Stronger economic management lifts Nigeria in World Bank assessement
by Onyinye Nwachukwu
July 1, 2014 | 12:15 am| | | Start Conversation
Stronger economic management helped Nigeria leap in the World Bank 2013 Country Policy and Institutional Assessment (CPIA) report, which describes progress African countries are making on strengthening the quality of policies and institutions that underpin development.
On a scale of 1-6, Nigeria scored 3.6 which is above the 3.2 Sub-Saharan average, and took up the 10th position out of the 39 African countries assessed. These countries are those eligible for support from the International Development Association (IDA), the concessional financing arm of the World Bank.
The World Bank said CPIA developments in 2013 were mixed among non-fragile countries and that amidst a weak and uneven global economy, more countries saw deterioration in the policy environment rather than improvement.
Slippages in economic management and weaknesses in the fiscal framework for instance, continued to weigh down on the CPIA performance of most countries like Ghana, and also pulled down the scores for Mozambique and Zambia.
In Malawi also, deterioration in financial management controls, which compromised the quality of fiscal reporting, and in accountability systems, contributed to a further weakening of the country’s CPIA score.
“By contrast, Nigeria showed steady improvement in scores, reflecting stronger economic management,” the World Bank said in the report seen by BusinessDay.
The improvement was particularly seen in debt policy and management, which the Brentwoods Institution described as outstanding, with Nigeria scoring 4.5 well ahead of the 3.3 regional average score.
“Nigeria is among the countries seeing a strengthening of debt management. In Nigeria, the federal DMO has made significant strides in improving the management of public debt since its establishment in 2000. The DMO has prepared a 2013-2017 Strategic Plan and Medium Term Debt Strategy for 2012-2015 to guide its activities,” the World Bank noted in the report.
“The DMO publishes an annual report on debt management activities, debt sustainability analysis, risk management and sub-national debt management ,amongst others. In addition, the DMO co-ordinates with fiscal and monetary authorities at several levels, to provide input into the conduct of macroeconomic policy in Nigeria,” the Bank continued.
The region’s debt-to-GDP ratio remained moderate, though rising, as several countries have turned to international capital markets (and domestic markets) to finance infrastructure needs: the ratio for the region has risen from 29 percent in 2008 to 34 percent in 2013.
However, there are significant differences across countries: for example, Ghana’s public debt-to-GDP ratio, which has risen sharply over the past few years, was 60 percent in 2013 and that of Mozambique and Senegal was around 45 percent.
But Nigeria’s debt to GDP ratio has rather dropped significantly, from 22 percent to 12 percent on the rebased GDP.
The report presents CPIA scores for the 39 African countries that are eligible for support from the International Development Association (IDA), the concessional financing arm of the World Bank.
The latest World Bank review of government policies and institutions in Africa shows that 20 percent of countries improved their policy environment to boost growth and cut poverty in 2013.
The scores, the Bank said, are an indicator of the quality of these countries’ policy and institutional framework across 16 dimensions, grouped into four clusters: economic management (Cluster A), structural policies (Cluster B), policies for social inclusion and equity (Cluster C), and public sector management and institutions (Cluster D).
The scores are on a scale of 1–6, with 6 being the highest, and are calculated by the World Bank staff based on quantitative and qualitative information. The assessment also relies on judgments of Bank staff. CPIA scores are used in determining IDA’s allocation of resources to the poorest countries.
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