This paper presents an assessment of the Democratic Republic of the Congo's eligibility for assistance under the enhanced initiative for heavily indebted poor countries. The country has made remarkable progress in consolidating the peace process, stabilizing the economic situation, and creating the conditions for sustainable economic growth and poverty reduction. The analysis supporting the poverty reduction strategy finds that structural constraints prevent the Democratic Republic of the Congo from achieving the international goal of reducing absolute poverty and meeting the goal for absolute poverty reduction.
This Selected Issues and Statistical Appendix paper outlines the recent developments in the political and security situation in Congo. It reviews economic performance during 1970–2003, including in the context of IMF-supported programs. The paper also reviews recent developments in public finance management, and examines the constraints on growth and poverty reduction. The sources of economic growth during 1970–2003 are analyzed. The paper also discusses the feasibility of an oil fiscal rule, and notes some key lessons and challenges for the Congo.
This paper discusses Côte d’Ivoire’s preliminary assessment of eligibility for assistance under the Enhanced Heavily Indebted Poor Countries Initiative. The March 2007 Ouagadougou Political Accord provides a roadmap for reunification, national reconciliation, demobilization, and presidential elections. Fiscal consolidation has generated fiscal space while reducing external and domestic arrears. Significant revenue collection efforts and overall expenditure restraint have resulted in a modest primary basic surplus in 2007 and a similar outcome is foreseen for 2008.
This paper examines Côte d’Ivoire’s debt sustainability analysis undertaken in connection with the Enhanced Initiative for Heavily Indebted Poor Countries. The crisis years led to a substantial increase in poverty and deterioration in living standards. The March 2007 Ouagadougou Political Accord provides a roadmap for reunification, national reconciliation, demobilization, and elections. Significant revenue efforts and overall expenditure restraint have resulted in a modest space for social and crisis-exit spending. To eliminate extrabudgetary spending in the future and enhance transparency, the authorities have established a range of safeguards.
This paper examines the Democratic Republic of the Congo’s Request for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility (PRGF) and for the First Annual Program. The authorities requested a three-year PRGF arrangement in support of their program covering April 1, 2002–July 31, 2005, in an amount equivalent to SDR 580 million. The authorities have also steadfastly implemented a Staff-Monitored Program covering June 2001–March 2002, aiming principally at stabilizing the economic situation, and laying the foundation for the restoration of growth and reconstruction.
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The price level behaviors of the CFA franc zone countries with respect to the price level of France, defined in terms of long-run convergence in price level and short-run linear dependence of their inflation rates are not homogenous and have a break-point in the mid 1980s except for Congo. This paper quantifies the evolution of the price level behavior of each CFA franc zone country from 1979 to 1993 using the cointegration and error-correction model techniques. The interzone linkages are also examined using the simple vector autoregression model.
This study examines the drivers of growth in Sub-Saharan African countries, using aggregate data, from the past decade. We correlate recent growth experience to key determinants of growth, including private and public investment, government consumption, the exchange regime and real exchange rate, and current account liberalization, using various econometric methodologies, including fixed and random effects models, with cluster-robust standard errors. We find that, depending on the specification, higher private and public investments boost growth. Some evidence is found that government consumption exerts a drag on growth and that more flexible exchange regimes are beneficial to growth. The real exchange rate and liberalization variables are not significant.
Presumptive income taxes in the form of a tax on turnover for SMEs are pervasive as a way to
reduce the costs of compliance and administration. We analyze a model where entrepreneurs
allocate labor to the formal and informal sectors. Formal sector income is subjected either to a
corporate income tax or a tax on turnover, depending on whether their turnover exceeds a
threshold. We characterize the private sector equilibrium for any given configuration of tax
policy parameters (corporate income tax rate, turnover tax rate, and threshold). Given private
behavior, social welfare is optimized. We interpret the first-order conditions for welfare
maximization to identify the key margins and then simulate a calibrated version of the model.
We analyze the growth impact of official development assistance to developing countries. Our approach is different from that of previous studies in two major ways. First, we disentangle the effects of two kinds of aid: developmental and non-developmental. Second, our specifications allow for the effect of aid on economic growth to occur over long periods. Our results indicate that developmental aid promotes long-run growth. The effect is significant, large and robust to different specifications and estimation techniques.