The FINANCIAL — The IMF’s Africa Regional Technical Assistance Center South (AFRITAC South) held a seminar on “Frameworks for the Management of Fiscal Risks” in Mauritius during April 27–30, 2015.
The event brought together twenty one Finance Ministry officials from eight AFRITAC South member countries (Botswana, Madagascar, Mauritius, Mozambique, Seychelles, South Africa, Swaziland, and Zimbabwe) and a representative of the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI), according to IMF.
Countries in the region face the pressing need to increase living standards, create new jobs, promote structural transformation, and increase investment in infrastructure. The challenge is to gear fiscal management to achieve these objectives without creating the risks of unintended additional costs for the government budget in the future. In this context, country representatives and international experts extensively discussed aggregate risks affecting budget revenues and expenditures, as well as specific fiscal risk emanating from state-owned entities, pension systems, volatile natural resource revenues, and infrastructure-related public private partnerships.
Country experts shared their experiences in setting up the institutional and organizational frameworks necessary for identifying, assessing and reporting on fiscal risks (South Africa), in managing natural resource income (Botswana), and in addressing risks from public/private partnerships (Turkey). Participants also developed draft outlines of fiscal risk statements for their own countries.
Matthew Simmonds, Technical Assistance Advisor in the IMF’s Fiscal Affairs Department, emphasized the importance of carefully selecting the most serious risks and identifying missing risk management frameworks in each country. Vitaliy Kramarenko, AFRITAC South Coordinator, noted that the seminar presented an opportunity for participants to identify and discuss fiscal risks in their countries. Following up on this discussion, AFRITAC South will provide technical assistance on fiscal risk management in a number of countries in the region.