Why a regional statistical capacity building operation pioneers the first regional Program-for-Results
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Sustainable policy is driven by lessons learned from the past. To learn, people, nations, and global societies need reliable measures of progress.A coveted key that, when used to inform policy, has the ability to help us forge solutions to persistent policy problems such as inequality, poverty, and economic stagnation.
This is most important in developing countries. However, they are also among the most data-deprived. Countries in the East African Community (EAC) are no exception. Three countries – Kenya, Rwanda, and Tanzania – account for 53 million (12.2%) of Sub-Saharan Africa’s poor population of 433 million. These countries have much to gain from sound data practices, yet all three are below the 60th percentile of the Statistical Performance Indicator (SPI) overall score.
A new regional approach to developing statistical systems pioneered by the World Bank in the above countries offers new avenues to produce sustainable improvements in the quality of data and capacity to use it. This is key to the improvement of lives, as argued in the World Development Report 2021: Data for Better Lives. That is why they joined the EAC – to accelerate economic growth and reduce poverty. The trade bloc offers access to several opportunities for its members. These range from entry into larger, regional markets, increased foreign and domestic investment, comparative advantage and specialization for firms, and gains in productivity for the workforce. Membership holds further promise of stimulating growth through the diffusion of technology, managerial know-how, and competitive practices as well as the operation of economies of scale and scope. The objectives are to improve the quality and quantity of workforce opportunities through economic integration.
To make strides towards realizing these objectives, available data not only needs to be of high quality, but also harmonized. With harmonized data, decision-makers are better informed about progress towards, as well as the benefits and costs of, regional integration. Reliable data further provides evidence for monitoring and evaluation of policy-making decisions at the regional and national levels.
A solid foundation of data has cascading benefits for policymakers, firms, and individuals. For policymakers, comparable data on inflation is important for adopting the right policies for convergence toward deeper integration. Firms benefit from regionally harmonized and transparent data by gaining an unbiased understanding of regional markets and their opportunities. Individuals benefit from increased quality job opportunities as well as improved policies in the labor, education, and health sectors. However, data across Kenya, Rwanda, and Tanzania is not sufficiently harmonized yet, which leaves these potential benefits unrealized.
This is where the World Bank comes in. The World Bank has a track record of funding statistical operations across the globe, especially in Sub-Saharan Africa. Most operations to date have used the traditional Investment Project financing (IPF) instrument. IPFs traditionally provide funding through a designated account, which the Government uses to purchase inputs, while complying with World Bank’s financial management and procurement guidelines. However, a recent statistical operation in Kenya successfully pioneered an alternative approach: Program-for-Results (PforR).
The PforR in Kenya was designed to provide support to the National Statistics Office in implementing a statistical operation. Implemented through Government’s budget, financial management, and procurement systems, savings directly benefit the Government’s budget and provide a strong incentive to improve the efficiency of expenditures. This helps to institutionalize Government’s support for statistics by creating more ownership of outcomes. The PforR, therefore, shifts the focus of the World Bank’s engagement from upstream technical advice and financing of inputs towards the support of specific and verifiable improvements of national statistical systems. Over the long term, if the statistics collected are used correctly, this has direct positive impacts on population outcomes.
The Eastern Africa Regional Statistics PforR uses the PforR instrument, but for the first time at the regional level. This 301m USD operation includes Kenya, Rwanda and Tanzania as well as the EAC and the African Union (AU). It was approved in May 2022 with a board waiver, as it is a first in the World Bank. Tapping into the regional IDA19 window, it combines PforR components for the three countries with more traditional support through IPFs for the regional organizations. This innovative design combines the benefits of the PforR instrument of effective delivery through Government systems with two more closely monitored IPF components for the EAC and AU to tailor technical assistance for improved statistical capacity at the regional and national levels. The Program became effective in just 3 months after board approval, reflecting its broad Government ownership. Its successful implementation can re-enforce the shift from country-specific to regional statistical capacity operations, by making an additional–and depending on the country context–superior funding instrument available.
However, this regional PforR is not only important in the context of statistical operations, but can also be a game changer for other World Bank operations. It opens the door for greater use of PforRs in regional operations to deliver cost-effective and outcome-focused operations, with more Government ownership.
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