This is the fifth Annual Report of the Competitive Industries and Innovation Program, a multi-donor partnership among the World Bank Group (WBG); the European Union (EU); the African, Caribbean, and Pacific Group of States (ACP) Secretariat; and the governments of Austria, Norway, and Switzerland. This report outlines the progress that CIIP has made in implementing the program’s objectives during its fiscal year from July 1, 2017, to June 30, 2018 (FY18).

Since its inception, CIIP has facilitated more than 40 consultations with the private sector, supported the implementation of more than 30 priority reforms, promoted more than 180 investment opportunities, and leveraged more than $700 million in private investment. CIIP financing has been used to streamline business licensing in Suriname’s fruit processing sector, to design a public-private partnership mechanism for infrastructure investment in Mauritania’s fisheries sector, and to link textile SMEs with large, foreign investors in the Bole Lemi Industrial Park in Ethiopia. These types of industry-specific interventions have led to the creation of more than 20,000 jobs, the training of more than 3,000 firms, and more than $30 million in new revenues from the sale of goods and services.

The extent to which CIIP interventions can deliver systemic change relies on a number of assumptions related to the global economic environment, such as political and economic stability, favorable trade agreements, positive investor outlook, and more. Although global economic expansion has remained robust following the decade-long recovery from the financial crisis, the experience of emerging and developing economies (EMDEs) has been complicated. More than 40 percent of low-income countries were in debt distress in 2018, more than twice the share in 2013 (IMF 2018). There were 48 armed conflicts in EMDE countries in 2016, almost twice the number of conflicts in 2006 (GEP 2018). Private investment in EMDEs has been slowing the past several years, and private investment in infrastructure has experienced negative growth (GEP 2018). Recent tariff announcements by the United States and China could reduce global trade flows into EMDEs by as much as 14 percent against a 2020 baseline (GEP 2018). While the trends tend to depress the broader impact of CIIP interventions, they also serve to highlight the importance of CIIP’s objectives and to prioritize the sequencing and direction of CIIP implementation. 

During this reporting period, CIIP has contributed to a number of interventions. In Suriname, the diagnostic of business licensing requirements and procedures has informed the development of the new business and professions licensing law that is being implemented by the Ministry of Finance. More than 2,100 firms have received training or support in Nigeria as part of a program that intends to measure the impact of different training interventions on firm productivity. CIIP support in Tunisia’s pharmaceutical space has led to the preparation of a pact in which the government has committed to achieving seven priority reforms and the private sector has committed to creating 2,500 jobs, increasing exports from 13 percent to 24 percent of production, and achieving 35 percent share in Africa’s market for clinical studies.

The global policy experience this year focused on innovation and new technologies and their impact on markets and industrial competitiveness. CIIP’s FY18 publication—The Innovation Paradox—revealed that a low level of technological adoption in developing countries reflects rational behavior by firms in response to a range of market constraints; it described a set of policy measures to unlock critical channels of productivity growth. CIIP hosted a technology symposium, which brought together panels of experts and 189 participants to discuss the impact of disruptive technologies on product and labor markets and what it is that governments can do to ease market adjustments.

CIIP’s global reach now totals 34 countries. The 12 country projects still active in FY18 are profiled in this report, as well as the 5 country projects that closed this year. FY18 CIIP operations leveraged $400 million in public investment. The CIIP grant in Tunisia contributed to the creation of 3,336 jobs and the attraction of 23 new company investments. CIIP operations in Tunisia also contributed to the preparation of seven priority reforms in the pharmaceutical industry. With CIIP’s support, 2,100 firms were trained in Nigeria and 1,800 workers were trained at Bole Lemi Industrial Park in Ethiopia, of whom 80 percent were female.

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