It’s not always easy to convince the private sector to participate in public infrastructure projects—especially in developing countries and emerging economies. Why is this a problem? Because there simply is not enough public money to meet the growing demand for infrastructure, which is a key element of development and poverty alleviation. The need is great, numbering in the trillions of dollars.
But there is good news—the market has both the trillions and the expertise to use it, if the conditions are right. And the World Bank Group has a number of instruments that can help create an environment that meets the needs of the private sector in financially, environmentally, and socially sustainable ways. Guarantees are one of those instruments, a tool that is highly effective in leveraging limited resources for mobilizing commercial financing for critical infrastructure projects.
In 2013, I was confronted by the realization of my country’s situation at a parliamentarian workshop organized by UNICEF where I learned about the different forms of malnutrition that we face. There, I discovered that my country, Cameroon, has an overall stunting prevalence of 32% for children under age five. In other words, one in three children under the age of five is affected. I now know of the devastating effects of malnutrition on the health of families, children and adolescents and consequently on the development of our country. As a parliamentarian, I’ve worked to serve my constituency and set up a community health insurance which helps improve the coverage of vulnerable children and young people. These challenges are our daily reality, but I was surprised to see them highlighted by the President of the World Bank in Washington, DC when I traveled there for the World Bank’s Spring Meetings.
Many people were bitterly disappointed when four cases of wild polio were discovered in August 2016 in insecure areas of Borno State in the northeast of Nigeria. Nigeria had gone for almost two years without any cases of wild polio being detected, and was just a year away from being able to declare polio eradicated.
This year’s UN Permanent Forum on Indigenous Issues, which kicked off last week in New York, marks the 10th anniversary of the United Nations Declaration on the Rights of Indigenous Peoples.
The World Bank’s Forest Carbon Partnership Facility (FCPF) is coming up on its own 10-year anniversary. Since 2008, the FCPF has run a capacity building program for forest-dependent indigenous peoples. The initiative, with a total budget of $11.5 million, has worked to provide forest-dependent indigenous peoples, national civil society organizations, and local communities with information, knowledge and awareness to increase their understanding of efforts to reduce emissions from deforestation and forest degradation (REDD+), and to engage more meaningfully in the implementation of REDD+ activities. The program recently wrapped up its first phase (2008-2016), which included 27 projects, and presented the results at a side event to the Permanent Forum.
After a decade of strong growth in the late 1970s and early 1980s, Cameroon was compared favorably with fast-growing East-Asian economies. This fame came to a sudden stop in the late 1980s when the country experienced one of the world’s deepest and most protracted recessions, triggered by large fall in the terms of trade and appreciation of the real exchange rate. Debts - previously at reasonable levels - mounted, banks failed and poverty increased. A 50% devaluation of the CFA Franc, a currency Cameroon shares with other former French colonies, in January 1994 pushed the foreign-currency denominated debt to increase to over 100 percent of GDP, triggering the Heavily Indebted Poor Countries (HIPC) debt relief process. Cameroon successfully exited HIPC in 2006. Since then, the authorities have set the goal to become a middle income country by 2035, anchoring their growth strategy on building infrastructure. After some initial success, with real growth steadily increasing from 1.9% in 2009 to 5.9% in 2014, the country is facing again some fiscal strains and risk of its debt distress has risen from low to moderate to high, in just 3 years.
In Ghana, coastal erosion and rising seas are burying some seaside villages, like Fuveme, which is now completely under sand. As in neighboring countries, hydrocarbon exploration is well underway not too far from the shore, and coastal urban areas are expanding. The fish stock has declined dramatically, and formerly thriving fishing communities are in trouble.
Just two years ago, Ghana was experiencing unstable commodity prices and a deteriorating macroeconomic situation. Yet, through a unique combination of World Bank guarantees nearly $8 billion in private investment was mobilized for the Sankofa Gas Project—the biggest foreign direct investment in Ghana’s history. The transformational project helped address serious energy shortages and put the country on a path to economic growth.
This is just one example illustrating how risk mitigation products play out in practice to encourage private sector investment and improve people’s lives.
- Public-Private Partnership in Infrastructure Resource Center
- Public Private Partnerships
- Public private partnership
- Private Sector Development
- Global Economy
- Financial Sector
- Latin America & Caribbean
- East Asia and Pacific
- Lao People's Democratic Republic
We took over the management of the obstetrics, gynecology, and pediatric hospital in Yaoundé (HGOPY) in 2014, inheriting an institution that faced chronic structural debt, obsolete equipment, and dilapidated buildings. No debt repayment plan was in place and fixed expenses such as staff salaries and benefits were extremely high.
This situation was regrettably common in many institutions across Africa which were hit hard by the economic and social crisis that resulted from structural adjustment policies implemented in by several countries, including Cameroon. Furthermore, the decision to increase health care charges adversely affected the poorest, limiting their access to health care and leading to a rise in maternal and infant mortality rates.
In response, African countries signed the Abuja Declaration in 2000, committing to earmark at least 15% of their national budget to the health sector. In addition to the goal of providing universal health care, the sector was expected to enhance the performance, effectiveness, and efficiency of its services.
Quality education is one of the most powerful instruments for reducing poverty and inequality; yet it remains elusive in many parts of the world. The Programme for the Analysis of Education Systems (PASEC), which is designed to assess student abilities in mathematics and reading in French, has for the first time delivered an internationally comparable measure around which policy dialogue and international cooperation can aspire to improve. The PASEC 2014 international student assessment was administered in 10 countries in Francophone West Africa (Cameroon, Burundi, Republic of Congo, Côte d’Ivoire, Senegal, Chad, Togo, Benin, Burkina Faso, and Niger).
This blog post originally appeared on the Global Financing Facility website.
Every year, more than 200 million women want to prevent or delay pregnancy—but they’re not using contraceptives. Why?