After a series of shocks, sub-Saharan Africa needs significant fiscal reforms—domestic revenue mobilization and public expenditure—to rebuild buffers and maintain public finance sustainability while achieving the region’s development goals. A new IMF Departmental paper explores how governments can approach this and bring the public along.
- the EU's international role | international cooperation
- Tuesday 17 October 2023, 15:00 - 16:30 (CEST)
Practical information
- When
- Tuesday 17 October 2023, 15:00 - 16:30 (CEST)
- Where
- Webex Meetings
- Languages
- English
- Organisers
- International Partnerships InfoPoint
Description
The paper argues that a strategic approach to fiscal policy is needed, as policies in the region typically lack an effective anchor and are excessively focused on short-term goals. An explicit debt target is a crucial element of the fiscal strategy. But calibrating this anchor is a difficult exercise. This paper proposes a novel method tailored to the low-income country context, which relies on the principle of the preservation of debt-servicing capacity. Results using this method point to a median debt anchor of 55 percent of GDP in the region. Moreover, the paper also shows that most (though not all) countries will need to consolidate over the medium term to achieve prudent debt targets. Adjustment needs are in the order of 2 to 3 percent of GDP over the next five years for the median country. This consolidation seems feasible given historical experience and domestic revenue mobilization should play a central role in the adjustment process. Finally, the paper discusses critical institutional reforms that are tailored to developing countries’ needs and constraints, including in the areas of medium-term budgeting, fiscal risk management, expenditure controls and revenue administration.
Speakers
- Arianna Vannini, Chief Economist, European Commission, DG INTPA
- Luc Eyraud, Division Chief, African Department, International Monetary Fund
- Antonio David, Deputy Division Chief, African Department, International Monetary Fund
- Fabio Comelli, Senior Economist, African Department, International Monetary Fund
- Arthur Sode, Economist, African Department, IMF
- Jimena Montoya, Research Analyst, African Department, IMF
- Peter Kovacs, Economist, European Commission
Language of conference: English
Language of Q&A session: English
Registration