Investment is one of the pillars of private sector development. The acquisition of assets enables firms to increase their capacity and improve their efficiency, unlocking avenues of growth. Promoting firms’ growth is especially critical in Sub-Saharan African countries that have predominantly low levels of economic development and high rates of poverty. Against this backdrop, there has been a rapid increase in mobile money use - that is the use of mobile phones for financial transfers. At the end of 2015, mobile money services were available in 93 countries -with a total of over 411 million registered accounts and 134 million active users (GSMA, 2015). Many of these users are firms that increasingly rely on mobile money to pay bills, suppliers, and salaries or to receive payments from customers. While numerous advantages of the permeation of mobile money has been explored, including lower transaction costs, little research has been done to investigate the far-reaching benefits that lowering transaction costs could entail, such as increasing firm investment. To fill this void, we recently completed a study on the effect of mobile money use on firm investment in three countries – Kenya, Tanzania and Uganda.
Sergio Carmona and Tendesayi Kufa-Chakezha are guest blog contributers from South African National Department of Health: National Health Laboratory Services and South African National Department of Health: National Institute of Communicable Diseases, respectively.
South Africa has the largest HIV treatment program in the world with over 3 million people currently on antiretrovirals. Every year, millions of VL and CD4 count tests are carried out to check treatment eligibility for new HIV cases (CD4 count) and treatment success in those on antiretroviral therapy (ART). A VL test monitors viral suppression, the goal of ART given to a HIV-infected person. The CD4 count checks whether the patient suffers from immune deficiency due to low CD4 counts and tracks recovery of the immune system during ART. In 2014, close to half of all VL tests carried out in lower-middle income countries were done in South Africa. In addition, large numbers of CD4 cell counts have been done routinely to predict patients’ risks for opportunistic infections and provide preventive therapy where indicated. While VL and CD4 testing are essential to monitor individual ART patients, the data is also useful in tracking the impact and performance of the ART program as a whole.
Like much of Sub-Saharan Africa, the Eastern and Southern Africa region has seen significant economic growth in recent years, largely relying on agriculture and extractives. However, it hasn’t been able to keep up with the skilled labor demanded by the region’s required economic transformation for further growth. Surveys reveal that firms in the region now face acute challenges in developing research and development (R&D) capacity and filling technical and managerial positions – not just due to inadequate production of college graduates that have been rising over the years, but also due to low quality and relevance of current education and training at the tertiary level.
UNESCO estimates that barely 30 percent of Africa’s women pursue research in science and engineering fields. I am inspired by one of them – a woman who is among the few female PhDs in the West African nation of Togo, and is helping more girls in her country enroll into science and technology fields.
Natural disasters—such as droughts, floods, landslides, and storms—are a regular occurrence, but climate change is increasing the frequency and intensity of such weather-related hazards. Since 1970, Africa has experienced more than 2,000 natural disasters, with just under half taking place in the last decade. During this time, natural disasters have affected over 460 million people and resulted in more than 880,000 casualties. In addition, it is estimated that by 2030, up to 118 million extremely poor people (living below $1.25/day) will be exposed to drought, floods, and extreme heat in Africa. In areas of recurrent disasters, this hampers growth and makes it harder for the poor to escape poverty.
Photo Credit: J Endres via Flickr Creative Commons
I’ve spent the last 18 years in Sub-Saharan Africa working with governments on making public-private partnerships (PPPs) work for their countries. My interest is not just professional. My wife is Cameroonian and we live with our children in Senegal. I love this region! So I have a deeply personal connection that drives me, and it is important that my work has a positive impact. But the countries I work in are typically very difficult for businesses and investors to operate in and tend to have regulatory systems and investment climates that dissuade private sector investment, which is critical for PPPs to succeed. So, even though it is personally rewarding, this is not an easy job.
A good number of African governments have shown how technologically-forward thinking they are by announcing one-tablet-per-child initiatives in their countries. President John recently announced that tablets for Ghana’s schoolchildren were at the center of his campaign to improve academic standards. Last year, President Kenyatta of Kenya abandoned a laptop project for tablets.
"Doing Business 2017: Equal Opportunity For All" was released on October 25, and it marked record progress for the business environment reform agenda in Sub-Saharan Africa. Implementing 80 of the 283 reforms recorded globally, Sub-Saharan Africa once again claims the status of the world's top reforming region. Beyond the record reform count, this year is also marked as the year with the highest number of countries in the region having passed reforms (37 out of 48), confirming that more and more economies in Africa are putting private-sector-led growth at the heart of their development agendas.
There is actual transformation tied to those rankings. For example: It now takes 156 days to build a warehouse in Mauritius, compared to 183 days in France and 222 days in Austria. Rwanda ranks second globally on the Getting Credit indicator, not to mention that, years ago, it used to take 370 days to transfer a property in Kigali, while today it takes only 12 days.
But, beyond the figures, a few additional thoughts come to mind.
How has Africa become not only better at reforming, but also become home to some good practice that inspires many to reform?
First, one should mention the unique momentum for reform. Most African countries’ development strategies place the private sector as the engine of their growth, and recognize that creating enabling business environments is a key pre-requisite to attract investments and encourages business expansion. That is a timely move from African governments, especially in the context of the present commodity-price fall, which calls on African countries notably to move away from an exclusive dependence on minerals and to diversify their growth models.
Then, Africa countries are simply getting better at reforming. A good sign of this is that reforming today costs less in Sub-Saharan Africa. Recent analysis shows that it costs on average of $310,000 to implement a reform today, versus $730,000 merely four years ago. That is a clear sign of increased efficiency. The capacity-building and hands-on assistance of World Bank Group teams to governments and implementing agencies throughout the region is beginning to bear fruit.