Assessing Africa’s policies and institutions: Safeguarding human capital during and beyond COVID-19
The Country Policy and Institutional Assessment (CPIA) for Africa is an annual diagnostic tool for Sub-Saharan African countries eligible for International Development Association (IDA) financing.
Covering the year from January to December 2019, the report measures the countries’ quality of policies and institutional frameworks, and their ability to support sustainable growth and poverty reduction. The report provides scores for 16 criteria for each country and an overall regional score on a scale of 1 (lowest) to 6 (highest), in four areas: economic management, structural policies, social inclusion and equity policies, and public sector management and institutions.
The score informs governments of the impact of the country’s efforts to support favorable growth and poverty reduction. It also helps determine the size of the World Bank’s concessional lending and grants to low-income Sub-Saharan African countries. The 2019 CPIA includes 39 IDA-eligible countries, one more than in 2018 with the addition of Somalia, which is now eligible for IDA financing after 30 years.
The 2019 CPIA scores also provides a view of the policies and institutions at the outset of the COVID-19 pandemic, highlighting the need for the region’s IDA countries to take action to strengthen health systems, protect human capital, strengthen public sector governance and implement structural reforms to boost productivity.
Here are the top five highlights from the 2019 Africa CPIA:
Rwanda leads CPIA rankings; score remains unchanged for three years
The overall CPIA score for the 39 IDA countries was 3.1, which has remained the same since 2016. Rwanda remained at the top of the ranking with an overall score of 4.0, which has also been the same since 2016, underscoring the need for IDA countries to implement economic and institutional reforms consistently. The highest scoring countries also stayed the same, including Cabo Verde, with an overall score of 3.8, followed by Kenya, Senegal and Uganda with overall scores of 3.7. Benin and Ghana saw their overall scores increase from 3.5 to 3.6. These high-ranking countries on the CPIA scale also have economies that are among the fastest growing in the region. Fifteen of the 39 countries, consisting predominantly of fragile countries, scored below the regional average.
Overall CPIA Scores of Sub-Saharan African Countries (IDA), 2019
There is a need to strengthen health systems
The region’s IDA countries entered the COVID-19 pandemic with significant vulnerabilities to the management of a health emergency, reflected in low health coverage, inadequate government spending on health, and elevated out-of-pocket health payments by citizens. Overall, countries in Sub-Saharan Africa have severe weaknesses in their ability to prevent, detect, and respond to health emergencies. They also display severe gaps in health care systems, such as health care capacity in clinics and hospitals, medical personnel deployment, access to health care and infection control practices.
Global Health Security Index, 2019
The importance of protecting human capital
The COVID-19 pandemic is likely to impact human capital including through disruptions in the provision of essential non-pandemic health services, income shocks, and mandatory school closures. In many health systems in the region’s IDA countries, the fight against the COVID-19 pandemic is expected to shift resources away from other essential health services due to their limited fiscal space, while in most countries lockdowns have led to loss of income for poor families without formal jobs and employment-based social protection, and school closures. Child mortality could rise due to the disruption of maternal and child health services.
Data suggest that, across the Africa region, about 252 million learners have been affected by COVID-19-driven school closures, which are likely to worsen learning outcomes. These disruptions to essential health and education services threaten the ability of IDA countries in the region to build the human capital they need for their development. By protecting human capital now, IDA countries in the region will be able to recover and sustain growth post COVID-19. This highlights the need for government policies to support vulnerable households, protect livelihoods, ensure access to education, and strengthen digital connectivity.
Human Capital Index, 2018
Gains in fiscal policy and debt management, but elevated debt vulnerabilities
The CPIA is made up of 16 criteria grouped into four clusters: economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions. The average scores for the economic management (cluster A) remained unchanged from last year, reflecting gains in fiscal policy and debt management in several countries. Under Cluster A measures, the average fiscal policy score stayed at 3.0, signaling a stabilizing trend. Debt policy and management scores had been trending downward, but steadied in 2019. In many countries, medium-term debt strategies were adopted and implementation capacity increased, strengthening debt management functions. Nevertheless, debt vulnerabilities remained elevated, with many countries at high risk of debt distress. Inconsistencies between monetary policy frameworks and price stability goals contributed to a decrease in average monetary and exchange rate scores.
Additionally, the average scores for the other clusters decreased. Due to a decline in the quality of the trade policy framework and further weakening of the financial sector in several countries, average scores for structural policies (Cluster B) decreased after remaining steady for several years. In social inclusion (cluster C), the decrease reflected weaker performance on human capital development, especially in the quality of health services. Public sector management and institutions (cluster D) scores, which had been lagging behind all other clusters, further decreased in 2019, as the efficiency of revenue mobilization and quality of public administration deteriorated in many countries.
Decreasing Trends in CPIA Cluster Scores
Fragile countries continued to lag behind non-fragile countries across every cluster
The gap between fragile and non-fragile countries was particularly large in economic management and structural policies. In economic management, fragile countries lagged non-fragile countries on the quality of their monetary and exchange rate policies and debt management frameworks. On the structural policies cluster, the difference in scores was largest on the trade criterion. Fragile countries’ scores were also notably weaker on gender equality and property rights, and rule-based governance.
Figure 25: CPIA Scores, by Country Group and Cluster, 2019