Publication: Post-HIPC growth dynamics in
Sub-Saharan Africa
Loading...
Published
2011-12-01
ISSN
Date
2012-03-19
Author(s)
Bayraktar, Nihal
Editor(s)
Abstract
Access to debt relief under the Highly Indebted Poor Country Initiative enhanced the growth performance across Sub-Saharan Africa, especially in the subset of debt-ridden low-income countries. Over the past few years, these Completion Point countries have enjoyed significantly higher investments and growth rates, primarily fueled by the expanding fiscal space of the post-Highly Indebted Poor Country Initiative era. They are also weathering the adverse effects of the global crisis much better than their non-Highly Indebted Poor Country Initiative counterparts. Despite these growth rebounds, the region is not likely to meet the Millennium Development Goals, however. Long-term growth projections from a simple macroeconomic model, which is applied to Ethiopia, suggest that prospects for reversing the widening income gaps with other regions of the developing world are limited. Under the baseline scenario, assuming current growth trends, the estimates show that it could take more than five decades for per capita real income to double in Ethiopia. However, even these gloomy prospects are likely to be undermined by the looming risk of another sovereign debt crisis. In effect, the experiments show that lowering interest rates on external debt would not bridge the widening income gap with other regions of the world, unless it is accompanied by a rapid expansion of capital accumulation financed by sustained inflows of foreign aid.
Link to Data Set
Citation
“Bayraktar, Nihal; Fofack, Hippolyte. 2011. Post-HIPC growth dynamics in
Sub-Saharan Africa. Policy Research working paper ; no. WPS 5924. © World Bank. http://hdl.handle.net/10986/3693 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication South Africa’s Fragmented Cities: The Unequal Burden of Labor Market Frictions(Washington, DC: World Bank, 2026-01-08)Using high-resolution administrative, census, and satellite data, this paper shows that South African cities are characterized by spatial mismatches between where people live and where jobs are located, relative to 20 global peers. Areas within 5 kilometers of commercial centers have 9,300 fewer residents per square kilometer than expected, which is 60 percent below the global median. Poor, dense neighborhoods are most affected. In Johannesburg, a 10-percentile increase in distance from the nearest business hub corresponds to a 3.7-percentile drop in asset wealth (a proxy of household wellbeing) and 4.9-percentile drop in employment. In Cape Town, the declines are 4.0 and 3.7 percentiles, respectively. Employment is 87 percent lower in the poorest decile than the richest in Johannesburg and 61 percent lower in Cape Town. These findings suggest that South Africa’s spatial organization of people and economic activity constrains agglomeration and reinforces inequality. This methodology provides a scalable and standardized data-driven framework to analyze spatial accessibility and agglomeration frictions in complex, data-constrained urban systems.Publication The Evolution of Local Participatory Democracy in Nepal(Washington, DC: World Bank, 2025-11-05)Nepal is, according to its constitution, among the world’s most decentralized countries, with a long and complex tradition of local-level public participation. This paper traces the evolution of Nepal’s modern participatory institutions, examining the extent to which they are “induced” by external interventions versus being “organically” rooted in indigenous practices. The paper identifies three broad phases: an initial focus on participation in project implementation; a subsequent phase that expanded citizen engagement; and a third phase of citizen empowerment, culminating in the 2015 federal constitution, which granted unprecedented local autonomy. The analysis yields five key findings. First, over the past 50 years, successive reforms have progressively expanded opportunities for citizens to influence local decision-making. Second, these reforms have integrated traditional participatory mechanisms into formal institutions of local government. Third, although central-level initiatives exist, most participatory platforms continue to operate at the local level. Fourth, the federal constitution has created a new landscape of local democracy, embedding autonomy and accountability. Fifth, although they are still valued in many ethnic and territorial communities, traditional participatory practices are gradually disappearing. The paper concludes by offering policy recommendations to help donor agencies and governments strengthen Nepal’s democratic trajectory. It argues that effective interventions should build on Nepal’s deep participatory traditions while recognizing the constitutional reality of far-reaching local autonomy.Publication Institutional Capacity for Policy Implementation: An Analytical Framework(Washington, DC: World Bank, 2026-01-07)State capacity is an important prerequisite for policy implementation, yet at the country level it is difficult to measure, assess, and reform. This paper proposes a focus on institutional capacity: the ability of public institutions to implement the specific policy mandates for which they are responsible. Based on a review of existing literature, the paper defines the different dimensions that compose institutional capacity and groups them into two cross-cutting categories: organizational dimensions (personnel, financial resources, information systems, and management practices) and governance dimensions (transparency, independence, and accountability). The paper proposes measures for organizational and governance dimensions using existing data, shows intra-institutional variation of these measures within countries, and discusses how new data could be collected for better measurement of these concepts. Finally, the paper illustrates how the framework can be used to diagnose the sources of common problems related to weak policy implementation.Publication Closing the Gender Gap in Entrepreneurship: Overcoming Challenges in Law and Practice for Female Entrepreneurs(Washington, DC: World Bank, 2026-01-07)Despite significant strides toward gender equality, women around the world continue to encounter systemic obstacles that hinder their entrepreneurial success. This paper systematically reviews the literature on the barriers female entrepreneurs face and the solutions proposed to overcome these challenges. It discusses institutional factors, financial factors, human capital factors, and social and cultural factors. The literature overview is complemented by a series of stylized facts that illustrate how overcoming some of these existing barriers is correlated with improved women’s entrepreneurship and female labor force participation, drawing on the World Bank’s Women, Business and the Law database as well as the World Bank’s Enterprise Surveys. The findings underscore the need for creating an enabling environment where women can thrive as entrepreneurs.