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Kenya’s re-based national accounts: myths, facts, and the consequences

Johan Mistiaen's picture

A month ago, the Kenya National Bureau of Statistics (KNBS) Kenya released a set of re-based and revised National Accounts Statistics (NAS), the culmination of an exercise that started in 2010.  Press coverage, reactions from investors and the public have been generally favorable, but some confusion still looms regarding some of the facts and consequences.  We wrote this blog post to debunk some of the myths.

NAS, including Gross Domestic Product (GDP), are typically measured by reference to the economic structure in a “base” year.  Statisticians sample businesses in different industries to collect data that measures how fast they are growing.  The weight they give to each sector depends on its importance to the economy in the base year.  As time passes and the structure of the economy changes, these figures become less and less accurate.

Re-basing is a process of using more recently collected data to replace an old base year with a new one to reflect the structural changes in the economy.  Re-basing also provides an opportunity to add new or more comprehensive data, incorporate new or better statistical methods, and apply advancements in classification and compilation standards. The current gold standard is the 2008 System of National Accounts (SNA).

Building for Development: Could Infrastructure Draw Unexpected Investors to Africa?

Laura Gómez-Mera's picture
Only one out of every 40 dollars of foreign direct investment (FDI) since the 1990s has gone to Sub-Saharan Africa. This is dwarfed by the one out of every eight dollars that went to Latin America and the Caribbean, or the more impressive one out of every four dollars invested in Asian countries. Yet recent studies point to increasing levels of investor interest in African countries. In the last decade, the continent has experienced a notable expansion in the level of FDI inflows, which in 2012 were almost as high as Net Official Development Assistance levels. International investors seem to be noticing the opportunities offered by a rapidly expanding African market.

FDI and Development Assistance to Sub-Saharan Africa
 

Source: Authors’ calculations based on World Development Indicators

In an effort to boost trade and investment relations between Africa and the United States, President Barack Obama this summer hosted the first-ever US-Africa Summit in Washington, D.C. The meeting resulted in $33 billion of public and private commitments to expand trade and investment in the African continent. Remarkably, US companies accounted for half of these pledges, including commitments by General Electric, Blackstone Group (in a joint deal with the Nigerian firm Dangote Industries) and the Carlyle Group to invest in energy infrastructure and to complement the $300 million per year announced by President Obama for the expansion of his administration’s energy initiative, Power Africa. The World Bank and the government of Sweden announced an additional $6 billion in support for enhanced access to electricity in Africa.

This is good news for Africa. FDI inflows will undoubtedly contribute to the technological development, industrial diversification, and economic growth of host countries. And the specific target of these investments – infrastructure – is particularly heartening. The state of Africa’s infrastructure is an important constraint to the continent’s economic development.

A Lesson from Palestinian Educational Reform: Find a Local Super-star

Noah Yarrow's picture

While he is undoubtedly a great player, Lionel Messi may not be the best person to learn from when working on your soccer game. This is not because his team lost to Germany in this year’s World Cup, but that his playing style is likely very different from yours. The next steps on your path to improvement may be closer to a better player on your own team than that of the super-star. 

Now Accepting Applications! Summer Institute 2015 - Reform Communication: Leadership, Strategy and Stakeholder Alignment

Roxanne Bauer's picture

How can leaders and change agents be more successful at achieving sustainable reforms? Can the strategic use of communication increase the likelihood of success? If so, what types of communication strategies are the most effective?

While few would dispute the important role of communication in building support among key stakeholders in the pursuit of reforms, many are unsure of exactly how to go about creating and launching a communication campaign for reform.

This is one impetus behind the 2015 Summer Institute in Reform Communication: Leadership, Strategy and Stakeholder Alignment, designed and led by World Bank Group's External and Corporate Relations (ECR), Operational Communications unit, the World Bank’s Leadership, Learning, and Innovation Group (LLI), the Annenberg School for Communication at the University of Pennsylvania, and the Annenberg School for Communication and Journalism at the University of Southern California.

The Summer Institute will be held at the University of Southern California in Los Angeles, June 1 - June 12, 2015

Financing Needs Cannot Be Met Without Private Sector's Help

Nazaneen Ismail Ali's picture
 
Photo: Dana Smillie / World Bank


To maintain current growth rates and meet demands for infrastructure, developing countries will require an additional investment of at least an estimated US$1 trillion a year through 2020. In the Mashreq countries, the required infrastructure investment for electricity alone is estimated at US$ 130 billion by 2020, and an additional US$108 billion by 2030.
 
These gigantic financing needs will continue to place a huge burden on government budgets. Simply put, they cannot be addressed without private sector participation. Public-private partnerships (PPPs) can help to close this growing funding deficit and to meet the immense demands for new or improved infrastructure and service delivery in sectors like water, transport, and energy (among others). In countries with diverse and numerous needs, PPPs can fill gaps in implementation capacity as well as the scarcity of public funds.

