “Middle Income status”.

Safety nets and poverty reduction: A hand-up not a hand-out

Wolfgang Fengler's picture

Do you sometimes wonder if the average person is benefiting when the economy is doing well? Aren’t the poor left behind, even in the most rapidly growing economies? Concerns around rising inequality exist in many countries, rich and poor, East and West. Kenya is among them.

Over the last 10 years, the economy grew at an average of about 4 percent. With population growth of 2.7 percent, every Kenyan would have benefited by a modest 1.3 percent per year, but that assumes the growth was distributed evenly.

Even though many governments around the world want to avoid rising inequality — at least this is what many say — they often don’t achieve it. One challenge is that the already well off tend to benefit more during periods of economic growth. The poor typically also benefit, but their income rises more slowly. Does this mean rising inequality is here to stay?

For shared prosperity Tanzania needs a universal strategy

Jacques Morisset's picture

The figures don’t lie. Today, about 11 million Tanzanians live in poverty. This is too much. Equally worrisome is that since 2001 the national poverty rate appears to be stuck at approximately a third of the total population despite rapid and stable economic growth.

People need jobs

For a long time, the Tanzanian Government has defended itself: poverty reduction will catch up thanks to the massive public investment made in social and infrastructure sectors over the past decade. More children, including girls, are going to school, and the efforts to reduce infant mortality have registered spectacular achievements. However, it is estimated that those improvements will take one generation to translate into actual productivity gains and higher incomes.

Invest in nutrition to invest in the future?

Janneke Hartvig Blomberg's picture

Let's think together: Every week the World Bank team in Tanzania wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a couple of questions. This post is also published in the Tanzanian Newspaper The Citizen every Sunday.

Malnutrition has detrimental effects on a child's physical growth (stunting); it can also result in irreversible damage to their brain and mental development, and it increases their risk to illness and death. The biggest impact of malnutrition is seen in the first 1,000 days of life of a child's life - from the time of conception to the time they reach their second birthday.

For women, malnutrition increases risk during pregnancy and the delivery of low birth weight babies. Malnutrition is a serious issue in Tanzania as shown by the following statistics:

Improving access to drugs: Fitting the solution to the problem

Shanta Devarajan's picture

Patricio Marquez’s post correctly  identifies lack of access  to quality medicines as one of the  constraints to poor people’s health in Africa.    But the  solutions he recommends—more public money for “essential drugs benefits”, building  resilient institutions,  and providing  physicians  with better  scientific information  and guidelines  about  drug  prescriptions—are   unlikely   by    themselves  to   improve poor   people’s   health  outcomes.

More public money.  Patricio notes that out-of-pocket expenditures are about 40 percent of total health expenditures and most of this is spent on outpatient drugs.  He assumes the reason is that countries have not adopted a program of essential drugs benefits, and the reason for the latter is lack of public resources.  But consider the following facts. 

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