CPIA/AEO Country Evaluations: Manual for Drafters · 4 AEO country notes needs to be delivered by...
Transcript of CPIA/AEO Country Evaluations: Manual for Drafters · 4 AEO country notes needs to be delivered by...
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CPIA/AEO Country Evaluations: Manual for Drafters
This Manual identifies the issues to be taken up in each Country Evaluation of the annual
CPIA/AEO Exercise and the main questions to be asked during country missions. All country
evaluationdrafters, reviewers and local consultants should read it carefully.
Latest revision 20/09/2013
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INTRODUCTION
The African Economic Outlook (AEO) exercise will be conducted in coordination with the African
Development Bank Country Policy and Institutional Assessment (CPIA). This manual is intended for use
by all experts involved in collecting information, drafting/reviewing country evaluations and assigning
ratings within the context of this exercise.
The AEO is an annual publication jointly produced by the African Development Bank (ECON Complex:
EDRE, and ESTA Departments), the OECD Development Centre and the UNDP. It analyses the economic
prospects for African countries by adopting a comparative approach and a common analytical
framework. It provides forecasts for key macroeconomic variables and discusses every year a specific
theme. The AEO covers 53 out of 54 African countries. Subject to data availability, it is expected that
Somalia will complete the set of countries included in the process.
The CPIA is a rating system designed to assess the quality of a country’s current policy and institutional
framework. It is based on the scores assigned by country evaluations’ drafters to 18 criteria covering five
main clusters: a) Economic Management; b) Structural Policies; c) Policies for Social Inclusion and Equity;
d) Public Sector Management; and e) Infrastructure Development and Regional Integration. Scores
range between 1 (very weak) and 6 (very strong) and are revised every year. The assignment of CPIA
country scores is the solely responsibility of the African Development Bank.
Taking into consideration the similarities, complementarities and synergies between both exercises in
terms of objectives, structure/content, process, participants, calendar, disclosure and approach, Senior
Management decided in 2011 to combine them into one single process with two different outputs (the
AEO note and the CPIA evaluation). Thus, it is expected that the AEO notes build on the previous analysis
performed within the context of the CPIA to avoid overlaps and increase efficiency. At the same time, it
is expected that CPIA evaluation follow the “history line” approach of the AEO to help explain the
rationale behind country scores.
The organization of this Manual is as follows: the first chapter deals with the structure of the exercise
and the relationship between CPIA country evaluations and AEO country notes; the second chapter
deals with the content of the AEO country notes. It includes the way in which information needs to be
gathered in the field and a set of guiding questions to help discussing the main issues affecting
countries. The third chapter deals with data requirements for calibrating and running the AEO country
forecasting model by AfDB Statistical Department (ESTA).
The calendar for the next CPIA/AEO Exercise is also attached. The final deadline for the complete,
revised CPIA country evaluation is the 13th December 2013 and for the AEO country note is the 6th
February 2014.
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CHAPTER 1: GENERAL CONSIDERATIONS
1.1. Relationship between CPIA and AEO Notes
CPIA evaluations and scores should complement AEO notes to identify the key issues confronting the
country. The information provided in the CPIA country evaluation should be as recent as possible. The
AEO country note should then assess the current quality of countries’ policy and institutional
framework, tackle the actual economic, social and political developments that took place in the current
year, and provide indications on the trend for the next two years.
AEO country notes should maintain a balance between current and forward-looking performance. To
facilitate the reading, the implicit sequence of each AEO sub-section should be: current situation in year
n (which also provides the rationale for CPIA ratings) followed by prospects/forecast for years n+1 and
n+2. CPIA ratings must be based exclusively on the current situation (year n) and not on
promises/forecasts.
Analysis should be evidence-based and relying on robust statistical data. Within the context of the
CPIA-AEO, the inputs collected in the field will feed the country evaluations/notes, the CPIA ratings and
the AEO forecasting model and statistical annexes. It is then of crucial importance to systematically
check the homogeneity of data and indicate the data source and year. Hence, it is important to always
quote the source and the year of the data, in particular those highlighted in the social context paragraph
(i.e. data on poverty, education and health).
1.2. Sequence and Timeline
Under the combined CPIA-AEO framework, AfDB country evaluations’ drafters should provide an early
draft of CPIA country evaluations and scores by Monday, October 21st 2013. The second draft taking
into consideration peer reviews and cleared by lead economists must be delivered by Friday, November
22nd 2013. These evaluations will be the basis for the discussion at the endorsement sessions where final
evaluations and ratings will be assigned. The final CPIA evaluations and scores taking into consideration
the conclusions of the endorsement sessions with Regional Directors will be available by Friday,
December 13th, 2013. The first, complete version of the AEO country notes containing all sections and
initial forecasts should be delivered by Monday, January 6th, 2013 and the final, revised version of the
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AEO country notes needs to be delivered by Thursday, February 6th, 2013. An internal peer review
session, mid-January, will be hosted at the AfDB after finalizing the first, complete draft.
Countries that foresee to receive updated, official government data in March are requested to mention
this to ESTA statistician and will be requested to perform a final update of the forecast early March.
Please refer to annex 3 for the detailed calendar and sequence of the next CPIA/AEO Exercise, including
intermediary milestones and individual responsibilities.
1.3. Process Management
1.3.1. CPIA Evaluations
In order to increase the transparency and efficiency of the CPIA, the drafting and review process of CPIA
country notes and scores is since 2012 entirely managed through a dedicated electronic platform
available at https://edre.afdb.org/aeo-cpia/. Each drafter and reviewer will be assigned a user name and
a password to log-in and complete her task. Automatic e-mails will be generated to inform them of the
approaching of deadlines and a clearance process by lead/chief country economists will be in place.
Regional directors, resident representatives and lead economists will be notified when the revised CPIA
country evaluation and scores are submitted by the designated drafter. There will be dedicated training
sessions on the use of the platform for incumbent Tunis and Field Offices staff. CPIA coordinators for the
current exercise are Mr. Oscar Alexander Pitti Rivera ([email protected]) and Mr. Riadh Ben
Messaoud ([email protected])
1.3.2. AEO Notes
In cases where AfDB partners are co-drafting AEO Country Notes, a principle of co-authorship with AfDB
country economists will apply to maximize synergies between products and institutions. The names and
contact of their counterparts will be provided at the kick-off meeting to all co-drafters in advance as to
facilitate discussion and preparation. Co-drafting implies the total collaboration and coordination during
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all stages of the process, from the moment of data collection in early October, year n, to the delivery of
the final draft in February, 2013.
The organization of each co-drafting team will be done by the authors themselves with the support of
the CPIA/AEO team. This includes division of labour for drafting the AEO country note, date and
organization of the AEO mission and the coordination of the local consultant.
It is important to remember, however, that all CPIA evaluations and scores remain the sole responsibility
of the African Development Bank. Coordinators for the 2012-13 AEO exercise are Mr. Anthony Simpasa
([email protected]), Mr. Adeleke Salami ([email protected]), and Mr. Ahmed Moummi
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CHAPTER 2: STRUCTURE AND CONTENT OF COUNTRY NOTES
2.1. Structure
The structure of the AEO and CPIA country notes/evaluations has been streamlined and expanded to
maximize the synergies between both exercises. Those familiarized with the CPIA exercise will notice
that the order of the criteria has been altered to adapt to the new structure. There are some sections
(overview; recent economic development and prospects, political context and the thematic analysis)
which are not required for the CPIA note but are mandatory for the AEO one.
Table 1 provides the detailed structure and the differences between the content of the CPIA evaluations
and AEO notes. The word limit is indicative for the CPIA evaluations but mandatory for the AEO notes.
However, CPIA evaluations should be 120 words minimum. Furthermore, to facilitate the review and
editorial process, the editing conventions laid out in the complementary “Editorial Guide” should be
followed beginning with the very first draft.
