Working Paper Series


Working Paper 59 - The Mineral and Energy Sectors and Stages of Economic Development: A Comparative Input - Output Analysis

The purpose of this paper is to highlight the nature of the linkages between the mineral and energy sectors and the rest of the economy at various stages of national development. It also aims at identifying viable investment alternatives among several mineral activities. The analysis is based upon the concept of intersectoral “linkages” which emphasizes the importance of stimulating key sectors which have strong technological linkages with other sectors in order to stimulate economic growth. It relies upon the use of input-output (I-O) tables for three countries at various stages of economic...

Working Paper 58 - The Contribution of African Development Bank to Economic Knowledge and Policy in Africa

The African Development Bank Group is mandated to contribute to the economic and social development of Africa—particularly the reduction of poverty. While its principal operational activity involves project and programme lending, it recognizes the need to become a knowledge center on African development. The development process includes the fostering of research and intellectual ideas, which not only support the Bank’s traditional lending activity but also promote discussion and inquiry into the socio-economic problems and challenges of the region. This paper discusses the contributions of...

Working Paper 57 - Exorcism of the Ghost: An Alternative Growth Model for Measuring the Financing Gap

In 1997, William Easterly authored an intriguing paper on “The Ghost of Financing Gap: How the Harrod-Domar Model Still Haunts Development Economics”. He concluded that the Harrod-Domar model “was not intended as a growth model, made no sense as a growth model, and was repudiated as a growth model forty years ago by its creator”. His empirical examination shows that the model fails drastically in explaining the performance of investment and growth. Yet, the ghost of the Harrod-Domar model still haunts the living minds of development economists. Easterly reveals that the Harrod-Domar growth...

Working Paper 56 - A Statistical Analysis of Determinants of Project Success: Examples from the African Development Bank

The African Development Bank (ADB) Group commenced lending operations in 1967 and had by the end of 1999, cumulative loan and grant approvals amounting to over US$ 36 billion. The project total summed up to 2,327 operations – 27 per cent in agriculture, 24 per cent in the multisector category, including adjustment loans and stand-alone poverty alleviation projects, 17 per cent in the transport sector, 15 per cent in industry, 9 per cent in the social sectors, mainly education and health, and 8 per cent in public utilities. As the project portfolio has expanded, so have demands for refined...

Working Paper 55 - Strategic Considerations for Building a Healthy Pipeline for Bank Group Operations

The African Development Bank has, since 1982, experienced a problem with bunching of projects towards the fourth quarter of each year’s Lending Program. Contributing factors include both systemic and endogenous constraints as well as exogenous constraints. This paper proposes a holistic approach, that recognizes all the forces at work in the development of Public Investment Programs (PIPs) at the RMC level as well as the Bank’s internal processes that help to guide and generate the pipeline.

Working Paper 53 - Linkages between SMEs and Large Industries for Increased Markets and Trade: An African Perspective

During the first half of this decade, most African countries have implemented far-reaching macroeconomic reforms in a bid to achieve higher levels of sustained economic growth. The last few years have witnessed a progressive reduction in budget deficits and inflation rates, the achievement of more realistic exchange rates and higher rates of GDP growth. These macroeconomic gains and the sustainability of the economic growth trajectory could be strengthened by actively promoting the development of small- and medium- scale enterprises, (SMEs), which have the potential to become a major force...

Working Paper 52 - Poverty Reduction in sub - Saharan Africa: Is There a Role for the Private Sector?

Restoration of adequate economic growth and improvement of people’s welfare has been a primary objective in Sub-Saharan Africa since the 1960’s. At the time, it was believed that the benefits of higher rates of economic growth would “trickle down” to the lower income groups of the population. However, existing evidence concludes that, although higher economic growth is a sine-qua-non for sustained poverty reduction, it has often resulted in a “trickle up”, in favor of the small middle class and the very rich.

Working Paper 51 - Competition and Regulation in Infrastructure

The restructuring of infrastructure is predicated on the need to be efficient in the use of resources and to become competitive in the global economy. It is thus an essential component of regulatory reform, defined here to extend beyond the functions of the regulatory body and to be inclusive of policy-changes aimed at bringing about sector restructuring. In most cases the restructuring process requires the reduction of government provisions by increasing the level of private participation in the provision of infrastructure services. In a limited number of cases it requires deregulation of...

Working Paper 49 - Private Sector Participation in Infrastructure in Southern African Development Bank

La force motrice de la réforme et de la participation du secteur privé dans l'infrastructure comprennent : la pression sur les budgets de l'Etat et la nécessité de supprimer les subventions compte tenu de la baisse des revenus; de l'absence de capitaux d'investissement, ainsi que L nécessité de remplacer les vieilles infrastructures; la pression de la nouvelle technologie, l'incapacité des entreprises publiques à satisfaire la demande croissante; les nombreux argument' avancés par les consommateurs plus informés en faveur de meilleures prestations de services; 1e secteur privé qui profitent...

Working Paper 48 - Challenges of Infrastructure Rehabilitation and Reconstruction in War - Affected Economies

This paper examines the state of infrastructure and the challenges of rehabilitation and reconstruction in war-affected economies in Africa. For the purpose of this study we concentrate on the following war-affected economies: Angola, Burundi, Democratic Republic of Congo (formerly Zaire), Djibouti, Eritrea, Ethiopia, Liberia, Mozambique, Rwanda, Sierra Leone, Somalia and Sudan.

