Building Resilience in Fragile States: Experiences from Sub Saharan Africa. Mumtaz Hussain International Monetary Fund October 2017

Similar documents
Fiscal Policy Responses in African Countries to the Global Financial Crisis

African Financial Markets Initiative

HIPC HEAVILY INDEBTED POOR COUNTRIES INITIATIVE MDRI MULTILATERAL DEBT RELIEF INITIATIVE

MDRI HIPC. heavily indebted poor countries initiative. To provide additional support to HIPCs to reach the MDGs.

HIPC DEBT INITIATIVE FOR HEAVILY INDEBTED POOR COUNTRIES ELIGIBILITY GOAL

MDRI HIPC MULTILATERAL DEBT RELIEF INITIATIVE HEAVILY INDEBTED POOR COUNTRIES INITIATIVE GOAL GOAL

Africa: An Emerging World Region

PARIS CLUB RECENT ACTIVITY

Assessing Fiscal Space and Financial Sustainability for Health

Improving the Investment Climate in Sub-Saharan Africa

Paying Taxes 2019 Global and Regional Findings: AFRICA

Challenges and opportunities of LDCs Graduation:

World Bank Group: Indira Chand Phone:

Financial Development, Financial Inclusion, and Growth in Africa

30% DEPOSIT BONUS FOR OUR TRADERS IN AFRICA PROMOTION. Terms and Conditions

Lessons learnt from 20 years of debt relief

REGIONAL MATTERS ARISING FROM REPORTS OF THE WHO INTERNAL AND EXTERNAL AUDITS. Information Document CONTENTS BACKGROUND

Pension Patterns and Challenges in Sub-Saharan Africa World Bank Pensions Core Course April 27, 2016

Regional Economic Outlook for sub-saharan Africa. African Department International Monetary Fund November 30, 2017

Background Note on Prospects for IDA to Become Financially Self-Sustaining

FINANCIAL INCLUSION IN AFRICA: THE ROLE OF INFORMALITY Leora Klapper and Dorothe Singer

in Africa since the early 1990s.

ERSU scholarships academic year

NEPAD-OECD AFRICA INVESTMENT INITIATIVE

Building resilience and reducing vulnerability in small states

FAQs The DFID Impact Fund (managed by CDC)

Perspectives on Global Development 2012 Social Cohesion in a Shifting World. OECD Development Centre

These notes are circulated for the information of Members with the approval of the Member in charge of the Bill, the Hon W.E. Teare, MHK.

Financial Market Liberalization and Its Impact in Sub Saharan Africa

International Comparison Programme Main results of 2011 round

Established in July 1989, extended, current closing date July 31, 2017.

Working Party on Export Credits and Credit Guarantees

Domestic Resource Mobilization in Africa

World Meteorological Organization

ALLOCATING IDA FUNDS BASED ON PERFORMANCE. Fourth Annual Report on IDA s Country Assessment and Allocation Process

Paying Taxes An African perspective. Paying Taxes An African perspective 1

RECENT ECONOMIC DEVELOPMENTS AND THE MACROECONOMIC OUTLOOK: FY 2019/ /23 MEDIUM TERM BUDGET PERIOD

Report on Countries That Are Candidates for Millennium Challenge Account Eligibility in Fiscal

IDA15 MULTILATERAL DEBT RELIEF INITIATIVE (MDRI): UPDATE ON DEBT RELIEF BY IDA AND DONOR FINANCING TO DATE

ADF-14 Resource Allocation Framework. ADF-14 Second Replenishment Meeting June July, 2016 Abidjan, Côte d Ivoire

Debt Management: The Alphabet Soup

Compliance Report Okinawa 2000 Development. Commitments 1. Debt

The Landscape of Microinsurance Africa The World Map of Microinsurance

WIPO s Cooperation With LDCs In Appropriate Technology Project Harare, Zimbabwe October, 2014

Presented for participation in The Council for the Development of Social Science Research in Africa (CODESRIA) 11th General Assembly

Innovative Financing for Energy Projects

53 rd UIA CONGRESS Seville - Spain October 27-31, 2009 FOREIGN INVESTMENT COMMISSION INVESTING IN SUB-SAHARAN AFRICA: DEVELOPMENT AND OR PROTECTIONISM

Let s look at the life cycle of a gold project from discovery to closure

AFRICAN MINING: POLITICAL RISK OUTLOOK FOR 2017

Regional Profile: Sub-Saharan Africa (SSA)

Incident Response. We ve had a privacy breach now what?

