World Bank: SSA performance due to credible economic, social policy reforms

The recently released Country Policy and Institutional Assessment Report by the World Bank has shed light on the performance of Sub-Saharan African countries in 2023. The report commended the region for weathering the year well due to credible economic and social policy reforms. Andrew Dabalen, Chief Economist for Africa at the World Bank, highlighted key findings from the assessment, emphasizing the resilience shown by these countries amidst challenges. Dabalen noted that out of the 39 Sub-Saharan African countries assessed, 11 had improved scores while 5 saw a decline. Notably, African countries have now converged with their non-African peers in terms of economic management and social equity. However, the report also pointed out areas of weakness that need attention. One major concern highlighted in the report was the issue of debt management. Many African countries are facing challenges related to high debt levels, which impact fiscal space and limit investments in crucial sectors like education and health. Transparency and clarity in debt profiling were identified as key areas that need improvement to attract private sector investments. Another weak spot identified was in the financial sector, particularly around financial inclusion for small businesses and issues related to supervision and non-performing loans. Additionally, public sector management in Africa was flagged for weaknesses in property rights, rule of law, accountability, and corruption. The report emphasized the importance of attracting private sector investments to drive growth and development in the region. With the public sector facing constraints due to debt burdens, the onus falls on the private sector to play a significant role in driving investments. Structural reforms by the public sector to promote competition, remove favoritism, and create a favorable business environment were highlighted as crucial steps. Moreover, better macroeconomic management, including exchange rate stability and inflation control, was deemed essential to provide a conducive environment for businesses to thrive. Investments in infrastructure, such as power, roads, and logistics, were also identified as key factors in reducing costs for businesses and enhancing trade. In light of the challenges faced by African countries, the report serves as a guide for international investors and businesses assessing the quality of institutions and recent reforms. By addressing weaknesses in debt management, financial sector, and public sector governance, African countries aim to attract more private sector investments and drive sustainable growth. Overall, the report underscores the resilience of Sub-Saharan African countries amidst economic challenges while highlighting the need for continued policy reforms to achieve better development outcomes.