Working Paper 47 - Participation du secteur privé à la fournitures des infrastructures en Côte d'Ivoire: Revue et recommandation

L'intervention de l'Etat pour soutenir la production et la croissance se manifeste en général à travers la fourniture de deux types d'infrastructures ; les infrastructures institutionnelles et les infrastructures physiques. Les infrastructures institutionnelles ou "capital social" se composent d'un enchevêtrement complexe de relations, de normes comportementales, de valeurs, de règles et lois, de canaux d'information, des contrats explicites ou implicites etc. Le fonctionnement correct de ces institutions permet aux agents économiques d'interagir efficacement dans un climat de confiance et...

Working Paper 45 - Commercial Infrastructure in Africa: Potentials and Challenges

The above analysis centered on the commercializing of African infrastructure since the earl, l990s. As revealed by the analysis, African countries were reluctant to privatize infrastructure because of the perceived importance of the sector to the economy. Indeed even when privatization was pursued as second-best to commercialization and performance contracting under public-ownership, it was primarily on the basis of securing private-sector management without having to relinquish control of the entity. But the inability of African countries to overcome the economic down-draft of the Debt...

Working Paper 43 - Energy Sector Development in Africa

The important and wide-ranging role of energy in the development process is well known and it needs no retelling here. However, suffice it to state that there is a strong feedback relationship between the energy sector and the national economy. Energy demand, supply and pricing have enormous impact on social and economic development and the living standards and overall quality of life of the population. On the other hand the economic structure and the changes in that structure as well as the prevailing macroeconomic conditions are key determinants of energy demand and supply. Furthermore,...

Working Paper 41 - Informal Finance for Private Sector Development in Africa

More than a decade after substantial macroeconomic reforms were initiated in many African countries, aggregate growth, has at best remained inconsistent in many of those reforming countries. While the reasons for poor aggregate performance vary across countries, there is substantial evidence that in many countries, poor private sector investment response in the medium-to-long term has delayed long term growth. The poor response of the private sector might generally be attributed to varying factors in different countries. Indeed, various surveys suggest that a more vigorous response from the...

Working Paper 40 - Industrial Restructuring in Africa During the1990s: Outcomes and Prospects

Since the advent of political independence, many governments in Africa have looked to the manufacturing sector as the main vehicle of structural transformation and reduction of dependence on primary exports. However, it is now generally accepted that “misguided attempts to promote industrialisation without regard to comparative advantage or stage of development have led to inefficient use of resources in many countries” (World Bank, 1992:122). During the 1970s, almost one-third of African countries had negative average annual rates of manufacturing output growth and, in another quarter, these...

Working Paper 39 - Human Capital and Economic Development

Health and education are both components of human capital and contributors to human welfare. One index of human welfare, which incorporates income, education and health, shows that Africa’s level of ‘human development’ is the lowest of any region in the world. In this paper we will frequently compare Africa with South Asia. While Africa’s level of human development is lower than that of South Asia, its per capita income is higher. Africa’s poor economic performance has been most marked in its growth rate which has been half that of South Asia.

Working Paper 38 - Health Development in Africa

Good health is important because it is an intrinsic element of human welfare. As a component of human capital, health is also a key factor in the creation of wealth. The close connection between health and wealth has been emphasized in a recent paper by Pritchett and Summers (1996) who explore a causal relationship between the two phenomena and conclude that wealthier nations are healthier nations. Wealthier nations are in a stronger position to provide better health to the population. Better health in turn increases labor productivity, thereby enhancing wealth. Apart from being both a...

Working Paper 37 - The Formation of Human Capital and the Economic Development of Africa: Returns to Health and Schooling Investments

This paper first outlines a framework within which to assess the contribution of health and schooling to increasing individual and aggregate income, as well as the possible feedback of increasing income on the demand for human resources. It then evaluates how African countries have fared from 1970 to 1985 in terms of survival and schooling, compared with other countries, to place in perspective areas of achievement and the aggregate composition of human capital formation in the African region. Several microeconomic studies are then described in more detail that illustrate the magnitudes of...

Working Paper 35 - Privatization of Public Enterprises in Zambia: An Evaluation of the Policies, Procedures and Experiences

The term Privatization is often loosely used to mean a number of related activities, including any expansion of the scope of private sector activity in an economy and the adoption by the public sector of efficiency enhancing techniques commonly employed by the private sector. While acknowledging that no definition of privatization is water tight, we will define privatization, for the purpose of this paper, as the transfer of productive asset ownership and control from the public to the private sector.1 The transfer of assets can be total, partial or functionary, with the sale being...

Working Paper 36 - Information Technology and the Challenge of Economic Growth in Africa

The recent advances in information technology are becoming central to the process of socio-economic development. Information technology offers new ways of exchanging information, and transacting business, changes the nature of the financial and other service sectors and provides efficient means of using the human and institutional capabilities of countries in both the public and private sectors. The world is rapidly moving towards knowledge-based economic structures and information societies, which comprise networks of individuals, firms and countries that are linked electronically and in...