News & Analysis: Fiscal policy
“The main finding from our research is that governments are falling short of managing their fiscal policy response to the crisis in a transparent and accountable manner. More than two thirds of the governments we looked at, across many regions and income levels, have only provided limited or minimal levels of accountability in the introduction and implementation of their early fiscal policy responses.”
“The Nigerian government has responded notably to address the pandemic’s impact on the economy. So far, $ 1.4 billion in additional spending has been executed, which is estimated at 0.3% of GDP. This paper examines the macroeconomic landscape and policy interventions in Nigeria with the objective of developing lessons not only for Nigeria but for other developing economies.”
“The G7 countries pledged a massive scale-up in support of developing-country financing at their recent summit in the UK. How it will be financed remains an open question. But analyzing trends in recent debt flows by lenders to developing countries, and taking stock of the Debt Service Suspension Initiative (DSSI), can provide some important lessons for the G7’s new ambitions.”
“Budget day on 10 June in East Africa meant ‘borrowing’, as the region’s three biggest economies unveiled their tax and spending plans for the coming fiscal year.”
COVID-19 Africa Watch talks to State Minister Yasmin Wohabrebbi about the policy response to the pandemic, the efforts to develop the digital economy, and the G20 Debt Service Suspension Initiative (DSSI).
“International credit-rating agencies perennially assign overinflated risks to Africa, irrespective of its improving macroeconomic fundamentals or the global economic environment. These ‘perception premiums’ are one of the region’s biggest development challenges.”
“Response measures introduced by the government, including tax deferrals and waivers, liquidity provision to commercial banks, measures to ease access to credit and loan refinancing, logistics facilitation and food distribution measures, have contributed to cushioning some of the impacts from the crisis.”
“Today, the earlier fear of a dangerous lack of liquidity has been replaced in large part by concerns about the ability of the international financial architecture to support countries with increasing levels of debt and uncertain access to capital. One worrisome aspect seems clear: Many countries will require debt relief in the next few years if they are to maintain or restore access to financial flows. Higher interest rates in advanced economies, and the United States in particular, could compound the difficulties of emerging market countries in servicing existing debt and refinancing maturing debt.”
“This will be accomplished through continued restraint in hiring and wage awards (including in the four-year wage agreement that will come into effect in FY2021/22) and by improved wage-bill management.”
“Such an unprecedented global undertaking requires strong cooperation, including financial support. Yet the urgency should be clear to all. As long as COVID-19 persists at high rates of transmission anywhere in the world, the pandemic will continue to disrupt global production, trade, and travel, and will also give rise to viral mutations that threaten to undermine previously acquired immunity from past infections and vaccinations.”
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