International Monetary Fund. Office of Budget and Planning
Amidst the unfolding COVID-19 crisis, the Fund faces twin challenges. Signs of early crisis recovery are uneven across countries, and many face daunting crisis legacies. At the same time, longer term challenges from climate change, digitalization and increasing divergence within and between countries demand stepped up effort by the Fund within its areas of expertise and in partnership with others. FY 22-24 budget framework. Considering these challenges and following a decade of flat real budgets, staff will propose a structural augmentation for consideration by fall 2021 to be implemented over two to three years beginning in FY 23. Recognizing the importance of ongoing fiscal prudence, the budget would remain stable thereafter on a real basis at a new, higher level. FY 22 administrative budget. The proposed FY 22 budget sustains crisis response and provides incremental resources for long-term priorities within the flat real budget envelope. The budget is built on extensive reprioritization; savings, including from modernization; and a proposed temporary increase in the carry forward ceiling to address crisis needs during the FY 22 to FY 24 period. Capital budget. Large-scale business modernization programs continue to be rolled out, strengthening the agility and efficiency of the Fund’s operations. In response to the shift towards cloud-based IT solutions, staff propose a change in the budgetary treatment of these expenses. Investment in facilities will focus on timely updates, repairs, and modernization, preparing for the post-crisis Fund where virtual engagement and a new hybrid office environment play a larger role. Budget sustainability. The FY 22–24 medium-term budget framework, including assumptions for a material augmentation, is consistent with a projected surplus in the Fund’s medium-term income position and with continued progress towards the precautionary balance target for coming years. Budget risks. In the midst of a global crisis, risks to the budget remain elevated and above risk acceptance levels, including from uncertainty around the level of demand for Fund programs and ensuing staffing needs, as well as future donor funding for CD. Enterprise risk management continues to be strengthened with this budget.
This book describes the reforms needed to move small middle-income countries in sub-Saharan Africa to advanced-economy status. The result of intense discussions with public officials in the countries covered, the book blends rigorous theory, econometrics, and practitioners' insights to come up with practical recommendations for policymakers. It spans topics from macroeconomic vulnerability and reserve adequacy to labor market institutions and financial inclusion. The book is a must-read for researchers interested in the economic issues facing developing countries in sub-Saharan Africa.
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.