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Front Matter

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    African Department

    ©2011 International Monetary Fund

    Production: IMF Multimedia Services Division

    Typesetting: Alicia Etchebarne-Bourdin

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    In the wake of the global economic crisis: Adjusting to lower revenue of the Southern African Customs Union in Botswana, Lesotho, Namibia, and Swaziland/Joannes Mongardini … [et al]. — Washington, D.C.: International Monetary Fund, 2010.

    • p.; cm.

    • At head of title: International Monetary Fund, African Dept.

    • Includes bibliographical references.

    • ISBN 9781462343492

    1. Revenue — Africa, Southern. 2. Southern African Customs Union. 3. Tariff — Africa, Southern. 4. Fiscal policy — Africa, Southern. 5. Government spending policy — Africa, Southern. I. Mongardini, Joannes, 1970-. II. International Monetary Fund. African Dept.

    HJ3050.I5 2010

    Disclaimer: This publication should not be reported as representing the views or policies of the International Monetary Fund. The views expressed in this work are those of the authors and do not necessarily represent those of the IMF, its Executive Board, or its management.



    Following the negative impact of the global economic crisis, the Southern African Customs Union (SACU) is facing a significant decline in revenue collections. This decline will have a large impact on transfers over the medium term to the smaller economies of SACU, namely Botswana, Lesotho, Namibia, and Swaziland (BLNS). This paper provides estimates of the revenue shortfall for each of the BLNS countries and proposes a strategy for the necessary adjustment to preserve fiscal and debt sustainability. It concludes that the challenges of the adjustments are significant, particularly for Lesotho and Swaziland, and that an appropriate mix of revenue and recurrent expenditure measures, with particular emphasis on reducing the wage bill, could restore debt sustainability over the medium term without unduly affecting economic growth and poverty alleviation.

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