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Africa > Uganda

You are looking at 1 - 5 of 5 items for :

  • Type: Journal Issue x
  • Financial institutions x
  • Economic & financial crises & disasters x
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Cover Policy Papers
Adequacy of the Global Financial Safety Net—Considerations for Fund Toolkit Reform
International Monetary Fund
liquidity in the face of increased vulnerabilities calls for enhancing the liquidity support provided through the global financial safety net (GFSN). The global economy is experiencing a period of protracted uncertainty, marked by frequent episodes of volatility. Demand for liquidity has intensified, in particular from emerging markets, which are experiencing a build-up of vulnerabilities and the depletion of their fiscal buffers. The enhanced GFSN meets only partially this higher demand for liquidity. The IMFC and G20 have called on the Fund to further strengthen the safety net. The uneven use of the Fund’s toolkit for crisis prevention suggests the need to reconsider its design. Despite a major overhaul of the Fund’s lending instruments available for precautionary financing, only a modest number of countries have used them. In particular, the lack of access to a liquidity backstop for members with strong policies—similar to the standing bilateral swap arrangements (BSAs) among central banks—limits the availability of Fund support over the whole duration of the shock during protracted periods of global uncertainty. Moreover, the need to resort to Fund financing still carries a high political cost (stigma) for some members. To enhance further the Fund’s toolkit for crisis prevention, consideration could be given to revisiting the existing toolkit and introducing new instruments. The toolkit could thus be enhanced by: establishing a new facility for precautionary financing that would provide a "standing" liquidity backstop to members with strong fundamentals and policies for use when hit by liquidity shocks; and adjusting the existing toolkit to maintain cohesion. Any change to the Fund toolkit would need to take into account the tradeoffs between reducing stigma and containing moral hazard, while simultaneously safeguarding Fund resources. A Fund policy monitoring instrument could improve the cohesion of the global safety net. As the GFSN has expanded and become more multi-layered, there is a need to improve cooperation across the different layers to unlock financing and signal commitment to reforms. Creating a policy monitoring instrument that is available to all Fund members could help in this regard. Next steps . In light of Directors’ views on these points, staff could come back with subsequent papers that lay out specific and detailed proposals for reforming the lending toolkit. While these papers focus on the GRA lending toolkit, a separate forthcoming paper will assess some aspects of the concessional lending toolkit.
Keywords:
PP; FCL; director; Short-term Liquidity Swap; resource; lending toolkit; review of the Flexible Credit Line; SLS qualification criteria; FCL qualification framework; crisis prevention; Ara metrics; fund resource; Liquidity; Balance of payments need; Lines of credit; Financial safety nets; Crisis prevention; Global
Cover IMF Working Papers
Evaluating the Impact of Non-Financial IMF Programs Using the Synthetic Control Method
Ms. Monique Newiak
and
Tim Willems
We use the Synthetic Control Method to study the effect of IMF advice on economic growth, inflation, and investment. The analysis exploits the existence of IMF programs that do not involve any financing (Policy Support Instruments, “PSIs”). This enables us to focus on the effects of IMF monitoring, advice, and approval (as opposed to direct financial assistance). In addition, countries with non-financial programs are typically not crisis-struck – thereby mitigating the reverse causality problem and facilitating the construction of counterfactuals. Results suggest that treated countries add about 1 percentage point in annual real GDP per capita growth, with inflation being lower by some 3 percentage points per year. While we do not find evidence for an impact on total investment and the resulting capital stock, PSI-treatment does seem to stimulate foreign direct investment.
Keywords:
WP; adverse selection; absolute value; International Monetary Fund; Program-evaluation; Economic growth; Inflation; Investment; IMF operations; IMF loan-participation rate; treatment effect; IMF's executive board; PSI review; traditional IMF program; structural adjustment; causal effect of IMF-program; effectiveness of IMF-program; adoption of an IMF-program; types of IMF-engagement; Stocks; Consumer price indexes; Sub-Saharan Africa
Cover Sub-Saharan Africa
Sub-Saharan Africa
Financial Sector Challenges
Ms. Catherine A Pattillo
,
Ms. Anne Marie Gulde
,
Mr. Kevin J Carey
,
Ms. Smita Wagh
, and
Mr. Jakob E Christensen

Abstract

Financial sectors in low-income sub-Saharan Africa (SSA) are among the world's least developed. In fact, assets in most low-income African countries are smaller than those held by a single medium-sized bank in an industrial country. The absence of deep, efficient financial markets seriously challenges policy making, hinders poverty alleviation, and constrains growth. This book argues that building efficient and sound financial sectors in SSA countries will improve Africa's economic prospects. Based on a review of the key features of financial systems, it discusses the main obstacles and challenges that financial structures pose for SSA economies and recommends steps that could address major shortcomings in implementing the reform agenda.

Keywords:
BOOK; bank; SSA bank; financial market imperfection; lending; development bank; renewed reform effort; credit information indices; Commercial banks; Financial sector; Credit; Stock markets; Africa; Sub-Saharan Africa; Southern Africa; credit constraint; survey evidence; portfolio diversification
Cover IMF Working Papers
Banking in Sub-Saharan Africa: What Went Wrong?
Ms. Françoise Le Gall
,
Mr. Roland Daumont
, and
François Leroux
The purpose of this paper is to study the origins of banking crises in sub-Saharan Africa, drawing upon the experience of ten countries during the period 1985-95. It examines, in particular, which factors were the most important sources of these crises. The conclusions underscore that the banking crises examined did not represent an entirely special case-a number of factors identified in the general literature, including macroeconomic shocks, were highly relevant-but note that several of their features were nonetheless specific to this part of the world. These banking crises were the very prototype of endemic crises associated with heavy government intervention in the banking system. In this regard, the paper analyzes the complex role of the government in banking in sub-Saharan Africa, the many channels through which governments intervened, and the economic and institutional environment in which the banks operated.
Keywords:
WP; banking crisis; broad money; private sector; development bank; CFA franc; credit policy; Banking Crises; Africa; Macroeconomic Shocks; Government Policy; Regulation; terms of trade; bank supervisor; risk-management practice; bank capital; bank assets; problem bank; local bank; bank financing; bank performance; Commercial banks; Loans; Credit; Foreign banks; Sub-Saharan Africa; West Africa
Cover Quasi-Fiscal Operations of Public Financial Institutions
Quasi-Fiscal Operations of Public Financial Institutions
Mr. George A Mackenzie
and
Mr. Peter Stella

Abstract

Central banks and other public financial institutions act as agents of fiscal policy in many countries. Their "quasi-fiscal" operations and activities can affect the overall public sector balance without affecting the budget deficit as conventionally measured, may also have important allocative effects, and increase the effective size of the public sector. This paper analyzes the macroeconomic and financial effects of such quasi-fiscal activities, as well as the taxes, subsidies, and other expenditures that such activities introduce outside the budget. Measurement and accounting issues are addressed, and policy recommendations are offered.

Keywords:
OP; QFAs; market; PFIs; central bank; central bank loss; central bank lending; income statement; central bank rescue operations; QFAs of central banks; exchange guarantee; Quasi-fiscal operations; Commercial banks; Loans; Credit; Exchange rates; Eastern Europe; Central Africa; West Africa; Caribbean; net loss; Public sector; Deposit insurance