HARARE, June 28 (The Source) – Zimbabwe is one of only seven African countries that strengthened their governance framework in 2015, driven by reforms under the International Monetary Fund’s Staff Monitored Programme (SMP), which is key in supporting development and poverty reduction, a new World Bank report shows.
The World Bank’s Africa Country Policy and Institution Assessment (CPIA) shows that Zimbabwe’s CPIA score went up from 2.2 in 2012 to 2.9 in 2015 thanks to better availability of data and information coupled with the implementation of economic policies under the SMP.
An SMP is an informal agreement between a government and IMF staff to monitor the implementation of a particular country’s economic reforms. It does not entail resumption of funding from the multilateral finance institution.
Under the SMP, Zimbabwe pledged to sharply cut its public sector wage bill from 82 percent of government spending currently to 52 percent of expenditure by 2019 and improve fiscal discipline.
It also strengthened governance and monitoring of the financial sector and started work on improving the business environment, in particular the implementation of the indigenisation policy.
A July 17, 2015 ruling by the High Court giving employers the right to dismiss employees on a three months notice prompted a review of labour laws, although some of the provisions are under legal challenge.
Zimbabwe achieved the highest score of 4.0 in Gender Equality and Efficiency of Revenue Mobilisation, above the regional averages of 3.2 and 3.4. However, its Debt Policy, Business Regulatory Environment and Transparency, Accountability and Corruption in the Public Sector fetched the lowest score of 2.0.
Other countries to improve in 2015 were Comoros, Chad, Ghana, Guinea, Madagascar and Rwanda. Overall, Rwanda leads with a CPIA score of 4.0 followed by Carpe Verde, Kenya, and Senegal, all with a 3.8 score. Ghana also saw an improvement in its CPIA score from 3.4 in 2014 to 3.6 in 2015.
The low governance scores for African countries indicate that public institutions need to be strengthened so they can be more accountable for delivering human development services, security, and justice to citizens, noted the World Bank.
“The end of the commodity super-cycle highlighted vulnerabilities in the structure of Sub-Saharan Africa’s economies,” notes Punam Chuhan-Pole, Lead Economist, World Bank Africa Region and author of the report.
“Yet, the current difficult situation also presents opportunities to accelerate key reforms to boost competitiveness and diversification which are critical for raising growth prospects and ending extreme poverty.”