SSA is stable environment for growth – WB-CPIA

The latest World Bank review of policies and institutions in Sub-Saharan Africa shows an overall stable environment for growth and poverty reduction despite divergence across countries.

The review is part of the annual World Bank Country Policy, and Institutional Assessment (CPIA) that rates the performance of poor countries, a statement from the World Bank and copied to the GNA said in Accra on Tuesday.

Since 1980, CPIA ratings had been used to determine countries’ allocation of zero-interest financing under the International Development Association, the World Bank Groups fund for the world’s poorest countries.

The scores of 11 countries rose by 0.1 points or more, reflecting a strengthened policy agenda and the indexes of another 12 countries declined by at least 0.1 points.

Cape Verde and Kenya had the highest scores, although Cape Verde saw a decline in its CPIA for the third year in a row.

South Sudan and Eritrea, both countries that suffer deep policy challenges had the lowest scores with countries recovering from conflict such as Cote d’Ivoire and Comoros having shown solid improvement.

On the contrary, it said conflict and political instability had weakened policies and institutions.

The CPIA examines 16 key development indicators covering four areas: (i) economic management, (ii) structural reforms; (iii) policies for social inclusion and equity; and (iv) 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 16 indicators.

“African countries with better policies tend to have higher economic growth”, said Punam Chuhan-Pole, Acting Chief Economist, World Bank, Africa Region and main author of the report added: “But a redoubling of effort is needed to translate this growth into broad welfare gains”.

There is variation between the CPIA scores of different country groupings. For example, poor governance, weak public sector capacity, and civil conflict have reduced the average scores for African fragile states to 2.7 well below the 3.5 average score for non-fragile countries.

Similarly, the region’s resource-rich countries, which have an average CPIA score of 3.0, continued to lag its non-resource counterparts, which averaged 3.2 for 2012, the statement said.

“Conflict and instability can greatly affect the policy gains of non-fragile states as well. For example, Madagascar has seen its scores slip in the last two years following a political crisis, and the same has happened in Mali as a result of conflict and political instability,” he added.

The acting Chief economist said: “As was the case last year, scores are higher in the area of economic management across countries. This pattern reflects the consensus among African policy makers that macroeconomic stability can facilitate the emergence of a productive private sector. It also reflects the fact that managing macroeconomic policy is not as politically-charged as changing institutions (such as the judicial system)”.

The upward trend of scores assessing social reforms shows that they were taking hold in Sub-Saharan Africa, he said and noted that Governance score, which cover the quality of public sector management and institutions of accountability, continued to lag all other areas assessed by the CPIA, reflecting the deep-rooted challenges facing African countries in this important area.