Innovative Approaches for Accelerating Connectivity in Africa. - One Stop Border Post (OSBP) development-

SECURED TRANSACTIONS AND COLLATERAL REGISTRIES PEER TO PEER LEARNING EVENT

2012/13 THE LITTLE DATA BOOK ON AFRICA

Subject: UNESCO Reformed Field Network in Africa

IDA16 Mid-Term Review. Capping MDRI Netting Out: Implementation Experience

Réunion de Reconstitution 14 th ADF Replenishment Meeting. Economic Outlook of ADF Countries

THE LITTLE DATA BOOK ON AFRICA

Increasing aid and its effectiveness in West and Central Africa

AFRICAN DEVELOPMENT FUND. Decentralization Progress Report (Background Paper #4)

Part One: Chapter 1 RECENT ECONOMIC TRENDS

Public Disclosure Authorized JULY Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT BOARD OF GOVERNORS. Resolution No. 612

Working Group on IMF Programs and Health Expenditures Background Paper April 2007

How the financial crisis is affecting Sub Saharan Africa. Sophie Chauvin and Marc Lantéri

Regional Profile Sub-Saharan Africa (SSA)

Intellectual Property, Innovation and Transfer of Technology: Implementation of the TRIPS Agreement

G20 Leaders Conclusions on Africa

Report to the Board June 2017

Ascoma, your insurance solutions in Africa

CLEAN TECHNOLOGY FUND ELIGIBILITY OF GUARANTEES FINANCED FROM THE CLEAN TECHNOLOGY FUND FOR SCORING AS OFFICIAL DEVELOPMENT ASSISTANCE

FINANCING THE FIGHT FOR AFRICA S TRANSFORMATION

The Concept of Middle Income Countries through a Health Lens

Small States - Performance in Public Debt Management

PwC Tax Calendar 2016

w w w. k u w a i t - f u n d. o r g

IFAD s participation in the Heavily Indebted Poor Countries Debt Initiative. Proposal for the Comoros and the 2010 progress report

H. R. To provide for the cancellation of debts owed to international financial institutions by poor countries, and for other purposes.

Part One Introduction

Aidspan Review of a Study by Y. Akachi and R. Atun on the Effect of Investment in Malaria Control on Child Mortality

4 th Session of the Continental Steering Committee (CSC) for the African Project on the Implementation of the 2008 System of National Accounts

Road Maintenance Financing in Sub-Saharan Africa: Reforms and progress towards second generation road funds

Global Environment Facility

Lusaka, 7 May Note: The original of the Agreement was established by the Secretary-General of the United Nations on 2 June 1982.

Findings. Global Coalition for Africa (GCA) Meets in Cotonou, Benin June 9-11, 1993

Capacity Building in Public Financial Management- Key Issues

Sub-Saharan Africa Casa Africa - Madrid & Valencia February 21, 2018

Enabling long term. finance in local currency. Enabling Long Term. Local Currency

Supplementary Table S1 National mitigation objectives included in INDCs from Jan to Jul. 2017

GEF INVESTMENT IN LCDS: EXPERIENCE IN AFRICA AND LOOKING FORWARD

International Investment Arbitration in Africa: Year in Review 2016

Monitoring the impact of the financial crisis on national education financing: A cross country study

THE GLOBAL FINANCIAL CRISIS: IMPLICATIONS FOR THE HEALTH SECTOR IN THE AFRICAN REGION. Report of the Regional Director CONTENTS

Charting the Diffusion of Power Sector Reform in the Developing World Vivien Foster, Samantha Witte, Sudeshna Gosh Banerjee, Alejandro Moreno

The African Development Bank Group. Financial Products and Services. BOS Presentation. March 22, 2018

SDT 413. Debt Sustainability in Sub- Saharan Africa: Unraveling Country-Specific Risks. Autores: Bill Battaile F. Leonardo Hernández Vivian Norambuena

Update on Multilateral Debt Relief Initiative (MDRI) and Grant Compensation

The Little Data Book

INTERNATIONAL DEVELOPMENT ASSOCIATION AND INTERNATIONAL MONETARY FUND. Heavily Indebted Poor Countries (HIPC) Initiative: Status of Implementation

The Changing Wealth of Nations 2018

Transcription:

Building Resilience in Fragile States: Experiences from Sub Saharan Africa Mumtaz Hussain International Monetary Fund October 2017

How Fragility has Changed since the 1990s? In early 1990s, 20 sub-saharan African countries were fragile Since then, 7 countries are becoming resilient But 6 countries regressed- and, by 2014, 19 countries remained fragile 2

Fragility in Sub Saharan African Low-income Countries: As of 2014 Classification of SSA Low-income Countries during 2011-13 Remained or became fragile Fragile, but progress made Became resilient Remained stable Burundi + Angola + Cameroon + Benin Central African Rep. + Congo, Dem. Rep. of + Ethiopia + Burkina Faso + Chad + Congo, Republic of + Mozambique Cabo Verde Comoros + Liberia + Niger + Gambia, The Côte d'ivoire + Nigeria + Ghana Eritrea + Rwanda Kenya + Guinea + Uganda + Lesotho Guinea-Bissau + Senegal Madagascar + Tanzania Malawi + Zambia Mali + São Tomé & Príncipe Sierra Leone + Togo + Zimbabwe + 3

Characteristics of Fragility? A country is considered fragile if the state is seriously impaired to: Provide stability and security Deliver basic public goods and services Promote economic and human development 4

