IMF Country Report Research Articles

Poverty Alleviation in Nigeria: A Decadal Examination of Political Economic Forces and Implications for Future Initiatives, Spotlighting Microfinance Banks

This research investigates the impact of political-economic dynamics on the effectiveness of Poverty Reduction Strategy Papers (PRSPs) in Nigeria from 2004 to 2014, with a specific emphasis on the role played by Microfinance Banks (MFBs). Employing a phenomenological approach within the social constructionist tradition, the study utilizes both individual and focus group interviews, complemented by the analysis of official documents from Nigerian Federal Ministries and the Central Bank. The case selection centers on microcredit, an important component of the IMF country report for the specified period. The findings reveal that while the National Economic Empowerment and Development Strategy (NEEDS) exhibits positive macroeconomic indicators, its alignment with the empowerment framework is nuanced. The study highlights the challenges faced by microcredit users, emphasizing the high interest rates, lack of government support, and inadequacies in the regulatory framework. Microfinance policy, as outlined by the Central Bank of Nigeria, is critiqued for its failure to provide safety nets and welfare benefits for microcredit users, exacerbating their economic vulnerabilities. This research contributes a comprehensive understanding of the socio-economic impact of PRSPs in Nigeria, shedding light on the complex interplay between macroeconomic policies and micro-level dynamics. The policy recommendations provided aim to address these challenges, advocating for regulatory enhancements, targeted interventions, and inclusive economic growth to foster a more effective and equitable poverty reduction strategy.

Crouching beliefs, hidden biases: The rise and fall of growth narratives

The debate among economists about an optimal growth recipe has been the subject of competing “narratives.” We identify-four major growth narratives using the text analytics of IMF country reports over 1978–2019. The narrative “Economic Structure”—services, manufacturing, and agriculture—has been on a secular decline overshadowed by the “Structural Reforms”—competitiveness, transparency, and governance. We observe the rise and fall of the “Washington Consensus”—privatization and liberalization—and the rise to dominance of the “Washington Constellation,” a collection of many disparate terms such as productivity, tourism, and inequality. We interpret these changes through the lens of a nexus of the changing pool of economic ideas, the power structure within organizations, and the shocks that trigger a shift of narratives and their translation into policies.

EX-POST EVALUATION of EXCEPTIONAL ACCESS UNDER the 2020 STAND-BY ARRANGEMENT IMF Country Report No. 22/237, July 2022

EX-POST EVALUATION of EXCEPTIONAL ACCESS UNDER the 2020 STAND-BY ARRANGEMENT IMF Country Report No. 22/237, July 2022

Cameroon

Since the approval of the first Rapid Credit Facility (RCF-1) request on May 4, 2020 (IMF Country Report No 20/185), weaker external demand in major trading partners (China and Europe) and a more pronounced impact of containment measures to slow the rising number of COVID-19 cases, have further deteriorated growth prospects and worsened Cameroon’s external and fiscal positions. Given limited fiscal buffers and urgent balance of payments needs due to the pandemic, the authorities allowed the current ECF arrangement expire at end-September, reiterated their interest on a successor arrangement, and in the meantime requested financial assistance under the “exogenous shocks window” of the RCF equivalent to 40 percent of quota (SDR 110.4 million). This additional request will bring the total disbursement under the RCF to 100 percent of quota in 2020.

Crouching Beliefs, Hidden Biases

The debate among economists about an optimal growth recipe has been the subject of competing “narratives.” We identify four major growth narratives using the text analytics of IMF country reports over 1978-2019. The narrative “Economic Structure”—services, manufacturing, and agriculture—has been on a secular decline overshadowed by the “Structural Reforms”—competitiveness, transparency, and governance. We observe the rise and fall of the “Washington Consensus”—privatization and liberalization— and the rise to dominance of the “Washington Constellation,” a collection of many disparate terms such as productivity, tourism, and inequality. Growth theory concepts such as innovation, technology, and export policy have been marginal while industrial policy, which was once perceived positively, is making a comeback.

