African Countries Show Mixed Results in Quality of Policies and Institutions
The World Bankâ€™s latest review of government policies and institutions in Africa shows that half of the regionâ€™s countries posted relatively weak performance in their policy environment supporting development and poverty reduction in 2015.
According to the World Bankâ€™s annual Country Policy and Institutional Assessment (CPIA) for Sub-Saharan Africa, seven countries out of 38 registered improvements while another 12 saw a decline in their performance. The CPIAÂ rates the performance and challenges of poor countries in order to determine the allocation of low to zero-interest financing and grants for countries that are eligible for support from the World Bankâ€™s International Development Association (IDA)*.
CPIA scores assess the quality of countriesâ€™ policy and institutional progress using 16 development indicators in four areas: economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions. Countries are rated on a scale of 1 (low) to 6 (high) for each indicator. The overall CPIA score reflects the average of the four areas of the CPIA.
The average CPIA score for Sub-Saharan Africa countries combined was 3.2 in 2015, which remains similar to last yearâ€™s performance. This latest average score is now similar to that of all IDA countries. With a series of policy reforms, Rwanda continues to lead all countries with a CPIA score of 4.0 followed by Cabo Verde, Kenya, and Senegal, all with a 3.8 score. Improvements in several policy areas reversed the slide in Ghanaâ€™s score, lifting the countryâ€™s CPIA score from 3.4 in 2014 to 3.6 in 2015.
Albert Zeufack, World Bank Chief Economist for Africa.
Countries transitioning out of violence saw modest improvements. CÃ´te dâ€™Ivoire (3.3), which has enjoyed four consecutive years of wide-ranging reforms and improvements in CPIA scores, saw stronger performance in equity of public resource use in 2015, but this did not translate into an improvement in the countryâ€™s aggregate CPIA score. By contrast, both Burundi (3.1) and The Gambia (2.9) saw the CPIA score drop from last yearâ€™s rating, underscoring that conflict and weak governance can set back policy gains and development progress.
â€œAlthough there are a number of highly performing countries, African IDA-eligible countries on average continue to lag behind those in other regions in their policy and institutional ratings,â€ says Albert Zeufack, World Bank Chief Economist for Africa. â€œUrgent action is needed as more countries are facing downward pressure on the current account and fiscal balances, declining reserve positions, depreciating currencies, higher inflation, and rising debt burdens.â€
The number of African countries that saw a decline in CPIA score in 2015 is nearly double the number of improvers. This is largely due to weaker performance in the economic management cluster underpinned by weaker global economic conditions. Sub-Saharan Africaâ€™s fragile countries also continue to lag behind fragile countries elsewhere, particularly in the quality of public institutions.
The analysis notes that there was a slowdown in the pace of improvement in governance in 2015. Only seven countries–Ghana, Comoros, Chad, Guinea, Madagascar, Rwanda, and Zimbabwe–strengthened their governance framework compared to nine in 2014 with another six countries experiencing a decline against four in 2014. Overall, the low governance scores for African countries indicate that public institutions need to be strengthened so they can be more accountable for delivering human development services, security, and justice to citizens.Â Â
Punam Chuhan-Pole, Lead Economist, World Bank Africa Region.
â€œThe end of the commodity super-cycle highlighted vulnerabilities in the structure of Sub-Saharan Africaâ€™s economies,â€ notes Punam Chuhan-Pole, Lead Economist, World Bank Africa Region and author of the report. â€œYet, the current difficult situation also presents opportunities to accelerate key reforms to boost competitiveness and diversification which are critical for raising growth prospects and ending extreme poverty.â€
* The World Bankâ€™s International Development Association (IDA), established in 1960, helps the worldâ€™s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor peopleâ€™s lives. IDA is one of the largest sources of assistance for the worldâ€™s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.