World Bank

The World Bank’s new vision for Africa

Mar 12th, 2011 8:36 AM UTC
By Nora Coghlan

Last week, the World Bank launched a strategy to replace the 2005 Africa Action Plan (AAP) as a blueprint for its engagement with African countries over the next ten years. The strategy, called “Africa’s Future and the World Banks Support For It,” rests on three pillars: competitiveness and employment; vulnerability and resilience (specifically to economic and health-related shocks, natural disasters and conflict); and governance and public sector capacity.

In my mind, the following goals are the most important highlights of the new strategy:

• Prioritizing impact: The strategy unveils the Bank’s ten-year “vision” for Africa, which includes ambitious targets for the region like middle-income status for five new countries, a doubling of the continent’s share of global trade and per capita income increases of 20% in 20 countries. Along with a new strategic monitoring framework, through which the Bank will track Africa’s progress and evaluate its own role in meeting the targets, this focus on impact – instead of inputs or outputs – is a welcome step toward ensuring that investments are delivering results.
• Applying lessons learned: The strategy calls for the Bank to innovate and learn from the AAP’s shortcomings – a promise that it has already started to make good on. To help prevent the strategy from becoming a “top-down exercise” like the AAP, the Bank vetted it through an aggressive consultation process that included meetings in 30 countries and an online forum to gather feedback from the public. Taking stock of lessons learned is a trend across donors agencies right now (take a look at USAID FORWARD and the recent aid reviews by the UK government, for example). Hopefully the Bank’s engagement on this agenda is a sign that the multilateral agencies are getting on board as well.
• Leveraging partnerships: The Bank identifies partnerships as the most critical instrument for implementing its new strategy – at the global level with the African Diaspora, the private sector and emerging economies, and at the country-level by playing to its comparative advantage and coordinating with partners to fill gaps. In the health sector, for example, the Bank says it will stay focused on building and sustaining systems, while looking to others to finance antiretroviral therapy and other vertical programs. Though this “division of labor” may cause alarm in some quarters (and indeed, we need details on where the Bank intends to “step back” to ensure others step in), it shows that the Bank is committed to leveraging its unique ability to convene partners and provide the “glue” in-country that enables vertical programs to succeed.
• Supporting governance and growth: Although the Bank will maintain its support for priority sectors like health and agriculture, the new strategy explicitly shifts from a stove-piped, sectoral approach to prioritize two broader engines of development –governance and economic growth. Some intriguing new initiatives in these areas include a “Growth Poles Project” to invest in industries and locations with the highest economic potential; a renewed emphasis on infrastructure; a commitment to promote social accountability through technology and public expenditure tracking projects; and a Civil Society Fund to support citizen groups focused on improving governance and transparency.

All in all, some pretty praiseworthy goals. Yet a lot of questions remain on the implementation side, especially exactly how the Bank plans to engage African governments, the private sector and emerging donors as partners (especially to help meet resource gaps) and how the new approach will be rolled out in individual countries. More than ever before, Africa is proving itself to be continent of 48 very different countries, some making great economic and political strides and others locked in cycles of conflict and poverty. Defining the Bank’s strategy in individual countries – what it will prioritize, where it will be pulling back, and how it intends mobilize new partners – is no doubt a big question for African governments and citizens right now. So let’s hope that the implementation process is as inclusive as the strategy-setting one.

IDA: The ‘glue’ to development assistance in Africa

Dec 15th, 2010 5:58 PM UTC
By Lauren Pfeifer

Donor governments are meeting in Brussels, Belgium this week to complete the 16th replenishment of the World Bank’s International Development Agency (IDA).

IDA -– known as the World Bank’s “fund for the poorest” -– is one of the largest development financiers in Africa and the world’s least developed countries. Historically, Africa has received more of IDA’s funding than any other region, at around 50 percent. IDA funds are delivered through grants and interest-free, long-term loans.

