2015年-IMF国际货币组织全球_Monitoring_and_Managing_Fiscal_Risks_in_the_East_African_Community_39页_1mb

Summary: Monitoring and Managing Fiscal Risks in the East African Community

Core Content

This document, prepared by an IMF staff team led by Paolo Mauro and Hervé Joly, examines the fiscal risks facing the East African Community (EAC) as it moves toward the East African Monetary Union (EAMU). It outlines the importance of monitoring and managing these risks in the context of fiscal policy and macroeconomic stability. The paper highlights that fiscal risks are not fully captured by headline indicators such as government deficit and debt, and therefore a more comprehensive approach is needed to assess and manage them effectively.

Main Objectives

• To identify and analyze the main fiscal risks in the EAC.
• To assess the potential impact of macroeconomic shocks and specific risks such as public enterprises, infrastructure, PPPs, and pensions.
• To evaluate the institutional framework for fiscal risk management in the EAC.
• To provide insights for policymakers to improve fiscal resilience.

Key Findings

1. Macroeconomic Shocks

• Baseline Scenario: The EAC countries are projected to maintain public debt below the 50% of GDP threshold set by the EAMU convergence criteria by 2021.
• Impact of Shocks:
  • A slowdown in real GDP growth and exchange rate depreciation have the largest individual impacts on public debt.
  • Combined adverse shocks could push some countries close to or beyond the debt threshold.
• Probability of Breach:
  • Only Kenya and Tanzania have a probability exceeding 5% of breaching the debt threshold.
  • Burundi, Rwanda, and Uganda have probabilities less than 1%.

2. Specific Fiscal Risks

• Public Enterprises:
  • Play a significant role in EAC economies, contributing to output and employment.
  • Their financial performance varies: some are chronic loss-makers, while others generate profits.
  • Public enterprises often require fiscal transfers and have been subject to bail-outs.
  • Inadequate data and monitoring mechanisms increase fiscal risks.
• Pension Systems:
  • Pension expenditures are a growing concern, particularly due to demographic changes and the sustainability of current systems.
  • The paper emphasizes the need for more transparent and sustainable pension arrangements.

3. Institutional Risks

• Data Quality and Transparency:
  • The quality, timeliness, and coverage of fiscal data are below global standards.
  • This undermines the accuracy of fiscal forecasts and risk assessments.
• Expenditure Management:
  • Expenditure allocation and control mechanisms are weak, leading to inefficiencies.
• Revenue Administration:
  • Revenue forecasting and administration are not robust, affecting the reliability of fiscal planning.
• Decentralization and Local Governance:
  • Oversight of local governments (devolution) is underdeveloped, creating potential fiscal risks.
• Natural Resource Management:
  • Natural resource wealth can be a significant source of fiscal risk if not managed effectively.
  • The paper stresses the need for improved transparency and accountability in this area.

Key Information

• The paper uses alternative scenarios and complete probability distributions to simulate fiscal risks.
• Fan charts are used to visualize the distribution of debt-to-GDP paths under different shock scenarios.
• PEFA scores (Public Expenditure and Financial Accountability) indicate that EAC countries have low levels of monitoring and oversight for public enterprises.
• The EAC Debt Ratio is projected to remain below the EAMU threshold, but with significant uncertainty.
• Kenya and Uganda have started incorporating fiscal risk statements into their budget frameworks, though more quantitative data is needed.
• The IMF has emphasized the need for greater transparency and better fiscal risk disclosure mechanisms in the region.

Conclusion

While macroeconomic shocks alone are unlikely to push EAC countries beyond the EAMU debt threshold, the combination of institutional weaknesses and specific fiscal risks (such as public enterprises and pension systems) poses a significant challenge. The paper underscores the importance of improving data quality, strengthening oversight mechanisms, and adopting more realistic fiscal assumptions to better manage these risks. It also highlights the need for coordinated regional efforts to ensure fiscal sustainability and alignment with EAMU objectives.