Politics and policy

Kenya scores high marks in economic reforms

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By GEOFFREY IRUNGU

Posted  Sunday, July 1  2012 at  16:28
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Kenya has been ranked the third best African country in a World Bank assessment of economy, reforms and governance covering 16 nations.

It scored 3.8 points out of a possible six. The top countries are Cape Verde and Ghana which attained middle-income status of $1,000 GDP per person in 2010 and 2011 respectively.

Kenya enacted a new Constitution in 2010 and the World Bank recently projected it would hit the middle-income status in 2016 on the basis of the current economic growth rate.

The ranking is part of the annual World Bank Country Policy and Institutional Assessment (CPIA) that rates the performance of poor countries and, since 1980, has been used to determine their allocation of zero-interest financing under the International Development Association, the World Bank Group’s fund for poorest countries.

Countries were ranked on the basis of 16 key development indicators covering four areas: economic management, structural reforms, policies for social inclusion and equity and public sector management and institutions.

Countries are rated on a scale of one (low) to six (high) for each indicator. The overall CPIA score reflects the average of the 16 indicators.
Others with a 3.8 score are Uganda, Rwanda, Senegal and Burkina Faso.

“In Africa, performance in economic management leads all other areas,” the Bank said in a statement. “Several years of prudent macroeconomic policies meant that African countries entered the 2008-09 global economic crisis with policy space to counter external shocks.”

Performance in structural policies is a close second, followed by social inclusion. Governance lags other areas though, shows the latest World Bank review of policies and institutions in Sub-Saharan Africa (SSA).

“Despite these differences, the countries that top the CPIA scores tend to do well in all of them, suggesting a broad-based approach to reforms,” said the statement.

The Bretton Woods institution said politically fragile countries “tend to show uneven reform efforts, typically addressing macroeconomic management issues ahead of difficult and complex structural and governance reforms.”

The report shows an improved policy environment for growth and poverty reduction in 13 of the continent’s poorest countries.
The countries are Comoros, Congo Republic, Cote d’Ivoire, Ethiopia, The Gambia, Guinea, Guinea Bissau, Liberia, Sao Tome and Principe, Senegal, Togo, Zambia, and Zimbabwe.

Positive trend

More broadly, most African countries show a stable or improved policy environment for development.

This positive trend is especially important given the more severe economic climate being weathered by other countries, most notably in the Developed World, said the Bank’s review.

“There was a concern that global economic turmoil would slow reforms across the continent,” said Shanta Devarajan, World Bank chief economist for the Africa region.

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