Syndicate content

Macroeconomics and Economic Growth

Punished twice: Kenya’s dual health burden

Wolfgang Fengler's picture

The data are un-ambiguous: Kenya’s economy is starting to catch up with the rest of the world. But many of you probably wonder if that is really true, especially when observing the streets of Nairobi or the daily life in rural areas. In other words, is economic catch-up translating into social progress?  Will today’s children live a better life than their parents? Will everyone enjoy decent social and infrastructure services in the new Kenya? Let’s zoom in on the case of health.

How healthy is Kenya today? Simply said, it could do better. This is important from an economic standpoint, because a population’s health is a key foundation for development. Healthy populations are more productive; they also save and invest more. On average and all other things equal, one extra year of life-expectancy is associated with an increase in a country’s GDP by 4 percent.

Big data and development: “The second half of the chess board”

Wolfgang Fengler's picture

Do you think Fortune 500 CEOs care about Africa? In the past, frankly, with the exception of oil and gas giants, they didn’t. But this is changing… and fast.

This week, IBM is opening its Africa innovation hub in Nairobi. To demonstrate the significance of the occasion, IBM has brought along all its senior team, led by CEO Ginni Rometty (named #1 most powerful woman in business by Forbes in 2012). Like other ICT companies, IBM wants to ride the wave of Africa’s ICT revolution. In this area, Africa has not only been catching up with the West, but is in fact overtaking it in areas such as mobile money.

Is Tanzania Raising Enough Tax Revenue?

Isis Gaddis's picture

Let's think together: Every Sunday the World Bank in Tanzania in collaboration with The Citizen wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a few questions.

The overall tax burden in a country is largely determined by the role that citizens expect the State to play in the economy.  People are paying more taxes in France than in the US, not because the French are richer but because they expect more public services from their government.  For this reason, no single 'optimal' tax burden can be applied uniformly.Tanzania’s tax revenues by the central government were equivalent to 15.7 per cent of GDP in 2011/12.  This was higher than Uganda (12 per cent) but lower than Zambia (16.5 per cent) and Kenya (19.5 per cent).

Has Africa outgrown Aid?

Wolfgang Fengler's picture

Africa’s emergence is the new consensus. For the second time in a just few months, a major international journal has run a cover illustrating newfound optimism about the continent. After The  Economist’s mea culpa (correcting its previous assessment of a “hopeless continent”), TIME magazine just re-ran an earlier title: “Africa rising”.

This is no fluke: Africa’s economies are growing and the continent is much wealthier today than it ever was – even though, collectively, it remains the poorest on the planet. Many African nations (22 to be precise) have already reached Middle Income Country (so called “MIC”) status and more will do so by 2025. Today, Africa includes a diverse “mix” of countries, ranging from the poorest in the world to the fastest growing; from war-torn countries to vibrant democracies; from oil-rich economies to ICT champions, and the list goes on.

Multipliers in Europe and Africa

Shanta Devarajan's picture

IMF Chief Economist Olivier Blanchard created quite a stir at the recent American Economics Association Meetings when he presented his joint paper with Daniel Leigh that showed that, for 26 European countries, the fiscal multipliers—the amount by which output expands with an increase in the fiscal deficit—were considerably higher than previously thought.  Whereas these multipliers were previously thought to be around 0.5, they find them to be above 1.0.  Applying these figures to a reduction in the fiscal deficit (sometimes called “fiscal consolidation”), Olivier and Daniel suggest that people may have underestimated the extent to which European economies would contract in the wake of their fiscal consolidation.

Has the African Growth Miracle Already Happened?

Shanta Devarajan's picture

Most of the literature about Africa’s growth, “Africa Rising”, “Lions on the Move”, etc., refer to the present or the future.  An oft-quoted World Bank report said, “Africa could be on the brink of an economic takeoff, much like China was 30 years ago and India 20 years ago.” 

Meanwhile, Alwyn Young has recently published a paper that claims that per-capita consumption on the continent has been growing at 3.4-3.7 percent a year for the last two decades—about three to four times the growth rates documented in other studies. Instead of using national accounts data (which, as we know, suffer from several deficiencies), Alwyn adopts the Demographic and Health Surveys (DHS), which calculate the households’ ownership of assets and other indicators of well-being (ownership of a car or bicycle; material of the house floor; birth, death or illness of a child, etc.). 

What can we learn from successful companies and teams?

Wolfgang Fengler's picture

This is the time of year when we make resolutions and you may be wondering what you can do better and more efficiently in 2013.A lot of books have been written on the topic but one of the best is 7 Habits of Highly Effective People by Stephen Covey who died in 2012. The 7 habits are: Be proactive; Begin with the end in mind; Put first things first; Think win-win; Seek first to understand, then to be understood; Synergize; Renew yourself.

Covey’s son – also called Stephen – wrote another remarkable book called The Speed of Trust, which includes this noteworthy statement: “You need to trust yourself before you can trust others.”

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.

One Billion Tanzanians, One Billion Ugandans

Anton Dobronogov's picture

It struck me to find out that according to the UN’s official projections, populations of Tanzania and Uganda would exceed one billion people by 2100 (up from 45 and 33 million, respectively, in 2010) if total fertility rates in each of these countries remain constant at their 2010 levels (5.6 and 6.4 children per woman, respectively).

To be sure, this “constant fertility scenario” is not a likely one. For a number of reasons, fertility rates tend to fall as economies develop, and the process of demographic transition from high mortality and high fertility to low mortality and low fertility is already under way in both countries. Still, even under assumption that total fertility rates will gradually decline to about 2 children per woman (and there is no international migration), the UN estimates that there will be 171 million Ugandans and 316 million Tanzanians in 2100.

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.

Pages