2.2. Content
Table 1: Structure and word count for the Country note/evaluations
# Section CPIA AEO
Word Limit (AEO)
English French
1. Overview X 400 500
2. Recent Developments and Prospects X 1000 1150
3. Macroeconomic Policy X X 1500 1700
3.1. Fiscal Policy X X 400 450
3.2. Monetary Policy X X 400 450
3.3. Economic Cooperation, Regional Integration and Trade X X 300 350
3.4. Debt Policy X X 400 450
4. Economic and Political Governance X X 1500 1750
4.1. Private Sector X X 350 450
4.2. Financial Sector X X 350 450
4.3. Public Sector Management, Institutions and Reform X X 300 350
4.4. Natural resource management and environment X X 250 300
4.5. Political Context X 250 300
5. Social Context and Human Development X X 1100 1300
5.1. Building Human Resources X X 400 450
5.2. Poverty Reduction, Social Protection and Labor X X 500 600
5.3. Gender Equality X X 200 250
6. Thematic analysis X 1000 1200
Infrastructure development x Cross
cutting - -
TOTAL word limit AEO country note X 6500 7600
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2.2.1. CPIA Evaluations
As mentioned in the previous chapter, the drafting of CPIA evaluations will be done entirely
electronically through the newly launched CPIA Electronic Platform. The CPIA Electronic Platform
contains all the information needed to draft the evaluations and assign the CPIA scores, including the
general content of each criterion and sub-criterion, the rating guidelines (i.e. the level of performance
associated to each rating) and the relevant guidepost. Each drafter and reviewer will be assigned a user
name and password to log in into the platform at https://edre.afdb.org/aeo-cpia/.
2.2.2. AEO Notes
Country Note Authors should apply the AEO writing style as laid out in the Annex 3.
2.2.2.1. Overview and three key sentences (word limit English 400/French 500)
The text of this section should not exceed 400 words divided in three paragraphs and will serve as an
independent summary of the country note, that will be both available on the website and in the print
publication. It should touch upon the most relevant facts described in the country note, following the
structure of the note.
The first paragraph should describe the economic growth in the current year n and the forecast for year
n+1 and year n+2 as well and the main driving forces for the recent and the expected economic
development.
The second paragraph should summarize the main policy issues facing the country and highlighted in the
other sections.
The third paragraph should be dedicated to the main policy issue/challenge/finding related to the AEO
Thematic Section.
At the beginning of the Overview is a little box with three key messages (Maximum one sentence per
message). The first sentence should be on the recent economic development and the forecast, the
second sentence on economic and political governance; and the third sentence on social context and
human development. The AEO editorial team will have to edit the three key sentences should they
exceed their length.
The Overview also includes a) the Box Basic Indicators; b) Table 1 Macroeconomic Development; c)
Figure 1 Real GDP Growth. The box, the table and the figure will be prepared by ESTA in collaboration
with the country note authors. This section does not have an associated CPIA rating or analysis. Only
Table 1 from the Overview will feature in the print version.
2.2.2.2. Recent economic developments and prospects (word limit English 1000/French 1150)
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The recent economic developments (current year n) and the forecast for year n+1 and year n+2 should
be discussed in detail. Focus should therefore be on economic growth, its main driving forces and
possible obstacles.
Table 2 GDP by Sector (latest available year) will inform about the importance of individual sectors.
When looking at growth trends, it is important also to assess whether growth is broad based or not, and
what is the impact of growth on employment and poverty based on country-specific studies that may
exist. This part can be further developed in the later section on Social context and Human Development.
The general overview of the economy should be completed by sub-sections on the most important
sectors of the economy including services depending on the structure of production of the country. Any
success or failure to diversify the economy should be highlighted.
For agriculture, it is very important to have some ideas about the harvests that affected GDP for year n
and any expectations/assumptions on the impact on the n+1 GDP. The general performance of the
sector should also be discussed; for export crops, it is important to know whether the sector is
liberalized, how producer prices affected the sector and what the social organization of the sector is.
Any policies and programs undertaken by the government to promote the sector should be described
and – if possible – assessed against the CPIA criteria.
For countries producing oil and other natural resources (like gold, copper or diamonds), reserves are a
key variable for the economy as well as production and commodity prices. It is of great importance to
understand the way petroleum and other natural resources affect the rest of the economy (the linkages
with public finance through the tax system, for instance, and what oil price and other commodity price
assumptions will be used for budget decisions). The analysis also gains from comparing GDP growth with
non-oil output growth. This helps to gauge i) the success with which countries are diversifying away
from overly dominant oil sector, and ii) the degree with the oil sector is having spillover effects on other
activities in the economy. It is also important to comment on the management of non-renewable
natural resources.
For countries relying to a large extent on industry/service sectors, it is important to stress what are the
precise sectors that drive growth and the reasons behind this dynamism. The section on recent
developments and prospects also includes information on the demand side. In particular the author
should comment on the contribution to growth of the different components of final demand and how
the various demand components affect each other (for example, has the increase in exports led to
higher private investment and then to higher wages and consumption).
This section does not have a specific CPIA rating associated to it. General guideline questions are:
- What are the recent developments (year n) in the whole economy and in the major productive
sectors?
- Which sectors have led growth in year n? What are the reasons for their dynamism?
- For natural resource-rich countries: What is the state of production? What are the perspectives for
exploration and new discoveries?
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- What major (positive and negative) factors affected the economy in year n (weather conditions,
regional crises, food prices and food security, commodity prices, FDI inflows, remittances, ODA,
other…)?
- What have been the major investments in year n?
- What are the assumptions underlying the projections for n+1 and n+2? (Exports, oil price, other
commodity prices, workers´ remittances, FDI inflows, ODA disbursement
- What are the major investment plans, which will affect the macro outlook for n+1 and n+2?
- What are the main risks to the forecast for n+1 and n+2?
- On the demand side: which components of demand were the main determinants for (lower or
higher) growth inyear n? What explains the trend of each component? What are the assumptions
underlying the projections for n+1 and n+2? (Exports, oil price, other commodity prices, workers´
remittances, FDI inflows, ODA disbursement?) What are the major investment plans, which will affect
the macro outlook for n+1 and n+2?
This section also includes a paragraph on the demand side, commenting on the contribution to growth
of the different components of final demand.
2.2.2.3. Macroeconomic policy (word limit English 1500/French 1700)
This part is divided into four sub headings: i) Fiscal Policy; ii) Monetary Policy; iii) Regional
integration/Trade; and iv) Debt Policy. The analysis should show how the macroeconomic policy stance
has performed inyear n, the changes with respect to year n-1 and the expected changes during the
forecasting period. Each these areas need to build upon the analysis done to support the respective
CPIA ratings associated to them and included in the CPIA evaluations.
Fiscal Policy (word limit English 400/French 450)
The discussion on fiscal policy should provide information on whether it has been expansionary or
contractionary with respect to aggregate demand in n-1 and year n and which policy stance is expected
for n+1 and n+2. Possible impacts of fiscal policy on the supply side of the economy could also be
discussed (for example is there a crowding-out effect of the fiscal deficit on private investment). For all
countries, systematic reference should be made to changes in the variables as used by the Franc zone
central banks for monitoring progress toward convergence (inflation, budget deficit, public debt deficit
ratio, arrears, public sector wage bill, public investment, current account and fiscal pressure).
The content of this sub-section should also build on the analysis done for the Fiscal Policy; Quality of
Budgetary and Financial Management; and Efficiency of Resources Mobilization Criteria of the CPIA. The
specific rating guidelines (i.e. the performance associated to each rating) for these criteria can be found
at the CPIA Data Center at http://cpia.afdb.org/ResourceCenter/Default.aspx :
The Fiscal Policy criterion of the CPIA covers the extent to which: (a) the primary balance is
managed to ensure sustainability of the public finances; (b) public expenditure/revenue can be
adjusted to absorb shocks if necessary; and (c) the provision of public goods, including
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infrastructure, is consistent with medium-term growth. Sustainability is defined inclusive of off-
budget government spending items and contingent liabilities.
The Quality of Budgetary and Financial Management CPIA criterion assesses the extent to which
there is: (a) a comprehensive and credible budget, linked to policy priorities, which in turn are
linked to a poverty reduction strategy; (b) effective financial management systems to ensure
that incurred expenditures are consistent with the approved budget, that budgeted revenues
are achieved, and that aggregate fiscal control is maintained; (c) timely and accurate fiscal
reporting, including timely and audited public accounts and effective arrangements for follow
up; and (d) clear and balanced assignment of expenditures and revenues to each level of
government. Each of these four dimensions should be rated separately.
When assessing CPIA rating in Efficiency of Revenue Mobilization, the focus should be not only
the tax structure as it exists on paper, but also actual revenue collection. Separate sub-ratings
should be provided for (a) tax policy and; (b) tax administration.
