News & Analysis: Fiscal policy
“The appeal of SDRs for developing countries is that they fill a gap in the toolkit available to advanced economies: money creation. While advanced economies have been able effectively to print money by buying their own bonds in a world of low or negative interest rates, most developing countries cannot do that without risking instability.”
“Kenya has changed its mind about a G20 coronavirus debt relief initiative it declined to join earlier this year, and is now planning to defer around $690 million in debt payments, its finance minister told Reuters on Wednesday.”
“Zambia’s debt crisis is part of a much bigger affliction facing many sub-Saharan African countries which have been sinking in sovereign debt since the financial crisis of 2008. Persistent systemic governance and economic challenges accompanied by external shocks have led to a rise in the continent’s indebtedness.”
“The World Bank, and other multilateral development banks, are unlikely to pull out the stops in their response to this once-in-two-generations crisis unless they get clear guidance from their major shareholders to do just that. The evidence suggests the rich country shareholders on whom the Bank depends for financial support are not sending this message.”
“A small multi-stakeholder working group convened by the National Economic Development and Labour Council has been set up to finalize South Africa’s COVID-19 economic recovery plan. The question is, will the policymakers accept these recommendations?”
“Large fiscal deficits will push government debt levels to the highest levels recorded since the aftermath of World War II. For many of the poorest countries, debt ratios next year will return to, or exceed, the levels reached before the Highly Indebted Poor Country initiatives launched in 1996.”
“Senators want a probe into how counties spent Sh13 billion meant for the war on COVID-19. They want the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations to institute a probe after revelations that counties utilised a huge chunk of the funds on non-essentials.”
“‘We need to take the initiative as a joined-up society to begin earnest discussions about the difficult trade-offs and compromises to kickstart growth, tackle inequality and forge a common, non-racial future,’ says Mcebisi Jonas, who delivered the Ahmed Kathrada Foundation annual lecture last week.”
“The economic disruptions of COVID-19 have put local government revenue in Ghana in a dire state. James Dzansi, IGC Country Economist in Ghana, argues that local governments must urgently adopt the digital Enhanced Revenue Management System to increase their capacities to deliver essential services to their citizens.”
“Policymakers have responded strongly, averting an even deeper recession. Monetary policy has and will remain central to this effort, but with the world in a global liquidity trap it is time for a global synchronised fiscal push to lift up prospects for all.”
A hub for information, analysis, and the global response to COVID-19’s impact on Africa