Syndicate content

March 2016

Kenyan firms benefit from increased use of financial services and lower crime-related losses

Silvia Muzi's picture

The private sector continues to be a critical driver of job creation and economic growth. However, several factors can undermine the private sector and, if left unaddressed, may impede development.  Through rigorous face-to-face interviews with managers and owners of firms, the World Bank Group’s Enterprise Surveys benchmark the business environment based on actual experiences of firms.

This blog focuses on surveys conducted of 781 Kenyan firms across five regions (including Nairobi and Mombasa) and six business sectors—i) food, ii) textiles and garments, iii) chemicals, plastics and rubber, iv) other manufacturing, v) retail, and vi) other services.

Under Kenya’s new constitution, the country recently embarked on several major business reforms that promoted a more market-friendly environment. Some examples of positive benefits include boosts in public investment in infrastructure, increased interest from foreign investors, and lowered transaction costs from information technology improvements. The Kenya Enterprise Surveys sheds light on how the country’s private sector fared amidst these reforms.

More firms use financial services than before

According to the Kenya Enterprise Surveys (ES) data, the use of financial services has improved since 2007.  On average, 44% and 41% of Kenyan firms use banks to finance investment and working capital, respectively. The corresponding figures in 2007 were much lower at 23% and 26%. Moreover, the percentage of Kenyan firms with a bank loan is 36%, which is on par with the global average yet higher than the average of countries in the same income group (do note that when this survey was conducted, Kenya was classified as a low income country, having since graduated to a lower middle income country).

Empowering a greener future

Mafalda Duarte's picture
CIF launches annual report that marks 2015 as year of achievements
 CIF
Photo: World Bank Group


This is Morocco’s Noor 1 concentrated solar power plant, the first phase of what will eventually be the largest concentrated solar power plant in the world. It is an impressive sight—visible even from space–and it holds the promise of supplying over 500 megawatts of power to over a million Moroccans by 2018. It also embodies the power of well-placed concessional financing to stimulate climate action. Low cost, long term financing totaling $435 million provided by the Climate Investment Funds (CIF) has served as a spark to attract the public and private investments needed to build this massive facility, and it is just one example of how the CIF is empowering a greener, more resilient future.

New ideas for financing American infrastructure: a conversation with Henry Petroski

Alison Buckholtz's picture
Henry Petroski, author of The Road Taken:
The History and Future
of America’s Infrastructure

Editor’s Note: Renowned engineer and historian Henry Petroski, author of the just-published The Road Taken: The History and Future of America’s Infrastructure, has a unique perspective on public-private partnerships (PPPs). He spoke to the PPP Blog about why the U.S. is at a much earlier stage of PPP development than the rest of the world, how America’s infrastructure PPPs are different than other countries’, and which European PPP models are influencing American progress. It’s an especially timely issue for PPP Blog readers who were reminded of the state of American infrastructure by the sudden closure of the Washington, DC Metro (subway) system earlier this month.

Q: Why is the U.S. so much “younger” than the rest of the world when it comes to PPPs?  
 
Henry: In the U.S. during the 19th century, almost all our large infrastructure projects, like railroads, were created through private investment.  If someone wanted to build a bridge, a corporation would be formed, find financing, and proceed on that basis. Owners might need a government concession so that they could put the bridge where they wanted, but aside from that it was a purely private enterprise. The Ambassador Bridge, which has linked Detroit, Michigan, and Windsor, Ontario, since 1929, is a good example; it was privately financed and remains wholly privately owned.

Get more farmers off their farms

David McKenzie's picture
Justin Wolfers had a nice piece in the Upshot about new work on how growing up in a bad neighborhood has long-term negative consequences for kids. The key point of the new work is that the benefits of moving from bad neighborhoods may be particularly high for kids whose parents won’t voluntarily move, but only move because their public housing is demolished.