Tables 3 and4 on Public finances and on current account (see Annex 2.3) are filled with actual data up
to n-1 and with estimates for year n and forecasts for n+1 and n+2coming from the forecasting model.
The discussion in the country note should therefore refer not only to the historical development but be
forward looking, commenting on the model projections for n+1 and n+2in the dedicated sub-section.
Country Policy and Institutional ratings, however, should be based exclusively on current events/facts.
The discussion of the forecast has to be finalized when the forecast is known but the author could
already include his/her views in the first version of the country note as these questions are discussed
during the mission. General guideline questions for this section would be:
- What is the evolution of the main fiscal indicators, internal and external public debt as a percentage
of nominal GDP, non-accumulation and/or elimination of payments arrears, public sector wage bill as
percentage of fiscal receipts, public investment financed from domestic resources as a percentage of
fiscal receipts, and fiscal receipts as a percentage of GDP i.e., fiscal pressure?
- Were targets set for any of the above indicators? Were they met? What was the level of execution of
the budget? Is it satisfactory? Why? Is absorption capacity improving?
- Is there any Medium Term Fiscal Framework (MTF) in place?
- What is the structure of public spending? What are the shares of spending on education, health,
agriculture and infrastructure? Do these match with the strategic priorities identified in Medium
Term Frameworks or other national development strategies? What is the structure of spending
between current and capital, wages and non-wage current spending etc. (Economic classification)
and does it tell something about the effectiveness of government as well as the quality of service
delivery?
- What was the fiscal policy pursued in year n? Was the impact of fiscal policy on aggregate demand in
year n expansionary or restrictive? What are the fiscal targets for n+1 and n+2? Will fiscal policy in
n+1 and n+2be expansionary or restrictive?
- Does the fiscal position pose a challenge to the government? How is the deficit financed?
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- For resource-rich countries: How is the country managing revenues from oil and/or other natural
resources? Is there a special account set up? Is there a fiscal rule guiding the management of
revenues from natural resources (for example accumulating reserves)? Does the country belong to
the Extractive Industry Transparency Initiative? (this will be expanded upon further in the thematic
section)
- For oil importing countries: Has the recent evolution in oil prices and food prices had an impact on
public finance? Did the government take any adjustment measures? Is there a complete pass through
to domestic prices?
- What is the amount of oil subsidies as a percentage of GDP? What is the amount of food subsidies as
a percentage of GDP? Are these subsidies closely targeted on the poor? How are foreign grants
evolving? Are commitments and disbursements in line? Is absorption capacity improving? Does the
country benefit from donor budget support?
Monetary Policy (word limit English 400/French 450)
The section on monetary policy should discuss the trends and policies regarding inflation, as well as the
policy tools used to control it. Where relevant, the situation of Franc-zone countries vis-à-vis the
convergence criteria of the regional central banks should also be discussed. This section must also build
on the CPIA rating and corresponding rationale for the Monetary Policy Criterion. The specific rating
guidelines (i.e. the performance associated to each rating) for this criterion can be found at the CPIA
Data Center at http://cpia.afdb.org/ResourceCenter/Default.aspx :
General guideline questions for this section are:
- Does the country participate in a monetary union (such as the CFA franc zone)?
- How was the evolution of annual rate of consumer price inflation in n-1 and year n? What drove the
global figure (food, public utilities, transports, energy, external factors such as exchange rates, oil and
food import prices, etc.)? How has the annual rate of inflation and of core inflation (excluding food
and energy) evolved in year n?
- How was the evolution of nominal Central Bank policy interest rates since n-1? How have real
interest rates evolved since year n? How have stock markets evolved? What was the impact on
business investment?
- Has private business difficulties to get bank loans and did the Central Bank take measures to increase
credit to the private sector?
- How does the Central Bank plan to implement monetary policy in n+1 and n+2?
- Did the economy suffered major internal/external shocks? Was the policy framework adequate to
mitigate the effects of these shocks?
Economic Cooperation, Regional Integration and Trade (word limit English 300/French 350)
The section analyses trends in exports and imports (main partners and products); and the current
account balance. The financing counterpart of the current-account balances (the capital account) should
also be discussed. The analysis of the profile of capital flows, for instance, could help assess the degree
to which current-account deficits are sustainable and draw some conclusions on possible real-side
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adjustments and their implications on growth trajectories. The section should also discuss any impact of
trade policies on recent or future trade developments, including from international/regional trade
agreements and the impact of recent developments in the WTO.
This section must also build on the analysis supporting the CPIA score in the Policies and Institutions for
Economic Cooperation, Regional Integration & Trade Criterion. It is important to note that this criterion
has been recently expanded to encompass two new dimensions: (i) Movement of persons and labour
and right of establishment; and ii) Regional Financial Integration. The first part of this criterion assesses
the extent to which a country supports regional organizations and its commitment to economic
cooperation and regional integration initiatives, including promoting movement of persons and capitals
across countries of a same regional economic community (REC). While drafters should assess the two
new areas of the regional integration dimension within the context of the CPIA country evaluations, it is
not mandatory to the AEO notes. The second part focuses on trade and covers two areas: (a) trade
regime restrictiveness focusing on the height of tariffs barriers, the extent to which non-tariff barriers
(NTBs) are used, and the transparency and predictability of the trade regime; and (b) customs and trade
facilitation, including the extent to which the customs service is free of corruption, relies on risk
management, processes duty collections and refunds promptly, and operates transparently. The specific
rating guidelines (i.e. the performance associated to each rating) for this criterion can be found at the
CPIA Data Center at http://cpia.afdb.org/ResourceCenter/Default.aspx
General guideline questions for this section are:
- What are the recent developments in imports and exports overall and of the main products? What
are the main determinants of these trade flows in year n and during the forecasting period n+1 and
n+2? How export competitiveness evolved and what will be the main forces driving competitiveness
in n+1 and n+2? How is the exchange rate affecting international competitiveness and investment?
- Have the recent developments in the WTO or discussion of new trade agreements had an impact on
trade performance?
- Is there any international/regional trade agreement of importance? It will be still important to
monitor the European Partnership Agreement (EPA) negotiations and what increases in market
access could mean for exports.
- How has trade balance and current account balance (without grants) evolved as a percentage of
nominal GDP? What drove these developments? What are the forecasts for n+1 and n+2?
- How did private capital flows (incl. FDI) evolve? Who are the main countries of origin of FDI? Which
are the main sectors? What are the expectations for n+1 and n+2?
- How did short-term capital flows evolve?
- Which is the level and trend of ODA in the country? Is there any measure of donor’s stress in the
country?
- What about “non-traditional” donors (China, India, etc.)?
Debt Policy (word limit English 400/French 450)
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In Debt Policy section, public debt should be discussed, distinguishing between domestic and external
public debt. As regards public debt, the part for which state-owned enterprises are responsible should
be provided. Recent increase in the level of subsidies may have been partially financed by an increase in
domestic and/or external public debt. The discussion on external debt should distinguish between
public, publicly guaranteed, and private debt. A brief exposition on the recent development of ODA
disbursements, FDI and portfolio capital on the external financing should be attempted. Information
should also be added on the discrepancy between commitments and disbursements. In that section, the
figure on external debt should be updated with data from the IMF (to be provided by the AfDB Statistics
Department). When relevant, the debt relief mechanism under the HIPC initiative should also be
followed closely.
This section must also build on the analysis supporting the CPIA score for the Debt Policy Criterion. The
focus should be on whether the debt management strategy aims at minimizing budgetary risks and
ensuring long-term debt sustainability. Debt sustainability should also be discussed taking into account
the joint Bank/Fund Debt Sustainability Framework and traffic light system. The adequacy of the debt
recording systems, the timelines of the public debt data, and the effectiveness of the debt management
unit also need to be considered. The specific rating guidelines (i.e. the performance associated to each
rating) for this CPIA criterion can be found at the CPIA Data Center at
http://cpia.afdb.org/ResourceCenter/Default.aspx
2.2.2.4. Economic and Political Governance (word limit English 1500/French 1750)
Private sector (word limit English 350/French 450)
This section should contain one or two paragraphs reviewing the business climate developments and
the constraints faced by entrepreneurs in their activity. It should also provide insights on the policies
undertaken by the authorities to tackle these issues.
