Country Economic Memorandum

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Guinea-Bissau Country Economic Memorandum : Terra Ranca! A Fresh Start, Summary

(Washington, DC, 2015-01-12) World Bank

After decades of turmoil and instability, a period of calm and progress evolved in Guinea-Bissau in 2009. A military coup in April 2012 interrupted it. A fresh start is needed to alter the dynamics that kept Guinea-Bissau poor. In 2013, Gross National Income per capita was US$590. Average economic growth barely kept pace with population growth. In 2010, poverty at the national poverty line of US$2 a day was 70 percent; extreme poverty at US$1 a day was 33 percent. These numbers have increased from their 2002 levels and they are estimated to have increased further since 2010. It is time to make a fresh start and turn the page on anemic growth and poverty. Guinea-Bissau s elections of May and June 2014 are described by many observers as the freest and fairest in the country s history. Voter registration and turnout were at record-levels. The conditions for progress and stability are favorable. Guinea-Bissau is a rural economy, almost entirely dependent on a single cash crop: cashew. It is the main source of income for most of the country s poor. Cashew nuts are Guinea-Bissau s main export, accounting for 85 to 90 percent of the country s total exports. The balance of payments is dominated by cashew, on the export side, and food and fuel, among imports. The economy is open, with exports and imports by land and sea amounting to more than 70 percent of GDP. Shocks to cashew, rice and oil prices have a considerable effect on the current account balance. Official Development Assistance (ODA) makes a critical contribution to supporting the state budget. In 2011, Guinea-Bissau ranked 20th among the world s most aid dependent countries. Recently, policy mistakes aggravated an already dire situation. However, the 2014 cashew campaign was been better than the 2013 campaign, and the prospects for a pick-up in growth have improved.
Guinea-Bissau Country Economic Memorandum : Terra Ranca! A Fresh Start

(Washington, DC, 2015-01-12) World Bank

After decades of turmoil and instability, a period of calm and progress evolved in Guinea-Bissau in 2009. A military coup in April 2012 interrupted it. A fresh start is needed to alter the dynamics that kept Guinea-Bissau poor. In 2013, Gross National Income per capita was US$590. Average economic growth barely kept pace with population growth. In 2010, poverty at the national poverty line of US$2 a day was 70 percent; extreme poverty at US$1 a day was 33 percent. These numbers have increased from their 2002 levels and they are estimated to have increased further since 2010. It is time to make a fresh start and turn the page on anemic growth and poverty. Guinea-Bissau s elections of May and June 2014 are described by many observers as the freest and fairest in the country s history. Voter registration and turnout were at record-levels. The conditions for progress and stability are favorable. Guinea-Bissau is a rural economy, almost entirely dependent on a single cash crop: cashew. It is the main source of income for most of the country s poor. Cashew nuts are Guinea-Bissau s main export, accounting for 85 to 90 percent of the country s total exports. The balance of payments is dominated by cashew, on the export side, and food and fuel, among imports. The economy is open, with exports and imports by land and sea amounting to more than 70 percent of GDP. Shocks to cashew, rice and oil prices have a considerable effect on the current account balance. Official Development Assistance (ODA) makes a critical contribution to supporting the state budget. In 2011, Guinea-Bissau ranked 20th among the world s most aid dependent countries. Recently, policy mistakes aggravated an already dire situation. However, the 2014 cashew campaign was been better than the 2013 campaign, and the prospects for a pick-up in growth have improved.
Tanzania : Productive Jobs Wanted

(Washington, DC, 2014-09) World Bank Group

Over the past 18 months, the World Bank has been working on a comprehensive plan to address the challenge of productive jobs in Tanzania. This study represents a step towards a better understanding of how to promote job creation in Tanzania. Indeed, the growth of productive jobs is vital for alleviating poverty and promoting shared prosperity - two important goals of Tanzania's economic strategy. This booklet highlights the three-pillar plan for job creation derived from the Tanzania country economic memorandum. The first pillar looks at job creation from the angle of small non-farm businesses, which have been growing very fast during the rapid urbanization. The second pillar focuses on farms because those still capture the largest share of employment in Tanzania, while the third pillar discusses the job-creation potential associated with business expansion into new markets. By focusing on a comprehensive set of concrete actions, the goal is to stimulate debate as well as to build ownership and accountability among policy-makers and key stakeholders in the country.
Niger - Accelerating Growth and Achieving the Millennium Development Goals : Diagnosis and the Policy Agenda

