Beside the great Lake Kivu, beneath the shadow of an enormous volcano, the Rwanda-DRC border divides the neighboring cities of Gisenyi and Goma. As the day begins, the predominant impression is one of movement, as people walk in either direction through the customs checkpoint, carrying giant bunches of green banana, stacks of nesting plastic chairs, anything that is tradable. They form an unbroken stream of humanity crossing to and fro, the tall border signboards towering overhead.
You don’t have to spend very long in Rwanda before you start to be impressed by the financial inclusion landscape in this country – not only by the progress made over the past several years, but by the scale of ambition for the rest of this decade and beyond.
The government has set a target of 90 percent financial inclusion by 2020 and the evidence of progress toward this goal is everywhere: Advertisements for mobile-money products are painted and plastered onto almost every available surface and, if you know what to look for, it doesn’t take long to spot an Umurenge Savings and Credit Cooperative (Umurenge SACCO) – Rwanda’s signature financial inclusion initiative.
Six years ago, the 2008 FinScope survey found that that 47 percent of Rwandan adults used some type of financial product or service, but just 21 percent were participating in the formal financial sector, which was at the time made up mostly of banks but which also included a handful of microfinance institutions and SACCOs.
Largely in response to these figures – and in particular to the large urban/rural divide illustrated by the data – and the government set out to establish a SACCO in each of the country’s 416 umurenges, or sectors. The Umurenge SACCO was born.
Are we effective in presenting education data to help tackle the real issues that developing countries are facing? The education community continues to be puzzled by two realities: (1) crucial data is often not available and (2) available data is often hard to digest.
On the sidelines of a high-level forum on Higher Education for Science, Technology and Innovation in Africa, the World Bank's Makhtar Diop, Vice President for its Africa Region, says we must increase the numbers of students in Africa graduating with degrees in science, technology and mathematics.
Over the next 10 years, Africa will have created about 122 million new jobs, says the World Bank Youth Employment in Sub-Saharan Africa Report. Although this is a very exciting forecast, mass job availability alone won’t be enough to address the unemployment issues in Africa, especially when the new jobs are not proportional to the influx of unemployed youth. Furthermore, the pace at which these jobs are being created falls short of the rate of youth entering the job market per year. During the next ten years that it takes for Africa to finally create the new jobs, eleven million youth will have been entering the labor market each year.
Inequality is back in the news. In his 2014 State of the Union address, U. S. President Obama lamented that, “after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled.” At the global scale, Oxfam is making the same point, noting in a recent report that the richest 85 people in the world own the same amount of wealth as the 3.5 billion bottom half of the Earth's population. Perhaps more surprising, the rich and powerful CEOs jetting to Davos earlier this year seemed to finally get it: capitalism cannot survive if income and wealth become concentrated in too few hands. Fighting inequality would therefore not only be the morally correct thing to do, it would also be smart economics. And this is what a recent Staff Discussion Note from the IMF suggests: “inequality can undermine progress in health and education, cause investment-reducing political and economic instability, and undercut the social consensus required in the face of shocks, and thus tends to reduce the pace and durability of growth.”
The three points made in my previous post—that services particularly fail poor people, money is not the solution, and “the solution” is not the solution—can be explained by failures of accountability in the service delivery chain. This was the cornerstone of the 2004 World Development Report, Making Services Work for Poor People. In a private market—when I buy a sandwich, for example—there is a direct or “short route” of accountability between the client (me) and the sandwich provider. I pay him directly; I know whether I got a sandwich or not; and If I don’t like the sandwich, I can go elsewhere—and the provider knows that.
Each month, about one million people enter the labor force in Africa. Another one million start looking for work in India. Add to this millions of others around the globe, and worldwide, some one billion people will enter the labor force between now and 2030.
Why is that date important? That’s the deadline World Bank Group President Jim Kim has set for ending extreme poverty and boosting shared prosperity. Making this happen will require not only a healthy and skilled labor force, but also requires creating ample job opportunities, and ensuring that young adults can find productive work.