Abstract

This note, prepared as background for the G20 submission, explores the potential for Multilateral Development Banks (MDBs) to increase the volume of climate financing by leveraging and intermediating resources, through two main avenues: leveraging shareholder capital through the MDBs non-concessional windows, by raising debt from capital markets to finance climate investment; and mobilizing and 'pooling' concessional flows to support climate investment beyond the MDBs own balance sheets. The note is organized along these two lines, with the aim of providing some insights into the feasibility for MDBs to mobilize resources to leverage a significantly larger volume of climate financing assistance. The next section of this note provides information on how MDBs can support concessional flows to climate investments through pooling of external concessional flows beyond traditional balance-sheet capital. Leveraging shareholder capital and mobilizing and-pooling concessional flows are two potential avenues through which MDBs can leverage and intermediate resources to ultimately increase the volume of climate financing. The experience gained by the MDBs and their clients and donors from implementing these financing arrangements should provide helpful lessons for the development community as it considers how to develop the green climate fund and other future climate change initiatives. Document type: Book

Abstract

This investment climate analysis reviews the experiences of over 3000 surveyed business owners in 26 states of Nigeria about the aspects of the business climate that affect their businesses. It complements a similar study in 2007 that covered 11 other Nigerian states. The survey asks business owners about both their perceptions and the actual costs of selected constraints. The analysis benchmarks Nigeria against comparator countries, and provides detailed data for each state. Nigerian firms have low productivity, as measured by their output in relation to their labor and capital inputs. Firms in Kenya are about 40 percent more efficient, firms in Russia almost twice as productive, and firms in South Africa almost four times as productive. Nigerian firms that export are about 90 percent more productive than non-exporters. Although labor in Nigeria is inexpensive, it is not inexpensive enough to compensate for this low productivity. The poor performance of Nigerian firms reflects many factors. This study focuses on constraints in the business climate and the serious costs they impose on Nigerian firms. Taken together, the total indirect costs of poor quality infrastructure, crime and security, and corruption amount to over 10 percent of sales for Nigerian firms. This is twice as high as in South Africa, Brazil, Russia and Indonesia. Microenterprises firms with fewer than five workers face similar constraints as larger firm's unreliable power, limited access to finance, corruption, and transportation bottlenecks. But the consequences for their businesses are far more severe. For instance, most microenterprises cannot afford generators, so power outages are more likely to shut down their operation. Lacking collateral, almost no microenterprises have access to formal external financing. Document type: Book

Abstract

The authors analyze the links between Russias disappointing growth performance in the second half of the 1990s, its costly and unsuccessful stabilization, the macroeconomic meltdown of 1998, and the spectacular rise of non-payments. Non-payments flourished in an environment of fundamental inconsistency between a macroeconomic policy geared at sharp disinflation, and a microeconomic policy of bailing enterprises out through soft budget constraints. Heavy untargeted implicit subsidies flowing through the non-payments system (amounting to 10 percent of GDP annually) have stifled growth, contributed to the August 1998 meltdown, through their impact on public debt, and have made at best a questionable contribution to equity. Dismantling this system must be a top priority, along with promoting enterprise restructuring and growth (by hardening budget constraints) and medium-term macroeconomic stability (by reducing the size of subsidies). Getting the government out of the non-payments system means settling all appropriately controlled budgetary expenditures on time, and in cash, and eschewing spending arrears, thereby setting an example for enterprises, and laying the groundwork for eliminating tax offsets at all levels of government, and insisting on cash tax payments. To stop energy-related subsidies, would require not only that the government pay its own energy bills on time, and in cash, but also that the energy monopolies be empowered to disconnect non-paying clients. This will enable the government to insist that the energy monopolies in turn pay their own taxes in full, and on time. Document type: Book