(Washington, DC, 2007-09) World Bank

This report has the following objectives: (i) identify the underlying constraints to strong and sustained growth, in particular, the dynamic circles that lock Niger in a low-growth/high poverty equilibrium; (ii) understand the key determinants of growth and poverty traps and the role increased foreign aid could play to promote growth and help achieve the MillenniumDevelopment Goals (MDGs); and (iii) help the Government of Niger design a strategy to accelerating growth and human development: Strategy Paper for Human Development (SPAHD). This report is organized as follows: Chapter 1 describes the main features of Niger's economy from a Social Accounting Matrix perspective. It aims to analyze the potential linkages between sectors and the impact a policy shock of an increased public investment could have on Niger's economy. Chapter 2 reviews Niger's growth performance over the past three decades. It draws some policy lessons critical to the design of a growth strategy for Niger. Chapter 3 provides a snapshot of where Niger stands in achieving the MDGs with less than a decade remaining. It examines the reasons why Niger is falling short of the goals, describes the recent progress, and highlights the challenges ahead. Chapter 4 analyzes the constraints to strong and sustained growth with particular focus on poverty traps. Chapter 5 discusses the macro and micro foundations for strong growth and achieving the MDGs. It examines the post stabilization macroeconomic policy required to enhance the macroeconomic foundations of growth. It also identifies the engines of growth and highlights the cross-cutting issues for improving the business environment. In addition, the chapter discusses the role the private sector can play in Niger's quest to achieve the MDGs. Chapter 6 analyzes the potential impact that increased foreign aid would have on growth, poverty, and other MDGs using Niger's macroeconomic model. It focuses mainly on the links between foreign aid, the level and composition of public investment - which is disaggregated into education, infrastructure, and health -- the supply-side effects of public capital, growth, poverty, and other MDGs. Furthermore, it discusses the impact of three policy experiments on growth and the MDGs, including an increase in foreign aid (namely grants), debt relief, and a combined increase in foreign aid and tax reforms. Finally, it highlights the importance of improving governance to maximize the impact of domestic reforms and increased foreign aid on growth and the MDGs. Chapter 7 concludes the report and draws up policy recommendations, highlighting the policy priorities needed to accelerate growth and achieve the MDGs.
Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report

(Washington, DC, 2004-10-20) World Bank

In October 1991 Zambia moved to a multiparty democratic system. In the following years, the government implemented a number of policy and structural reforms, liberalizing exchange and interest rates, simplifying the tariff structure, and removing quantitative restrictions on trade, privatizing most state-owned enterprises, and substantially withdrawing from the agriculture sector. Despite these reforms, economic growth has remained lackluster, and poverty and social conditions have worsened. There are however, hopeful signs that increased growth and poverty reduction are within reach in Zambia. The country's economy has long been tied to the copper industry, whose purchasing power has been in decline for decades. But declining copper prices were not the only reasons Zambia's economic performance declined between 1991 and 2002. Excluding the one-time disruption in real sector activity in 1994-95, real GDP grew at an average annual rate of 3 percent during 1991-2002. The report argues that estimates puts its annual long-term growth potential at about 5 percent, implying per capita income growth of 2.5-3.0 percent a year, and, the reason why its potential is not being achieved, lies in several key problems, namely macroeconomic mismanagement, lack of ownership of reform and poor policy implementation, a weak investment climate, lack of good governance, and, the HIV/AIDS pandemic. And further asserts that central to the lack of macroeconomic stability - in particular to the high inflation and real interest rate - is the lack of fiscal control and commitment to fiscal discipline. Zambia's large external and rising domestic debt, combined with budgetary dependence on external financing, has constrained the government's ability to exert monetary control to achieve macroeconomic stability. The financial sector must become more efficient and capable of supporting private investment and growth. Key institutional and policy issues for immediate attention are creating a mechanism to resolve the debt of failed banks and state-owned non-bank financial institutions; upgrading the human and technological resources of financial system regulators and supervisors; improving access to financial services, in particular rural financial services; and, investing in financial system infrastructure to improve market data, and accounting and auditing standards. The report expands on the country's opportunities in the mining sector, particularly copper, but also on its rich reserves of gemstone minerals, as an opportunity for export diversification; in the manufacturing sector, specifically textiles, garments, and processed foods; and, in tourism development.
Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 2. Annexes

