Public Debt Sustainability in the West African Monetary Zone PDF Download
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Author: Ngozi Egbuna
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
"WAMZ countries have accumulated high levels of public debt less than two decades after the massive debt forgiveness effected under the Highly Indebted Poor Countries (HIPC) initiative. This has raised sustainability concerns as rising debt levels have the potential to create negative spillover effects and derail the macroeconomic convergence process in the Zone. This study examines the response of WAMZ countries to increases in public debt levels. Utilizing pooled OLS and panel fixed effects (FE) on annual data covering the period 2000 - 2018, the study shows positive response of primary balance to changes in the debt to output ratio across WAMZ countries, indicating that public debt were sustainable during the period. Results from the Panel Smooth Transition Regression (PSTR) model indicate significant positive non-linear response of primary balance to increases in the debt ratio below a threshold debt-to-GDP ratio of 90 percent. The study recommends the continuation of fiscal consolidation efforts aimed at enhancing revenue and rationalizing unproductive expenditures in all Member States"--Page 4.
Author: Ngozi Egbuna
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
"WAMZ countries have accumulated high levels of public debt less than two decades after the massive debt forgiveness effected under the Highly Indebted Poor Countries (HIPC) initiative. This has raised sustainability concerns as rising debt levels have the potential to create negative spillover effects and derail the macroeconomic convergence process in the Zone. This study examines the response of WAMZ countries to increases in public debt levels. Utilizing pooled OLS and panel fixed effects (FE) on annual data covering the period 2000 - 2018, the study shows positive response of primary balance to changes in the debt to output ratio across WAMZ countries, indicating that public debt were sustainable during the period. Results from the Panel Smooth Transition Regression (PSTR) model indicate significant positive non-linear response of primary balance to increases in the debt ratio below a threshold debt-to-GDP ratio of 90 percent. The study recommends the continuation of fiscal consolidation efforts aimed at enhancing revenue and rationalizing unproductive expenditures in all Member States"--Page 4.
Author: Ngozi E. Egbuna
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
WAMZ countries have accumulated high levels of public debt less than two decades after the massive debt forgiveness effected under the Highly Indebted Poor Countries (HIPC) initiative. This has raised sustainability concerns as rising debt levels have the potential to create negative spillover effects and derail the macroeconomic convergence process in the Zone. This study examines the response of WAMZ countries to increases in public debt levels. Utilizing pooled OLS and panel fixed effects (FE) on annual data covering the period 2000 - 2018, the study shows positive response of primary balance to changes in the debt to output ratio across WAMZ countries, indicating that public debt were sustainable during the period. Results from the Panel Smooth Transition Regression (PSTR) model indicate significant positive non-linear response of primary balance to increases in the debt ratio below a threshold debt-to-GDP ratio of 90 percent. The study recommends the continuation of fiscal consolidation efforts aimed at enhancing revenue and rationalizing unproductive expenditures in all Member States.
Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 56
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Book Description
West African Economic and Monetary Union: Selected Issues
Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN: 1498305946
Category : Business & Economics
Languages : en
Pages : 49
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Book Description
This Selected Issues paper reviews West African Economic and Monetary Union’s (WAEMU) regional macroeconomic surveillance framework to control all sources of debt accumulation and ensure debt sustainability. WAEMU’s regional surveillance framework aims at ensuring the sustainability of national fiscal policies and their consistency with the common monetary policy. While fiscal deficits have been the main driver of public debt across WAEMU member countries, the size of residual factors has varied greatly among these countries. The WAEMU Macroeconomic Surveillance Framework would benefit from adjustments to more effectively set the region’s public debt on a sustainable path. In addition, beyond adhering to the WAEMU fiscal deficit rule, member countries must curb below-the-budget-line operations. This would require improved monitoring of fiscal risks and the building of adequate budget provisions to address such risks before they materialize. Improved Treasury practices would also help eliminate the recourse to pre-financing arrangements and tighten control over expenditure. Public dissemination of the WAEMU progress report and strengthened peer-to-peer learning among member countries could improve the momentum for reforms.
