Economic Briefs

22-Apr-2010

Development Research Briefs - Enhancing the Competitiveness of Four African Economies: Botswana, Mauritius, Namibia, and Tunisia

The competitiveness of most African countries lags behind other regions. This constrains their ability to cope with external shocks. Indeed, the challenge of the continent has been exacerbated by the 2007-2009 global financial and economic crisis. This leaves a clear role for the Bank to assist Africa in addressing these challenges and to sustain the growth momentum through policy support and capacity building. Given the critical role that knowledge plays in promoting dynamic and sustained economic growth, the study aims to promote knowledge generation and dissemination as part of the process...
22-Apr-2010

Development Research Briefs - Mauritius Investment Climate Assessment 2009

Mauritius has transformed itself from a mono-crop economy, where sugar accounted for over 95 percent of its export earnings, to a strong and diversified economy in which the services sector accounted for 72.5 percent of Gross Domestic Product (GDP) in 2008. This robust performance is a result of sound economic governance, strong partnerships between the private and public sectors, and preferential access to export markets in textiles and sugar. The reforms undertaken since 2006 have sparked growth, set the economy back on track, and advanced the country’s transition from an economy based on...
03-Feb-2010

Development Research Briefs - Africa: Africa’s Counter Cyclical Policy Responses to the Crisis

While the severe global recession seems to be bottoming out and the global economic outlook is turning cautiously optimistic, the negative impact of the crisis on many African countries continues to deepen. The crisis has hit Africa with a lag, interrupting at best, and ending at worst, the impressive growth record of the last ten years. The crisis has also already started to erode the hard-won improvements in macroeconomic positions.
22-Jan-2010

Development Research Briefs - Development Aid and Access to Water and Sanitation in Sub-Saharan Africa

The disparities in performance among African countries in terms of access to water and sanitation call for an examination of factors that determine the effectiveness of development aid in these sectors. On this basis, the African Development Bank’s (AfDB) Water and Sanitation Department (OWAS) and its Development Research Department (EDRE) have initiated a study on “Development Aid and Access to Water and Sanitation in sub-Saharan Africa”.
01-Dec-2009

Development Research Briefs - Impact of the Financial and Economic Crisis on China’s Trade, Aid and Capital Inflows to Africa

Three decades of a high annual economic growth of eight percent has made China the fourth-largest economy in the world. The country commands four percent of global economy, six percent of global trade and 12 percent of global output. The rise of China has led it to forge development and trade relationships with many Africa countries.
01-Dec-2009

Development Research Briefs - Accounting for Vulnerability of African Countries in Performance Based Aid Allocation

Like other Multilateral Development Banks, the African Development Bank (AfDB) Group allocates some of its aid through a performance-based allocation (PBA) formula which is primarily based on the quality of economic policies and governance in each beneficiary country. Governance plays a major role in the PBA formula and its weight is equal to more than double that of economic policy1. During times when many regional member countries of the Bank are facing severe liquidity problems because of the current economic and financial crisis, it is useful to consider whether the PBA penalizes...
01-Dec-2009

Development Research Briefs - The G20 in Africa: Issues and Concerns

The global economy is experiencing immense contraction in output. There is also a substantial rise in unemployment in key sectors that depend on global demand. Mining is one of them. In Africa, job cuts in the mining sector are pervasive. De Beers has already lost 4,500 jobs in Botswana. Similar numbers of job losses have been reported in the Democratic Republic of Congo (DRC) and in Zambia’s copper mines. For Africa, this is, therefore, not a temporary crisis requiring temporary solutions. It will take sustained concerted efforts to return countries on the continent to the previous growth...
01-Dec-2009

Development Research Briefs - Infrastructure Investment in Africa

The African Development Bank has long recognized that infrastructure investment has a central role in the development agenda and is critical for supporting economic growth, poverty reduction and the achievement of the millennium development goals (MDGs). Infrastructure affects growth through two channels: directly through physical capital accumulation and indirectly through improvement in productivity. The relationship between investment and infrastructure is also bi-directional. Countries with high growth rates invest more in infrastructure which subsequently feeds back into the growth...
01-Dec-2009

Development Research Briefs - Growth, Poverty, and Inequality in Selected African Middle Income Countries

Most African countries continue to face challenges of persistent poverty and rising inequality, which potentially constitute a source of social conflicts and vulnerability. Poverty reduction strategies can be improved by deeper analysis and understanding of the triggers of economic growth and the relationships between growth, inequality and poverty reduction. In other words, this study examines the nature and distribution of additional wealth that derives from economic growth. It is in this context that the Bank sought to undertake case studies in some middle-income countries (MICs) in Africa...
17-Nov-2009

