Republic of Ghana Country Strategy Paper 2012-2016

This report aims to propose a Bank Group's strategy for supporting Ghana's development efforts over the period 2012 -- 2016. Several factors make a new Bank country strategy for Ghana particularly timely at this moment. These include the enormous challenges the country still faces in its development trajectory in spite of its impressive growth in the last decade, the recent adoption by the Government of the "Ghana Shared Growth and Development Agenda" (GSGDA), the promising developments the country is experiencing in its economic prospects, including becoming an oil producer, attracting interest from BRICS, and the recent completion by the Bank and other development partners of a number of key knowledge products. All these combined provides an opportunity for the Bank and Ghana to lay the foundations for a renewed partnership

Are Commercial Banks Really More Efficient than Agricultural Development Banks? Evidence from Bangladesh

Previous studies have argued that commercial banks are more efficient in making and recovering loans than are development banks. Few studies, however, directly compare the efficiency of the two types of banks operating in the same market area. This study in Bangladesh made such a comparison. A normalized profit function was estimated based on the data collected from rural bank branches for the years 1987 and 1988. The results showed that the nationalized commercial bank branches were relative price efficient with respect to wages, while the development bank branches were relative price efficient with respect to deposit interest rates. The development bank branches were relative technical efficient with respect to loans made, while there was no technical efficiency differences between the two bank types with respect to deposits. These results suggest that the issue of relative bank efficiency is unique to each country and cannot be easily generalized

Working Paper 141 - Always Late: Measures and Determinants of Disbursement Delays at the AfDB

Over the years, an abundant number of studies have pointed to long delays at project start-up as one of the main impediments to the performance of development operations in Africa. The influence and importance of time delays on project performance emphasizes the need for a systematic effort to understand why some projects delay so much and others do not. This study attempts to identify the projects’ characteristics which affect the probability to experience delays. Using a sample of African Development Bank Projects, statistical and econometric analyses are employed to identify the determinants of long delays in project start-up in the agricultural sector. The dataset used, consists of all the 525 agricultural sector operations approved by the Bank between 1990 and 2007. Analyses generally reveal that long gestation and delays at project start-up is prominent for agricultural sector projects and is a potential bottleneck for the Bank funded operations. Time delays have significantly improved for newly approved operations. Close to half of the time delay to the first disbursement is due to the delay between commitment and loan effectiveness. Multinational projects are significantly more efficient in term of delays at start-up. The smaller the cost of the operation, the greater will be the probability to experience long start-up delays. The longer the planned implementation period of a project, the higher the start-up delay will be. Projects with many components have lower probability of experiencing delays at start up. After a project has entered into force, the time elapsed to first disbursement will be longer for ADB countries. The paper concludes by outlining a number of implications for effective strategies to mitigate long delays encountered throughout the project cycle in the agricultural sector.

Development Partner Group-Health Retreat

Following the publication of the draft Tanzanian Joint Assistance Strategy (JAS) in July 2005 which outlined a medium-term framework for enhancing aid effectiveness through the rationalisation and alignment of development partner approaches, a series of consultations on this draft strategy took place both within government agencies and among Development Partners. The Development Partner Group in Health (DPG-H) took this opportunity to hold a two-day workshop in late September with the first day devoted to discussing the implications of the JAS for Development Partners, Ministry of Health and President's Office Regional Administration and Local Government. The second day was used as a time to internally reflect on the present functioning of the DPG-H Group, identifying ways of enhancing the work of the group in response to the changing environment. Discussions on the first day of the Retreat were structured around the five key elements of the JAS, i.e., Sector Dialogue, Aid Modalities, TA and Capacity Building, Division of Labour and Monitoring & Evaluation. Presentations were made by Development Partners with input/comments and clarification given by the Ministry of Health, President's Office Regional Administration and Local Government; and Ministry of Finance. Group work was undertaken in the afternoon to further address pertinent issues that were raised from the plenary discussions in the morning session. This resulted in a number of recommendations that included the following: supporting an effective division of labour; harmonising support with government plans and priorities irrespective of the funding modality; complementarity and coordination enhanced between the various aid modalities; basket funding to continue as a transition towards General Budget Support (GBS); demand driven technical assistance; and over time developing an agreed competency/profile skills mix of health development partners. The second day was an opportunity for members of the DPG-H to come together and reflect on the work of the group - where it had come from, the current functioning of the group (strengths/challenges) and looking forward. A number of presentations were made that covered the background of the group; the history of the Sector Wide Approach (SWAp) and the role of development partners; the sector dialogue structures, the expectations and challenges with respect to communication; strengthening the ways of working as a group and the development of an activity plan for prioritising activities. During the plenary sessions a number of recommendations were agreed that included better structuring of the DPG-H meetings; regularity of meetings (once month but more frequently when required); enhancing the coherency and linkages with the overall Development Partner Group; developing and agreeing a work plan and communication strategy; re-visiting the division of labour in terms of roles and responsibilities; putting in place a fully staffed DPG-H Secretariat and organising a troika chairing structure for the group. Moreover, a number of critical suggestions and recommendations were made for further strengthening sector dialogue that centred around revising the structure of the SWAp. As they had implications beyond the mandate of the DPG-H, it was concluded that this would require further discussions, elaboration and agreement by the Ministry of Health/PORALG.\u