These meetings will conclude IDA’s last replenishment before 2015 — so, the commitments made to IDA will be critical in helping the world’s poorest countries mobilize the funds needed to meet the UN Millennium Development Goals (MDGs) in Africa by 2015. In past decade, IDA immunized 310 million children, provided access to water and sanitation for more than 177 million people and brought better education to more than 100 million children each year. With strong commitments from donor countries, IDA estimates that it can immunize 200 million more children, give access to improved water sources to 80 million more people and train and recruit more than two million more teachers.

IDA is also responsible for many of the less “sexy” (but still critical) development projects in areas like infrastructure, institutional development and technical support. IDA financing is also a crucial complement to the efforts of other donors. IDA helps countries develop the systems and capacity they need to utilize other donors’ funds and build on the results that have been achieved. IDA is the glue that coordinates donor efforts and ensures that systems and capacity are in place to build on results and sustain long-term progress toward achieving the MDGs.

Later this week, we’ll take a look at how the IDA replenishment goes in Brussels, so stay tuned. In the meantime, feel free to check out some of the analysis going on over at the Center for Global Development.

Photo courtesy of the World Bank

Doing Business in Africa: Where does the continent rank in business regulations?

Nov 12th, 2010 3:55 PM UTC
By ONE Partners

Mikiko Imai Ollison is a former policy manager at ONE. She currently leads a team at the World Bank Group that gathers data for the “trading across border” indicator, one of the nine indicators of the “ease of Doing Business” measure and is one of the authors of the Doing Business 2011 report.

Since I left ONE 10 months ago, I’ve been busy co-writing the Doing Business 2011: Making a Difference for the Entrepreneurs report, which was published by the World Bank and IFC last week.

Doing Business 2011 is the eighth in a series of annual reports that benchmark the regulations that enhance business activity and those that constrain it around the world. A vibrant private sector, with firms making investments, creating jobs and improving productivity, promotes growth and expands opportunities for the poor.

A regulatory environment where new entrants with drive and good ideas — regardless of their gender or ethnic origin — can start their own business and where firms can invest and grow is essential for the private sector to prosper. That’s where the Doing Business report comes in. The report and related data-rich website present quantitative indicators on business regulation and the protection of property rights for 183 economies around the world.

So, where is it easiest and hardest to do business? As you might have guessed, doing business is the easiest in OECD high-income economies. On average these economies rank 30 (out of 183 total). Entrepreneurs in sub-Saharan Africa have it hardest, and the average ranking is 137 for these countries. Sadly, nine out of the 10 lowest ranked economies are in sub-Saharan Africa. These rankings reflect very high levels of red tape — starting a business still costs 18 times more and takes more than three times as much in sub-Saharan Africa as in OECD high-income economies (relative to income per capita). It takes a whopping 216 days to start a business in Guinea-Bissau, compared to one day in New Zealand. Exporting requires 11 documents in the Republic of Congo but only two in France.

But it’s not all bad news for Africa. In fact, the Doing Business database also tells the story of a dynamic continent making strides toward a business friendly regulatory environment. Rwanda, Cape Verde and Zambia were among the 10 economies worldwide that most improved the ease of doing business.

Rwanda moved up 12 places in the global rankings, while Cape Verde and Zambia rose 10 and eight spots respectively. Ghana led the world in making it easier for businesses to obtain credit. Malawi led in improving contract enforcement.

Since 2005, 84 percent of sub-Saharan African economies made it easier to do business by implementing regulatory reforms. Among the top 10 economies globally that made the largest strides in making their regulatory environment more favorable for business, four are from sub-Saharan Africa: Rwanda, Burkina Faso, Mali and Ghana. Overall, a third of the top 30 are in the sub-Saharan Africa (circled below in red).

There is still much to do in Africa to make it easier for local entrepreneurs. The Doing Business report does not measure all aspects of business environment that matter to firms and investors or affect the competitiveness of an economy. But as a co-author of this report, my hope is that this year’s edition will encourage policymakers in Africa to have another look at their business regulations and stimulate debate about what works in business regulations -– and how and why.

-Mikiko Imai Ollison, World Bank Group

World Bank and IMF keep on keeping on at fall meetings… but is more needed for Africa?

