Public sector management plagues East African governments

August 1, 2017 in Policy by Editor

August 1—The quality of policies and institutions weakened in sub-Saharan Africa in 2016 amid challenging economic conditions, but Rwanda managed to stay ahead of the pack, according to the latest review by the World Bank Group published last week.

Weaker trends were seen in 40% of the region’s IDA countries, notably commodity exporters and fragile states. The annual World Bank Country Policy and Institutional Assessment (CPIA) analysis scores the progress African countries are making on strengthening the quality of their policies and institutions.

Since 1980, CPIA ratings have been used to determine the allocation of zero-interest financing and grants for countries that are eligible for support from the International Development Association (IDA), the concessional financing arm of the Group.

CPIA scores are based on 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. In 2016, the average CPIA score for the 38 African countries assessed edged lower to 3.1.

Rwanda once again led all sub-Saharan Africa countries with a score of 4.0, closely followed by Senegal and Kenya, both with 3.8. Tanzania scored 3.7 while Uganda was rated at 3.6, Burundi, 3.0 and South Sudan, 1.6. Lowest scores for five of the six East African Community (EAC) member countries came in the category of Public Sector Management and Institutions while South Sudan’s lowest rating came in economic management.

Albert Zeufack, the World Bank Chief Economist for Africa said, “Governance underpins all sectors of World Bank Group engagement, and moving forward, despite these slight gains, it will remain critical that sub-Saharan countries implement or expand governance and public-sector reforms that will upgrade financial management systems, increase transparency, reduce corruption, protect rights, and improve public services.”

Public Sector Management and Institutions covers governance and public sector capacity issues: property rights and rule-based governance, quality of budgetary and financial management, efficiency of revenue management, quality of public administration, and transparency, accountability and corruption in the public sector. Rwanda scored 3.7; Burundi, 3.5; Kenya and Tanzania were rated 3.4 and Uganda 3.0.

Punam Chuhan-Pole, the Lead Economist for the World Bank Africa Region and author of the repor said, “African countries exhibiting economic resilience tend to have stronger macroeconomic policy frameworks, better quality of policies that promote sustainable and inclusive growth, and more effective public institutions than other countries. Nonetheless, there is scope for all countries in the region to speed up policy reforms and strengthen institutional quality.”

The highest score for Rwanda came in at 4.3 for Policies for Social Inclusion and Equity while Burundi was given 3.5. Kenya scored 4.3 for Economic Management while Tanzania and Uganda rated 4.0 in the same category. South Sudan’s highest performance was Structural Policies at 2.2.

Although some countries saw a strengthening in policy and institutional quality, the number of countries with worsening overall scores outpaced those improving by a margin of two to one.

A common pattern across countries that experienced a weakening in their overall policy and institutional quality was slippage in economic management: monetary and exchange rate, fiscal, and debt policies. This can in part be explained by unfavorable economic conditions—deteriorating terms of trade, sluggish global growth, and difficult economic conditions—that continued to take a toll on countries across the region, deepening macroeconomic vulnerabilities. Weakening of fiscal and external buffers constrained the scope for macroeconomic policies to mitigate the effects of adverse shocks to economic activity.

On the upside, Côte d’Ivoire, the Comoros, Cameroon, Guinea, Madagascar, Mauritania, and Sudan have experienced a modest gain in the CPIA score, with most of these countries showing a stronger performance in the quality of governance. In a few countries, the quality of policies for social inclusion and equity also improved, reflecting a strengthening of safety net programs.