Rwanda

COVID-19 has had a severe economic impact on Rwanda through the implementation of strict domestic measures to contain the spread of the virus and the related global spillovers. The authorities have responded by rolling out health and economic measures totaling USD 311 million (3.3 percent of GDP) to mitigate the impact on businesses and households. To help address the urgent balance of payments need arising from the pandemic, the Executive Board approved on April 2 and June 11, 2020 the authorities’ consecutive requests for emergency financing under the “exogenous window” of the Rapid Credit Facility (RCF) totaling SDR 160.2 million (IMF Country Reports No. 20/115 and No 20/207). This brings the total IMF COVID-19 support to Rwanda to 100 percent of quota, or USD 220.46 million.

Seychelles

COVID-19 has had a severe economic impact on Seychelles through the implementation of strict domestic measures to contain the spread of the virus and the related global spillovers. The authorities have responded with measures to mitigate the economic fallout on businesses and households. To help address the urgent balance of payments need arising from the pandemic, the Executive Board approved on May 8, 2020 the authorities’ request for emergency financing under the Rapid Financing Instrument (RFI) of SDR 22.9 million, equivalent to 100 percent of quota (IMF Country Report No. 20/170).

Gabon

Since the approval of the first RFI request on April 9, 2020 (IMF Country Report No 20/109), weaker external demand and a more pronounced impact of containment measures have further deteriorated growth prospects and worsened external and fiscal positions. The authorities are requesting a purchase under the Rapid Financing Instrument (RFI) of 50 percent of quota (SDR 108 million) to be used as budget support to help address urgent balance of payment (BoP) needs and mitigate the risk of disorderly fiscal or BoP adjustment. This additional request will bring the total purchases under the RFI to 100 percent of quota in 2020.

Chad

Chad’s economy has been severely impacted by the twin Covid-19 pandemic and terms of trade shocks. A national lockdown to contain the spread of the virus, disruptions in supply chains, and a drop in international oil prices are curtailing economic activity and weakening the outlook. While the authorities’ policy response has been timely and proactive, the economic shock and containment policies are triggering a severe recession, resulting in significant social costs and urgent balance of payment and budget financing needs. These are estimated at 7.0 percent of non-oil GDP compared to 4.6 percent in IMF Country Report No. 20/134. The pandemic is unfolding in a context of rising regional and domestic insecurity and an already weak health care system, which are exacerbating Chad’s vulnerabilities.

Italy

The Italian financial safety net and crisis-management framework has been substantially strengthened since the 2013 FSAP. Among others, the authorities have enhanced the early intervention framework, introduced a new resolution regime (including recovery and resolution planning requirements), and introduced reforms of the two deposit guarantee schemes (DGS) that are active in Italy. Further enhancements at the Banking Union level, as outlined in the 2018 Financial System Stability Assessment for the euro area (IMF Country Report No. 18/226)—including the introduction of an adequately funded common deposit guarantee scheme, a harmonized bank liquidation framework and a finetuning of state aid rules—would yield further benefits for Italy.

Rwanda

As explained in IMF Country Report No. 20/115, COVID-19 has had a severe economic impact on Rwanda through the implementation of strict domestic measures to contain the spread of the virus and related global spillovers. The authorities have responded by deploying health and economic measures totaling USD 311 million (3.3 percent of GDP). They have also set up an economic recovery fund to support firms affected by the pandemic. To help address the urgent balance of payments (BOP) need arising from the pandemic, currently estimated at about USD 433 million, the authorities request an additional disbursement under the Rapid Credit Facility (RCF) of 50 percent of quota (SDR 80.1 million) under the “exogenous shock” window of the RCF. This follows the Executive Board’s approval on April 2, 2020 of the authorities’ earlier request for the same amount, before the doubling of the annual access limit of emergency financing under the “exogenous shock” window of the RCF to 100 percent of quota on April 9, 2020. This additional request will bring the total disbursement under the RCF to 100 percent of quota.

