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---

### Study scope, data, and identification approach
- Constructs a new database of fiscal consolidation measures for 14 sub-Saharan African (SSA) economies during 1990-2024 using the "narrative approach" (Romer and Romer, 2010).
- Sample countries: Angola, Côte d’Ivoire, Cameroon, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Senegal, South Africa, Tanzania, Uganda.
- Sample coverage: 73 fiscal consolidation episodes in 14 SSA economies between 1990 and 2024; data presented at an annual frequency.
- Narrative inclusion criterion: fiscal policy actions motivated primarily by long-term objectives (reduce an inherited budget deficit, ensure public financial sustainability, improve economic efficiency, reduce inequality, or philosophical preference for smaller government) rather than responses to current or prospective economic conditions.
- Exclusions: measures primarily motivated by cyclical stabilization or commodity-price-driven swings; announced but unimplemented measures; one-off or offsetting measures that produce no net budgetary savings.
- Budgetary effects coding rules:
  - Magnitudes based on estimates at time of implementation, annual terms and at prevailing GDP.
  - Permanent measures recorded when they come into effect and zero thereafter (Devries et al., 2011 convention).
  - Announced but unimplemented measures excluded; partially implemented/delayed measures coded accounting for implementation details.

### AI-assisted data collection and validation workflow
- An AI agent programmatically retrieved IMF staffreports and complementary sources, converted PDFs to machine-readable text via OCR (preserving page references), scanned for fiscal policy actions, applied predefined rules to classify motivation (structural, cyclical, commodity-related, unclear) and instrument type, and produced structured summaries with sentence-level evidence.
- The "fiscal consolidation scanner" produced strict JSON objects containing episode window, measures, computed size (percentage points of GDP), motivation, and evidence snippets; intermediate JSON converted to CSV and Word narrative files; scripts and prompts version-controlled.
- Human oversight: all AI-derived episodes cross-checked against manually extracted narratives; discrepancies reconciled and reclassifications applied.
- AI validation examples:
  - Tanzania FY2011/12: agent flagged consolidation; manual review reclassified as mainly cyclical tightening.
  - Côte d’Ivoire: agent correctly identified episodes for 1994, 1995, 2017, 2018, 2019, 2021, 2023, and 2024; excluded 2007 and 2014 measures offset by spending increases.
  - Cross-comparison: Mozambique 2003 confirmed by both narrative and cyclically adjusted primary balance methods; Nigeria 2011 flagged by balance-based method but narrative approach found tightening motivated by demand pressures and rising oil prices → excluded.

### Dataset composition and key statistics
- Total identified narrative fiscal consolidation episodes: 73 (1990–2024).
- Composition of measures:
  - 42 expenditure measures
  - 57 revenue measures
- Consolidation size statistics:
  - Average consolidation size: about 0.95 percent of GDP (introductory section).
  - Standard deviation: about 0.85 percentage point (introductory section).
  - Section 3: average fiscal consolidation size 0.95 percent of GDP (non-zero observations), standard deviation 0.86.
  - Median consolidation size: 0.77 percent of GDP.
  - 25th percentile: 0.35 percent of GDP.
  - 75th percentile: 1.1 percent of GDP.
- Distribution by size:
  - 28 episodes ≤0.5 percent of GDP (about 39%)
  - 21 episodes between 0.5 and 1 percent of GDP (29%)
  - 17 episodes between 1 and 2 percent of GDP (approximately 24%)
  - 6 episodes >2 percent of GDP (around 8%)
- Tax- vs. spending-based classification:
  - 38 tax-based consolidations
  - 32 expenditure-based consolidations
  - 2 balanced cases (Ghana 2015 and Mozambique 2023) where tax hikes and spending cuts contributed identically
  - Both expenditure-based and tax-based episodes average around 0.9 percent of GDP in size
- Notable example entries from Table 1 (values as percent of GDP):
  - Cameroon CMR 1991: Tax 0.65, Spend 0.13, Total 0.78
  - Côte d’Ivoire CIV 1994: Tax 3.10, Spend 2.00, Total 5.10
  - Ghana GHA 2015: Tax 2.00, Spend 2.00, Total 4.00
  - Kenya KEN 2011: Tax 1.10, Spend 0.00, Total 1.10
  - Uganda UGA 2021: Tax 0.35, Spend 1.20, Total 1.55
- Note: Angola and Democratic Republic of the Congo reported as having no narrative episodes identified.

