This paper discusses Seychelles’ Third Review Under the Extended Arrangement and Request for Modification of Performance Criteria (PC). All PCs for end-June 2015, the program’s third test date, were met. Based on preliminary data, all the third-quarter indicative targets were also met. The structural agenda is proceeding, albeit with some delays. Growth for 2015 has been revised upward to slightly more than 4 percent. Presidential elections are taking place during December 3–5. The IMF staff recommends completion of the third review under the Extended Arrangement and modification of the PCs for end-December 2015.
This Selected Issues paper analyzes policies that can raise potential growth in small middle-income countries (SMICs) of sub-Saharan Africa (SSA). The findings suggest that although macroeconomic stability and trade openness are necessary for productivity growth, they are not sufficient. SMICs in SSA need to improve the quality of their public spending, most notably on education, to solve the problem of skill mismatch in the labor market, reduce the regulatory burden on firms, improve access to financing by small and medium-size enterprises, and pave the way for structural transformation in these economies. Given the short-term cost of these reforms, the timing and sequencing of reforms and the role of quick wins is important for their implementation. In some cases, a social bargain can be a mechanism to generate consensus around a package of mutually reinforcing reforms.