Oct 9th, 2009 4:47 PM UTC
By Sarah Jane Staats

The annual fall meetings of the World Bank and IMF in Istanbul this week focused on the “road to recovery” from the global economic crisis. While we didn’t see major new initiatives emerge from the meetings, the Bank and the Fund reaffirmed important commitments to help emerging market and developing countries cope with the impacts of the financial crisis. These include commitments to ensure the Bank and the Fund have adequate resources to respond to the crisis and timetables for governance reforms that would give greater voice and representation to emerging market and developing countries.

They echoed calls to: protect core spending on health, education, infrastructure, agriculture and social safety nets; revive global trade and investment; and establish a multilateral trust fund at the World Bank for the food security initiative. The World Bank and African Development Bank also announced this week that they would invest $215 million to bring high-speed, low-cost internet access to central African countries.

While important progress is being made at the institutions, some say it’s not going fast enough or deep enough. Nancy Birdsall, at the Center for Global Development, says the newly inclusive G20 is more progressive than the modest changes in governance being proposed at the World Bank and IMF. Several African finance ministers also issued a statement during the annual World Bank and IMF meetings calling for their countries to have a voice in the G-20, and another self-styled “group of 30” financial figures called for much more dramatic reforms at the IMF including ending the U.S. veto power and cutting the number of European board chairs.

We’ll be watching to see how these financial mechanisms and new governance proposals will benefit sub-Saharan African countries.

ONE’s Reaction to the Pittsburgh G20 Communique

Sep 28th, 2009 8:19 AM UTC
By Virginia Simmons

Overall, the Pittsburgh G20 Summit appears to have made some progress towards reshaping global power structures to make them more representative, but it still has some way to go before it becomes a truly representative global decision making body.

I spent the summit with our US Government Relations Director Tom Hart, who said:

“Moving from the G8 to the G20 is a seismic shift: it brings many more of the world’s people to the table, but the new expanded world body must now start addressing the needs of the poorest countries, especially in Africa. For nearly a decade now, Africa has been squarely on the G8’s agenda, even if delivery on their commitments has been mixed. During this transition time, African development must not fall through the cracks. One way to show the world will not forget Africa would be to hold an upcoming G20 summit on the African continent.”

As I posted earlier here, we passed our petition, in which 75,000 ONE members worldwide call for a G20 Summit to be held in Africa, to the US delegation at the summit.

Below are some key points in the summit’s communique that are relevant to Africa:

• Agriculture – The G20 called on the World Bank to develop a new trust fund, as a way to implement the G8’s food security initiative announced at the L’Aquila Summit in Italy in July. This multilateral fund will support the set of principles championed by the White House to make aid for agriculture more effective, coordinated and geared towards the strategies developed by poor countries themselves.
• Climate change – The G20 failed to call for resources to help the poorest countries adapt to the harmful impacts of climate change, and tackle its causes. It was disappointing that there was no mention of the urgency of addressing these needs.
• African Development Bank – The G20 have reaffirmed the commitment to make sure the multilateral development banks have enough finance, especially the World soft loan arm, the International Development Association (IDA) and the African Development Bank (AfDB). The African bank has increased its lending to respond to the financial crisis by as much as US$4bn and now needs support to replenish its coffers. ONE welcomes Canada’s announcement of an extra US$2.8bn in loan guarantees for the Bank.
• World Bank and IMF- Both International Financial Institutions took steps towards increasing representation of developing countries.

Rwanda becomes top global reformer for making business easier

Sep 11th, 2009 12:31 PM UTC
By Mikiko Imai

In the IFC-World Bank Doing Business 2010 report released yesterday, for the first time a sub-Saharan African country—Rwanda—was named the world’s top reformer of business regulations, based on the number and impact of reforms implemented. Doing Business is an annual report that ranks economies based on 10 indicators of business regulation that record the time and cost to meet government requirements for starting and operating a business, trading across borders, paying taxes, and closing a business.

In Rwanda, it now takes an entrepreneur just two procedures and three days to start a business. Imports and exports are more efficient, and transferring property takes less time thanks to a reorganized registry and time limits. Investors have more protection, insolvency reorganization has been streamlined, and a wider range of assets can be used as collateral to access credit.