### CAPB construction and comparison methodology
- CAPB estimates constructed following conventional approach (Escolano, 2010) using April 2025 vintage of WEO database.
- Revenue adjustment: government revenues adjusted using an elasticity of one with respect to the output gap.
- Price conversion: GDP deflator applied to express adjusted series in nominal terms.
- Primary balance computation: adjusted primary balance = adjusted revenues − interest revenue − primary expenditure, divided by nominal GDP.
- Output gap computation: real GDP Hodrick-Prescott filter with smoothing parameter 6.25.
- Approximation noted: "The approximation CAPB GDP = PB GDP −  G GDP ×Output Gap  yields very similar results."

### Statistical relationship and main findings from CAPB comparison
- Sample: 14 SSA economies; narrative dataset: 72 fiscal actions displayed in Figure 5 for CAPB comparison.
- Bivariate regression of the CAPB measure on the narrative consolidations (both as share of GDP):
  - F-statistic = 10.15
  - p-value = 0.002
  - Interpretation: rejects the null hypothesis of no association at the 1 percent level; narrative consolidations are, on average, accompanied by increases in the CAPB-based measure.
- Despite statistical correlation, many substantive divergences exist:
  - Large discrepancies defined where difference exceeds 2.5 percent of GDP: 17 cases (detailed in Appendix C).
  - Of the 72 narrative episodes, approximately 30 are not captured by CAPB ("false negatives").
  - About 164 CAPB-based improvements lack narrative evidence ("false positives").
- Directional patterns:
  - Numerous CAPB-classified consolidations reflect cyclical or accounting factors (e.g., higher revenues from expansions) rather than discretionary actions.
  - In some instances CAPB deteriorates while narrative evidence indicates implemented consolidation.
  - Authors report no cases where CAPB provides a more accurate identification than the narrative approach.

### Characterization and attribution of major discrepancies (17 cases)
- Predominant causes where CAPB overstates consolidation or misattributes:
  - CAPB captures fluctuations in fiscal aggregates unrelated to discretionary actions (cyclical, accounting, commodity-related factors).
  - One-off receipts (e.g., asset sales) and policy-mixing can generate large CAPB improvements not reflecting sustained discretionary consolidation.
  - CAPB misrepresents magnitude when policy responded to adverse cyclical conditions or crises.
- Selected illustrative cases (CAPB improvement vs narrative assessment):
  - Angola 2000: CAPB improvement 9.1 percent of GDP; narrative: no discretionary consolidation (tax reform aimed mainly at reducing inflation; included stimulus measures).
  - Angola 2010: CAPB improvement 9.52 percent of GDP; narrative: tightening was cyclical response to oil price decline and partly offset by arrears clearance.
  - Mauritius 2021: CAPB improvement 5.88 percent of GDP; narrative: improvement driven mostly by sale of shares (quasi-fiscal receipts), not sustained discretionary consolidation.
  - Cameroon 2005/06: CAPB improvements (3.41 percent in 2005; 24.75 percent in 2006) overstate discretionary tightening that was later offset by social and infrastructure spending.
- Cases where CAPB understates or misses narrative consolidations:
  - Ghana 2018: CAPB deterioration of 2.7 percent of GDP while narrative records revenue measures amounting to 0.33 percent of GDP.
  - Nigeria 2013: CAPB deterioration of 1.86 percent of GDP while narrative records a spending-based consolidation of 1 percent of GDP.
  - Senegal 1995/96: CAPB shows deterioration while narrative documents a 3.7 percent of GDP consolidation (1.5 revenue, 2.2 spending).

