African countries show mixed results in quality of policies and institutions
The World Bank’s latest review of government policies and institutions in Africa shows that half of the region’s countries posted relatively weak performance in their policy environment supporting development and poverty reduction in 2015.
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According to the World Bank’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 CPIA 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 Bank’s International Development Association (IDA).
CPIA scores assess the quality of countries’ 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 one (low) to six (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 year’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 Cape Verde, Kenya, and Senegal, all with a 3.8 score. Improvements in several policy areas reversed the slide in Ghana’s score, lifting the country’s CPIA score from 3.4 in 2014 to 3.6 in 2015.
Countries transitioning out of violence saw modest improvements. Côte d’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 country’s aggregate CPIA score. By contrast, both Burundi (3.1) and The Gambia (2.9) saw the CPIA score drop from last year’s rating, underscoring that conflict and weak governance can set back policy gains and development progress.
According to the World Bank Chief Economist for Africa, Mr Albert Zeufack, “Although 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.” Urgent 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.”
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 Africa’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.
Lead Economist, World Bank Africa Region and author of the report, Dr Punam Chuhan-Pole, noted that “The end of the commodity super-cycle highlighted vulnerabilities in the structure of Sub-Saharan Africa’s economies,”,. “Yet, 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.”