2016年-IMF国际货币组织全球_Djibouti_Selected_Issues_39页_891kb

Djibouti Fiscal Reform and Economic Challenges Summary

Core Content

This document is a report by the International Monetary Fund (IMF) on Djibouti's fiscal and economic challenges, focusing on fiscal sustainability, inclusive growth, and financial inclusion. It was prepared for the periodic consultation with the Djibouti authorities and based on information available up to November 18, 2015.

Main Points

Fiscal Reform for Sustainability and Inclusive Growth

• Public Investment and Debt: Djibouti is experiencing a significant increase in public investment, primarily financed by debt. Public investment is expected to reach 28% of GDP in 2015–16, lifting aggregate investment to 57% of GDP.
• Debt Risks: The external debt-to-GDP ratio is projected to rise from 48% in 2013 to 80% in 2017. Debt service costs are expected to consume about 20% of tax revenues by 2019.
• Fiscal Sustainability: The current fiscal path is unsustainable due to persistent negative primary balances and insufficient revenue to meet debt service requirements. Primary balances are projected to remain negative throughout 2015–34, with an average shortfall of 6 percentage points of GDP relative to debt service needs.
• Fiscal Consolidation: To ensure sustainability, fiscal consolidation is necessary, particularly through reducing investment spending and enhancing domestic resource mobilization.

Investment Projects and Their Impact

• Two major infrastructure projects drive public investment: a railway connecting Djibouti and Ethiopia, and a pipeline to transport potable water from Ethiopia.
• The railway, costing $550 million, is partially financed by a non-concessional loan from the Exim Bank of China. The pipeline, costing $340 million, is fully financed by the government.
• These projects are expected to boost economic growth, create jobs, and improve infrastructure, but their revenue generation is uncertain, posing risks to fiscal stability.

Tax Exemptions and Incentives

• Djibouti's tax regime includes generous exemptions for foreign investment, such as the free zone law offering 50 years of tax exemption for certain enterprises.
• The investment code grants exemptions for enterprises investing over $28,134 or creating sufficient jobs. These exemptions have created an uneven playing field, disadvantaging domestic enterprises.
• Tax exemptions have led to forgone revenues and a high marginal effective tax rate on investment (65% in 2012), which has been a barrier to inclusive growth.

Reform Priorities

• Reduce Tax Exemptions: The free zone and investment code should be reformed. New enterprises would face a 15% income tax from the 11th year, while existing ones would face a gradual increase from 5% to 15% over time.
• Eliminate Domestic Consumption Tax on Investment Goods: This tax penalizes investment and should be removed.
• Raise Minimum Tax: The lump sum minimum tax should be increased from 1% to 1.5%.
• Improve Tax Administration: A unified large taxpayers' unit should be established to streamline VAT and income tax administration.
• Introduce Market-Based Pricing: A pricing mechanism that reflects international oil prices should be introduced, along with safety nets to protect the poor from price increases.
• Strengthen Public Investment Management: Coordination among government entities is weak, and rigorous cost-benefit analysis is lacking. Investment projects should be managed on a commercial basis to ensure profitability and revenue generation.

Financial Inclusion Challenges

• The banking system faces constraints in credit and deposit availability, which limits financial services access.
• Credit and deposit growth has been uneven, with a high concentration of loans in certain sectors.
• Financial inclusion initiatives should focus on reducing participation costs, relaxing borrowing constraints, and increasing intermediation efficiency.

Institutional Weaknesses

• The budget process is weak, lacking a medium-term framework and regular audits.
• Treasury cash management is poor, leading to arrears accumulation.
• Reforms are needed to modernize public financial management and improve transparency and accountability.

Key Information

• Current Fiscal Outlook: Primary balances are negative for most of 2015–34, and domestic revenues are projected to decline from 19.3% of GDP in 2015 to 17.3% in 2019.
• Debt Service Gap: The table shows a significant financing gap for debt service, reaching -18.4% of GDP in 2015 and remaining negative throughout the period.
• Social Impact: Tax exemptions and fuel subsidies disproportionately benefit higher-income groups, while the poor are left vulnerable to price increases.
• Economic Structure: Djibouti's economy is small (GDP of $1.6 billion in 2014), with limited domestic resource mobilization capacity and high reliance on foreign aid and non-tax revenues (e.g., military base rents).
• Policy Recommendations:
  • Reform the tax regime to enhance revenue mobilization and equity.
  • Implement a medium-term budget framework and regular audits.
  • Improve public investment management and coordination.
  • Enhance financial inclusion through cost reductions and efficiency improvements.
  • Strengthen institutional capacity in public financial management and debt management.

Figures and Tables

• Figure 1: Investment, Debt, and Revenue, 2010–20.
• Table 1: Djibouti: Debt Service Financing Gap, 2015–34 (in percent of GDP).
• Table 2: Djibouti: Tax Receipts, 2012–14 (average).

Conclusion

The document concludes that while the investment boom presents opportunities for growth, it also poses serious fiscal risks. Fiscal reform is essential to ensure sustainability, promote inclusive growth, and improve public financial management. Institutional strengthening and policy coordination are critical to the success of these reforms. The long-term sustainability of the fiscal path will depend on the successful execution and profitability of investment projects.