### Implications, conclusions, and suggested extensions
- Narrative identification advantages:
  - Grounded in contemporaneous policy documentation; identifies intent and composition of measures.
  - Mitigates endogeneity concerns inherent in purely statistical approaches when used for identification.
- Limits of CAPB-based identification in emerging markets and developing economies:
  - Prone to misclassification due to data volatility, one-off budgetary operations, cyclical movements, accounting adjustments, or commodity-price effects.
- Policy and research recommendations:
  - Complement CAPB-based analyses with narrative evidence to distinguish genuine action-driven consolidations from cyclical or accounting-driven CAPB changes.
  - Continue updating and expand the narrative dataset to additional SSA economies and other regions (e.g., Southeast Asia, the Pacific, the Middle East and North Africa).
  - Integrate actual fiscal outturns, debt dynamics, and political-economy variables (elections, conflict) to improve classification and explain failures of planned consolidations.
  - Use the narrative dataset with econometric methods to assess impacts of narratively identified consolidations on fiscal outcomes (future causal analysis).

### Selected substantive country-level findings and projections (high-level highlights)
- Angola:
  - Multiple episodes (2000, 2010, 2015, 2018, 2019, 2020, 2022, 2023) where motivations ranged from inflation reduction to responses to oil-price shocks and arrears clearance.
  - Debt projection example: public debt expected to peak at 134 percent of GDP at end-2020 and projected to decline to 63 percent of GDP by 2027 under the program (IMF Country Report No. 21/17).
  - 2023 outcomes: overall fiscal balance of -0.1 percent of GDP and non-oil primary fiscal balance of -6.3 percent of GDP; public debt projected about 84 percent of GDP in 2023 (increase of 19 p.p.).
- Côte d’Ivoire:
  - 1994 consolidation: Tax 3.1 percent of GDP, Spend 2.0 percent of GDP, Total 5.1 percent of GDP.
  - 2017 consolidation: total 1.5 percent of GDP (0.8 percent discretionary recorded; 0.7 percent excluded as cyclical).
  - 2021–2024: tax revenue rise examples—tax revenues at 13.1 percent of GDP in 2021; target tax revenue 14.5 percent of GDP in 2024; 2024 budget aims to consolidate deficit to 4 percent of GDP.
- Tanzania:
  - Notable episodes: 1994/95 revenue-side 2.8 percent of GDP (allocated 1.4 percent per calendar year), 1995/96 spending-side 0.7 percent of GDP (0.35 percent per calendar year), 2007/08 revenue-side 1.0 percent of GDP (0.5 percent per calendar year), 2023/24 combined 1.5 percent of GDP (0.25 percent tax and 0.25 percent spending allocated per calendar year).
  - FY2023/24: domestic primary balance improved by 1.4 ppts of GDP; domestic revenues improved by 0.4 ppts of GDP.
- Ethiopia:
  - 2003 VAT introduction: fiscal consolidation from tax side 0.5 percent of GDP.
  - 2018/19: narrative spending-side consolidation of 0.3 percent of GDP recorded (allocated 0.15 percent of GDP to 2018 and 2019); general government fiscal deficit 2.5 percent of GDP in 2018/19.
  - 2023/24: recorded narrative actions 0.25 percent of GDP tax-side and 0.5 percent of GDP spending-side in each calendar year 2023 and 2024; fiscal deficit 2.0 percent of GDP in 2023/24.
- Ghana:
  - Multiple episodes with mixed implementation and offsets (e.g., 2003 revenue measures 2.8 percent of GDP offset by 4 percent of GDP in expenditure → no net consolidation).
  - 2015 balanced case: Tax 2.00, Spend 2.00, Total 4.00 (balanced classification).
  - 2021 package: 1.4 percent of GDP (VAT and NHIS rate hikes, fuel excises, new bank profit levy); staff adjustments and offsetting items noted.
- Kenya:
  - 1993/94 large measures with multi-year allocations; 2011 tax-side 1.1 percent of GDP.
  - 2023/24 tax increase 0.9 percent of GDP and spending cuts 1.2 percent of GDP (allocated 0.45 percent tax and 0.6 percent spending to each calendar year).
- Mauritius:
  - 1996/97 sales tax reform: 2 percent of GDP (allocated 1 percent per calendar year).
  - 2007 tax reform: 1 percent of GDP recorded in calendar year 2007.
  - CAPB appears to reflect cyclical growth and one-off receipts in some years (e.g., CAPB 2016 improvement due to growth, not narrative measures).
- Nigeria, Senegal, South Africa, Uganda:
  - Nigeria: several CAPB overstates linked to oil-price-driven revenue swings (e.g., 2011 CAPB improvement 3.55 percent of GDP attributed to higher oil prices rather than discretionary measures).
  - Senegal: 1995/96 narrative consolidation documented (3.7 percent of GDP) though CAPB shows deterioration; 2016 consolidation: tax 1.4 percent of GDP and spending 1 percent of GDP.
  - South Africa: 1993/94 VAT increase 1.5 percent of GDP (calendar allocations 1.12 and 0.38 percent of GDP); 2018/19 revenue measures 0.7 percent of GDP but subsequent fiscal deterioration projected.
  - Uganda: multiple fiscal years with tax-side consolidations (e.g., VAT introduction FY1996/97 recorded 0.5 percent of GDP) and 2021/22 total consolidation of 3.1 percent of GDP (spending 2.4, tax 0.7), with narrative shock recorded as 1.55 percent of GDP in each calendar year 2021 and 2022.