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Liberia : Strategic Policy Options for Medium Term Growth and Development(Washington, DC, 2012-03-15)This paper explores Liberia's policy options in support of the development of a Medium-Term Growth and Development Strategy (MTGDS) for 2013-2017 and its national vision, Liberia Rising 2030. At issue is the mismatch between available fiscal space and the enormous development needs that the government must resolve as it prepares to transform the economy into a middle-income country by 2040. This dilemma calls for the new administration to make trade-offs among various priorities if it is to achieve its aspirations. For this purpose, a Liberian version of a single-country Computable General Equilibrium (CGE) model, MAMS (Maquette for Millennium Development Goal, or MDG simulations), was developed and informed by analytical studies as well as sector strategies prepared in support of Liberia's MTGDS. This paper examines the likely impacts on macroeconomic and social indicators of alternate strategic policy scenarios. A base scenario (designed to represent a central case for the evolution of Liberia's economy up to 2030) was first established, and thereafter a set of different assumptions were introduced for the mining sector, government spending on infrastructure and human development, and foreign borrowing. The paper is organized into five sections including this introduction. Section two presents the basic features of MAMS. The simulation analysis, which is the focus of the paper, is covered in the next two sections: the base scenario in section three and a set of alternative scenarios, which are contrasted with the base scenario, in section four. The final section summarizes the main findings and conclusion. Appendices one and two include a set of figures with selected simulation results and a brief discussion of the Liberian database for MAMS, respectively.Publication Indonesia Economic Quarterly, December 2013 : Slower Growth, High Risks(Washington, DC, 2013-12)The Indonesia Economic Quarterly (IEQ) has two main aims. First, it reports on the key developments over the past three months in Indonesia's economy, and places these in a longer-term and global context. Based on these developments, and on policy changes over the period, the IEQ regularly updates the outlook for Indonesia's economy and social welfare. Second, the IEQ provides a more in-depth examination of selected economic and policy issues, and analysis of Indonesia's medium-term development challenges. This document summarizes the findings of the IEQ for the last quarter of 2013. The final quarter has seen the continuing adjustment of the Indonesian economy to more subdued commodity prices and tighter external financing conditions, and to the related pressures on external balances. Policies have responded, particularly through tighter monetary conditions, the currency has depreciated substantially in real terms, and investment spending and output growth have weakened. These developments are broadly supportive of continued macroeconomic stability, including by helping to lower the current account deficit, although their impact continues to play out, adding additional uncertainty to the path of the domestic economy. At the same time, the international environment is also shifting, with global growth expected to improve, bringing potential policy changes, notably in US monetary policy, which could add to the pressures on Indonesia's external financing position. In light of the slower pace of growth, and the risks facing the economy, there is a strong need for Indonesia to augment the recent macro focus on tighter monetary policy, exchange rate adjustment and import compression, with deeper reforms to lift export performance and support investment inflows.Publication Nepal Development Update, October 2013(World Bank, Kathmandu, 2013-10)Nepal's political developments continue to overshadow and impede its economic development. Over the short term, whether the scheduled elections are held and, if so, whether they achieve a modicum of consensus will be a major test. Political instability clouded the outlook in FY2013 and remains the principal source of vulnerability going forward. While Nepal's macroeconomic fundamentals remain stable, sources of vulnerability have not disappeared. Although the financial sector has rebuilt strength, it remains an important source of weakness. Important initiatives to improve the governance environment have been taken, but these initiatives can be amplified further. For FY2014, the baseline scenario is a gradual return to trend, with higher growth and sustainable fiscal expansion. While important psychologically and for some sectors of the economy, the recent depreciation of the Nepal rupee is not expected to hold back growth or to threaten macroeconomic stability. While a revision of the peg with India may eventually be warranted, the report agrees with Nepali policy makers that this is not the time when markets are unstable to move impulsively. Instead, such a major policy shift should be based on clear policy objectives and in-depth analysis of likely economic outcomes, including the long-term impact on Nepal's trade competitiveness. The report is structured as follows: chapter one gives summary; chapter two gives recent economic