Five Dimensions of Progress Conflict reduction and political stabilization Institutional improvements Fiscal space and institutions Economic performance Social outcomes 5

1. Conflict Reduction and Political Stabilization Since the 1990s, both the severity and incidence of conflicts and instability in general have declined But progress can be jeopardized or reversed: recent threats pose new risks, e.g., in CAR, Mali, and South Sudan 6

2. Institutional Improvements Institutions have improved significantly in resilient and, on average, in resource-rich countries 0.6 0.4 0.2 0.0-0.2 Average Change in CPIA Scores by Country Groups Fragile non resource-rich Fragile resource-rich Resilient Other fragile countries have made little or no progress -0.4 Economic Management Structural Policies Policies for Social Inclusion/Equity Public Sector Management and Institutions 7

3. Fiscal Space and Institutions Average index score 0.56 0.54 0.52 0.5 0.48 0.46 Quality of Budget Institutions Index, 2006 09 Number of countries 7 6 5 4 3 2 Fiscal Policy Space Index, 2012 Low Medium and high 0.44 1 0.42 Fragile nonresource-rich Fragile resource-rich Resilient 0 Fragile nonresource-rich Fragile resource-rich Resilient Resilient countries have better fiscal and budget institutions Resilient countries also expanded their fiscal policy space (financial position, revenue collection, expenditure flexibility), while results were mixed in the fragile group. 8

4. Economic Performance Countries that became resilient and resource-rich countries experienced strong growth and declining inflation In resilient countries these gains were supported by strong policies and a favorable regulatory and institutional environment Constant 2005 U.S. dollars 1,600 1,400 1,200 1,000 800 600 Gross Domestic Product per Capita 400 Fragile nonresource-rich 200 Fragile resource-rich 0 Resilient 1990 1993 1996 1999 2002 2005 2008 2011 In resource-rich countries, they largely reflected a huge improvement in terms of trade 9

5. Social Outcomes Deaths per 1,000 live births 250 200 150 100 50 Infant Mortality Rate (under age five) Percent 90 80 70 60 50 40 30 20 School Enrollment, Primary 10 0 1990 95 1996 2001 2002 07 2008 11 0 1990 95 1996 2001 2002 07 2008 11 Fragile nonresource-rich Fragile resource-rich Resilient Health and education levels have improved, especially in resilient countries but in all country groups more than half of the people are still poor 10

Lessons from 4 Case Studies: Mozambique, Rwanda, Central African Rep., and Dem. Rep. Congo Factors that set apart the successful countries: Political inclusion and the rule of law Fiscal management and revenue mobilization External support and debt relief Reforms to foster private sector growth (relevant in long-term) 11

Political Inclusion and Rule of Law Successful countries have pursued an inclusive political approach backed up by better governance 75 Political Stability Percentile rank Central African Rep. Congo, Dem. Rep. of Mozambique Rwanda 50 Rule of Law Percentile rank Central African Rep. Congo, Dem. Rep. of Mozambique Rwanda 60 40 45 30 30 20 15 10 0 1996 2000 2003 2005 2007 2009 2011 0 1996 2000 2003 2005 2008 2010 2012 Source: World Bank. Source: World Bank. 12

Fiscal Management and Revenue Mobilization Fiscal institutions, particularly budget institutions, and domestic revenue mobilization played a key role 4.00 CPIA Public Sector Management & Institutions Cluster 3-year moving average Central African Rep. Congo, Dem. Rep. of Mozambique Rwanda 30 Government Revenue Percent of GDP 3-year moving average Central African Rep. Congo, Dem. Rep. Of Mozambique Rwanda 3.50 25 3.00 20 2.50 15 2.00 10 1.50 5 1.00 1998 2001 2004 2007 2010 2013 0 1990 1993 1996 1999 2002 2005 2008 2011 Source: World Bank. Sources: WEO; IMF Staff Calculations. 13

Case Studies: Summary Mozambique, Rwanda, Central African Rep., and Dem. Rep. Congo Stabilization Political inclusion Central African Republic Democratic Republic of the Congo Mozambique Rwanda Capacity and institutions (including budget institution) Restoration of macrostability and growth Delivering to the Population Creating Policy Space Mobilizing domestic revenue Donor support Debt relief Spending Priority spending Public investment International Support Continued IMF programs Donor coordination Private Sector Private domestic investment Foreign direct investment Outcomes Security, political stability, governance Economic growth and stability Social Factor developed negatively, likely to have contributed to fragility. Factor did not develop decisively and impact unclear, or too early to tell. Factor developed positively, likely to have contributed to building resilience. 14

How can the IMF help? The Fund s engagement depends on country conditions and needs. In general, 4 types of help: Capacity building Policy advice Financial assistance no grants, but zero interest rate Facilitating the mobilization of aid and investment, including sometimes coordinating international support 15

For more information, see Online IMF Book 16

Building Resilience in Fragile States Questions/Comments 17