The average quality of policies and institutions in Sub-Saharan Africa was broadly unchanged in 2017, according to the latest review by the World Bank. This is a shift from the deterioration observed in the previous year.
This analysis covers 38 countries and describes the progress these countries are making on improving the quality of their policies and institutions. Countries are rated on a scale of 1 (low) to 6 (high) for 16 dimensions reflecting four pillars: economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions. In 2017, the regional Country Policy and Institutional Assessment (CPIA) score was 3.1. This average CPIA score for Sub-Saharan Africa remains slightly below the average of 3.2 for other IDA countries.
“In 2017, African countries had a more favorable global environment that provided them with space to implement reforms”explainedPunam Chuhan-Pole, lead economist and lead author of the report.“According to our analysis, nearly 30 percent more countries strengthened their policy and institutional quality in 2017 compared with 2016. This is an encouraging trend.”Favorable global economic conditions supported a turnaround in economic activity in Sub-Saharan Africa in 2017, easing pressure on weak policy frameworks.
Country-level policy and institutional quality varied widely across the region. Rwanda continued to lead at the regional level and globally, with a CPIA score of 4.0. Other countries at the high end of the regional score range were Senegal, with a score of 3.8, closely followed by Cabo Verde, Kenya, and Tanzania, all with scores of 3.7. Overall, slightly more than half (20) of the region’s IDA borrowers posted relatively weak performance—that is, a score of 3.2 or lower. The fragile countries had difficulties to face the challenges posed by their environment regarding the high risks of conflict, commodity price shocks, or climate threat.
“The CPIA is important for African countries not only because a better score leads to an increase in concessional financing from the World Bank, but also because it’s an excellent tool for policy formulation and monitoring” saidAlbert Zeufack, the World Bank’s Chief Economist for Africa. “Our countries should pay more attention to this important tool and use it accordingly.”
Since 1980, CPIA scores are used in determining IDA’s(*) allocation of resources to the poorest countries. They are also useful for monitoring country progress and benchmarking it against progress in other IDA-eligible countries.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.