developments; chapter three gives policies and short- to medium-term development challenges; chapter four presents short and medium-term economic projections; chapter five focuses on bank support and activities; and chapter six presents special focus.Publication Exploring Lebanon's Growth Prospects(Washington, DC, 2006-06-27)This policy note reviews the current determinants of gross domestic product growth in Lebanon, and proposes a strategy to accelerate such growth in the years to come. Emigration and macro-economic trends will require urgent attention to foster growth. In the absence of job opportunities, half of each Lebanese generation eventually emigrates while another fourth stays idle. Lebanon's active population is aging, its human capital is eroding, and its resident population is aging. To reverse these trends, growth needs to be accelerated to meet Lebanese economic expectations. Reviewing various possible constraints, the note concludes that fiscal imbalances and barriers to entry are most binding to economic growth. A pro-growth strategy could be articulated around fiscal stabilization and reducing barriers to investment. If synonymous with structural reforms in the pension, civil service and energy sectors, fiscal stabilization could even bring significant growth rewards, which are estimated at 0.4-0.5 percentage points of additional real GDP growth per year.Publication External Shocks, Fiscal Policy and Income Distribution : Alternative Scenarios for Moldova(World Bank, Washington, DC, 2013-02)The economy of Moldova, which has one of the lowest levels of gross national income per capita in the World Bank Europe and Central Asia region, is strongly linked to the outside world, especially to the neighboring countries of the European Union and the Commonwealth of Independent States. This paper analyzes a set of scenarios for Moldova up to 2020, defined to shed light on issues related to an alternative future dominated by goods and services exports as opposed to today's reliance on worker remittances. The analysis is based on a Moldovan version of MAMS (Maquette for Millennium Development Goal Simulations), a CGE (Computable General Equilibrium) model for country strategy analysis. In sum, the impact of increased export demand and productivity growth is more positive when these shocks are directed to manufacturing, a sector more heavily linked to international trade, compared with agriculture. Increased productivity in transport and communications generates faster growth with widely diffused benefits, reaching households in a relatively equitable manner compared with foreign trade-induced growth. A comparison between adverse shocks in two areas, higher energy import prices, and lower remittances, designed to have similar effects on gross domestic product, suggests that a remittance shock leads to less of a poverty increase, related to the fact that remittance-receiving households are not highly vulnerable; among sectors, agriculture is most vulnerable due to heavy energy reliance. Finally, well-targeted transfer schemes may offer an effective tool for diffusing the benefits of economic growth to the whole population, perhaps also contributing to more general acceptance of structural change.
Users also downloaded
Showing related downloaded files
Publication Global Economic Prospects, June 2025(Washington, DC: World Bank, 2025-06-10)The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16)Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication The Container Port Performance Index 2023(Washington, DC: World Bank, 2024-07-18)The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy. These stakeholders include port authorities and operators, national governments, supranational organizations, development agencies, and other public and private players in trade and logistics. The index highlights where vessel time in container ports could be improved. Streamlining these processes would benefit all parties involved, including shipping lines, national governments, and consumers. This fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). Combining these two approaches ensures that the overall ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. The CPPI methodology assesses the sequential steps of a container ship port call. ‘Total port hours’ refers to the total time elapsed from the moment a ship arrives at the port until the vessel leaves the berth after completing its cargo operations. The CPPI uses time as an indicator because time is very important to shipping lines, ports, and the entire logistics chain. However, time, as captured by the CPPI, is not the only way to measure port efficiency, so it does not tell the entire story of a port’s performance. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. A detailed port-specific diagnostic would be required to assess the contribution of underlying factors to the time a vessel spends in port. A very low ranking or a significant change in ranking may warrant special attention, for which the World Bank generally recommends a detailed diagnostic.Publication Using Immunization Coverage Rates for Monitoring Health Sector Performance : Measurement and Interpretation Issues(World Bank, Washington, DC, 2000-08)Immunization against childhood diseases such as diphtheria, pertussis, tetanus, polio and measles is one of the most important means of preventing childhood morbidity and mortality. Despite the low cost of basic childhood immunizations, nearly 3 million children still die each year from vaccine-preventable diseases. Achieving and maintaining high levels of immunization coverage must therefore be a priority for all health systems. In order to monitor progress in achieving this objective, immunization coverage data can serve as an indicator of a health system's capacity to deliver essential services to the most vulnerable members of a population. This note discusses the use of trends in immunization coverage data, and argues that immunization is a health output with a strong impact on child morbidity, child mortality and permanent disability. This note discusses measurement and interpretation issues for coverage data collected through surveys and administrative records.