Author: Can Sever
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 22
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Book Description
This paper aims to provide a broad perspective on the WAEMU fiscal framework. Based on backward looking exercises and forward looking scenarios, it shows that (i) repeated fiscal slippages and historically large stock flow adjustments contributed to the surge in the WAEMU public debt, and (ii) stock flow adjustments can have significant effects on the WAEMU debt dynamics going forward. This paper also discusses that it is essential and urgent to reintroduce the fiscal rules and the Convergence Pact and to enhance the rules. Revamping the fiscal rules should focus on introducing a correction mechanism (which could contain surges in debt in the future) and an escape clause (which would enhance fiscal discipline and predictability), as well as capturing the extensive extra-budgetary and below-the-line operations and strengthening the enforcement mechanism. Any consideration to changing the fiscal deficit target should also encompass addressing extra-budgetary and below-the-line transactions (for example by changing the definition of the deficit). It is not appropriate to increase the debt ceiling.
Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN: 1484325265
Category : Business & Economics
Languages : en
Pages : 48
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Book Description
KEY ISSUES Context. The region continued to experience strong growth in 2014, led by the continued economic expansion in Cote d’Ivoire. The outlook is for further strong growth, subject to a range of downward risks, in particular political instability ahead of upcoming elections in several countries, and security issues in Mali and Niger. With an elevated fiscal deficit exerting pressure on the balance of payments and the regional financial market, delays in fiscal consolidation or structural reforms pose the main medium-term risks. Policy recommendations: • Fiscal consolidation. Safeguarding external stability in the region will require governments to adhere to their budget deficit reduction plans while maintaining public investment efforts, which will require increasing tax revenue and controlling current expenditure. • Monetary policy. Macroeconomic conditions do not warrant a tightening of monetary policy at this juncture. However, if fiscal deficits do not decline as envisaged, the BCEAO should consider increasing its policy rates. In the mean time, the BCEAO should very closely follow the evolution of the macro-prudential risks flowing from its sharp increase in commercial bank refinancing. • Financial stability. The WAEMU authorities should enforce existing prudential rules and raise standards to international best practice. Ongoing reforms go in the right direction but need to be accelerated. • Structural transformation and regional integration. Policies to promote structural transformation should focus on addressing weaknesses, such as the lack of education and training, finance, and supportive regulatory environments. Countries should refrain from using the possibility to deviate from the common external tariff of the Economic Community of West African States (ECOWAS) in force since January 1, 2015, in order to protect the gains from regional integration in WAEMU.
Author: Amadou N. R. Sy
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 24
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Book Description
The paper reviews trends and developments in the rapidly growing local currency debt markets in the WAEMU. The main findings are that common institutions, such as a regional central bank and securities exchange have led to high cross-border transactions within the union. However, excess liquidity in the regional banking system has led to limited credit differentiation among issuers and a reliance on supply and demand conditions as a key determinant of yields. The paper also discusses a number of policy issues, including debt management, that are likely to emerge as the markets for government securities continue to develop.
Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN: 1484352920
Category : Business & Economics
Languages : en
Pages : 52
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Book Description
The West African Economic and Monetary Union (WAEMU) member countries have experienced growth acceleration since 2012. Relative to an earlier reference period in the 1990s, the WAEMU’s recent strong growth has coincided with an increase in macroeconomic stability and investment, improvement in political institutions, improvement in the terms of trade, and increase in productivity.
Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN: 1475577605
Category : Business & Economics
Languages : en
Pages : 87
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Book Description
This West African Economic and Monetary Union (WAEMU) IMF staff report focuses on common policies for member countries. The region continued to experience a strong upswing in 2013, and the immediate outlook is for further vigorous growth and moderate inflation. Delays in implementing reforms, at both the national and regional levels, are the principal medium-term risk. It highlights that with continued strong growth projected for the region, countries are encouraged to seek opportunities to strengthen fiscal sustainability while maintaining public investment efforts.
Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN: 1484341694
Category : Business & Economics
Languages : en
Pages : 87
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Book Description
This West African Economic and Monetary Union (WAEMU) IMF staff report focuses on common policies for member countries. The region continued to experience a strong upswing in 2013, and the immediate outlook is for further vigorous growth and moderate inflation. Delays in implementing reforms, at both the national and regional levels, are the principal medium-term risk. It highlights that with continued strong growth projected for the region, countries are encouraged to seek opportunities to strengthen fiscal sustainability while maintaining public investment efforts.