This section must build on the analysis supporting the CPIA rating in the Business Regulatory
Environment Criterion. The emphasis should be on direct regulations of business activity and regulation
of goods and factor markets. Three sub-components should be assessed: (a) regulations affecting entry,
exit, and competition; (b) regulations of ongoing business operations; and (c) regulations of factor
markets (labor and land). The analysis should also consider hiring and firing costs for temporary and
long-term contracts separately and take into account the overall cost of employing formal labor, i.e.
payroll taxes and safety regulations. It should assess the efficiency and reliability of labor courts as well
as matching services that help employers find workers efficiently. The specific rating guidelines (i.e. the
performance associated to each rating) for this CPIA criterion can be found at the CPIA Data Center at
http://cpia.afdb.org/ResourceCenter/Default.aspx
General guideline questions for this section are: What is the state of business climate? Has there been
any improvement? What are the major challenges for private sector development? What are the
authorities doing to improve the situation, notably in terms of regulatory environment (administrative
procedures regulating business, labor market reforms, taxation)? Are efforts made to improve the
enforcement of already existing laws?
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Infrastructure Development (Cross cutting section)
A criterion to assess country’s performance in promoting policies and institutions conducive to
Infrastructure development has been recently added to the CPIA questionnaire. This criterion provides
rationale and support for scores in three criteria: 1) Legal and Regulatory Frameworks for Infrastructure;
2) Sector Strategy; 3) Public Resource Management and Accountability in the Infrastructure Sector.
While the AEO does not include a full section to the infrastructure sector, this topic has been
consistently treated all over across the AEO notes. If relevant, drafters are therefore invited to build on
the analysis supporting the CPIA rating in the Infrastructure Development Criterion to enhance the AEO
notes. The specific rating guidelines (i.e. the performance associated to each rating) for this CPIA
criterion can be found at the CPIA Data Center at http://cpia.afdb.org/ResourceCenter/Default.aspx)
Financial sector (word limit English 350/French 450)
This section should contain one or two paragraphs reviewing the state of the financial system, the
reforms that are being undertaken and their results. In particular, this section should focus on the
development and health of major banks and other financial intermediaries and of the local stock
exchange. It should also provide an analysis of the main programs put in place by the government.
This section must build on the analysis supporting the CPIA rating for the Financial Sector Development
Criterion, which covers three dimensions; (a) financial stability; (b) the sector’s efficiency, depth, and
resource mobilization strength; and (c) access to financial services. The first dimension assesses the
sector’s vulnerability to shocks, the banking system’s soundness, and the adequacy of relevant
institutional elements. The second dimension assesses efficiency, the degree of competition, and the
ownership structure of the financial system, as well as its depth and resource mobilization strength. The
third dimension covers institutional factors, (such as the adequacy of payment and credit reporting
systems) the regulatory framework affecting financial transactions (including collateral and bankruptcy
laws and their enforcement) and the extent to which consumers and firms have access to financial
services. The specific rating guidelines (i.e. the performance associated to each rating) for this CPIA
criterion can be found at the CPIA Data Center at http://cpia.afdb.org/ResourceCenter/Default.aspx
Key questions for this sub-section would be: Is the financial system healthy (% of non-performing credits
in total bank credits)? What is its degree of development (banking system, stock-exchange…)? Has there
been any major reform of financial regulations? Is the financial system sufficiently liquid? How readily
can long-term financing be raised? Do banks have the capacity to finance big-ticket items? What is the
state and evolution of the nonblank financial sector, such as insurances and pension funds?
Public sector Management, Institutions and Reform (word limit English 300/French 350)
This section reviews all public reforms not analyzed in the Recent Development or Macroeconomic
Policy section or in Political Context (for example: decentralization). Special attention should be paid to
the follow up of the privatization process in the countries, especially in utilities such as water and
electricity. Any reforms of public financial management (PFM) systems, should also be described and
their impact on improving the quality of spending.
15
This section must incorporate the analysis supporting the CPIA rating for three CPIA Criteria: i) Property
Rights and Rule Based Governance; ii) Quality of Public Administration; and Transparency,
Accountability; and iii) Corruption in the Public Sector. The specific rating guidelines (i.e. the
performance associated to each rating) for this CPIA criterion can be found at the CPIA Data Center at
http://cpia.afdb.org/ResourceCenter/Default.aspx
The Property Rights and Rule Based Governance criterion assesses the extent to which private
economic activity is facilitated by an effective legal system and rule-based governance structure
in which property and contract rights are reliably respected and enforced. IT has four
dimensions: (a) legal basis for secure property and contract rights; (b) predictability,
transparency, and impartiality of laws affecting economic activity, and their application by the
judiciary; (c) difficulty in obtaining business licenses; and (d) crime and violence as an
impediment to economic activity.
The Criterion Quality of Public Administration assesses the extent to which civilian central
government staffs (including teachers, health workers, and police) are structured to design and
implement government policy and deliver services effectively. Civilian central government staffs
include the central executive together with all other ministries and administrative departments,
including autonomous agencies. It excludes the armed forces, state-owned enterprises, and sub-
national government. The key dimensions for assessment are: i) Policy coordination and
responsiveness; ii) Service delivery and operational efficiency; iii) Merit and ethics; and iv) Pay
adequacy and management of the wage bill.
The Criterion Transparency, Accountability and Corruption in the Public Sector assesses the
extent to which the executive can be held accountable for its use of funds and the results of its
actions by the electorate and by the legislature and judiciary, and the extent to which public
employees within the executive are required to account for the use of resources, administrative
decisions, and results obtained. Both levels of accountability are enhanced by transparency in
decision-making, public audit institutions, access to relevant and timely information, and public
and media scrutiny. National and sub-national governments should be appropriately weighted.
It has three dimensions: (a) the accountability of the executive to oversight institutions and of
public employees for their performance; (b) access of civil society to information on public
affairs; and (c) state capture by narrow vested interests.
Natural resource management and environment (word limit English 250/French 300)
This section should take stock of the progress of the country in achieving goal 7 of the MDGs (i.e.
ensuring environmental sustainability). It must build on the analysis supporting the CPIA rating in the
Environmental Policies and Regulations Criterion, which assesses the extent to which environmental
policies foster the protection and sustainable use of natural resources and the management of pollution.
The assessment of environmental sustainability requires multi-dimension criteria (i.e. for air, water,
waste, conservation management, coastal zones management, natural resources management).The
two-way relationship between environmental degradation and poverty is well recognized. Poverty tends
16
to lead to an extensive use of marginal land, water and forest resources, thus straining the already
fragile and limited environment base. This section assesses the effectiveness of government's policies to
protect the environment and promote sustainable development. The specific rating guidelines (i.e. the
performance associated to each rating) for this CPIA criterion can be found at the CPIA Data Center at
http://cpia.afdb.org/ResourceCenter/Default.aspx
Some guiding questions:
- How large are the public revenues that come from the natural resource sector(s) as
royalties, taxes, or profit sharing?
- Have there been recent changes to improve the terms of agreements with major
multinational enterprises in these sectors?
- Is there any major reform currently underway pertaining to natural resource management
or environment?
- Is the country making any progress in achieving goal 7 of the MDGs aiming at ensuring
environmental sustainability?
- Have steps been taken to improve linkages between natural resource sectors and other
sectors? What steps have been taken to strengthen institutional capacity to monitor natural
resource use and to manage the sector?
- Have projects been developed to take advantage of funds available from the Clean
Development Mechanism?
1.4.5. Political Context (word limit English 250/French 300)
This section reviews the latest political developments in the country paying special attention to the
election process. In order to ensure the objectivity of the analysis, this section needs to be built on
factual evidence. This section is country specific in the sense that these topics should be developed only
when relevant. No CPIA Criterion is associated to this sub-section.
Besides assessing the election process, guiding questions will encompass: How was the election process
set? What steps is the government taking to improve governance? Did important strikes take place
(mention the motivation?)? If so, in which sector? Did riots take place? In which circumstances? What
was the authorities’ reaction? Where there casualties or injured? Did demonstration take place
(mention the motivation?)? What were the causes? Was there any coup or attempted coup? Did the
government declare the state of emergency? (Any lift of state of emergency?) Where any political
opponents or journalists arrested? (Any liberation of political opponents or journalists) Where there any
reform in the police? Where there any episodes of violence on civilian inflicted by the police? Where
there any banning of demonstration/strike or closing of newspaper? (Any lift of bans?). Any measure for
the defense of human right, including improving the conditions of women? Any significant opening
towards rebel group/opposition (peace agreements, opening of dialogues etc)?
