Private Sector Development, Privatization, and Industrial Policy

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  • Publication
    Creating Markets in Botswana - A Diamond in the Rough: Toward a New Strategy for Diversification and Private Sector Growth - Country Private Sector Diagnostic
    (World Bank, Washington, DC, 2022-06) International Finance Corporation
    Diamonds have been at the center of Botswana’s growth miracle for decade - but the urgency to diversify is stronger than ever. Although Botswana’s economy has undergone transformation over the past decades, the shift has been largely into non-tradable services, with limited gains in employment, income equality, and export diversification. In addition, Botswana’s high vulnerability to climate change, which affects all major sectors of the economy, underscores the need to strengthen Botswana’s response to climate factors as a basis for renewed, sustainable growth. A positive growth outlook and steps taken as part of the Coronavirus disease 2019 (COVID-19) crisis response should give the government new impetus to accelerate reforms. Success in diversifying the economy will depend on the decisive implementation of structural measures to increase private sector participation in nonmineral exports and transformative sectors. The dominant role that the government of Botswana still plays in large parts of the economy, particularly through its footprint as a shareholder in companies in the corporate sector, is a critical constraint that inhibits the entry and success of private sector participants. Gaps in infrastructure, access to finance, and skills are additional key constraints to employment and productivity growth. A coordinated approach to financing entrepreneurship and policies to increase uptake of digital finance can help close the gap. Trade barriers are another key cross-cutting constraint for the private sector, and a greener path for the economy can be unlocked by facilitating improved trade in environmental goods and services (EGS). Three key recommendations for the energy sector are as follows. The first recommendation is the fast tracking of instruments to facilitate investment in energy infrastructure development, including independent power producer (IPP) licensing, and procurement guidelines and processes. The second recommendation is the enhancement of the institutional capacity and governance model of the Botswana Energy Regulatory Authority (BERA). The third recommendation is the development of credit-enhancement and risk-mitigation strategies and supporting instruments to attract and mobilize private sector investment.
  • Publication
    How Have Firms Fared in Times of COVID-19 in Addis Ababa?: Evidence from Eight Rounds of High-Frequency Phone Surveys
    (World Bank, Washington, DC, 2021-11-24) Wieser, Christina; Abebe, Girum; Asfaw, Adamsu
    The COVID-19 pandemic and its negative economic effects create a need for timely data and evidence to help monitor and mitigate the social and economic impacts of the crisis. To monitor the impacts of the COVID-19 pandemic and related containment measures on formal firms in Ethiopia and inform the policy response, the World Bank, in collaboration with the government, is implementing a high-frequency phone survey of firms (HFPS-F). The HFPS-F interviews a sample of firms in Addis Ababa every three weeks for a total of eight survey rounds. This high-frequency follow-up allows for a better understanding of the effects of and responses to the COVID-19 pandemic on firm operations, hiring and firing, and expectations of future operations and labor demand in order to better tailor and implement interventions and policy responses and monitor their effects
  • Publication
    The Untapped Potential of Mauritania’s Entrepreneurial Ecosystem: Lessons from the Entrepreneur's Marathon
    (World Bank, Washington, DC, 2019-08) World Bank Group
    In Mauritania – a country dominated by the Sahara Desert and defined by tradition – players from across society are coming together to encourage innovation and set a new path for the country's development. From the public sector to local and international businesses, as well as the donor community, entrepreneurship is beginning to emerge as a crucial element in any strategy to address Mauritania's greatest challenges: socio-economic inclusion, poverty reduction, youth employment, economic diversification and climate change. Since independence, the country has pursued a traditional state-driven model that has failed to catalyze the necessary investments and private sector-driven solutions to these problems. Due to structural limitations of competition in the economy, the country's private sector is a concentration of large business groups that dominate the trade, banking and procurement markets. New entrants are crowded out, with formal micro, small and medium enterprises (MSMEs) in Mauritania numbering a mere 3,000. Informal self-employment and micro-businesses in agriculture, livestock and commerce currently make up the vast majority of jobs among the poorest households in Mauritania. Smaller independent firms continue to encounter obstacles, discouraging the emergence of local suppliers and directly impacting international investors who face higher operating costs. Poor quality in education and professional training reinforce these challenges, limiting job opportunities even in expanding sectors in the economy. A lack of expertise and practical skills are compounded by complex labor regulations, making it even harder for businesses to recruit and retain young job-seeking Mauritanians.
  • Publication
    Creating Markets in Kenya: Unleashing Private Sector Dynamism to Achieve Full Potential
    (International Finance Corporation, Washington, DC, 2019-07-31) International Finance Corporation
    Kenya has the opportunities and resources to stimulate sustainable economic growth and development, but its potential has been constrained by under-investment and low firm-level productivity. Altogether, its development has not been sufficiently sustainable or equitable to transform the lives of ordinary citizens. Poverty remains high, with thirty-six percent of Kenyans living under the national poverty line, whereas the richest ten percent of the population receive forty percent of the nation’s income. This country private sector diagnostic (CPSD) sheds light on how the private sector can more effectively contribute to advancing the country’s developmental goals. Applying a sectoral lens, it puts forward operational recommendations highlighting strategic entry points for diversification and growth and addresses key constraints to private sector engagement. It also seeks to inform World Bank and IFC strategies, paving the way for joint programming to create markets and unlock private sector potential.
