Occasional Paper No. 34
By Justin B. Zulu and Saleh M. Nsouli
with case studies by
Nur Calika and Lelde Schmitz
International Monetary Fund
Washington, D.C.
April 1985
© 1985 International Monetary Fund
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Contents
Prefatory Note
I. Introduction
Economic Background
Contributory Factors
II. The Role of the Fund
Adjustment Versus Financing
Duration of Adjustment
III. The Objectives of Programs
IV. Instruments and Policy Design
Domestic Structural Policies
Fiscal Policies
Monetary Policies
External Sector Policies
V. Performance Under Programs
Achievements Versus Targets
Achievements Versus Previous Year
Factors Affecting Implementation
Performance Criteria
VI. Case Studies of Somalia and Mali
Somalia
Emergence of Imbalances
The 1981-83 Adjustment Effort
The Policies
The Objectives
Conclusion
Mali
Emergence of Imbalances
The 1982-83 Adjustment Effort
The Objectives
The Policies
Conclusion
VII. Conclusion
TABLES
Section
I 1. Africa: Selected Economic Indicators, 1979–83
II. 2. Africa: Stand-By Arrangements and Arrangements Under Extended Fund Facility, 1979–83
3. Africa: Purchases and Repurchases from the Fund, 1979–83
V. 4. Africa: Indicators of Performance Under Fund-Supported Adjustment Programs, 1980–81
VI. 5. Somalia: Selected Economic and Financial Indicators, 1980–83
6. Mali: Selected Economic and Financial Indicators, 1980–83
CHARTS
Appendix
I. Charts 1–14: Targets Compared with Previous Year
II. Charts 1a–14a: Actuals Compared with Targets
III. Charts 1b–14b: Actuals Compared with Previous Year
The following symbols have been used throughout this paper:
… to indicate that data are not available;
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
– between years or months (e.g., 1979–81 or January–June) to indicate the years or months covered, including the beginning and ending years or months;
/ between years (e.g., 1980/81) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
Prefatory Note
This study was prepared by Justin B. Zulu, former Director of the African Department of the International Monetary Fund and currently Director of the Central Banking Department, and Saleh M. Nsouli, Division Chief in the Fund’s African Department. The case studies on Somalia and Mali were prepared respectively by Nur Calika and Lelde Schmitz, both economists in the African Department.
The original draft of this study was prepared at the request of the African Center for Monetary Studies, Dakar, Senegal, and presented at the eighth meeting of the Association of African Central Banks, which was held in Arusha, Tanzania, in August 1983.
This paper has benefited from comments and suggestions from Fund staff members. However, opinions expressed are those of the authors and do not necessarily represent the views of the International Monetary Fund.
The authors are grateful to a number of colleagues who contributed data and information, to Maha A. Sabi for her assistance in compiling the data base, and to the editor, Maxine Stough.