(Washington, DC, 2004-10-20) World Bank

In October 1991 Zambia moved to a multiparty democratic system. In the following years, the government implemented a number of policy and structural reforms, liberalizing exchange and interest rates, simplifying the tariff structure, and removing quantitative restrictions on trade, privatizing most state-owned enterprises, and substantially withdrawing from the agriculture sector. Despite these reforms, economic growth has remained lackluster, and poverty and social conditions have worsened. There are however, hopeful signs that increased growth and poverty reduction are within reach in Zambia. The country's economy has long been tied to the copper industry, whose purchasing power has been in decline for decades. But declining copper prices were not the only reasons Zambia's economic performance declined between 1991 and 2002. Excluding the one-time disruption in real sector activity in 1994-95, real GDP grew at an average annual rate of 3 percent during 1991-2002. The report argues that estimates puts its annual long-term growth potential at about 5 percent, implying per capita income growth of 2.5-3.0 percent a year, and, the reason why its potential is not being achieved, lies in several key problems, namely macroeconomic mismanagement, lack of ownership of reform and poor policy implementation, a weak investment climate, lack of good governance, and, the HIV/AIDS pandemic. And further asserts that central to the lack of macroeconomic stability - in particular to the high inflation and real interest rate - is the lack of fiscal control and commitment to fiscal discipline. Zambia's large external and rising domestic debt, combined with budgetary dependence on external financing, has constrained the government's ability to exert monetary control to achieve macroeconomic stability. The financial sector must become more efficient and capable of supporting private investment and growth. Key institutional and policy issues for immediate attention are creating a mechanism to resolve the debt of failed banks and state-owned non-bank financial institutions; upgrading the human and technological resources of financial system regulators and supervisors; improving access to financial services, in particular rural financial services; and, investing in financial system infrastructure to improve market data, and accounting and auditing standards. The report expands on the country's opportunities in the mining sector, particularly copper, but also on its rich reserves of gemstone minerals, as an opportunity for export diversification; in the manufacturing sector, specifically textiles, garments, and processed foods; and, in tourism development.
Malawi - Country Economic Memorandum : Policies for Accelerating Growth

(Washington, DC, 2004-06) World Bank

The report reviews the economic developments in 2003-04, and discusses the main reforms implemented by the government as of March 2003. Since early 2003, the government continued to implement both macro, and structural reforms designed to generate sustainable growth. The economic performance over the past year indicates that these efforts have had mixed results. Despite the adoption of a macroeconomic framework, the government repeatedly failed to reach the set fiscal targets. In addition, the government also implemented, and initiated a number of growth oriented, structural reforms designed to, improve parastatal management, restructure the Agricultural Development and Marketing Corporation (ADMARC) and the food markets, improve the tobacco sector, and, alleviate the impact of HIV/AIDS, in line with the development strategy. In spite of achievements since early 2003, much remains to be done, namely in maintaining fiscal discipline, implementing the next phase of the reforms in maize, tobacco, and agriculture services, including forthcoming reforms to improve the business, and trade environment.
Senegal - Policies and Strategies for Accelerated Growth and Poverty Reduction : A Country Economic Memorandum