2.2.2.5. Social Context and Human Resources Development (word limit English 1100/French
1300)
17
Building Human Resources (word limit English 400/French 450)
This section assesses human resource development across three major areas: health, education and
prevention and treatment of HIV/AIDS, tuberculosis, and malaria. It should contain a short paragraph on
the progress made towards the MDGs 2, 4, 5 and 6. For uniformity, the discussion should follow the
sequence of the MDGs: primary and secondary school enrolment, reducing child morality, improving
maternal health and combating HIV/AIDs, malaria and other infectious disease.
Most of the information should be collected from the field (i.e. from the National Aid agencies when
present) this will refine the data from international sources and allow a better follow-up of the
countries. It is essential to ensure the comparability across countries by using reliable data collected for
at least two points in time with the same methodology. To that purpose, it is important to have a clear
definition of the information given by the domestic authorities as well as an assessment of their
soundness.
This section must also build on the analysis supporting the Building Human Resources CPIA Criterion
which assesses the national policies and public and private sector service delivery that affect access to
and quality of: (a) health and nutrition services, including population and reproductive health, (b)
education, ECD, training and literacy programs, and (c) prevention and treatment of HIV/AIDS,
tuberculosis, and malaria. ECD refers to Early Child Development programs, including both formal and
non-formal programs (which may combine education, health and nutrition interventions) aimed at
children aged 0-6. Within each HD domain, it assesses the quality of both policies and program design
and implementation. In most cases, government performance will be stronger in some program areas
than in others (i.e., basic health services vs. nutrition, primary education vs. tertiary, or HIV/AIDS vs.
malaria). The assessment should reflect a judgment about the relative importance of each underlying
policy/program area for the country’s overall development. The specific rating guidelines (i.e. the
performance associated to each rating) for this CPIA criterion can be found at the CPIA Data Center at
http://cpia.afdb.org/ResourceCenter/Default.aspx
Poverty Reduction, Social Protection and Labor (word limit English 500/French 600)
This section should contain a review of the country strategy and progress in terms of poverty reduction
with a strong focus on social protection policies and labor market conditions including unemployment
protection (insurance; etc.) and support to unemployed youth should be included in this section. The
analysis should pay special attention to the intra-country inequalities (i.e. rural-urban, major-minor
cities, etc.).
There are two CPIA criteria associated to this section: i) Equity of Public Resource Use; and ii) Social
Protection and Labor. The specific rating guidelines (i.e. the performance associated to each rating) for
this CPIA criterion can be found at the CPIA Data Center at
http://cpia.afdb.org/ResourceCenter/Default.aspx
The CPIA Criterion Equity of Public Resources assesses the consistency of government spending
with the poverty reduction priorities taking into account the extent to which: (a) individuals,
18
groups, or localities that are poor, vulnerable, or have unequal access to services and
opportunities are identified; (b) a national development strategy with explicit interventions to
assist the groups identified in (a) has been adopted; and (c) the composition and incidence of
public expenditures are tracked systematically and their results feedback into subsequent
resource allocation decisions. The assessment of the revenue collection dimension takes into
account the incidence of major taxes, e.g., whether they are progressive or regressive, and their
alignment with the poverty reduction priorities. When relevant, expenditure and revenue
collection trends at the national and sub-national levels should be considered.
The CPIA Criterion Social Protection and Labor assesses government policies which reduce the
risk of becoming poor, assist those who are poor to better manage further risks, and ensure a
minimal level of welfare to all people. Interventions include: social safety net programs, pension
and old age savings programs; protection of basic labor standards; regulations to reduce
segmentation and inequity in labor markets; active labor market programs, such as public works
or job training; and community driven initiatives. In interpreting the guidelines it is important to
take into account the size of the economy and its level of development. For example, a
combination of pension and savings programs can include mandatory, voluntary, public, private,
funded, pay-as-you go, contributory and non-contributory programs, as appropriate given the
country’s level of development.
Labor market issues are also covered in the Private Sector Section, where the focus is on the effects of
labor market regulations on firms’ employment decisions. Here, the focus is on the balance between job
creation and social protection, and the availability and coverage of active labor market programs (e.g.,
retraining and public works).
General Guideline questions for this section are: Is there any reduction in poverty rates? Is there any
improvement in the priority sectors defined in the PRSP? Are there public expenditures fully aligned
with poverty reduction priorities? Is there a Strong poverty diagnosis in place that very clearly identifies
poor, vulnerable groups, and those lacking services? Is there a strategy adopted with well-defined
interventions directed at assisting identified groups? Is there good progress achieved in aligning
expenditures with the strategy? Is there a tracking of spending (program, category, and region) in place?
Is benefit incidence analysis carried out for major programs? Is feedback of the analysis to subsequent
expenditure allocations fully implemented? Are there any egregious regressive revenue sources? Is
revenue generation aligned with national poverty reduction priorities?
Gender Equality (word limit English 200/French 250)
This section must discuss progress in terms of achieving MDG 3 on reducing gender disparity and build
on the analysis supporting the CPIA score for the Gender Equality Criterion. It must assess the extent to
which the country has enacted and put in place institutions and programs to enforce laws and policies
that: (a) promote equal access for men and women to human capital development opportunities; (b)
promote equal access for men and women to productive and economic resources; and (c) give men and
women equal status and protection under the law.
19
In addition to data on gender gaps in education, employment, political participation and health, the
section should also report available data related to social norms and discriminatory practices, for
example, the prevalence of early marriage, gender-based violence, attitudes towards domestic violence,
access to credit and asset ownership. The assessment of laws should consider an analysis of the quality
and coverage of the laws, implementation and enforcement mechanisms such as the provision of
training to the policy and judiciary, legal literacy programs and broader sensitization programs.
2.2.2.6. Thematic AnalysisTO be updated annualy(word limit English 1000/French 1200)
Each AEO country note should include a section of 1,000 words (about 6 to 8 paragraphs) in English or
1,200 words in French focused on the thematic chapter “tbd”). This section will be the opportunity for
the country note drafters to highlight the key policy challenges their country’s government currently
faces with regards
Wherever possible, authors should try to illustrate their account with specific examples from the
country. A good question to ask interview partners would be “Where should I go in this country
to better understand?”
As in previous years, a short electronic questionnaire will be circulated at the kick-off meeting.
This year the questionnaire will focus exclusively on qualitative assessment of selected policy
issues and illustrations of country cases.
20
CHAPTER 3: DATA COLLECTION AND USE
3.1. CPIA RATINGS
A complete list of the guidepost for each CPIA rating is included in Annex 2. Many of these indicators are
available at the AfDB CPIA Data Center (http://cpia.afdb.org). Public available data must be
complemented with the one gathered during country assessment missions from Ministries, Government
Agencies, CSOs, etc., especially for sections 3 (Macroeconomic Policy) and 5 (Social Context and Human
Development). When standardized indicators are not available in one country, drafters are expected to
fill the gaps with well documented qualitative assessments. The following considerations must also be
observed when assigning and reviewing country ratings:
- Update the text with respect to last year. This is valid even if you are proposing to maintain the same
score. Remember that you are expected to assess performance against specific criteria. In some cases
government inaction can be a strong argument for downgrading;
- Strong justification and rationale must be provided for any modification in the score. The use of
quantitative and qualitative indicators and consultation with relevant local institutions is required;
- Stronger level of justification and evidence is expected to support improvements at higher levels of
the scale (i.e. moving from 4.5 to 5 should be more difficult than moving from 2 to 2.5). Same
rationale applies for maintaining a score (i.e. maintaining a score of 5 should be more difficult that
maintaining a score of 2);
- To set the general policy framework is useful but must be complemented with recent developments
and (when possible) with quantitative and/or qualitative indicators. Remember that the objective of
the CPIA rating exercise is to assess the level of policy performance against the criteria included in
the year n CPIA Questionnaire;
- In case you refer to events that have occurred before 2011 or 2010 please provide a follow-up (i.e.
assess performance). For example if a law went to Parliament in 2009 you are expected to provide
information on the final outcome of that process (i.e. approved or not, level of implementation, etc.);
- Avoid mentioning bank projects or budget support operations as this can lead to circular references
(i.e. CPIA ratings influence the amount of funding that it is allocated to projects and BSOs);
- Intentions (either good or bad) are not valid arguments to support a rating. Scores should be based
entirely on actual policies and not on promises;
- It is possible that due to past misjudgments (i.e. overrating) the current score of a country in a certain
category is in a clear misalignment with the reality. In these situations the country economist/drafter
should “reset” the country rating (i.e. lower scores not because of events that occurred during the
past year but due to historical misalignments).
