Country Economic Memorandum
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Publication
Ghana Rising: Accelerating Economic Transformation and Creating Jobs
(World Bank, Washington, DC, 2021-11-10)Ghana has been a rising growth star and a beacon of hope in West Africa. Strong economic growth over the past two decades led to a near doubling of GDP per capita, lifting the country through the threshold for middle-income status in 2011. GDP per capita grew by an average of 3 percent per year over the past two decades, putting Ghana in the top ten fastest growing countries in Sub-Saharan Africa (SSA). A rising tide has tended to lift all boats. Poverty rates more than halved between 1998 and 2016, and the extreme poverty rate declined from 36.0 percent in 1991 to 8.2 percent in 2016. The net primary school enrollment rate rose from 62.5 percent in 2000 to 86.0 percent in 2019. This progress has motivated the government’s goal to lift the country to high-income status by 2057. The focus of this Country Economic Memorandum (CEM) is to review options for Ghana to create enough higher quality jobs through economic transformation. Economic transformation, or inclusive productivity growth, occurs as people and resources shift from lower to higher productivity activities. It raises household incomes and living standards, thereby lifting people out of poverty. It can be achieved through the movement of workers and other resources between firms and sectors, or through workers staying within existing firms that benefit from within-firm productivity growth by adopting better technologies and capabilities. -
Publication
Lake Chad Regional Economic Memorandum: Technical Paper 1. Socioeconomic Trends in the Lake Chad Region
(World Bank, Washington, DC, 2021-11-09)The Lake Chad region, which is an economically-and socially integrated area spanning across four countries of Chad, Cameroon, Niger, and Nigeria in north-west Africa, has been trapped in a vicious circle of suboptimal territorial development and fragility. This note shows that the Lake Chad region lags in multiple dimensions of development ranging from poverty, human capital, and access to services. A poverty rate in the Lake Chad region is found to be much higher than other parts of the countries surrounding the lake. The regional poverty rate in the Extreme North region of Cameroon (59 percent) is three times higher that of the rest of the country (19 percent). In Nigeria, the Lake Chad region203 has a poverty rate (72 percent) nearly twice as high as in the rest of the country (38 percent). Chad is the only exception, where the poverty rate in the country’s Lake Chad region (31 percent) is lower than the rest of the country (40 percent).204 This is explained by the fact that the Chad region around the lake lies near the capital of the country, with a consequently higher urbanization rate and a relatively high population density. The note is organized as follows. Section 2.2 provides key statistics on poverty, sector of work, and human capital indicators in the Lake Chad region vis-à-vis other parts of the country and examine how the Lake Chad lags behind in different dimensions. Section 2.3 provides a diagnostic of economic geography with a focus on three dimensions of density, distance and division. Section 2.4 identifies a set of structural factors, aggregate shocks and selected policies that might be associated with the dynamics of economic activity and social inclusion across the region. -
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Escaping the Low-Growth Trap: Guinea-Bissau Country Economic Memorandum
(World Bank, Washington, DC, 2020-11-02)Guinea-Bissau’s massive economic potential has not so far translated into better livelihoods for its population. Growth per capita has averaged less than 1 percent per year over 2000-2019. This chapter provides an in-depth analysis of the factors behind the economic stagnation. An interplay of three constraints have impeded sustained high growth. First, the low and volatile growth performance is linked to fragility and political instability, which, together with a poorly diversified economy, with raw cashew nuts accounting for 95-98 percent of export earnings, help explain the stop-go growth cycle. Second, human capital accumulation remains low. An acute shortage of a skilled workforce is a major constraint to inclusive growth. The education system is marked by alarmingly low levels of learning. Third, private investment is particularly low—the second lowest in Africa. Years of underinvestment in infrastructure, energy, and human capital are holding the country back from achieving strong, enduring and inclusive growth. The chapter concludes by highlighting how the COVID-19 crisis exacerbates these constraints and discusses areas that could support sustainable growth. The chapter is organized as follows: section 1.1 presents a brief overview of the political and social context. Section 1.2 puts recent growth into historical and comparative perspective. Section 1.3 presents analysis that helps explain the low-growth trap and identifies possible areas that Guinea-Bissau could pursue to escape this trap. Finally, Section 1.4 discusses the economic impact of COVID-19 and potential pathways to recovery. -
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Mauritania Country Economic Memorandum: Accelerating Growth Through Diversification and Productive Cities
