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Uganda

Can temporary subsidies and agricultural extension build sustainable adoption?

Markus Goldstein's picture
A fair number of governments in developing countries support agricultural subsidy programs.   One of the arguments for these subsidies is that there is some kind of market failure (information is often cited) that the subsidy is meant to overcome.    So, that means when the subsidy is removed (which is the politically hard part), we should see adoption sustained.    There isn’t much clear evidence on this, but two recent papers provide some insight.
  

World Refugee Day: What you need to know about the displaced and their host communities

Ede Ijjasz-Vasquez's picture

Today is World Refugee Day, a day for us all to remember how many people are moved or displaced from their homes—either within their own country or across borders.

The UN High Commissioner for Refugees (UNHCR) just announced that there were 22.5 million refugees and 40 million displaced internally due to conflicts last year, as well as many more forced to move due to natural disasters.  
Forced displacement is a crisis centered in developing countries, which host 89% of refugees and 99% of internally displaced persons. Watch a video below and learn how the crisis affects the displaced and their host communities alike around the world.
 

 


Motorization and its discontents

Roger Gorham's picture
Photo: Sarah Farat/World Bank
They say a picture is worth a thousand words.  While visiting the World Bank library the other day, I was struck by how many development publications featured pictures of motor vehicles on their covers, even though most of them covered topics that had little to do with transport.  The setting and tone of the pictures varied – sometimes they showed a lone car on a rural highway, sometimes congested vehicles in urban traffic, and sometimes a car displayed proudly as a status symbol – but the prevalence of motorized vehicles as a visual metaphor for development was unmistakable to me: in the public imagination, consciously or otherwise, many people associate development with more use of motorized vehicles.

Indeed, motorization – the process of adopting and using motor vehicles as a core part of economic and daily life – is closely linked with other dimensions of development such as urbanization and industrialization.

Motorization, however, is a double-edged sword.

For many households, being able to afford their own vehicle is often perceived as the key to accessing more jobs, more services, more opportunities—not to mention a status symbol. Likewise, vehicles can unlock possibilities for firms and individual entrepreneurs such as the young man from Uganda pictured on the right, proudly showing off his brand new boda boda (motorcycle taxi). 

But motorization also comes with a serious downside, in terms of challenges that many governments have difficulty managing.  Motor vehicles can undermine the livability of cities by cluttering up roads and open spaces—the scene of chaos and gridlock in the picture below, from Accra, is a telling example. In addition, vehicles create significant safety hazards for occupants and bystanders alike… in many developing countries, road deaths have effectively reached epidemic proportions. From an environmental standpoint, motorized transport is, of course, a major contributor to urban air pollution and greenhouse gas emissions. Lastly, motorization contributes to countries' hard currency challenges by exacerbating their long-term demand for petroleum products.

Given these challenges, how are developing countries going to align their motorization trajectories with their development goals?  What should the World Bank advise our clients about how to manage this process?

How small social enterprises tackle drought challenges in East Africa

Caroline Weimann's picture
Photo: Caroline Weimann/Siemens Stiftung

This past February, Kenyan President Uhuru Kenyatta officially declared the drought in his country a national disaster. No rain had fallen for months in East Africa, causing a dire living situation.
 
Tribes migrated to find water and food, and we saw an increase in the amount and severity of conflicts, specifically between herders and owners of large farms.
 
In the cities, the situation is not much better. Nairobi’s main water supply is a dam which is currently only 20% full. The Nairobi Water Company is rationing water, and many people only have running water once a week.

Agriculture is suffering; the price of milk has risen from 40 to 65 Kenyan Shillings (KES) for half a liter in just six months. Maize meal, a staple food, has gone up nearly 40%, with the state recently announcing a subsidy for maize.

When it comes to developing Africa’s cities, “grow dirty now, clean up later” is not an option

Ede Ijjasz-Vasquez's picture
Africa’s cities have grown at an average rate of 4% per year over the past 20 years. While rapid urbanization has helped reduce poverty and improve livelihoods in the region, it is putting increasing pressure on Africa’s natural environment and sustainable development.
 