- Seek for external advice in those areas where you consider you do not have the necessary expertise
(i.e. gender equality, environmental policies, etc.);
- Be concise and concrete. Your report must be convincing at the eyes of independent experts and
colleagues;
21
- Country write-ups must contain all the necessary information to support a country rating (i.e. assume
no prior knowledge of the country by the reader). This ensures the transparency and the fairness of
the process;
All the information needed to assign CPIA ratings can be found at the knowledge centre section in the
CPIA electronic platform http://cpia.afdb.org/
3.2. AEO FORECASTING MODEL
3.2.1 General considerations
In order to generate the forecasts, the model needs the data listed in annex 2.2. These data are
collected in the Masterdata template. For all countries except the new ones, such a framework has
already been filled and will be provided to you. Consequently, feeding the model is just a matter of
updating the existing series with the latest updates and checking the series and the sources. However,
because of a lack of time/data, for some countries, the series that were used in previous years might be
inappropriate and need to be replaced by better ones. No break in the series is allowed and the source
used should be consistent throughout the series and the block of data (national accounts, public finance,
etc). Special care should be taken on the time frame of the national accounts and the public finances.
Each country economist is responsible for filling the model template. The checking of the relevance of
the data in the model has to be undertaken on a country by country basis, before the mission so that the
gaps can be filled with the help of the local consultant.
For some countries, the fiscal year does not correspond to the calendar year. In those cases, the data
collected on the field are the raw data and they are processed only when entered in the model. In the
2012/2013 AEO report, we will give estimates for 2012 and forecasts for 2013 and 2014. Keeping in
mind our objective of building a database, we will need time series running from 2000 to the latest
available actual data (2011) completed, and as many estimated data points for 2012 as possible. Except
when explicitly stated, the required data are levels and not shares.
Authors are responsible to provide the basic assumptions for the forecasting period n+1 and n+2, based
on your discussions with the various authorities during the mission and other relevant sources of
information. Your ESTA contact person will provide you with a template for completing the
assumptions. These assumptions should be discussed explicitly in the section 2 “Recent economic
development and prospects”
The Masterdata file has 4 important blocks:
- National accounts, essentially the GDP breakdown by sector at current and at constant prices as
well as expenditure on GDP at current and constant prices
- Main commodities exported, both quantities exported and export prices in US$
- Balance of payments including export and imports of goods, services, income transfers at least
up to the current account
- Government finance providing full details of income and components of expenditure
22
Authors will work in close collaboration with ESTA’s focal points in the country’s respective national
statistical authority. The source data will be provided to ESTA preferably in electronic format, within one
week after the mission, to facilitate checking of consistency of the Masterdata, calibrating and ensure
the convergence of the model. The source data will be collected from the national authorities: National
statistics office for real sector data national accounts, prices, external trade statistics etc; Ministry of
Finance for data on government finance and budgets, Central Bank for balance of payments. Data to be
collected includes historical data as well as country forecasts. Since data for full year 2012 is not
available monthly/quarterly data can provide very useful indications for making the forecasts for the
year.
For each country, a series of exchange rates, inflation rates and growth rates (volume) should be
provided (and must be consistent with the national account figures) to allow for the calibrating of the
model and to ensure the comparability with known historical trends. On top of these basic data, the
following inputs are needed:
3.2.2. Prices
These data are exogenous in the forecasting model. The historical series should be collected on the
ground, from the Central Statistical Office for instance. The estimates for the forecasting years should be
made by the country economists, based on preliminary information collected on the ground
(commitments of the government on public wages and utility prices, central bank inflation target,
expectations for future food crops...).
Public Wage Rate: nominal growth rate, local currency units (LCU) Private Wage Rate: nominal growth
rate, LCU. If not available, it can be useful to collect a series on minimum wages instead. Food
Production (volume growth and producer price): so far the food production growth has been taken from
the FAO while the producer price was proxied by a food price index. You can also base your estimates on
trends in food crop production in the national accounts. Other exogenous prices (public utilities): public
utilities price index.
The prices are not always available in the appropriate format, in which case, we use the prices with the
closest definition. For instance, when the public utilities price index was not directly available, we used a
basket of prices encompassing the price of electricity, the price of transport.
3.2.3. Major primary exports
This is the most country specific section of the model as the chosen commodities heavily depend on the
comparative advantages of the countries. For each country, the products that account for the biggest
shares of the country exports are selected (up to 4 commodities). The number of selected commodities
is however lower for less diversified countries (Gabon) as well as for South Africa which is specialized in
non-traditional exports. The non-traditional exports are also taken into account in the model. They are
computed as the residual of total exports (from the balance of payments) minus major primary exports.
Consequently, it is important to check that the level of exports derived from the major primary exports
is consistent with the total of exports reported in the external trade section of the model. As total
23
exports are derived from the balance of payments, the best way to ensure the consistency is to take the
traditional exports from the balance of payments as well. For each commodity, Volume (unit) Export
price ($/unit) and Producer Price (LCU/unit) has to be collected until year n.
Regarding the estimates of volume and producer prices, the country economists should rely on local
sources (government commitment on producer prices when they are regulated, long term programs
regulating the production…). The forecasting value of international export prices over 2012-2014 is
available for most of the commodities from the World Bank and will be made available to you.
3.2.4. External trade in current local currency units (LCU)
Historical series from 2000 to year n-1 are needed, plus estimates for year n when available.
Imports of energy: a series of import of petroleum - or if not available energy - is needed in order to
estimate the weight of oil products in trade. The series should be in value, possibly LCU but the most
important is to make sure that all the inputs of the section are in the same currency.
Imports of goods (fob): series taken from the balance of payments.
Imports of non-factor services: the non-factor services are calculated as the difference between the
balance of payments data on trade in goods and the national accounts (where trade in goods and in
non-factor services are combined) in the historical series, and thus include statistical discrepancies.
However, for some countries the non-factor services are a very important component of the balance of
payments (for countries where tourism is important like Egypt for instance). In those cases, it is essential
to gather consistent series of non-factor services and their components from the balance of payments
data.
- Total imports (goods + non-factor services): taken from the national accounts.
- Exports of goods: series taken from the balance of payments.
- Exports of non-factor services: same logic as for imports of non-factor services.
- Total exports (goods + non-factor services): taken from the national accounts.
Tourism receipts: only for countries where tourism accounts for a substantial weight in GDP. So far it has
included Egypt, Kenya, Mauritius, Morocco, Tunisia, South Africa (Data to be collected from the Ministry
of Tourism or the BOP).
The input sheet of the model should also include the remaining items of the current account: factor
income, remittances and transfers up to the forecasting period (2012-2013).
3.2.5. National accounts in current LCU
Time series from 2001 to year n-1 (first estimates for year n); GDP by expenditure
3.2.6. Fiscal accounts in current LCU
24
Time series from 2001 to year n-1 (first estimates for year n); Grants and interest payments are required
until n+2: they can be collected from government Letter of Intent or medium term programs.
3.2.7. Items for estimates and projections only (needed foryear n, n+1 and n+2)
These items refer to data estimated by the government in the forecasted budgets for 2012 and 2013.
They are available from the Letter of intent that the IMF reports on its website for countries under IMF
programs, but also directly from the ministry of economy and finance.
Estimates (annual percentage changes) are needed for the following: Growth of Public Current
Expenditure, excluding wages (volume) Growth of public Investment (volume) Growth of private
Investment (volume) Growth of public employment (volume) Change in tourism receipts
3.2.8. Elasticities / structural parameters
(Data is already available in the master data file but has to be reviewed in case of structural change)
The structure of private consumption, namely the shares in private consumption of the following items
(source: social accounting matrix, one year, preferably for the latest year for which data is available, is
sufficient):
- Domestic food products - Other Domestic goods - Imported goods (food and non-food imports
separately) - Public Utilities Structure of production costs (source: social accounting matrix, one
year is sufficient): - Inputs (Domestic, Imported non-oil, Imported oil)- Value-added (Labor
Income, Capital Income)
- Share of imported investment goods (source: social accounting matrix, one year is sufficient)
- Population growth (source: UN Population Division to be consistent with the statistical annex, 2
observations are enough: 2002-2007 and 2007-2014).