What to expect when you’re expecting, in Nigeria: Lessons from a series of health impact evaluations

Anushka Thewarapperuma's picture
The life of a Nigerian midwife


Childbirth is a time for expectant mothers to revel in the wonders and joy surrounding the arrival of a new human being; one breathing crisp new air, bawling with resonance in finding their voice and opening their eyes in awe to see the world around them. It’s the last conceivable moment where a mother wants to worry about the cleanliness of the birth facility, the baby’s life and, least of all, her own life. But in many developing countries including Nigeria, this is the reality.  

Teacher Management 2.0: An innovative, data-driven approach in Malawi

Salman Asim's picture
Nine year old Selina Josophati, a standard two learner at the Government Junior Primary School in Mchinji district of Malawi. Photo Credits: Wathando Mughandira

There is a need for a teachers’ house in my school,” said nine-year old Selina Josophati.

Selina, a second grade student at the government-run primary school in the Mchinji district of Malawi, is afraid that without a place to live, all the teachers in her school might leave town, shattering her dreams to continue studying and join secondary school. Selina wants to become a teacher when she grows up.   

Going beyond goods: Measuring services for export competiveness

Claire H. Hollweg's picture

The simplest way to think about international trade is the transfer of goods – cars, clothing, bananas. Countries that export more goods are generally better off, because they’re earning money, which allows them to import and build their economies in the process. But services are also vital to exports. In fact, services play a dual role in building an economy’s export competitiveness.

For one, services matter for manufacturing and agriculture exports. Take tee-shirts for example. Sure, they’re made of cotton, but they’re also the result of many service industries. This can include transporting cloth to the factory, tee-shirt design, testing to ensure quality standards are met, and branding and marketing for sale on international markets. All are part of the tee-shirt exporting process. [1]

The second role services play in export competitiveness involves diversification. With cost reductions and technological progress, services have become more tradeable. Exporting services provides an opportunity for export diversification and growth, which is important for economic stability. If global demand for one sector drops, a country with diversified exports can rely on others such as banking, transport, or business services.

Many governments are interested in how services support their country’s exports and economy at large. For example, how much value added do services exports, such as transport or communications, generate in a country? And how much of that is generated directly versus indirectly as inputs like transportation in our tee-shirt example? What types of services inputs, and is that different from comparator countries?

Answers to such questions are typically left unanswered because systematic data is not readily available on how services contribute to exports across developing countries and sectors.

The Export of Value Added (EVA) Database was developed to fulfill this need. The database was recently launched on the World Bank Group’s World Integrated Trade Solutions (WITS) data website. It includes data for user-specific queries and also has data for bulk download.

The EVA Database measures the domestic value added contained in exports for about 120 economies across 27 sectors, including nine commercial services sectors, three primary sectors, and 14 manufacturing sectors. The data spans intermittent years between 1997 and 2011.

What sets the EVA Database apart is the wide coverage of developing countries: over 70 of the economies included are low- and middle-income.

What Vietnam can learn from Singapore about flood risk management

Linh X. Le's picture
Overview of Bishan-Ang Mo Kio Park, Singapore. Photo: Stefan/Flickr
As Vietnamese, we look very fondly to Singapore as a model for development in the region, especially fostered by a close relationship between Vietnamese leaders and the former Minister Mentor Lee Kuan Yew—Singapore's founder and mastermind behind all its modern-day achievements. Singapore represents modernity and civilization, notably with limited natural resources. The city-state has proved an applicable model of development for cities in Vietnam to achieve not only competitiveness but also sustainability and inclusiveness.
 
I just returned to Vietnam after attending the World Bank’s first-ever Urban Week in Singapore, a series of events that brought together city leaders from across Asia and beyond to explore innovative approaches to urban planning and management.
 
A topic that cut across all these areas is flood risk management, which was featured extensively during the launch event of the Global Platform for Sustainable Cities. I had the opportunity to learn more about the role of green mitigation infrastructure in integrated urban flood risk management, with lessons from Japan, Korea, Sri Lanka, Senegal, and the Netherlands. In these countries, green structures such as retarding basins, permeable pavement, and rainwater storage or infiltration trench have complemented conventional structural measures to reduce flood risk in a cost-effective manner.
 

Pages