[Download a newly launched report—Greening Africa’s Cities—to learn more about the interplay between urbanization and sustainability in Africa.]
 
Take Kampala, Uganda as an example. It is estimated that only 5% of the city’s population is connected to the sewer network, with 95% of the population having access to basic on-site, mostly shared, sanitation. As a result, the volumes of flows entering the city’s Nakivubo wetland channels have increased significantly with contaminated runoff from informal areas and partially treated wastewater from the overburdened sewage works. This has significant negative impacts on human health, wetland and lake ecological function, as well as the cost of water supply to the city from Lake Victoria’s Inner Murchison Bay.
 
The city is considering rehabilitating the Nakivubo wetland, but it would cost US$53 million upfront, in addition to ongoing maintenance and operating costs of about US$3.6 million per year. Although benefits would include water treatment cost savings of US$1 million and recreational benefits exceeding US$22 million per year, it is now too costly and impractical to restore the wetland to a state where benefits can be achieved.

Electricity and the internet: two markets, one big opportunity

Anna Lerner's picture
The markets for rural energy access and internet connectivity are ripe for disruption – and increasingly, we’re seeing benefit from combining the offerings.
 
Traditionally, power and broadband industries have been dominated by large incumbent operators, often involving a state-owned enterprise. Today, new business models are emerging, breaking market barriers to jointly provide energy access and broadband connectivity to consumers.
 
As highlighted in the World Development Report 2016, access to internet has the potential to boost growth, expand economic opportunities, and improve service delivery. The digital economy is growing at 10% a year—significantly faster than the global economy as a whole. Growth in the digital economy is even higher in developing markets: 15 to 25% per year (Boston Consulting Group).
 
To make sure everyone benefits, coverage needs to be extended to the roughly four billion people that still lack access to the internet. In a testing phase, Facebook has experimented with flying drones and Google has released balloons to provide internet to remote populations.
 
But as cool as they might sound, these innovations do nothing for the one billion people who still live off the grid… and don’t have access to the electricity you need to use the internet in the first place! The findings of the Internet Inclusion Summit panel which the World Bank joined recently put this nicely: “without electricity, internet is only a black hole”.
 
That’s why efforts to expand electricity and broadband access should go hand in hand: close coordination between the energy and ICT sectors is probably one of the most efficient and sensible ways of making sure rural populations in low-income countries can reap the benefits of digital development. This thinking is also reflected in a new generation of disruptive telecom infrastructure projects.

What can we do about gender-based violence and violence against children in infrastructure projects?

Inka Schomer's picture



You are young, poor, living in a remote rural area, and one day your whole life is turned upside down by a sexual assault. No matter whether the offender is your partner or spouse, another family member, a teacher, a co-worker or a stranger, you will need to make choices.

What happens when business training and capital programs get caught in the web of intrahousehold dynamics?

Markus Goldstein's picture
Two weeks ago, I blogged about a new paper by Arielle Bernhardt and coauthors which looked at the idea that when women receive a cash infusion from a program, they may give it to their husbands to invest in their business.
 

How to make grants a better match for private sector development

Cecile Fruman's picture



From the Yemen Enterprise Reviltalization and Employment Pilot Project.

In December 2016, the 18th  replenishment of the International Development Association, the World Bank’s fund for the poorest countries, put private sector development squarely at the heart of our organization’s commitment to end extreme poverty and boost shared prosperity. In addition, the Internal Finance Corporation’s 3.0 strategy placed new emphasis on creating and catalyzing markets and scaled up the role of advisory services in providing firm-level support.

This new focus makes it even more important to answer the following question: Do we have sufficient evidence about the efficiency and effectiveness of the tools used by the World Bank Group to help firms grow in our client countries?

Building on a broad evaluation of the Bank Group’s support to small and medium-sized enterprises (SMEs), published in 2014, a recent report by the Trade & Competitiveness Global Practice, supported by the Competitive Industries and Innovation Program, reviews the experience to date of supporting SMEs through matching grant schemes. The report looks at the how and why of an instrument that has been used in more than 100 Bank Group projects since the 1990s.

