2016年-IMF国际货币组织全球_Make_Investment_Scaling_41页_1mb

Summary of "Make Investment Scaling-Up Work in Benin: A Macro-Fiscal Analysis"

Core Content

This document, authored by a team from the International Monetary Fund (IMF) African Department, presents a macro-fiscal analysis of Benin's plan to scale up public investment. The goal is to assess the growth potential of the investment plan and identify how the government can create fiscal space to support this increase without undermining macroeconomic stability.

Benin has achieved strong macroeconomic stability and growth in recent years, but further growth is needed to reduce poverty and enhance prosperity. The government announced a significant increase in public investment (around 12.5% of GDP) for the period 2014–2019, with an additional 20% of GDP potentially funded by private sources such as public-private partnerships (PPPs). The investment will focus on energy and transportation infrastructure, which are identified as key growth bottlenecks.

The analysis uses a diagnostic decision tree framework developed by Hausmann, Rodrik, and Velasco (HRV 2005) to evaluate growth constraints. It highlights two main areas: the cost of finance and the return to economic activities.

Main Viewpoints

1. Growth Performance and Constraints

• Benin has made progress in growth, closing the per capita GDP growth gap with sub-Saharan African (SSA) averages in the last three years.
• The main growth drivers have been agriculture and services, with agriculture benefiting from improved cotton production and services driven by demand from neighboring countries like Nigeria.
• Total factor productivity (TFP) growth has been a key constraint, contributing to about 75% of the growth gap between Benin and fast-growing SSA countries.
• Capital accumulation also plays a role, contributing to about 25% of the gap.
• Infrastructure is a major constraint, particularly in energy and transport, limiting private sector productivity and growth potential.
• Human capital and geography are not binding constraints, with Benin's education levels and location being comparable to other fast-growing countries.

2. Cost of Finance

• The lending rate and lending spread in Benin are comparable to those of comparator countries.
• Credit to the private sector has grown significantly and is now at levels similar to those of fast-growing SSA countries.
• Access to international finance is not a major constraint, as Benin has attracted stable net foreign direct investment (FDI) inflows and maintains low public debt (about 10 percentage points below the WAEMU average).
• The financial sector is relatively advanced for a low-income country, though reforms are still needed to improve access and inclusion.

3. Return to Economic Activities

• Infrastructure quality and business environment are the primary constraints on private returns.
• Benin's business environment is ranked poorly (158th in 2016), with significant corruption and informal economic activity (estimated to be between 30% and 56% of total trade).
• Doing Business indicators show that Benin lags behind its comparator countries in terms of ease of doing business.
• Market failures, such as information and coordination externalities, are present but not binding.
• Private firms report infrastructure problems, especially energy shortages, as a major constraint.

Key Information

Investment Plan

• Benin plans to increase public investment by 12.5% of GDP by 2019.
• Additional investment of 20% of GDP could be sourced from private sectors.
• Investment will target energy and transportation infrastructure, which are seen as critical for growth.

Fiscal Space Creation

• Tax revenue potential is a key source of fiscal space.
• Spending efficiency is another avenue, particularly in education and health sectors.
• The document suggests that improving tax collection and reducing inefficiencies in public spending can help mobilize additional resources.

Methodology

• A DSGE model with endogenous fiscal adjustments is used to evaluate the macro-fiscal implications of the investment scaling-up.
• The model considers three types of government debt: domestic, external concessional, and external commercial.
• It assumes that public investment is complementary to private capital, enhancing growth potential.
• The model also accounts for government inefficiencies:
  • Spending inefficiency: Only a fraction of public investment expenditure translates into productive public capital.
  • Tax inefficiency: Actual tax revenue is less than what is implied by tax rates and the tax base.

Policy Implications

• Baseline scenario assumes that the government can finance the investment gap through taxes and concessional borrowing.
• The model shows that higher tax rates are necessary to maintain fiscal sustainability, but the increase is small and short-lived.
• Nonconcessional external debt allows for a smoother fiscal adjustment while preserving sustainability, though it is not recommended without proper management.
• Trade liberalization with Nigeria could reduce customs revenues, which is a concern due to the significant role of informal reexports in the economy.

Conclusion

The document concludes that Benin has the potential for higher growth through increased public investment, particularly in infrastructure. However, this requires careful fiscal management to ensure sustainability. The analysis suggests that tax reforms and improving spending efficiency are crucial to creating the necessary fiscal space. The government should also focus on reducing red tape, enhancing tax administration, and strengthening the judicial system to improve the business environment and support long-term growth.

The policy discussions emphasize the need for comprehensive reforms in both the revenue and expenditure channels to support the investment scaling-up strategy. The findings are consistent with the government's reform objectives and highlight the importance of infrastructure development and institutional improvements for sustainable economic growth.