Development Research Briefs - Foreign Investments in Africa’s Agricultural Land: Implications for Rural Sector Development and Poverty Reduction

Globally, oil and food prices rose rapidly in 2007 and early 2008, reaching their highest level ever in mid2008. Despite the sharp fall in commodity prices in the second half of 2008, the oil and food crisis seems to have ignited an investment interest in Africa’s agricultural sector. The renewed interest is particularly directed at agricultural land acquisition – purchased or leased. This is a new phenomenon.
17-Nov-2009

Development Research Briefs - Computations of Development Financing Gaps: Some Conceptual and Empirical Issues

Multilateral institutions such as the World Bank, the IMF, and regional banks routinely use simpler, but practical financing gap models to guide policy discussions and resource mobilisation. Frequently used by these institutions is the Two-Gap model, which is rooted in the works of Domar (1939), Harrod (1946, 1947), and Chenery and Strout (1966). The Two-Gap model is the precursor and foundation of more elaborated growth models (starting from SolowSwan, leading to modern endogenous growth models).
17-Nov-2009

Development Research Briefs - Smallholder Agriculture in Africa’s Changing Economy: Case Studies

The choice between smallholder farming and large-scale agriculture has continued to generate a controversy in Africa’s agricultural development. The debate, however, should not be about the choice between two. It should be about the optimal conditions for them to promote desirable economic outcomes in different social contexts. Recent food security problems have made it imperative to investigate the role and future of smallholder farmers and the kind of support they need to function well in a globalised world. It is in this context that the AfDB’s Development Research Department (EDRE) and...
17-Nov-2009

Development Research Briefs - Impact of Global Financial Crisis on Remittances Flows to Africa

According to official statistics, the recorded migrant remittances to Africa in 2007 were USD36.9 billion. The amount was expected to increase to USD 40.1 billion in 2008 (see Table 1). Despite the scarcity of information and the fact that most statements on migration and remittances to Africa still need to be qualified, studies indicate that remittances play an important role in reducing the level and severity of poverty. They also contribute to levelling consumption of the poor. Research shows that remittances have had a significant role in raising the income of poor households, and they...
17-Nov-2009

Development Research Briefs - How Do Africa’s Poor Fare During a Global Economic Slowdown and Food Price Crisis?

These are indeed tumultuous times for most African countries. The global recession, preceded by the food price crisis and the perils of climate change, is driving a wedge between hopes of a return to the growth witness ed over the last five years and the spectre of a return of economic hardship typical of past decades.
17-Nov-2009

Development Research Briefs - Global Economic Crisis, Long-Term Growth and Policy Implications for Africa

The 2009 African Economic Conference (AEO) has discussed, in some detail, the possible impact of the current global economic crisis on African economies. It has mainly focused on the medium-term effects. The adverse impact that the crisis can have on growth in the immediate future and its effect on macroeconomic balances and fiscal space, are also well recognised. However, for some countries, the possibility that the shock could have long-lasting effect on growth has received less attention. There is considerable diversity among African countries in terms of their vulnerability to the current...
30-Jun-2008

Law for Development Review - Vol. 1

The African Development Bank is unquestionably the premier African development finance institution, with a clear mandate to promote the social progress and sustainable economic development of its regional (African) member countries, individually and collectively. The Bank seeks to become the premier development finance institution on the African Continent, and in this regard, has set itself, among other objectives, the twin challenges of becoming a knowledge-based bank and promoting Good Governance.
28-Feb-2006

Law for Development Bulletin 2006

The African Development Bank is a multilateral development finance institution whose members are 53 African countries and 24 non-African countries from Asia, Europe, North America, and South America. The purpose of the Bank is to further the economic development and social progress of African countries, individually and collectively. To this end, the Bank promotes the investment of public and private capital for development, primarily by providing loans and grants for projects and programs that contribute to the growth and development of African countries. Established in 1964, the ADB...
10-May-2005

Law for Development Bulletin 2004

The African Development Bank is a multilateral development finance institution whose members are 53 African countries and 24 non-African countries from Asia, Europe, North America, and South America. The purpose of the Bank is to further the economic development and social progress of African countries, individually and collectively. To this end, the Bank promotes the investment of public and private capital for development, primarily by providing loans and grants for projects and programs that contribute to the growth and development of African countries. Established in 1964, the ADB...