The High Density of Brazilian Production Chains

Otaviano Canuto's picture

International trade has undergone a radical transformation in the past decades as production processes have fragmented along cross-border value chains. The Brazilian economy has remained on the fringes of this production revolution, maintaining a very high density of local supply chains. This article calls attention to the rising opportunity costs incurred by such option taken by the country.
 
Moving Tectonic Plates under the Global Economic Geography

In recent decades, international trade has gone through a revolution, with the wide extension of the organization of production in the form of cross-border value chains. This extension was a result of the reduction of tariff and non-tariff barriers, the incorporation of large swaths of workers in the global market economy in Asia and Central Europe, and technological innovations that allowed modularization and geographic distribution of production stages in a growing universe of activities. International trade has grown faster than world GDP and, within the former, the sales of intermediate products has risen faster than the sale of final goods.

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

 
The Challenge Of Connecting The Unconnected
TechCrunch
Every time we return to or sign up for an Internet service (e.g. Facebook, Google, Gmail, YouTube, etc.), we rely on what UX experts call a “mental model” for navigating through the choices. A mental model is essentially a person’s intuition of how something works based on past knowledge, similar experiences and common sense. So even when something is new, mental models help to make sense of it, utilizing the human brain’s ability to transcode knowledge and recognize patterns. For instance, most of our grandparents can hit the ground running with changing the channel or increasing the volume when handed the remote control for the latest television available in the market today, squarely because of a well-developed mental model for TV remote control units. But our grandparents may not have the same level of success when using Internet services, smartphones or tablets. Under-developed mental models in these domains are their primary obstacles

Beyond Magic Bullets in Governance Reform
Carnegie Endowment for International Peace
Domestic reformers and external donors have invested enormous energy and resources into improving governance in developing countries since the 1990s. Yet there is still remarkably little understanding of how governance progress actually occurs in these contexts. Reform strategies that work well in some places often prove disappointing elsewhere. A close examination of governance successes in the developing world indicates that effective advocacy must move beyond a search for single-focus “magic bullet” solutions toward an integrated approach that recognizes multiple interrelated drivers of governance change.
 

Empowering new generations to act

Paula Caballero's picture
Photo by CIAT via CIFOR FlickrWhen I look at the rate of resource depletion, at soil erosion and declining fish stocks, at climate change’s impacts on nearly every ecosystem, I see a physical world that is slowly but inexorably degrading. I call it the "receding reality"—the new normal—slow onset phenomena that lull us into passivity and acceptance of a less rich and diverse world.

In my lifetime, I have seen waters that were teeming with multi-colored fish, turn dead like an empty aquarium. I have seen the streets of Bogota, my home town, lose thousands of trees in a matter of years.

It’s tempting to feel demoralized. But as the world’s protected area specialists, conservationists and decision makers gather in Sydney, Australia, this week for the World Parks Congress, there is also much to hope for.

 

With Large-Scale Temporary Employment, Is Poland the Next Spain? – Part 2

Piotr Lewandowski's picture

Coal mine transporter, Poland. Photo credit: iStock © EunikaSopotnicka

In my previous post I showed that Poland has become a country with the highest share of temporary contracts in Europe – now around 26.9% of workers. I argued that this process wasn’t triggered by interactions between several labor regulations. In particular, the use of civil law contracts (as opposed to those based on the labor code) has become increasingly common, resulting in a dual labor market, in which one segment of the work force is better off (in terms of wages, income, and training) than the other. The Polish government has labeled these contracts “junk contracts” but so far it has failed to truly address the issue. What can be done to overcome the current deadlock on this issue?

Getting it Right: A New Framework for Reducing Disaster Risk

Francis Ghesquiere's picture

By Francis Ghesquiere, Head of the GFDRR Secretariat, & Robert Reid, DRM Specialist, GFDRR
 
Early warning systems in Bangladesh. Amir Jina/Flickr Creative CommonsThe approval of a successor to the Hyogo Framework for Action (HFA) in Sendai, Japan, in March 2015 will mark the beginning of a new era for the disaster risk management (DRM) community. The UN World Conference on Disaster Risk Reduction will set new international DRM standards, targets, and priorities for the next 20 years. It is our hope that the international DRM community seizes this opportunity to build upon the strengths of the first HFA to make the next edition even more actionable.
 
We’re pleased to see that the proposed goal of the HFA2 zero draft recognizes the need to prevent the creation of new risks. This is the only realistic way to gradually tame the continuous increase in disaster loss observed in recent decades.  This is particularly true in developing countries where we will see billions of dollars invested in expanding cities, in new schools and new homes.  To avoid putting people at risk, we must first make sure that this infrastructure is built in the right places and using resilient standards.


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