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FEATURE STORY

In Africa, Progress in Country-Led Government Reforms

August 5, 2015


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STORY HIGHLIGHTS
  • A new review of African policies and institutions shows that 26% of countries made broad progress in supporting development and poverty reduction.
  • Weak performance in conflict-ridden countries illustrates how violence quickly destroys gains made in equity and growth.
  • Cote d’Ivoire and Rwanda were among countries that continued to post steady gains in this annual World Bank review.

WASHINGTON, August 5, 2015 —The overall quality of government policies and institutions designed to spur development and reduce poverty in African countries remained steady in 2014, with the greatest progress made in budgetary and financial management, according to a new World Bank review.

The latest Country Policy and Institutional Assessment (CPIA) Africa analysis, “Assessing Africa’s Policies and Institutions,” describes the progress and challenges faced by governments in Africa when strengthening the polices, institutions and programs that help boost sustainable development.

The CPIA scores countries on a scale of 1 to 6 (with 1 the lowest and 6 the highest), for 16 indicators in four policy areas, to reach a country’s overall score.  The areas are economic management, structural policies, social inclusion and equity, and public sector management and institutions.

The ratings help determine the allocation of zero-interest financing for the African countries that are eligible for support from the International Development Association (IDA), the World Bank Group’s fund for the world’s poorest countries.

The average CPIA score for these African countries was 3.2 in 2014.

“The sharp drop in commodity prices in 2014 put pressure on current account and fiscal balances in the region’s commodity exporters, presenting a challenge to countries with depleted policy buffers,” says Punam Chuhan-Pole, Acting Chief Economist for the World Bank Africa Region and the report’s author. “One bright spot on the economic management front was progress in debt policy and management, where Chad, Côte d’Ivoire, the Democratic Republic of Congo, Madagascar and Zambia all saw improvements.”

The Lead Performers

Beneath the flat regional trend, the range of CPIA scores for the region widened. Ten countries experienced a climb in the overall CPIA score. A strengthening of policy reforms boosted Rwanda’s CPIA score to 4.0 and elevated it to the top of the list, just above Cabo Verde’s 3.9 score. Kenya, Senegal, and Tanzania followed closely behind, all with scores of 3.8. Among the countries with gains, Zimbabwe led all with a large 0.4-point increase to 2.7.

Elsewhere, countries transitioning out of violence saw modest improvements. For the fourth consecutive year, Côte d’Ivoire’s focus on a broad range of policy reforms lifted the CPIA score to 3.3. Ongoing policy development progress, especially in the area of governance, saw an uptick in the CPIA scores for Chad and the Democratic Republic of Congo.

South Sudan (which saw a decline in its score) and Eritrea — both countries struggling with deep policy challenges — had the lowest score at 2.0. The Central African Republic’s CPIA score dropped from last year’s rating, illustrating that conflict quickly eats away at policy gains.

Strengthening Good Governance

The overall quality of economic management in Sub-Saharan Africa weakened in 2014, underscoring the region’s vulnerability to adverse movements in the price of commodities such as oil, metals, and minerals. By contrast, nearly one-fourth of countries had CPIA gains in governance-related reforms. Six countries posted gains related to budgetary and financial management policy development and some others made progress on transparency and accountability. This trend suggests that governments are responding to their citizens’ demand for improved transparency in public affairs and better use of public resources.

“This review shows that 24% of countries in Sub-Saharan Africa showed improvements that strengthen governance-related policies,” Chuhan-Pole said. “Governance quality and performance is increasingly viewed as a transformational element for sustainable and inclusive development. Thus, greater attention to strengthening property rights and rules-based governance, enhancing the quality of public administration, and addressing corruption is desirable.”

Côte d’Ivoire, the Democratic Republic of Congo, Mozambique, and Uganda all saw improvement in financial inclusion, thanks to policy reforms related to access to finance. Mobile banking helped to accelerate this access: almost a third of account holders in the region—or 12 percent of all adults—reported having a mobile money account.

Social Inclusion, Gender Equality

Up to eight countries in Africa deepened policy reforms for health services. Yet several countries continue to show extremely high rates of maternal mortality, with only about half of all deliveries attended by skilled health care providers.

The analysis concludes that the CPIA score for Africa’s non-fragile countries continues to be similar to those of non-fragile countries outside the region. And Africa’s fragile countries continue to lag behind in the CPIA scores of fragile countries in other parts of the world, showing that there is still work that can be done to improve the quality of life for men and women in Africa.

Main CPIA Findings

  • More than 50% of the countries in the region saw a change in their policy environment: 10 countries experienced a lift in their overall CPIA score, and an equal number saw deterioration.
  • The sharp drop in commodity prices and continuing fiscal policy slippage weakened economic management reforms.
  • Nine countries improved governance policies - more than twice the number of countries with declines - with the greatest progress in budgetary and financial management.
  • Recent trends show that better debt management has helped to keep debt burdens at modest levels and strengthen debt sustainability. 

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