- Imports and exports geographical structure (source: national statistical office, central bank or if
not available use international sources such as Direction of Trade, IMF.;, annual)
3.2.9. Euro Zone Other
- Estimate of food crop in household income (source: household survey, one year is sufficient)
- Average propensity to consume (source: from household survey, one year is sufficient)
25
ANNEX 1: Correspondence between Country Notes Sections and CPIA Criteria
Section # Section Name CPIA Criteria assessed
1 Overview -
2 Recent Economic Developments and prospects
-
3 Macroeconomic Policy -
3.1 Fiscal Policy Criterion 2: Fiscal Policy Criterion 13: Quality of Budgetary and Financial Management Criterion 14: Efficiency of Revenue Mobilization
3.2 Monetary Policy Criterion 1: Monetary Policy
3.3 Economic Cooperation, Regional Integration and Trade
Criterion 4 and 18: Economic Cooperation, Regional Integration and Trade
3.4 Debt Policy Criterion 3: Debt Policy
4 Economic and Political Governance -
4.1 Private Sector Criterion 6: Business Regulatory Environment
4.2 Financial Sector Criterion 5: Financial Development
4.3 Public Sector Management, Institutions and Reform
Criterion 12: Property Rights and Rule Based Governance Criterion 15: Quality of Public Administration Criterion 16: Transparency, Accountability and Corruption in the Public Sector
4.4 Natural resource Management and environment
Criterion 11: Environmental Policies and Regulations
4.5 Political Context -
5 Social Context and Human Development -
5.1 Building Human Resources Criterion 9: Building Human Resources
5.2 Poverty Reduction, Social Protection and Labor
Criterion 10: Social Protection and Labor Criterion 8: Equity of Public Resource Use
5.3 Gender Equality Criterion 7: Gender Equality
6 Thematic Analysis -
Cross cutting Criterion 17: Infrastructure Development
26
ANNEX 2: Guideposts for CPIA Ratings
Important Note: indicators marked with a “*“ can be found at http://cpia.afdb.org/
CPIA Criterion Guideposts
# Name
1 Monetary Policy IMF Article IV Consultation
National (or regional) Central Bank Websites and Annual Reports
2 Fiscal Policy IMF Article IV - Checklist of Budget/Financial Management Practices from Public Expenditure
Management Handbook (see Annex D).
IMF Code of Good Practices on Fiscal Transparency—Declaration on Principles at
http://www.imf.org/external/np/fad/trans/code.htm
World Development Indicators (Tax policy indicators)*
The Global Competitiveness Report, The World Economic Forum (Extent and Effect of Taxation)
http://gcr.weforum.org/gcr09/
3 Debt Policy IMF/World Bank Debt Sustainability Reports
National (or regional) Central Bank Websites and Annual Reports
4 Economic
Cooperation,
Regional
Integration and
Trade
Penn Tables (Trade openness and others)
http://pwt.econ.upenn.edu/php_site/pwt63/pwt63_form.php
FIAS Administrative Barriers Reports (where current); http://www.fias.net/
Enterprise surveys; http://www.enterprisesurveys.org/
WTO Trade Policy Review (where current); http://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm
Doing Business Indicator (Trading across Borders)*
The Global Competitiveness Report; The World Economic Forum
(Prevalence of trade barriers, Burden of customs procedures) http://gcr.weforum.org/gcr09/
5 Financial Sector
Development
World Development Indicators; Finance and Private Sector Development Databases*
Financial Sector Assessment Programs Documents (FSAP) where available;
Doing Business Indicator (Getting Credit) http://www.doingbusiness.org
The Global Competitiveness Report; The World Economic Forum Indicators (Financial Market
Sophistication) http://gcr.weforum.org/gcr09/ *
National (or regional) Central Bank Websites and Annual Reports
6 Business
Regulatory
Environment
Doing Business Indicators*
Corporate governance disclosure index*
Investment Climate Assessments
http://www.worldbank.org/privatesector/ic/ic_country_report.htm ;
World Bank Institute Governance Indicators (Regulatory Quality)*
27
http://www.worldbank.org/wbi/governance/data
7 Gender Equality World Development Indicators (School Enrolment rates by Gender)*
International Labor Organization (Professional occupations prevalence by gender)
UNECA, AU, AfDB, UNDP - MDG Report 2013*
http://www.uneca.org/sites/default/files/publications/mdgreport2013_eng.pdf
8 Equity of Public
Resource Use
National development strategy and the Bank’s (or their partners’) assessment,
Available Public Expenditure Reviews, poverty analyses, country economic memorandum, or any
other relevant analytical work prepared by the Bank, the government, other donors and
development partners
9 Building Human
Resources
Recent PERs, sector reviews, poverty assessments, Country Status Reports for education and health.;
EDSTATS: http://www1.worldbank.org/education/edstats/ ;
EFA Fast Track monitoring indicators (under development)
http://www1.worldbank.org/education/efafti/ ;
Education attainment (DHS survey data for 80 countries):
http://www.worldbank.org/research/projects/edattain/edattain.htm ;
UNICEF: http://www.childinfo.org/ ;
WHO: http://www3.who.int/whosis/menu.cfm ;
UNAIDS: http://www.unaids.org/en/resources/epidemiology.asp ;
US Bureau of the Census (HIV/AIDS database): http://www.census.gov/ipc/www/hivaidsd.html
UNECA, AU, AfDB, UNDP - MDG Report 2013*
http://www.uneca.org/sites/default/files/publications/mdgreport2013_eng.pdf
10 Social
Protection and
Labor
Summary indicators of labor market regulations in the World Bank Doing Business Database*
11 Environmental
Policies and
Regulations
Existence of an environmental policy framework and Environmental Impact Assessment legislation;
Specific Issues: deforestation, protected areas, water use, access to safe water, access to sanitation,
air pollution in major cities, ratification of global treaties
UNECA, AU, AfDB, UNDP - MDG Report 2013*
http://www.uneca.org/sites/default/files/publications/mdgreport2013_eng.pdf
12 Property Rights
and Rule Based
Governance
Legal base for secured property and contract rights
Mo Ibrahim Index of African Governance (Property Rights Index)*
African Competitiveness Report (Property Rights Indicator)*
Predictability, transparency, and impartiality of laws affecting economic activity
Doing Business Report (Enforcing Contracts)*
Global Integrity Report (Rule of Law/Law Enforcement)*
Difficulty in obtaining business licenses
Doing Business Report (Obtaining business licenses)*
Enterprise Surveys (Days to obtain Operating Licenses) http://www.enterprisesurveys.org/
28
Global Integrity Report (Business Licensing and Regulation)*
Crime and violence as an impediment to economic activity
Mo Ibrahim Index of African Governance (Safety and Security)*
African Competitiveness Report (Business Costs of Crime and Violence / Organized crime /
Reliability of police)*
Worldwide Governance Indicators (rule of law/Oversight and Regulation/Business Licensing and
Regulation)*
13 Quality of
Budgetary and
Financial
Management
General
IMF Report on the Observance of Standards and Codes (ROSC) – Fiscal Transparency*
Comprehensive and credible budget
PEFA (PI-11 and PI-12)
Effective financial management systems
PEFA (PI-1, PI-2, PI-4, PI-5, PI-6, PI-7)
Open Budget Survey (Open Budget Index)
Timely and accurate fiscal reporting
ROSC Accounting and Auditing
PEFA (PI-21, PI-22, PI-23, PI-24, PI-25, PI-26, PI-27, PI-28)
Clear and balanced assignment of expenditures and revenues to each level of government
PEFA (PI-8)
14 Efficiency of
Revenue
Mobilization
General
IMF Article IV staff report
Tax policy
Enterprise Surveys (% of Firms Identifying Tax Rates as Major Constraint)
http://www.enterprisesurveys.org/
African Competitiveness Report (Extent and effect of taxation)*
African Development Indicators Online (ADI)
Tax administration
Doing Business Report (Paying Taxes)*
Enterprise Surveys (% of Firms Identifying Tax Administration as Major Constraint)
http://www.enterprisesurveys.org/
Global Integrity Report (Taxes and Customs)*
PEFA (PI-13, PI-14, PI-15)
15 Quality of Public
Administration
General
African Governance Report
Policy coordination and responsiveness
Afrobarometer (Government Performance)*
Bertelsmann Transformation Index (Status Index and Management Index)*