(Washington, DC, 2004-04-03) World Bank

This Country Economic Memorandum (CEM) finalized as the implementation period of the Poverty Reduction Strategy (PRSP) began, undertaken in a context of other significant investigations on PRSP themes. One of the main macroeconomic variables affecting growth and competitiveness of the Senegalese economy, is the nominal exchange rate, which, as a member of the West Africa Economic and Monetary Union (WAEMU), its currency, the CFA franc, has a fixed parity to the Euro, and its issuance is governed for all members, by a single central bank, where the nominal exchange rate is not a policy variable under Senegal's direct control. This is why the CEM does not take up issues concerning the nominal exchange rate, however, several measures of the real exchange rate are examined. CEM chapters on human capital include treatment of PRSP-related issues in health and education. The chapters present a portrait of constraints hindering progress toward PRSP targets, and the main interrelated points, first, between health and education, and second, between the public expenditure system and the delivery of health and education services to the poorest citizens. On social protection, the CEM analyzes important topics in tax incidence and pensions. Recommendations suggest Senegal should foster cooperation between unions, firms, and government, so as to shift all parties' focus away from dividing rents, toward the expansion of employment and production, creating a profitable business environment, with long term commitment to the marketplace, and, where the labor force is more likely to stimulate appropriate human capital formation. This calls for improvements in the overall efficiency of the education system, while systems of fiscal decentralization must b e adequate to the delivery of social services in all regions.
Mauritania : Accelerating Diversified, Private Sector-Led Growth

(Washington, DC, 2003-11-07) World Bank

In 1992, the Government of Mauritania embarked on a series of macroeconomic and structural reforms that have stimulated sustained economic growth, stabilized public finances, and reduced the state's role in the economy and increased private sector activity. These positive developments, furthermore, have resulted in a decline in the incidence of poverty and improvements in social indicators. In order to consolidate and further build upon these achievements, the government has designed a poverty reduction strategy (PRS) that aims to sharply reduce poverty and improve social indicators over the 2001-2004 period. This Country Economic Memorandum (CEM) reviews the economic, structural, and institutional reforms introduced by the Government of the Islamic Republic of Mauritania (GIRM) since 1992, and assesses the economic and social impact of these measures, as a prelude to exploring the long-term structural and regulatory constraints that Mauritania needs to deal with, in order to achieve an accelerated, diversified private sector-led growth and poverty reduction. While sound macroeconomic management is a cornerstone to build the bases of stronger medium and long-term economic growth. Key policy actions leading to the high growth scenario are: enhancing the enabling environment, promoting private investment in the productive sectors in order to diversify the sources of growth, and developing basic infrastructure.
Kenya : A Policy Agenda to Restore Growth

(Washington, DC, 2003-08-18) World Bank

This Country Economic Memorandum (CEM) - the first since 1995 - is a contribution to the government's economic recovery strategy, and to its Poverty Reduction Strategy Paper (PRSP), being finalized. It examines Kenya's economic performance during the past decade, and identifies the structural weaknesses that have contributed to the decline in productivity, and the competitiveness of the economy during this period. It also recommends policy, and institutional reforms to revitalize economic growth, and to reduce poverty. The message from the CEM is a sober one: increased poverty is the legacy from almost two decades of slow growth; and, the burden of disease, particularly malaria and HIV/AIDS will constrain growth in the years to come. However, given the improved economic policy environment, the potential for economic growth is significantly better than the poor performance in the 1990s would indicate. But even in our high-case scenario Kenya is unlikely to reach the Millennium Development Goal of cutting in half by 2015 the proportion of Kenyans living in poverty in 1990. Reducing poverty will remain a tremendous challenge. The CEM is organized into six chapters. Chapter 1 reviews recent economic developments, and Kenya's integration with the world economy. Chapter 2 discusses trends in poverty, and focuses on the long term economic factors that affect productivity, and institutional effectiveness. Chapters 3-5 provide detailed analyses of the agricultural, manufacturing, and services sectors, identifying specific cross-sectoral issues, and, recommending policy, and institutional reforms to promote broad-based economic growth. Finally, chapter 6 discusses the investment climate, and its relationship to private sector investment.