Text-Mining Imf Country Reports – An Original Dataset

This article introduces an original panel dataset based on the text of country reports by the International Monetary Fund. It consists of a total of 5561 Article IV consultation and program review documents, published between 2004 and 2018 on 201 countries. The text of these reports provide indications of the perceived policy weaknesses, economic risks, ongoing reforms and implemented or neglected policy advice. Thus the content of IMF reports are widely used in the economics, political science and IR literature. To our knowledge this is the first comprehensive dataset that aggregates these country reports. The paper gives a detailed account on the data acquisition and management process. To demonstrate and validate the dataset's application for research we present three validation exercises. We find that Article IV reports can indicate incoming institutional reforms, show changes in IMF policy advice over time and identify potential gains from recently discovered natural resources in certain cases. Taken together, this paper contributes an original dataset of IMF country reports and demonstrates how it can be a useful foundation for further research into the role of international financial institutions.

Austerity: The New Normal - A Renewed Washington Consensus 2010-24

Austerity: The New Normal - A Renewed Washington Consensus 2010-24

Crouching Beliefs, Hidden Biases: The Rise and Fall of Growth Narratives

The debate among economists about an optimal growth recipe has been the subject of competing 'narratives.' We identify four major growth narratives using the text analytics of IMF country reports over 1978-2019. The narrative 'Economic Structure'-services, manufacturing, and agriculture-has been on a secular decline overshadowed by the 'Structural Reforms'-competitiveness, transparency, and governance. We observe the rise and fall of the 'Washington Consensus'-privatization and liberalization- and the rise to dominance of the 'Washington Constellation,' a collection of many disparate terms such as productivity, tourism, and inequality. Growth theory concepts such as innovation, technology, and export policy have been marginal while industrial policy, which was once perceived positively, is making a comeback.

Eurozone Debt Crisis and Albania

Albania as part of the Western Balkans was affected by the consequences of the financial crisis in 2009 followed by the EU debt crisis. However, as a result of external factors, the slowdown in economic growth began to feel in 2008. Despite the fact that the economic growth in the country was the largest in the Western Balkans region and remained at positive levels even during the crisis, some of the economic and financial indicators had significant impact. Also, high increase in public spending in the infrastructure area was noticed, which accompanied the pre-crisis period and further deteriorated by its impact. Looking at these up rising data of the budget deficit and the public debt to cover the latter, IMF proposed two fiscal rules in order to contribute strengthening fiscal sustainability: 1- The debt rule, which directly allows the full functioning of automatic stabilizers and keeps government under control; 2- The expenditure rule aiming at debt brake, which allows a close connection between the operational goal and the fiscal sustainability objective (IMF Country Report No. 10/206: July 2010). Focus of this paper is particularly on the most important economic and financial indicators in Albania to better understand the extent of the impact of this crisis in the country and the measures taken as well. Through the comparisons of the situation before and after the crisis will be reached on the conclusions on the main instruments used by the government to cope with the crisis or avoid its consequences.

The Decade of Adjustment: A Review of Austerity Trends 2010-2020 in 187 Countries

This paper: (i) examines the latest IMF government spending projections for 187 countries between 2005 and 2020; (ii) reviews 616 IMF country reports in 183 countries to identify the main adjustment measures considered by governments in both high-income and developing countries; (iii) applies the United Nations Global Policy Model to simulate the impact of expenditure consolidation on economic growth and employment; (iv) discusses how austerity threatens welfare and social progress; and (v) calls for urgent action by governments to adopt alternative and equitable policies for socio-economic recovery.

The Age of Austerity: A Review of Public Expenditures and Adjustment Measures in 181 Countries

This paper: (i) examines the latest IMF government spending projections for 181 countries by comparing the four distinct periods of 2005-07 (pre-crisis), 2008-09 (crisis phase I: fiscal expansion), 2010-12 (crisis phase II: onset of fiscal contraction) and 2013-15 (crisis phase III: intensification of fiscal contraction); (ii) reviews 314 IMF country reports in 174 countries to identify the main adjustment measures considered in high-income and developing countries; (iv) discusses the threats of austerity to development goals and social progress; and (v) calls for urgent action by governments to adopt alternative and equitable policies for socio-economic recovery.

