Policy Briefs



Policy Brief - How they did it Vol. 2 lssue 2 - Dubai’s Economic Transformation : Lessons for Some African Countries

In this paper, we review Dubai’s unique economic transformation model, which has been driven by bold government interventions in globally competitive markets. We highlight diversification strategies and policies that Dubai implemented throughout its transformation. We discuss the respective roles of leadership, governance structure, the public sector, and the business environment and regulations, which were instrumental in rapidly transforming the economy. Finally, with some caveats, we provide some policy lessons for African countries. Keywords: Diversification; structural transformation...

Policy Brief on the Financial Crisis - What the G20 Can Do on Trade that Can Benefit Africa?

The text and data in this publication may be reproduced provided the source is cited. Reproduction for commercial purposes is forbidden. The Policy Briefs on the Financial Crisis (PBFC) are produced by the Complex of the Chief Economist with contribution from other departments of the African Development Bank. The PBFC are intended to present analyses of experiences and lessons emerging from the Financial Crisis, so as to encourage policy debate that guides the search for sustainable solutions to the crisis.

Policy Brief on the Financial Crisis - Impact of the Crisis on African Economies-Sustaining Growth and Poverty Reduction

Although most African countries are not on track to meet the Millennium Development Goals, Africa had made steady progress over the last decade, building the foundations for higher growth and poverty reduction. This more optimistic picture is now being undermined by factors outside its control. While the initial effects of the financial crisis were slow to materialize in Africa, the impact is now becoming clear. It is sweeping away firms, mines, jobs, revenues, and livelihoods; it is in short a full blown development crisis. For the first time in a decade there will be zero growth per capita...

Policy Brief on the Financial Crisis - Containing the Impact of the Global Crisis and Paving the Way to Strong Recovery in Africa

Africa was an innocent victim of the global crisis, which disrupted a period of the continent’s highest growth in decades and presented a severe setback to poverty reduction progress. Due to prudent macroeconomic policies and reforms, Africa entered the global crisis on stronger footing then the past recessions, with some countries being able to implement stimulus packages. However, many low income and especially fragile and post-conflict countries were not in the position to adopt counter-cyclical measures when the crisis hit. While the global economy shows signs of recovery, the outlook...

Policy Brief on Fragile States

The Bank’s policy on fragile states, as outlined in its Policy for Enhanced Engagement in Fragile States, is to assist fragile states move from the condition of fragility to a path of sustainable recovery and development by providing them with tailored assistance at critical junctures of their re-engagement and recovery process. To achieve these objectives, the Bank set up the Fragile State Facility as a distinct financing vehicle in March 2008. The Fragile State Facility has three pillars: supplemental support, arrears clearance and targeted support. The cumulative resource envelope of the...

Documents de Politique sur l’intégration Régionale No.3


West Africa Policy Notes - Note 3, Septembre 2015

The African Development Bank’s West Africa Department covers fourteen countries from Senegal to Benin. Its mission is to conduct dialogue with these countries, programme activities therein, allocate resources to various sectors of activity and define country-level and regional lending as well as work programmes. The Department’s main outputs are Economic and Sector Works, Country Strategies, Country Portfolio Performance Reviews, Country Economic Reviews. It also coordinates country portfolio management efforts, contributes to sector analytical works, supports regional organisations and...

Policy Brief - How they did it Vol. 2 Issue 1 - The Journey of Ethiopian Airlines

Despite sceptics who believed Ethiopia lacked the comparative advantage to adopt the latest aviation technologies, Ethiopian Airlines (EAL) has in the past seven decades narrowed the gap between itself and leading global players in the aviation industry by upgrading its technological, organizational, and management capabilities. This paper reviews EAL’s journey to build an internationally competitive airline, explores the challenges and complexities of learning for African firms, and examines implications for capability building and catch-up in late-latecomer countries. One key to EAL’s...

Information Note - Measuring and Reporting on Value for Money - A Conceptual Framework for MDBs

The African Development Bank is leading an MDB initiative1 aimed at better defining the concept of value-for-money. To this end, the MDBs commissioned Consultants to draft a conceptual framework on measuring and reporting on value for money. A first draft of this paper was reviewed and discussed by MDBs at a seminar in London, hosted by the European Bank for Reconstruction and Development, on 29-30 June 2015. At this seminar, MDBs agreed to publish a revised paper as a valuable contribution to the on-going debate on value-for-money. The views expressed in this paper remain, however, those of...

Policy Brief - How they did it Vol. 1 Issue 2 - Ethiopia: Lessons from an experiment

The recent “African Rising” narrative is detached from reality and lacks the perspective that growth should be underpinned by structural transformation. Ethiopia has sustained rapid economic growth since 2003, and has practiced industrial policies to achieve structural transformation. Embedded in structural transformation perspectives and based on a comparative review of three export-oriented and import-substitution industries, this brief discusses Ethiopia’s experiment with structural transformation and industrial policies. The Ethiopian experiment shows that structural transformation and...

