The Design of Fiscal Adjustment Strategies in Botswana, Lesotho, Namibia, and Swaziland

39 Pages Posted: 20 Dec 2011

See all articles by Olivier Basdevant

Olivier Basdevant

International Monetary Fund (IMF) - IMF Institute; Government of New Zealand - Department of Economics

Dalmacio Benicio

affiliation not provided to SSRN

Borislava Mircheva

International Monetary Fund (IMF)

Joannes Mongardini

International Monetary Fund (IMF)

Geneviève Verdier

affiliation not provided to SSRN

Shu-Chun Susan Yang

International Monetary Fund (IMF)

Luis-Felipe Zanna

International Monetary Fund (IMF)

Date Written: November 2011

Abstract

Botswana, Lesotho, Namibia, and Swaziland face the serious challenge of adjusting not only to lower Southern Africa Customs Union (SACU) transfers because of the global economic crisis, but also to a potential further decline over the medium term. This paper assesses options for the design of the needed fiscal consolidation. The choice among these options should be driven by (i) the impact on growth and (ii) the specificities of each country. Overall, a focus on government consumption cuts appears to minimize the negative impact on growth, and would be appropriate given the relatively large size of the public sector in each country.

Keywords: Customs duties, Economic models, Fiscal consolidation, Fiscal policy, Government expenditures, Revenues, Southern Africa

Suggested Citation

Basdevant, Olivier and Benicio, Dalmacio and Mircheva, Borislava and Mongardini, Joannes and Verdier, Geneviève and Yang, Shu-Chun Susan and Zanna, Luis-Felipe, The Design of Fiscal Adjustment Strategies in Botswana, Lesotho, Namibia, and Swaziland (November 2011). IMF Working Paper No. 11/266, Available at SSRN: https://ssrn.com/abstract=1974834

Olivier Basdevant

International Monetary Fund (IMF) - IMF Institute ( email )

700 19 th Street NW
Washington, DC 20431
United States

Government of New Zealand - Department of Economics ( email )

2 The Terrace
P.O. Box 2498
Wellington
New Zealand

Dalmacio Benicio

affiliation not provided to SSRN

No Address Available

Borislava Mircheva

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Joannes Mongardini

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Geneviève Verdier (Contact Author)

affiliation not provided to SSRN

No Address Available

Shu-Chun Susan Yang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Luis-Felipe Zanna

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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