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Public Sector and Governance

African Debt since Debt Relief: How Clean is the Slate?

Mark Roland Thomas's picture

This blog post was co-authored with Dino Merotto, Tihomir Stucka, and Tau Huang. 

The benefits of debt relief have persisted, although some countries may now be borrowing too quickly.

Remember Jubilee 2000 and the HIPC Initiative? Remember the “Drop the Debt” and “One” movements in 2005? Live 8? Bono on the White House Lawn?  Those white “make poverty history” wristbands?

Seven years on, debt is now making headlines in the rich countries.  In Europe and the US the news is of sovereign debt downgrades amid speculation about capacity to rollover debts, and countries’ long-term fiscal capacity to repay. 

Country policy and institutional assessment: How well are African countries doing?

Punam Chuhan-Pole's picture

Every year, the World Bank’s country teams and sector experts assess the quality of IDA countries’ policy and institutional framework across 16 dimensions to measure their strenght and track progess.  

The latest country policy and institutional assessment (CPIA) results show that despite difficult global economic conditions, the quality of policies and institutions in a majority of Sub-Saharan African countries remained stable or improved in 2011.

DOWNLOAD the indicators here: www.worldbank.org/Africa/CPIA

For several countries the policy environment is the best in recent years. Of the 38 African countries with CPIA scores, 13 saw an improvement in the 2011 overall score by at least 0.1. Twenty countries saw no change, and five witnessed a decline of 0.1 or more. The overall CPIA score for the region was unchanged at 3.2.  

In short, despite a challenging global economic environment, African countries continued to pursue policies aligned with growth and poverty reduction. 

What will it take to end poverty in Africa?

Shanta Devarajan's picture

My colleague Jim Kim has launched a social media campaign on what it will take to end global poverty (please send your solutions via twitter to #ittakes.) I was reminded of a blog post I did about four years ago entitled “Ending poverty in Africa and elsewhere”. 

My answer then and now is:  Overcome government failure.  By “government failure,” I don’t mean that governments are evil or even that they are incompetent or ill-intentioned.  Analogous to “market failure,” government failure refers to a situation where the particular incentives in government lead to a situation that is worse than what was intended with the intervention.  

For instance, governments finance and provide primary education so that poor children can have access to learning.  But if teachers are paid regardless of whether they show up for work, and politicians rely on teachers to run their political campaigns, the result is absentee teachers and poor children who don’t know how to read or write—precisely the opposite of what was intended.  We see similar government failures in health care, water supply, sanitation, electricity, transport, labor markets and trade policy.

Africa’s Learning Crisis

Shanta Devarajan's picture

Hardly a week goes by without someone pointing out that, despite being enrolled in school, many of Africa’s primary school-age children don’t seem to be learning very much. 

Today’s salvo is from the Brookings Institution’s Center for Universal Education, whose Africa Learning Barometer estimates that 61 million children (half of the primary school-age population) “will reach their adolescent years without being able to read, write or perform basic numeracy tasks.”  

Last week, my colleagues Elizabeth King and Ritva Reinikka called on Africa’s education system to “put learning first for all students.”  We have documented disappointing learning outcomes in Tanzania on this blog.  Despite being a middle-income country and having substantially increased public spending on education, South Africa’s performance in standardized tests is below the average for African countries.

If Kenya was a member of the Euro zone – Lessons in managing debt sustainably

Wolfgang Fengler's picture

As European leaders convened in Brussels to find solutions—yet again!—to the debt crisis in the Euro zone, Kenyans are witnessing the old continent’s woes with a mix of surprise and self-satisfaction. 

If only Greece had managed its debt like Kenya, Europe would be in a much better shape today. Greece’s debt would be standing at 45 percent of GDP, less than a third of what it actually is. Recent global economic history would need to be rewritten and Europe’s sick nation would be a macroeconomic success, with the luxury of deciding how to spend its resources well, rather than scrambling to mobilize them. 

What the Global Findex Database says about Africa

Asli Demirgüç-Kunt's picture

With the recent opening of a rural savings and credit cooperative, the people in Gebremichael’s Ethiopian village no longer have to save their money in pots or under the mattress at home. He and his neighbors are learning to use formal savings and credit systems.

We know that many in Sub-Saharan Africa have benefited from using the formal financial system, but exactly how many are using it to save, borrow, make payments and manage risk? 

