No. 47     November 1999

The Year 2000 Computer Bug:
Identifying Potential Impacts on Sub-Saharan Africa

The Year 2000 (Y2K) computer bug could potentially affect digital control systems and computer hardware/software that rely on date-dependent calculations for their proper functioning.

A considerable level of automation and computerization has taken place in Sub-Saharan African (SSA) countries in recent years. Although the level of automation may be lower compared with more technologically advanced countries, the relative reliance of SSA countries on these systems is generally higher. This is partly because a limited number of systems process the information required by most public agencies. Examples include treasury, customs, central bank, pension, and other similar public sector operations, many of which do not have alternative backups in case of system failures. Any major failures in these systems could potentially lead to economic and social hardships for affected countries, resulting in an undesirable impact on the country's development.

Due to the complexity of both national and cross-border interdependencies among various sectors, the longer term effects of potential Y2K failures in certain critical operations on the national economy are often ignored. The Knowledge and Learning Center in the Africa Region of the World Bank has developed a potential risk exposure profile for SSA countries based on a set of indicators from various critical sectors. These indicators provide a better picture of the potential Y2K risk exposures, and the significance of certain operations for the economy. The salient features of the findings from these indicators are discussed below.

Lessons Learned

• Y2K-related disruptions in one or more of the following sectors could have a considerable impact on the economic performance of SSA countries, and the region:

• There are major interdependencies among SSA countries in various sectors. For example, at least 10 countries export power, while over 17 countries rely on the import of electricity from neighboring countries to various degrees. Therefore, problems in power generation / transmission in some countries could adversely affect some neighboring countries as well.

• Some cross-border issues involve multiple sectors. For instance fuel is transported through one country to another that uses it for power generation, and in turn transmits the electricity to a third country. How would these countries deal with the power shortages if the supplying countries can not deliver all or part of this electricity, because of the potential Y2K failures (if any) in their generation / transmission systems?

• A very large proportion of imports ( an average of 85 percent) by the top 20 SSA economies comes from outside the SSA region, mostly by sea routes. Therefore the proper operation of Ports and Customs is very important for these countries.

• Because of the very high volume of such transactions, it appeared that Customs operations are very important both from a government revenue generation perspective as well as from a general economic one.

An Example of a Critical Issue:

• What is the scope of government revenue losses if Customs or port operations are disrupted? How would it affect the economy as a whole?

Impact

Based on the above findings, the significance of ensuring Y2K readiness in customs operations were pointed out to Ministries of Finance and Interior in two countries. In both cases, although the line ministries were aware of the level of revenues from Customs, they had not looked at these operations as national priorities in the context of Y2K readiness, and the potential impact of disruptions on the national economy. Subsequent to these discussions, appropriate steps were taken by the authorities to address these issues on a priority basis.

For more information on this specific study or copies, contact P.C. Mohan, Rm. J5-171, Knowledge and Learning Center, World Bank, 1818 H Street NW, Washington D.C., 20433. Tel. (202) 473-4114 or e-mail at: pmohan@worldbank.org

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