Road network upgrading and overland trade expansion in Sub-Saharan Africa

Recent research suggests that isolation from regional and international markets has contributed significantly to poverty in many Sub-Saharan African countries. Numerous empirical studies identify poor transport infrastructure and border restrictions as significant deterrents to trade expansion. In response, the African Development Bank has proposed an integrated network of functional roads for the subcontinent. Drawing on new econometric results, the authors quantify the trade-expansion potential and costs of such a network. They use spatial network analysis techniques to identify a network of primary roads connecting allSub-Saharan capitals and other cities with populations over 500,000. The authors estimate current overland trade flows in the network using econometrically-estimated gravity model parameters, road transport quality indicators, actual road distances, and estimates of economic scale for cities in the network. Then they simulate the effect of feasible continental upgrading by setting network transport quality at a level that is functional, but less highly developed than existing roads in countries like South Africa and Botswana. The authors assess the costs of upgrading with econometric evidence from a large World Bank database of road project costs in Africa. Using a standard approach to forecast error estimation, they derive a range of potential benefits and costs. Their baseline results indicate that continental network upgrading would expand overland trade by about $250 billion over 15 years, with major direct and indirect benefits for the rural poor. Financing the program would require about$20 billion for initial upgrading and $1 billion annually for maintenance. The authors conclude with a discussion of supporting institutional arrangements and the potential cost of implementing them.Transport Economics Policy&Planning,Common Carriers Industry,Rural Roads&Transport,Transport and Trade Logistics,Economic Theory&Research

Working Paper 43 - Energy Sector Development in Africa

The important and wide-ranging role of energy in the development process is well known andit needs no retelling here. However, suffice it to state that there is a strong feedback relationshipbetween the energy sector and the national economy. Energy demand, supply and pricing haveenormous impact on social and economic development and the living standards and overall qualityof life of the population. On the other hand the economic structure and the changes in that structureas well as the prevailing macroeconomic conditions are key determinants of energy demand andsupply. Furthermore, energy affects environmental quality through deforestation associated withunsustainable biomass energy dependence and greenhouse gas emission from fossil fuel use resultingin global warming.Prior to 1973, the rate at which energy consumption increased closely followed the rate atwhich the economy expanded. Rapid economic growth and steadily rising income and higher livingstandards combined with the long term declining trend in energy prices to produce rapidly risingglobal energy demand. Until the emergence of the high cost energy era in the post 1973 era,relatively cheap and abundant energy was a key feature of rapid industrialization and economicprogress. Indeed, commercial energy use remains a key factor in human development. This is despitethe global de-coupling of energy demand-economic growth relationship in the post – 1970 period,triggered by the onset of a new era of more expensive energy associated with the quadrupling of oilprice increases between 1973 and 1974, and further price escalation in 1979 and 1980.Beyond the low level of energy consumption per capita, and unsustainable over-dependenceon bio-mass (wood-fuel), Africa is faced with enormous problems in the quest for sustainableenergy development. For the purpose of addressing these problems effectively, we can summarizethe fundamental energy question facing Africa as: providing and maintaining widespread access ofthe population to reliable and affordable supplies of environmentally cleaner energy to meet therequirements of rapid economic growth and improved living standards. Two sets of factors complicatethe solutions to this critical question. First is the difficult initial energy and economic conditions inmuch of the region. These are broadly defined by the significant deterioration in energy infrastructure,inadequate and unreliable supply of commercial energy to end users despite the enormous untappedenergy resources in the region, and significant inefficiency in energy use. The energy constraints havebeen exacerbated by difficult domestic economic and social conditions. These are defined broadly by, low per capita income, high incidence of poverty, weak economic growth and growth collapsein several cases, stagnating or declining investment (energy inclusive) and weak though improvingdomestic macroeconomic conditions, social conflict and weak governance in public enterprises incharge of energy. Second, there is the global pressure driven by sustainable human development totackle the increasingly significant adverse local, regional and global environmental impact of energysector development. This will accelerate the demand for cleaner energy and the associated energyresource development. The search for a sustainable energy sector development will therefore remainan important issue in Africa as well as in the rest of the world. The paper presents a broad butsystematic discussion of the main issues concerning sustainable energy development in Africa.The structure of the paper is as follows. In section 2 the socio-economic context of theproblem is discussed. In section 3 we present an overview of the developments in the energy sectorin the post 1970 period with emphasis on the sub-regional perspective. This is followed by ananalysis of the constraints to energy sector development in section 4. The paper explores some ofthe key issues and strategies for achieving the goal of sustainable energy development in Africa insection 5. The conclusions are presented in section 6.

Development of Non Bank Financial Institutions to Strengthen the Financial System of Bangladesh

Non-bank financial institutions (NBFIs) represent one of the most important parts of a financial system. In Bangladesh, NBFIs are new in the financial system as compared to banking financial institutions (BFIs). Starting from the IPDC in 1981, a total of 25 NBFIs are now working in the country. As on June 30, 2001 the total amount of paid up capital and reserve of 24 NBFIs stood Tk.6901.8 million (BB, 2002). The NBFIs sector in Bangladesh consisting primarily of the development financial institutions, leasing enterprises, investment companies, merchant bankers etc. The financing modes of the NBFIs are long term in nature. Traditionally, our banking financial institutions are involved in term lending activities, which are mostly unfamiliar products for them. Inefficiency of BFIs in long-term loan management has already leaded an enormous volume of outstanding loan in our country. At this backdrop, in order to ensure flow of term loans and to meet the credit gap, NBFIs have immense importance in the economy. In addition, non-bank financial sector is important to increase the mobilization of term savings and for the sake of providing support services to the capital market. The focus of this paper is to highlight the necessity and importance of NBFIs to strengthen the financial system for rapid economic development of the country.Non-bank financial institutions, banking financial institutions, financial system of Bangladesh