With the release of the Global Financial Inclusion Indicators (Global Findex) we now have a comprehensive, individual-level, and publicly-available database that allows comparisons across 148 economies of how adults around the world manage their daily finances and plan for the future. The Global Findex database also identifies barriers to financial inclusion, such as cost, travel time, distance, amount of paper work, and income inequality.  Our new Working Paper offers an overview of Financial Inclusion in Africa.

Slums dwellers need opportunities not hand-outs

Wolfgang Fengler's picture

The International School of Kenya just hosted its last football tournament of the year. Teams from Nairobi’s poor neighborhoods dominated the event. Rain was pouring and many of the players were playing barefoot, but they still thrived, outperforming many teams from schools where the rich take their children.

In the 10-11 age group, the top three places went to teams from destitute neighborhoods, including Kibera, which some people have (wrongly) dubbed as the world’s largest slum. Kibera Sports Academy stood at the top of the podium, while second and third places went to Inspiration Kenya and Peace Academy respectively. 

Many people, including Kenyans, consider slums the epitome of misery. The common wisdom is they breed disease, crime and many other forms and manifestations of poverty. Why then are slums growing bigger, with people migrating to them in ever increasing numbers?

The politics of service delivery

Shanta Devarajan's picture

Teachers in Tanzania are absent 23 percent of the time; doctors in Senegal spend an average of 39 minutes a day seeing patients; in Chad, 99 percent of non-wage public spending in health disappears before reaching the clinics.

These and other service delivery failures have been widely documented since the 2004 World Development Report, Making Services Work for Poor People.

But why do these failures persist?  Because they represent a political equilibrium where politicians and service providers (teachers, doctors, bureaucrats) benefit from the status quo and will therefore resist attempts at improving services.  For instance, teachers are often the campaign managers for local politicians.  They work to get the politician elected, in return for which they get a job from which they can be absent. Powerful medical unions ensure that their members can work in the private sector and neglect their salaried government jobs.  The losers are the poor, whose children don't learn to read and write, or get sick and die because the public clinic is empty.

Can Kenya replicate Indonesia’s turnaround?

Wolfgang Fengler's picture

JakartaRecently, a friend from Indonesia visited me in Nairobi. He is one of the world’s leading experts on social development and a long-term Jakarta resident. One of his observations stuck in my mind: “Kenya is just like Indonesia ten years ago”, he said. 

Comparing Kenya with Indonesia is counterintuitive—except perhaps when it comes to traffic jams—because of the many differences between the two countries. Indonesia is the world largest island state with more than 17.000 islands and a demographic heavyweight with 240 million people (six times more than Kenya). It is also 85 percent Muslim, while Kenya is about 85 percent Christian. Indonesia has massive natural resources – coal and gas (and some oil) – that it exports to other Asian countries, especially China, while Kenya’s economy is fuelled by a strong service sector.

There are many more reasons to challenge a comparison between these two countries but when one digs below the surface, there are also some similarities. Economically my friend was spot on: in GDP per capita terms, Kenya is roughly at the level of Indonesia a decade ago (about US$800 per capita). Today Indonesia is far ahead, but I don’t see any reason why Kenya couldn’t follow suit. Indeed, Indonesia is a good benchmark case for Kenya because it was never a “star reformer”, but instead a consistently strong performer.

A wiki on Africa Youth Employment

Shanta Devarajan's picture

Ever wonder how a World Bank  flagship report gets written?  A team of experts drafts an outline and shares it with stakeholders for their comments, suggestions and inputs.  Based on this feedback, the team drafts the report and shares the draft for further comment, before publishing the final draft.

Today, we are proposing to write our flagship report on youth employment in Africa differently.  We are launching a wiki platform and inviting the world to participate in the writing of the report. The wiki contains the preliminary outline which you can revise and rewrite.  I emphasize that the outline is preliminary; it contains assertions that may not be borne out by further analysis (I know because I wrote some of them).  So please add to, subtract from and edit the outline.

 

Why are we doing this?  First, the topic of youth employment in Africa is so important that we need to engage as many people as possible in finding solutions.  And second, young people are so tech-savvy that this may be a way of harnessing that talent and energy.  

 

As you can imagine, the idea of writing a report on a wiki platform raised some questions, even from my teammates ("if you needed brain surgery, would you crowd source that too?"). But we decided that the benefits outweigh the risks.

 

Writing a report on a wiki is the logical extension of the World Bank's open knowledge and open data programs (link to these), not to mention this blog.

 

And if we succeed in collaborating with a large number of people, we could call it the world's development report.

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