Austerity Measures Threaten Children and Poor Households: Recent Evidence in Public Expenditures from 128 Developing Countries

In the wake of the food, fuel and financial shocks, a fourth wave of the global economic crisis began to sweep across developing countries in 2010: fiscal austerity. Serving as an update of earlier research by UNICEF, this working paper: (i) examines the latest IMF government spending projections for 128 developing countries, comparing the three periods of 2005-07 (pre-crisis), 2008-09 (crisis phase I: fiscal expansion) and 2010-12 (crisis phase II: fiscal contraction); (ii) discusses the possible risks for social expenditures; (iii) assesses the most common adjustment measures being considered by developing countries in 2010-11 and their potentially adverse impacts on vulnerable populations; and (iv) summarizes a series of alternative policy options that are available to governments to expand fiscal space and ensure a Recovery for All, including children and poor households. While most governments introduced fiscal stimuli to buffer their populations from the impacts of the crisis during 2008-09, premature expenditure contraction became widespread beginning in 2010 despite vulnerable populations’ urgent and significant need of public assistance. Our analysis confirms that the scope of austerity is severe and widening quickly, with 70 developing countries (or 55 percent of the sample) reducing total expenditures by nearly three percent of GDP, on average, during 2010, and 91 developing countries (or more than 70 percent of the sample) expected to reduce annual expenditures in 2012. Moreover, comparing the 2010-12 and 2005-07 periods suggests that nearly one-quarter of developing countries appears to be undergoing excessive contraction, defined as cutting expenditures below pre-crisis levels in terms of GDP. Regarding austerity measures, the scope of options under consideration in developing countries seems to have widened considerably since a pioneer expenditure analysis was carried out by UNICEF in October 2010 (“Prioritizing Expenditures for a Recovery for All”). An updated review of the latest IMF country reports shows that governments are weighing various cost-saving policies, including: (i) wage bill cuts/caps, including salaries of education, health and other public sector workers; (ii) elimination or reduction of subsidies, including for basic food items; and (iii) rationalizing social protection schemes by reforming pensions or further targeting social safety nets. Also widely discussed is the introduction or broadening of taxes, such as VATs, on basic products consumed by vulnerable populations. The paper questions if the projected fiscal contraction trajectory – in terms of timing, scope and magnitude – as well as the specific austerity measures considered are conducive to the objective of adequately protecting children and poor households and the achievement of development goals such as the MDGs. The paper encourages policymakers and development partners to evaluate the potential human and development costs of foregone social expenditures and to consider alternative policy measures to ensure a Recovery for All.

Framework Administered Account for Selected Fund Activities - United States Subaccount for Selected Fund Activities

Niger’s macroeconomic performance and policies through end-January 2010 were assessed in the IMF Country Report No. 10/146, issued following the completion of the third program review under the arrangement under the Extended Credit Facility (ECF) from the IMF. Since the military intervention in February, the near-term growth outlook has weakened, reflecting the intensity of the food crisis and some contraction in public spending, but the outlook for 2011 is broadly favorable provided that budgetary policies remain appropriately cautious, that normal weather conditions prevail, and that donor support for Niger picks up.

Niger - 2010 Assessment Letter for the European Union and African Development Bank

Niger’s macroeconomic performance and policies through end-January 2010 were assessed in the IMF Country Report No. 10/146, issued following the completion of the third program review under the arrangement under the Extended Credit Facility (ECF) from the IMF. Since the military intervention in February, the near-term growth outlook has weakened, reflecting the intensity of the food crisis and some contraction in public spending, but the outlook for 2011 is broadly favorable provided that budgetary policies remain appropriately cautious, that normal weather conditions prevail, and that donor support for Niger picks up.