Working Paper

Capacity Issues in the Formulation and Implementation of the Next Generation of Poverty Reduction Strategy Papers

Although economic growth is widely acknowledged to be crucial for poverty reduction and
for sustaining development, efforts aimed at tackling these challenges in Africa did not, for a
long time, yield the desired results. The decade of the 1980s was thus deemed a lost decade
for Africa despite the plethora of development initiatives and a sea-change in the policy
landscape. In recent years, however, Africa’s growth performance has improved significantly,
though shy of the 7 – 8 per cent required to halve poverty by 2015. With Africa’s low
economic performance over the three decades to 2000, it is hardly surprising that it remains
the poorest continent in the world. It was against this background that
the Bretton Woods Institutions (World Bank and IMF) introduced the Poverty Reduction
Strategy Paper (PRSP) in 1999 as the fundamental principle for both their loan policies and
the extension of debt relief to heavily indebted poor countries (HIPCs). This study seeks to review the implementation of the firstgeneration PRSPs to distill and prioritise capacity issues that should be addressed in order to improve the formulation and implementation of the next generation of growth-oriented PRSPs. Four case studies have been selected for the inquiry — namely, Lesotho, Mali,
Rwanda and Ghana — with occasional reference to some additional countries and the broader literature for further or sharper illustration.