Mauritius, ranked 17 globally, is the top sub-Saharan economy for the second year in a row in terms of the overall regulatory ease of doing business.

However, despite these advances, more reforms are needed in Africa. The average rank for sub-Saharan African countries remain the lowest of any region.

Globally, the report shows that despite the financial and economic crisis, a record 131 economies reformed business regulations between June 2008 and April 2009. Singapore is the top-ranked economy on the ease of doing business for the fourth year in a row, but most of the action occurred in developing economies. Two-thirds of the reforms recorded in the report were in low- and lower-middle-income economies.

-Mikiko Imai

Global economic crisis: A development emergency

May 21st, 2009 9:31 AM UTC
By Eloise Todd

Last week I attended the launch of the World Bank’s Global Monitoring Report 2009 in Brussels. The report’s subtitle is ‘A Development Emergency’. A couple of key facts coming out of the report which, although not necessarily new statistics, serve to highlight the ‘development emergency’ as the World Bank calls it:

• In 2009, growth in developing countries will be 1.7%, just a quarter of pre-crisis levels; in sub-Saharan Africa it will be 1.6%
• The number of poor people will rise in over half of developing countries and in three quarters of countries in sub-Saharan Africa
• At the global level, access to sanitation is the most off-track Millennium Development Goal (MDG) after MDG1 on hunger

The report picks out 6 priorities for action: 1) adequate fiscal response 2) improve climate for private investment 3) redouble efforts on human development goals 4) scale up aid 5) open trade system 6) ensure multilateral system has the mandate, resources, and instruments to respond adequately.
Within the report’s main findings, infrastructure investment is presented as a win-win-win, in the sense that it has the highest multiplier effect, it removes bottlenecks to future growth, and contributes to a green recovery.

However, the report states that the infrastructure financing gap for sub-Saharan Africa (SSA) is $40bn annually. The World Bank contends that this amount could be reduced by 45% through improved management, efficiency and cost.

In March of this year, ONE undertook some research with ODI and NIESR to show the positive impact that investing $50bn in SSA could have on the world economy- invested in the right way, that development aid could ‘pay for itself’ within 16 years given the positive impact it would have on the global economy.

There was time for some discussion after the presentation of the report during which someone from the UN made a very interesting point. He said that just like with global warming, we need a kind of ‘polluter pays’ principle for this economic crisis. I don’t think we’ve had anything like this kind of ‘speculating countries pay’ idea muted before. The general debate that followed the report underlined the urgency of the whole situation much more. It was suggested that the civil society push is too weak, especially considering we know that there will be 200m more people pushed into poverty (that’s equivalent to around half the population of Europe) and that at least 200,000 children will die per year up to 2015 (that’s 1.2million lives in total). The figures are almost too much to comprehend, statistics which struggle to convey the human suffering they mask. It’s averting those crises that spurs us all on as campaigners.

You can check out the full report here.

-Eloise Todd

Reflections on the IMF, World Bank Spring Meetings

Apr 27th, 2009 8:59 AM UTC
By Chandler.Smith

On Sunday, we headed to the final portion of the IMF and World Bank Spring meetings. Unlike the International Monetary and Financial Committee (IMFC) on Saturday, where little was discussed on what the IMF can do for the poor, yesterday, the World Bank and the International Monetary Fund Joint Development Committee gathered to discuss how the global economic crisis is impacting developing countries specifically.

The Development Committee and the IMFC released communiqués laying out their recommendations for action. Generally, a few positive recommendations were made, but we have yet to see a comprehensive, grand plan to protect the world’s poorest people from the fallout of the financial crisis.

The good news first: ONE, along with others in the development community, requested that the Bank “frontload” funding to low income countries. Yesterday’s Development Committee communiqué indicates that this may happen. Frontloading International Development Association (IDA) funding commitments means that the World Bank will have the resources to provide funding to low income countries now in larger bundles over smaller periods of time, rather than spanning it out until 2011. This is critical in order to ensure that development projects already underway can be completed and new projects that help the poor can be implemented.

