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Ms. Sena Eken, Mr. John F. Laker, and Mr. Shailendra J. Anjaria

Abstract

In late 1979, the African Center for Monetary Studies requested, on behalf of the Association of African Central Banks (AACB), that the Fund staff prepare a study describing the existing payments, exchange control, and exchange rate arrangements in the proposed 17-nation Preferential Trade Area (PTA) of Eastern and Southern African States, analyzing any payments obstacles to trade in the region, and recommending improvements in payments arrangements that would promote intraregional trade.1 This paper contains an updated and slightly revised version of the report prepared in response to that request.2

Ms. Sena Eken, Mr. John F. Laker, and Mr. Shailendra J. Anjaria

Abstract

Intraregional trade is limited, accounting for only some 4 per cent of the combined trade of the countries in the region. Although the share of intraregional trade in total trade varies across countries, it does not exceed one fifth in any country; for most, the proportion is 5 per cent or less. Intraregional trade is unbalanced, as evidenced by the persistent surpluses of one or two countries. As in many developing regions, the foreign trade of countries in this region is hampered by their reliance on exports of a few basic primary commodities, the lack of complementarity of the national ecomomies, transport and communications difficulties, and the paucity of trade information and contacts.

Ms. Sena Eken, Mr. John F. Laker, and Mr. Shailendra J. Anjaria

Abstract

Intraregional trade among the PTA countries is small in absolute terms and of limited importance to most of them. In 1973, intraregional trade (exports plus imports) amounted to $575 million, or almost 7 per cent of total trade.6 In 1980, mutual trade is estimated to have reached some $1 billion, which implies a fall in its share of total trade over this period. In 1980, the share of intraregional exports in total exports was 4.5 per cent (5 per cent including Zimbabwe) and the share of intraregional imports was 3.8 per cent (4.1 per cent including Zimbabwe)(see Table 11 in the Appendix).

International Monetary Fund

This 2008 Article IV Consultation highlights that Djibouti’s macroeconomic performance improved significantly, but inflation pressures are intensifying. Real GDP growth accelerated to 5.3 percent in 2007, driven mainly by foreign direct investment concentrated in the construction and port services. Executive Directors have welcomed Djibouti’s strong economic growth driven by large foreign direct investments in the port and other key sectors of the economy. Directors have also emphasized the importance of maintaining the fiscal consolidation objective, with a view to controlling inflation and creating fiscal space to finance the poverty reduction strategy.

International Monetary Fund. Middle East and Central Asia Dept.

This 2014 Article IV Consultation highlights that Djibouti is undergoing an investment boom that would accelerate economic growth. Aggregate investment is projected to rise from 26 percent of GDP in 2010-13 to 52 percent in 2014-16. GDP growth is expected to rise from 6 percent in 2014 to about 7 percent in 2015-19. Inflation is projected to pick up from 3 percent in 2014 to 3.3 percent in 2015-19 as the large investment spending fuels demand for housing and basic services. Central bank gross foreign assets are projected to remain strong, permitting full currency board coverage over the period 2015-19.

International Monetary Fund. External Relations Dept.
Following are edited extracts of an address by IMF Managing Director Michel Camdessus at the Konrad Adenauer Foundation in Frankfurt on October 11. The full text is available on the IMF’s website (www.imf.org).
Mr. Dhaneshwar Ghura, Mr. Anupam Basu, and Mr. Anthony E Calamitsis
This paper analyzes the factors affecting economic growth in sub-Saharan Africa, using data for 1981–97. The results indicate that per capita real GDP growth is positively influenced by economic policies that raise the ratio of private investment to GDP, promote human capital development, lower the ratio of the budget deficit to GDP, safeguard external competitiveness, and stimulate export volume growth. The favorable evolution of these variables played an important role in the region’s apparent postreform recovery of 1995–97. The paper also discusses a policy framework to promote sustainable economic growth and reduce poverty in sub-Saharan Africa
Ms. Sena Eken, Mr. John F. Laker, and Mr. Shailendra J. Anjaria

Abstract

All countries in the Eastern and Southern African region except Angola and Mozambique are members of the Fund and maintain the exchange rates between their currencies and selected currencies or currency baskets within a relatively narrow margin.14 The currencies of Djibouti, Ethiopia, and Somalia are pegged to the U.S. dollar; the currencies of the Comoros and Madagascar to the French franc; and the currencies of Lesotho and Swaziland to the South African rand. The currencies of Kenya, Malawi, Mauritius, Seychelles, Uganda, and Zambia are linked to the special drawing right (SDR). Tanzania pegs its currency to a basket of the currencies of its main trading partners, Zimbabwe to a currency-weighted basket, and Botswana to a basket of currencies consisting of the SDR and the rand. Angola and Mozambique establish exchange rates for the kwanza and the metical, respectively,15 against the U. S. dollar.

Ms. Sena Eken, Mr. John F. Laker, and Mr. Shailendra J. Anjaria

Abstract

In late 1979, the African Center for Monetary Studies requested, on behalf of the Association of African Central Banks (AACB), that the Fund staff prepare a study describing the existing payments, exchange control, and exchange rate arrangements in the proposed 17-nation Preferential Trade Area (PTA) of Eastern and Southern African States, analyzing any payments obstacles to trade in the region, and recommending improvements in payments arrangements that would promote intraregional trade.

Ms. Sena Eken, Mr. John F. Laker, and Mr. Shailendra J. Anjaria

Abstract

Several arguments have been advanced for the establishment of regional clearing arrangements. Also, various reasons have been given why regional clearing facilities in developing countries may not always produce the hoped-for results. This section examines some of the main considerations that would influence the establishment and operation of a clearing facility in the Eastern and Southern African region.