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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mailto:[email protected]


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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

([email protected]).




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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


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


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



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



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



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


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;

http://cpia.afdb.org/

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


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/ *


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)*


http://www.imf.org/external/np/fad/trans/code.htm


http://pwt.econ.upenn.edu/php_site/pwt63/pwt63_form.php

http://www.fias.net/

http://www.enterprisesurveys.org/

http://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm


http://www.doingbusiness.org/


http://www.worldbank.org/privatesector/ic/ic_country_report.htm

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



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



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/

http://www.worldbank.org/wbi/governance/data

http://www1.worldbank.org/education/edstats/

http://www1.worldbank.org/education/efafti/

http://www.worldbank.org/research/projects/edattain/edattain.htm

http://www.childinfo.org/

http://www3.who.int/whosis/menu.cfm

http://www.unaids.org/en/resources/epidemiology.asp

http://www.census.gov/ipc/www/hivaidsd.html


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)


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)


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)


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

http://www.icafrica.org/en/


http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf

http://unctadstat.unctad.org/ReportFolders/reportFolders.aspx

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://unctad.org/en/PublicationsLibrary/wir2013_en.pdf

http://www.uneca.org/sites/default/files/publications/aria5_print_uneca_fin_20_july_1.pdf



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


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