Policy Brief - How they did it Vol. 1 Issue 4 - China’s Financial Mechanisms for Industrial Development

The paper starts from the comparison between China and other developing economies and gives a rough overview of China’s financial mechanisms in industrial development from a systematic perspective. Since the beginning of reform and opening up of the financial system, China’s industrial development has taken great strides in expansion, diversification, transformation, and upgrade of its industries. This resulted from the interaction of multiple factors, in particular, the financial factor. China’s financial system has grown rapidly and maintained its stability during a long term, because of...

Policy Brief - How they did it Vol. 1 Issue 3 - Financing Industrial Development in Korea and Implications for Africa

In the 1950s, the initial conditions of Korea were quite similar to those of several African countries today: several years of civil war, continual external imbalances with persistent trade deficits, reliance on foreign financial and food aid. Since the early 1960s, the country has successfully launched a series of five-year economic plans that enabled it to make remarkable economic catch-up progress. This paper studies the experience of Korea and, in light of this experience, analyzes how the implementation of diverse cases of industrial policy and financing may have some policy implications...

Policy Brief - How they did it Vol. 1 Issue 1 - Building Effective Clusters and Industrial Parks

It is a daunting task to build institution and infrastructure over a short time period in developing countries. But in the absence of sound institutions and adequate infrastructure, it is difficult for economic transformation to take place. An alternative is to facilitate existing clusters or build industrial parks by creating an enabling environment in a limited place. This paper reviews the commonly used strategies to build effective clusters and industrial parks. Clusters and industrial parks are location-specific. Because local governments have an informational advantage, they are in a...

West Africa Policy Note - Note 01, July 2014

With a small and underdeveloped banking sector as well as an embryonic microfinance segment, Guinea-Bissau is barely able to harvest the growth benefits that could accrue from a more efficient and effective financial intermediation. Acknowledging that the financial sector’s vulnerabilities are very much driven by the fragile political and economic environment, there are key policy recommendations that the country ought to follow in order to improve the status quo. In this regard, more robust policies, regulations and procedures should be implemented in order to strengthen the financial sector...

Policy Brief - Perfomance Contracts and Social Service Delivery - Lessons from Rwanda

The brief was prepared by Bernis Byamukama under the overall guidance of Negatu Makonnen, Resident Representative RWFO. Edward Sennoga, RWFO Country Economist, provided useful comments and suggestions. Ejide Rugamba, Director General in the Ministry of Local Government, also provided comments to earlier drafts.

Policy Brief - Enhancing Stability and Development in Africa- The Role of the AfDB

In fragile and conflict affected states in Africa, the provision of justice and security is often poor, with the most vulnerable members of society suffering disproportionately. The institutions that make up the justice, security and governance structures in these states are often weak or dysfunctional. They are also a major obstacle to conflict resolution, stabilisation, and longer-term peace and development. There is a pressing need to build up these institutions to be sustainable, efficient and accountable, in order to avoid a relapse into conflict. A Collier study estimated the benefit...

Regional Integration Policy Papers: Supporting Macroeconomic Convergence in African RECs


Policy Brief - Financing Water Security for Economic Growth in Africa

The African Union Summit of Heads of State at Sharm El Sheikh in 2008 agreed on several key conclusions: • the importance of making the case for investing in water infrastructure by demonstrating its benefits to national economies; • the urgency of preparing national plans for the development of water infrastructure, containing estimates of cost, indications of phasing, and other aspects of implementation; • the need to prepare financing strategies and develop all feasible sources of funding for this infrastructure. This Policy Brief contains suggestions about how these Ministerial...

Policy Brief - Africa in the Post-Crisis Global Economy: Turning the Recovery into Strong, Sustained and Shared Growth

In the aftermath of the global financial and economic crisis, African policy makers have been rethinking their economic strategies for the next decade. Africa’s high pre-crisis growth and a quick rebound from the crisis highlighted its vast economic potential. At the same time, poverty is still wide-spread across the continent. The key question then is how to turn Africa’s potential into strong, sustained and shared growth and achieve tangible improvements in people’s lives.

Policy Brief - Domestic Resource Mobilization Across Africa: Trends, Challenges and Policy Options

The global economic crisis has given a new impetus to dialogue on domestic resource mobilisation in Africa, particularly on taxation. Lower export revenues, uncertain future foreign investment and aid inflows amidst generally high levels of indebtedness have raised the importance of increasing domestic resources. This brief paper presents some general stylized facts about domestic resource mobilization with a focus on taxation in Africa, explores several taxation challenges across much of the continent, and offers various policy options to address them. The paper draws from the African...