(World Bank, Washington, DC, 2020-05)The Mauritanian economy is at an important crossroad. Despite significant increases in itsnatural resource wealth, economic development in Mauritania remains weak. The over-reliance on natural resources has left the economy undiversified with growth, exports, and fiscal revenues all dependent on extractives. Responding to the 2015 commodity price shock, the authorities implemented a strong fiscal consolidation program that restored macroeconomic stability andsteered the economy onto a recovery path. The new administration—appointed following the election in mid-2019—now has the challenge and opportunity to map out a more sustainable development model and steer the economy onto a path of accelerated and equitable economic growth for the rapidly growing population. The objective of this report is to support policy makers in Mauritania in their reform efforts to accelerate growth as outlined in the National Development Plan (SCAPP).It attempts to answer the following questions: (i) Why Mauritania could not diversify its economy in the past and what are the opportunities to do so in the future? (ii) What are the reasons behind the weak link between urbanization and growth, and is Nouakchott lifting its weight as anurban agglomeration? (iii) Which policy actions could help build those pathways? By answering these questions, the report aims to contribute to the economic discussion and provide policy recommendations for the choices that Mauritania is facing to accelerate growth and improve theliving standards of its population. The report is organized around five chapters. Chapter 1starts with a brief introduction. Chapter 2 analyzes the key characteristics of Mauritania’s past growth performance. Chapter 3 evaluates the current and future potential for economic and export diversification. Chapter 4 examines the challenges that are preventing urbanization from contributing to growth, with a focus on Nouakchott. Chapter 5 concludes by proposing a menu of policy recommendations that could help Mauritania achieve faster and more sustainable economic growth. -
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Kyrgyz Republic Country Economic Memorandum
(World Bank, Washington, DC, 2020-03-26)The Kyrgyz Republic has experienced modest and volatile economic expansion since the economy bottomed out from the transition recession in 1995, when GDP amounted to about half of its pre-independence levels. As a result of structural reforms at the start of transition, the emergence of remittances and commodity exports, largely gold, as powerful new drivers of growth, and improvements in the macroeconomic management in the recent decade, per-capita real GDP grew by 3.1 percent a year on average since 1995. The Kyrgyz Republic is now a lower middle-income economy, as it was in 1990. Economic expansion has benefitted from fixed investment that has risen to 31 percent of GDP, one of the highest in Europe and Central Asia and well-above the threshold of 25 percent reached by the group of successful countries studied by the Growth Commission in 2007. Lower fiscal deficits and low inflation indicate the success of recent macroeconomic policies. These achievements notwithstanding, Kyrgyz Republic’s growth and productivity performance has lagged most relevant comparators, frustrating the needs of the poor and the young. As a result, while per-capita GDP in constant prices has doubled since 1995, it has still not caught up with pre-independence levels. Per-capita incomes in the Kyrgyz Republic have increased by 20 percent less than the average of lower middle-income countries since 2000 and 40 percent less than the average for the Caucasus and Central Asia. Productivity increases – proxied by changes in total factor productivity, have averaged half a percent since 2000, leaving largely factor accumulation as the driver of economic growth. And while ‘Productivity isn’t everything, but in the long run it is almost everything’, highlighting one of the main challenges of the country’s current growth model.3 Poverty has declined, but modest growth has made a modest dent, leaving the poverty rate as high as 31 percent, with a substantial part of the population living in regions with more limited and lower quality government services than in Bishkek. -
Publication
Tajikistan Country Economic Memorandum: Nurturing Tajikistan’s Growth Potential
(World Bank, Washington, DC, 2019-05)This Country Economic Memorandum (CEM) analyzes a set of the critical constraints to domestic private sector-led and outward-oriented growth in Tajikistan, by examining the structural bottlenecks to private sector investment and exports. The report is selective in looking at key public policies needed to improve Tajikistan’s macroeconomic resilience and foster private sector development to ensure sustainable growth. This CEM should be seen as the first of a series of programmatic work intended to provide advisory support to the Tajik authorities over the medium-term as they update the National Development Strategy. The report focuses on two important areas of public policy: first, the role of the tax system in encouraging investment and entrepreneurship, examines the principal deficiencies in the tax regime and in its administration, and proposes reforms to improve the incentives for investment. Second, in view of the dominance of the state and of state-owned enterprises in the economy and regulatory gaps to ensure level playing field, the report analyzes the competition policy framework, with the aim of identifying policy reforms that will encourage firm entry and create a competitive market in goods and services. The two interrelated objectives – macroeconomic incentives for investment and savings and the domestic competition and tax regime - reinforce each other. The choice of the above thematic areas is guided by the team’s preliminary discussions with various stakeholders within the government and outside the government. The CEM builds on the World Bank’s previous reports on Tajikistan, namely on the Jobs Diagnostics and Systematic Country Diagnostics. The Jobs Diagnostics proposes the government to consider a jobs strategy based on the following three pillars: i) facilitate the creation of more jobs, particularly in the formal private sector; ii) improve the quality of existing jobs, especially in the informal sector; and iii) facilitate better access to jobs including transitions from inactivity to employment and from low to higher quality jobs, with a focus on vulnerable workers. The focus of the CEM is well aligned also with the new Country Partnership Framework (CPF) for 2019-23 currently in making. This report will be followed by analytical and policy work on other critical constraints to private sector-led growth: the establishment of a rules-based policy setting and creating market-supporting institutions that promote greater economic formalization; building upon areas of high potential for transformative change such as the financial strengths of the energy sector and macro-fiscal implications of investments to Rogun HPP; gains from deeper international integration and infrastructure access provided by the Belt and Road Initiative (BRI); and investing in human capital. This chapter of the CEM analyses the main causes of macro-fiscal vulnerabilities and suggests policy recommendations to improve resilience of the Tajik economy. -