Service delivery and operational efficiency
29
Worldwide Governance Indicators (Government Effectiveness)*
African Competitiveness Report (Burden of Government Regulation)*
Merit and ethics
Global Integrity Report (Civil Service Regulation)*
Africa Peer Review Mechanism*
Pay adequacy and management of the wage bill
World Bank Civil Service website
16 Transparency,
Accountability
and Corruption
in the Public
Sector
General
Transparency International Corruption Perception Index
Accountability of the executive to oversight institutions and of public employees for their
performance
Global Integrity Report
Africa Peer Review Mechanism
Open Budget Survey
Afrobarometer
Access of civil society to information on public affairs
Africa Peer Review Mechanism
Global Integrity Report
Open Budget Survey
Reporters Without Borders
Freedom House
State capture by narrow vested interest
Enterprise Surveys (Corruption)
African Competitiveness Report (Diversion of Public Funds)
17 Infrastructure
Development
Existing National Infrastructure Master Plans/Strategies
AfDB - Africa Infrastructure Development Index (AIDI)
Infrastructure Consortium for Africa (ICA)*
http://www.icafrica.org/en/
Doing Business Indicator (Energy)*
Enterprise Surveys (Corruption)
http://www.enterprisesurveys.org/
The Global Competitiveness Report; The World Economic Forum (Quality of overall infrastructure;
quality of infrastructure per sector)
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf
World Development Indicators
18 Regional
Integration
Websites of Regional Economic Communities (RECs)
UNCTAD Stats* (http://unctadstat.unctad.org/ReportFolders/reportFolders.aspx) and thematic
30
reports
UNCTAD - World Investment Report*
http://unctad.org/en/PublicationsLibrary/wir2013_en.pdf
UNECA – Assessing Regional Integration in Africa V*
http://www.uneca.org/sites/default/files/publications/aria5_print_uneca_fin_20_july_1.pdf
Enterprise surveys; http://www.enterprisesurveys.org/
The Global Competitiveness Report; The World Economic Forum*
http://gcr.weforum.org/gcr09/
31
ANNEX 3: AEO Country Note Writing Style – Checklist for English version only
Use UK spelling, e.g. equalise (not equalize) and labour (not labor)
e.g., et al., i.e., should be written in roman type, not italics and should not be followed by a comma
Hyphens (pg.25). Use hyphens for compound adjectives, i.e. middle-class characteristics, but the
middle class ; long-term loan, but in the long term.
Never use non-breaking hyphens as these do not print out in some software. For negative numbers,
use an ordinary hyphen before the number. These should be adjusted manually by proofreader if
there is a line break between the negative sign and the number.
Numbers –remove any commas separating numbers and replace with hard spaces (Ctl, Shift, Space).
Also place a hard space between the number and th unit, e.g. 5#568#000#people
Periods of years in the same decade should be written as follows – 2008-09. Or 2008/09 for a fiscal
year (covering the period of 12 months). For 2008-09, use an ordinary hyphen.
Notes – Endnotes should be numbered using arabic figures. 1, 2, 3. The number in the text should be
place after the punctuation.
Dates – Put a hard space (#) between the day and the month, but not the month and the year
15#January 2003
Always use the % symbol in the text, not the word (except in the case of percentage points). When
two numbers are not separated by a hyphen, repeat the % symbol, e.g. 30-40% , but 25% to 50%.
For parentheses within parentheses, use square brackets, e.g. (In this regard, consult Fowlers
[2003])
For numeration within the text, use i) xxxxi; ii) xxxxxxx; iii) xxxxxxxx.
For regional denominations use Northern Africa, Western Africa, Eastern Africa, Central Africa and
Southern Africa.
Notes
There should be no footnotes, only endnotes that appear at the end of the country note.
No endnotes should be placed in graphics – graphics, tables and boxes have their own notes, which
should be numbered 1,2, 3...
There should be no sources or references in the notes, unless additional information is given.
Endnotes should be numbered using arabic figures 1, 2, 3. The number in the text should be place
after the punctuation.
32
Source: and Note: should be written in italics (including colon)
Acronyms and abbreviations (including currencies)
These should be kept to a minimum.
The term should be spelt out the first time it is used in each chapter, followed by the abbreviation in
brackets, and the abbreviation should be used thereafter.
Always use the ISO code for currencies. For little known currencies, spell it out the first time and use
the ISO code thereafter, e.g.IDN#1#500 (Indonesian rupiahs).
Put in hard spaces between currency and figure: USD#20 and USD#30#billion
Other words (special cases)
Internet, Internet site – but web, website
Policy maker and policy making (no hyphen) but policy-making as an adjective
Co-ordination (with hyphen) NB. But uncoordinated
Co-operation (with hyphen) NB. But uncooperative
Use world wide as an adverb, and worldwide as an adjective
Use online as an adverb, and online as an adjective
33
ANNEX 4: CPIA-AEO Calendar: Key dates
Month Day Task
September 2013
Circulation of the 2013 CPIA questionnaire
20 Friday
Circulation of 2013-14 CPIA/AEO Manual for Drafters
Circulation of the CPIA platform’ guidelines
23-24 Monday CPIA/AEO kick off meeting
23 Monday Reception of Requests for Local and International Consultants starts
24 Monday Drafting of CPIA evaluations starts
25-30 Wednesday-Monday
Training on CPIA Electronic Platform for Drafters
October 2013
1-4 Tuesday-Friday Training on CPIA Electronic Platform for Drafters
14-25 Monday - Friday Training on new CPIA Electronic Platform for Reviewers
21 Monday
Reception of Requests for Local and International Consultants ends
Experts Meeting on AEO Theme Part (tbc)
Deadline for delivery of First Draft CPIA evaluation and scores
November 2013
8 Friday Deadline Peer Review of Country Evaluations/Ratings and feedback to drafters
22 Friday Deadline for delivery Second Draft CPIA evaluations and scores
December 2013
9 Monday Delivery of AEO Source Data to ESTA
9-11 Monday-Wednesday
CPIA endorsements sessions
13 Friday Final CPIA country evaluations and scores
January 2014
6 Monday Deadline of delivery of First, complete Draft of AEO Notes (all sections +forecasts)
7-17 Tuesday-Friday External Peer Review of AEO Notes
20-25 Monday-Friday Internal Peer review at AfDB (tbc)
February 2014
6 Thursday Deadline for delivery of AEO final notes
6-25 Thursday-Tuesday Finalization of Country notes, including comments from peer review.
34
ANNEX 5: Detailed Tables of the Country-Note (Provided by ESTA) Table 1 - Macroeconomic Indicators
2012 2013 2014 2015
Real GDP Growth
Real GDP per capita growth
CPI inflation
Budget balance % GDP
Current account balance % GDP
Source: Data from Domestic authorities; estimates (e) and prediction (p) based on authors' calculations.
Table 2 - GDP by Sector (percentage)
2008 2013
Agriculture, hunting, forestry, fishing
Mining
Manufacturing
Electricity, gas and water
Construction
Wholesale and retail trade, hotels and restaurants
Transport, storage and communication
Finance, real estate and business services
Public Administration, Education, Health & Social Work, Community, Social & Personal Services
Other services
Gross domestic product at basic prices / factor cost
Source: Data from Domestic authorities; estimates (e) and prediction (p) based on authors' calculations.
Table 3 - Public Finances (percentage of GDP)
2005 2010 2011 2012 2013 2014 2015
Total revenue and grants
Tax revenue
Oil revenue
Total expenditure and net lending (a)
Current expenditure
Excluding interest
Wages and salaries
Interest
Primary balance
Overall balance
a. Only major items are reported.
Source: Data from Domestic authorities; estimates (e) and prediction (p) based on authors' calculations
Table 4 - Current Account (percentage of GDP)
2005 2010 2011 2012 2013 2014 2015
Trade balance
Exports of goods (f.o.b.)
Imports of goods (f.o.b.)
Services
Factor income
Current transfers
Current account balance
Source: Data from Domestic authorities; estimates (e) and prediction (p) based on authors' calculations.