Ms. Monique Newiak, Mr. Abdoul A Wane, and Mr. Alex Segura-Ubiergo
Governance and corruption issues have taken the center stage in international discussions, especially after the adoption by the IMF in 2018 of a new framework for engagement on governance and corruption. Sound institutions that guarantee integrity in the management of public affairs are critical on the path toward higher and more inclusive growth. Corruption undermines the quality of institutions, weakens the effectiveness of government programs, and compromises social trust in government policies. Indeed, countries around the world that improved their governance systems are reaping a “governance dividend,” and governance-enhancing reformist countries in sub-Saharan Africa include Botswana, Rwanda, and Seychelles. In addition, Liberia, Sierra Leone, and Angola demonstrate that important reforms are possible, including in fragile environments. The importance of good governance has acquired even more importance as countries try to introduce policies to fight the ongoing COVID-19 pandemic. Special attention to governance in an emergency context, including situations associated with conflict, other health crises and natural disasters, is therefore essential. Innovation and new technologies are critical instruments that policymakers can use in their efforts to improve governance and transparency.
This 2019 Article IV Consultation with Ghana highlights discussions focused on strengthening institutions and policies to preserve macroeconomic stability and promote inclusive growth, building on the authorities’ “Ghana beyond Aid” strategy. The government headline deficit is projected to reach 4.7 percent of gross domestic product in 2019, driven by lower-than-expected revenues, spending on flagship programs, and unexpected security outlays due to emerging security challenges in the region. Medium-term prospects are favorable, with robust growth driven mostly by the extractive sector. Election-related spending pressures in 2020 constitute the main risk to the baseline scenario. Fiscal risks in the financial and energy sectors could also impact the government deficit. Government borrowing needs are exposed to rollover risk that should be carefully managed as financing conditions could tighten. The commitment to the new fiscal rules is expected to help maintain fiscal discipline, as reflected in the unchanged policy baseline. A more ambitious fiscal stance is called for to reduce macroeconomic risks, accelerate debt reduction, and strengthen the external balance.
This paper discusses Burkina Faso’s Request for a Three-Year Arrangement Under the Extended Credit Facility (ECF). The program aims to maintain macroeconomic stability while promoting sustainable and inclusive growth. Under the program, fiscal space for priority security, social, and investment spending would be supported by strengthening revenue mobilization and containing current spending, especially on wages. Efforts to improve investment selection and execution would achieve more with the resources available. Prudent public financial and debt management along with energy sector reforms would ensure fiscal sustainability and mitigate fiscal risks. Structural reforms would improve the business environment and promote diversification. The IMF staff supports the authorities’ request for an ECF arrangement.
State-owned enterprises (SOEs) play an important role in Emerging Europe’s economies, notably in the energy and transport sectors. Based on a new firm-level dataset, this paper reviews the SOE landscape, assesses SOE performance across countries and vis-à-vis private firms, and evaluates recent SOE governance reform experience in 11 Emerging European countries, as well as Sweden as a benchmark. Profitability and efficiency of resource allocation of SOEs lag those of private firms in most sectors, with substantial cross-country variation. Poor SOE performance raises three main risks: large and risky contingent liabilities could stretch public finances; sizeable state ownership of banks coupled with poor governance could threaten financial stability; and negative productivity spillovers could affect the economy at large. SOE governance frameworks are partly weak and should be strengthened along three lines: fleshing out a consistent ownership policy; giving teeth to financial oversight; and making SOE boards more professional.
This paper discusses Niger’s Eighth Review Under the Extended Credit Facility (ECF) Arrangement and Request for Waivers of Nonobservance of Performance Criteria (PC) and for Modification of PCs. Niger’s medium-term prospects are closely linked to returns on major projects in oil and mineral extraction that are under way. Two of the end-2015 PC for the eighth ECF review were missed (on domestic financing and domestic arrears repayment), as were several indicative targets. The IMF staff supports the authorities’ request for waivers for the unmet PC on domestic financing and domestic arrears repayments at end-December 2015.
This paper discusses outlook and risk for Nigeria. Its economy has been hit hard by global developments that have aggravated longstanding development weaknesses. Macrofinancial outcomes are closely linked with the price of oil. Policy uncertainty has amplified the impact of global developments. The large permanent terms-of-trade shock requires a significant macroeconomic adjustment. It is important to initiate urgently an integrated package of policies centered on a fundamental change in the nature of government; reducing external imbalances (including real exchange rate realignment); further safeguarding the resilience and improving the efficiency of the banking sector; and implementing structural reforms for inclusive growth.