  • Publication
    Scaling Up Ecosystems for Small Businesses in the Democratic Republic of Congo: Analysis Based on Data from Kinshasa, Lubumbashi, Matadi, and Goma
    (World Bank, Washington, DC, 2019-01)
    Micro, small, and medium-sized enterprises (MSMEs) dominate the private sector of the Democratic Republic of Congo (DRC) and can serve as an engine of growth and job opportunities for the country. To support the growth of MSMEs and increase employment and entrepreneurship opportunities, the DRC government prepared a SME Development and Growth Project with support and funding from the World Bank Group (WBG). To better understand the challenges particular segments of MSMEs face, WBG with support from the competitive industries and innovation program (CIIP) conducted a MSME ecosystem analysis in four project locations in the DRC: Kinshasa, Goma, Lubumbashi, and Matadi. The study leveraged a diverse range of data collection channels and methods to capture deep, detailed, and meaningful insights on formal and informal MSMEs in the DRC. Overall, the MSMEs report a positive revenue growth trend in the past five years. This increase is linked to growth in domestic demand and improved quality of suppliers. The key conclusions and recommendations reflect the needs of various types of MSMEs and the international experience of policy responses that are adapted on their needs: simplify and make more transparent the policy environment; address market and institutional gaps to foster private investment in the MSMEs; strengthen and expand the base of opportunity entrepreneurs; devise innovative solutions to infrastructure challenges; pilot approaches to address MSME skills gap at scale; and pursue integration into national market and value chains. Recommendations from the multi-stakeholder dialogues about the SME ecosystem will support the implementation of the SME Growth and Development Project but can also be applied more broadly and inform the design of government policies and reforms.
  • Publication
    South Africa Digital Economy Assessment
    (World Bank, Washington, DC, 2018) World Bank
    An assessment of South Africa’s digital economy has been launched as part of the World Bank Group’s digital economy for Africa (DE4A) initiative, which leverages an integrated and foundations-based diagnostic framework to examine the present level of digital economy development across Africa. The assessment will map the current strengths and weaknesses that characterize the national digital economy ecosystem, as well as identify challenges and opportunities for future growth. Rapid digital transformation is now re-shaping the global economy, permeating virtually every sector and aspect of daily life - changing the way one learns, work, trade, socialize, access public and private services and information. Well-functioning digital economies are thus expected to achieve faster economic growth, offer innovative products and services, as well as create more job opportunities. Assessing where strategic investments and interventions need to be made is a critical first step to enabling digital economy growth. This background paper will provide an overview of digital entrepreneurship in South Africa.
  • Publication
    Sierra Leone Growth Pole Diagnostic : The Growth Poles Program
    (Washington, DC, 2013-08) World Bank
    This First Phase Report on Sierra Leone growth poles is the result of a 9 months consultative process led by the Office of the President which specifically requested that the output of this diagnostic be in an engaging format. The fundamental concept of growth poles is that they exploit agglomeration economies and spillover effects to spread resulting prosperity from the core of the pole to the periphery. At the basis of this theory is the assumption that economic development is not uniform over a region. Rather, it concentrates around a geographic feature or economic hub. In particular, it frequently concentrates around a key industry, around which linked industries develop. A growth pole can be used to nurture direct and indirect linkages from the flagship industry to supporting sectors, which vastly expands the employment generation potential of new investments in said flagship industry. The expansion of this key industry implies the expansion of output, employment, related investments, as well as new technologies and new industrial sectors.
  • Publication
    South Africa : Enhancing the Effectiveness of Government in Promoting Micro, Small and Medium Enterprise
    (Washington, DC, 2007-02) World Bank
    This study focuses in particular on the question of whether incentives and support programs have: (a) been correctly targeted to address the diverse and specific needs of small, especially micro, enterprises; (b) been implemented efficiently by the responsible agencies in terms of their delivery and impact, and (c) have been effective in helping smaller firms access a wider market for their products and services. The findings of the micro-enterprise survey, the review of the various incentive programs and the value chain analyses indicate that: (a) among specific constraints faced by the small, micro and medium enterprises (SMME) sector, the skills gap and the issue of access to finance are of particular relevance; and (b) while the economic rationale that existed in 1995 for SMME support remains valid, there is a need to find cost-effective and well-targeted programs that meet that rationale. The issue of skills development, in particular, is central to the medium-term agenda as a means of raising productivity and, hence, employment in segments of industry - both in the formal and informal sectors. As regards the Department of Trade and Industry (DTI) programs, there is a need to improve the effectiveness of promotion, strengthening selection criteria, and modulate the process of scaling up of individual programs. As regards other incentives, implementation of the Duty Credit Certification Scheme (DCCS) incentives has not been highly effective in ensuring the compliance of beneficiaries with the training and skills development requirements of the scheme; and this will need to be tightened up in the future.