Matching grants are short-term, temporary subsidies, provided to the private sector on a cost-sharing basis (typically 50 percent). The grants generally aim at building firms’ capacity and knowledge through the procurement of business development services (BDS), which include a wide variety of non-financial services such as employee and management training; consultancy and advisory; marketing and information services; and technology development and diffusion. For example, a matching grant initiative in Uganda targets businesses in priority sectors such as tourism, agribusiness and fisheries with the goal of diversifying their products and increasing exports. A similar facility in Afghanistan operates in four cities – Kabul, Mazar-e-Sharif, Jalalabad and Herat – and helps SMEs and business associations to improve product quality and processing technologies, and to gain market knowledge in order to expand their presence in domestic and international markets.

The economic rationale for subsidies to private firms is usually a perceived underinvestment in BDS. This could be due to market failures preventing a profitable investment in such services (e.g., lack of financing for intangible activities, insufficient awareness of the potential benefits or perceived high risk), or to positive externalities from an otherwise unprofitable private investment (e.g., knowledge spillovers). If these conditions are not present, however, matching grants could create distortions in resource allocation, could have limited additionality and spillovers, or could have non-durable impacts if they fail to address the underlying market failure.

The Trade & Competitiveness report reviewed virtually all matching grant projects financed by the Bank Group over the last two decades. Most of these have focused on SME development while some have also supported rural development. Over half of the reviewed projects are in Africa, followed by Latin America and the Caribbean. The average size of matching grant schemes is $11.5 million, with grants for agriculture projects typically being significantly larger than for SME development. The average number of beneficiaries per project is 450 and the average maximum cumulative funding going to a single beneficiary is $112,000, although this amount is much lower in many projects.

In terms of how, the report examines a number of common variables of matching grant projects, such as type of implementing agency and eligibility criteria. A key conclusion is that there appears to be no obvious correlation between the design features of matching grants and either positive or negative outcomes. Rather, matching grants need to be tailored to local circumstances and capacities.

The report does find that personalized technical assistance to beneficiary firms can increase the odds of success. In addition, contrary to perceptions, public implementing agencies generally outperform private consulting firms. Public agencies do particularly well in lower income countries where procuring large international contracts can be difficult and where the agencies know the local context. Whether public or private, strengthening of local capacities, broad stakeholder engagement, and transparent communication increase the chances that a matching grant will achieve its goals.

In terms of why, the report also examines how projects define what constitutes a successful outcome.  About three quarters of the reviewed projects received a positive outcome rating. However, the definition of success varied widely, and rarely reflected measures of broad and sustainable economic benefit. Projects should articulate a sound economic rationale identifying a specific market failure. Otherwise, the benefits of a grant may not extend beyond the recipient firm or be sustainable in the long term.

For this reason, the report recommends that, when considering the use of matching grants, development practitioners identify a clear economic rationale, consider alternative instruments, carry out an economic analysis, assess the potential for additionality and spillovers, and establish a realistic exit strategy that would leave sustainable benefits. A strong monitoring and evaluation system is an equally important requirement and an essential tool for real-time assessment of impact, potential course corrections and learning. Strengthening these elements could help development practitioners and their clients maximize the benefits of this potentially powerful tool for private sector development and competitiveness.

To gain access to the full report, click here.

Indigenous peoples, forest conservation and climate change: a decade of engagement

Kennan Rapp's picture
Women in Panama participated in activities supported by the capacity building program. Photo credit: World Bank  


This year’s UN Permanent Forum on Indigenous Issues, which kicked off last week in New York, marks the 10th anniversary of the United Nations Declaration on the Rights of Indigenous Peoples.
 
The World Bank’s Forest Carbon Partnership Facility (FCPF) is coming up on its own 10-year anniversary. Since 2008, the FCPF has run a capacity building program for forest-dependent indigenous peoples. The initiative, with a total budget of $11.5 million, has worked to provide forest-dependent indigenous peoples, national civil society organizations, and local communities with information, knowledge and awareness to increase their understanding of efforts to reduce emissions from deforestation and forest degradation (REDD+), and to engage more meaningfully in the implementation of REDD+ activities. The program recently wrapped up its first phase (2008-2016), which included 27 projects, and presented the results at a side event to the Permanent Forum. 


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