The not-so-good news: The IMFC Communique recommended that the IMF increase its lending capacity for poor countries, and agreed to explore the idea of giving better terms for low income countries on their lending, but did not specify how far the IMF will go with this. IMF loans also frequently come with burdening economic conditions and has the potential to lead to a new debt crisis.

Also, little progress has been made to reform the IMF and World Bank governance. We are asking that African countries be given strong representation because, after all, institutions like the World Bank and IMF have a very large impact on their development and it’s only right that these nations have a say.

The weekend was productive, but we still have a lot of work to do. Even with the petitions of ONE members, the IMF did not budge on the gold sale issue. We’ll now need to take that up with participating countries to ask them to help us move on this issue. We also continue to ask that funds be made available to poor countries through grants and debt relief, rather than in loans. Additionally, the IMF and World Bank must move forward quickly on reform.

Stay tuned for ways you can help.

-Chandler Smith

Liberia Slashes its Debt with Historic Buyback Deal!

Apr 16th, 2009 10:30 AM UTC
By Virginia Simmons

Liberia bought back $1.2 billion in debt today at a 97% discount, “the steepest ever negotiated on developing country commercial debt.”

From the World Bank:

“The deal was concluded with the payment of $38 million to retire 25 outstanding commercial claims. The World Bank contributed half of this money through the International Development Association (IDA) Debt Reduction Facility, and Germany, Norway, the United Kingdom, and the United States contributed the other half.

“The successful resolution of this inherited debt, which had ballooned through interest and penalty charges during a period when my country was wracked by civil war, is an important step on our road to recovery,” said Liberian President Ellen Johnson Sirleaf. “This puts us on a firmer footing to attract investment and accelerate economic growth.”

Expect more from ONE soon on this amazing update.

-Virginia Simmons

G20 Summit- Day After ReCap

Apr 3rd, 2009 9:16 AM UTC
By Virginia Simmons

Overall, yesterday’s G20 Summit communique has left ONE very hopeful, but as always, with a lot of work on our plates. Below, I’ll quote the very succinct recap by our Global Campaigns Director Roxane Philson, and then I’ll include 3 very short flip camera interviews with some incredible G20 Voice bloggers: Nigerian blogger Sokari Ekine, Richard Murphy of the UK (who was able to ask a question about tax havens to Gordon Brown at his internationally-covered G20 press conference), and Kenyan blogger Daudi Were.

Roxy’s Summary:

“Yesterday’s G20 Summit looks like it made some real progress for the world’s poorest. Caution tells me that some of the vague language will take hard work to clarify, but this morning, as I re-read statements and news from yesterday, I am filled with a sense of hope and optimism.

Highlights include:

Resources: The G20 announced US $50 billion for low-income countries – although we are concerned this includes existing funding – and a further US $100 billion in lending for development banks.

Reform: Developing countries will have greater representation in the international financial institutions and that election to World Bank/IMF leadership will be based on merit.

Regulation: The G20 announced regulation of illicit tax havens.

As with all summits like the G20, we’re left with just as much work coming out of the summit as we had going in. We need to work to ensure that money going to developing countries is given as grants, not loans that trigger another debt crisis. Also, much more needs to be done on the green agenda in the interests of developing countries at the UN Climate Change Conference in Copenhagen later this year.”

And below, short interviews with 3 great global bloggers:

Nigerian Sokari Ekine of the blog Black Looks on attending the 2009 London G20 Summit:

UK Richard Murphy of The Tax Research Blog on asking a question on tax haven reform to British Prime Minister Gordon Brown at the internationally-covered G20 press conference:

Daudi Were, who lives in Nairobi, Kenya, and blogs at Mental Acrobatics blog, on the outcomes of the G20 Summit.

Attending the 2009 London G20 Summit as an accredited member of the media was absolutely the opportunity of a lifetime. I just want to publicly thank Karina Brisby, Shane McCracken, Samantha Bronnar, and everyone who put the G20 Voice project together and made it possible for 50 bloggers from around the world to attend this historic global summit. I hope it’s only the beginning for allowing new independent voices, particularly those from from the developing world, into these critical global discussions. I also want to thank our own Weldon Kennedy for handling all of ONE’s G20 Voice project work from the UK.

-Virginia Simmons