Publication
Angola Country Economic Memorandum: Towards Economic Diversification
(World Bank, Washington, DC, 2018-12-01)The Angolan economy is at a significant juncture. The current growth model based on oil wealth is nearly exhausted and has not delivered inclusive growth and shared prosperity. Angola faces two broad policy challenges that need to be addressed urgently: macroeconomic stabilization and a more inclusive economic growth. The internal and external imbalances following the adjustment to lower oil prices pose a challenge to macro-stabilization. The prospect of volatile oil prices and potentially diminishing oil reserves over the medium and long-term call for a new sustainable and inclusive growth model that promotes economic diversification, a model that is less dependent on natural resource exports. The new administration is aware of these challenges and has started to implement much needed reforms. Angola is right to focus on reforms that lay the foundation for long-term macroeconomic stability and economic diversification. Analyses conducted as part of this report indicate that there are significant gains to be had from such reforms. The objective of this report on Angola is to support policy makers in their reform efforts. The report is organized as follows: Chapter 1 takes stock of recent trends and determinants of growth in Angola, highlighting the importance of natural resource wealth and volatility for growth outcomes. Chapter 2 presents the findings of a growth diagnostic for Angola, and highlights low human capital, access to finance, weak institutions and macroeconomic instability as critical and binding constraints for the non-oil economy. Chapter 3 uses product space analysis to evaluate Angola’s current and future potential for economic and export diversification, drawing attention to products and services sectors in which there is potential for export upgrading and/or product innovation. Chapter 4 provides an overview of the agriculture sector and assesses its potential for economic diversification. Chapter 5 sets out the way forward, identifying: critical reforms for macroeconomic stability; a fiscal framework for natural-resource wealth management; and macro-financial stability. -
Publication
Climbing Higher: Toward a Middle-Income Nepal
(World Bank, Washington, DC, 2017-05-01)Nepal's recent history of development is marred by a paradox. Many countries in the world have experienced rapid growth but modest poverty reduction, as income has increasingly concentrated in the hands of the wealthy. Nepal, however, has the opposite problem-modest growth but brisk poverty reduction. The country has halved the poverty rate in just seven years and witnessed an equally significant decline in income inequality. Yet, Nepal remains one of the poorest and slowest-growing economies in Asia, with its per capita income rapidly falling behind its regional peers and unable to achieve its long-standing ambition to graduate from low-income status. -
Publication
Lessons from Poland, Insights for Poland: A Sustainable and Inclusive Transition to High Income Status
(World Bank, Washington, DC, 2017)This report discusses Poland’s experience along five dimensions. These five dimensions - a pentagon of policies and institutions are governing, sustaining, connecting, growing, and including. The main lessons from Poland and the key insights for its future, based on this pentagon, are presented in the lessons and insights summarized in this report. Poland’s experience underlines the importance of a shared vision to sustain continuing reforms. Poland’s rapid economic ascent created new challenges: the creative destruction on which the growth process was based, successfully, caused massive social change. The report addresses two sets of questions. First, what are the lessons from Poland’s remarkable transition to high income?; what policies were behind Poland’s economic achievements?; why was Poland able to achieve high-income per capita so fast, while many other countries remained in the upper-middle-income range for decades - trapped middle-income countries (MICs)?; what policies were similar to those pursued by other new high income countries (HICs) and what were specific to Poland?, and second, what are the insights for Poland going forward? Given international experience and Poland’s characteristics, what policies can it adopt to continue its ascent and reach the much higher incomes of countries that have been high income for a considerable period - the established HICs? -
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Cameroon Country Economic Memorandum: Markets, Public Administration, and Growth
(World Bank, Washington, DC, 2016-12)To become an upper-middle income country by 2035, as targeted in its Vision 2035 document, Cameroon will have to increase productivity and unleash the potential of its private sector. Specifically, Cameroon’s real GDP must grow by around 8 percent and 5.7 percent in per capita terms over 2015–2035, which in turn will require the investment share of GDP to increase from around 20 percent of GDP in 2015 to 30 percent of GDP in 2035 and productivity growth to reach 2 percent over the same period, from its average rate of zero growth over the past decade. These are daunting yet doable challenges. To make it happen the public sector would need to reinvent itself and change its nature: reduce distortion, promote innovation and increase allocative efficiency; and more competitive markets would be needed to promote productivity gains. Based on the rigorous analysis of the Cameroonian economy using five main sources of data,1 the report will address the following topics: Chapter 1 analyzes constraints to growth, Chapter 2 explores constraints to enhance competitiveness, Chapter 3 examines the role played by the Cameroonian state on these constraints, and Chapter 4 derives from these analyses a set of actionable policy recommendations. The abstract contains the following structure: 1. Underpinnings of Cameroonian economy affecting growth potential 2. Recommendations on nine major areas of collaboration between the government and the private sector.