CPIA Report Shows Sub-Saharan Africa’s Economic Resilience Amidst Global Challenges

Governments and central banks in the region have shifted focus from mitigating global shocks to enhancing credibility, capacity, and transparency.

The annual Country Policy and Institutional Assessment (CPIA) for Africa reveals that countries in Sub-Saharan Africa (SSA) weathered 2023 relatively well due to credible economic and social policy reforms. Governments and central banks in the region have shifted focus from mitigating global shocks to enhancing credibility, capacity, and transparency.

The 2024 CPIA report highlights SSA’s strong performance in Central Bank independence, which aids in reducing inflation and improving investor confidence. However, challenges remain, such as low transparency and inadequate judicial oversight. High debt service costs have constrained budgets, necessitating increased private sector investment to spur economic growth.

The CPIA, a diagnostic tool for countries eligible for financing from the International Development Association (IDA), assesses the quality of policies and institutions in 39 SSA countries. Countries are rated on a scale of 1 (low) to 6 (high) across 16 dimensions, reflecting economic management, structural policies, social inclusion, and public sector management.

The average overall CPIA score in SSA remained stable at 3.1 for the third consecutive year. Detailed assessments show that SSA has caught up with the average overall score for IDA countries globally, driven by social policy reforms, fiscal policy improvements, and institutional provisions promoting economic stability.

“The CPIA review offers a chance to identify areas of relative weakness and engage in a dialogue around policy reforms that can produce better development outcomes,” said Andrew Dabalen, World Bank Chief Economist for Africa.

The 2024 report emphasizes the need to attract and sustain greater private sector investments. “Private sector investments will need to pick up after years of investment growth coming from the public sector. High interest rates and public debt mean that the public sector can’t continue to do the heavy lifting, but there are huge opportunities around trade and the digital economy,” said Nicholas Woolley, the CPIA report’s main author.

CPIA scores can guide international investors and businesses on the quality of institutions and the efficacy of recent reforms in the region. Detailed scores for all 39 SSA countries are available online at World Bank CPIA Data.

The report will be launched today in Accra, Ghana by Mr. Dabalen, with a panel discussion on policies to promote private sector growth moderated by Bernard Avle of Citi FM. The discussion will cover areas of the CPIA, including the importance of macroeconomic stability for the private sector, low-cost regulatory solutions to support trade and investment, and how education, health, and social inclusion boost local firm growth. The role of government transparency and accountability to avoid captured markets is also on the agenda.