*Source: wpiea2026011-source-pdf - A Narrative Fiscal Consolidation Dataset for Sub-Saharan Africa, Working Paper No. WP/2026/011*

### 1.  Introduction

### 1.  Introduction

### Study scope and approach
- Constructs a new database of fiscal consolidation measures for 14 sub-Saharan African (SSA) economies during 1990-2024 using the "narrative approach" (Romer and Romer, 2010).
- Primary sources: publicly available IMF staffreports (Article IV consultations, program review documents, economic development reports) and, when IMF reports were unavailable, complementary sources such as Economist Intelligence Unit reports.
- Builds on earlier narrative compilations: Devries et al. (2011) and Carriere-Swallow et al. (2021).
- Sample countries: Angola, Côte d’Ivoire, Cameroon, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Senegal, South Africa, Tanzania, Uganda.
- Sample coverage: 73 fiscal consolidation episodes in 14 SSA economies between 1990 and 2024; data presented at an annual frequency.

### Motivation and identification of measures
- Narrative inclusion criterion: fiscal policy actions motivated primarily by long-term objectives (reduce an inherited budget deficit, ensure public financial sustainability, improve economic efficiency, reduce inequality, or philosophical preference for smaller government) rather than responses to current or prospective economic conditions.
- Excludes measures primarily motivated by cyclical stabilization or commodity-price-driven swings; such episodes are noted in the paper but not included in the database.
- Examples:
  - Included: Cameroon multi-year effort starting in 2017 (“The government is determined to restore fiscal and external sustainability in the medium term and to keep public debt on a sustainable path”, IMF Country Report No. 17/185, page 54).
  - Excluded: Angola’s 2010 tightening in response to an oil price collapse (classified as cyclical).
- Episodes must be documented in official reports with explicit measures and rationales.
- When revenue increases and expenditure cuts are counterbalanced by other measures that widen the deficit, the net effect is computed and only net budgetary savings produce a consolidation episode. Examples:
  - Ghana 2003: revenue measures estimated at 2.8 percent of GDP offset by expenditure increases of 4 percent of GDP → no net consolidation.
  - Tanzania 1995/96: expenditure cuts 1.1 percent of GDP offset by development expenditure and net lending 0.4 percent of GDP → net consolidation 0.7 percent of GDP.

### Budgetary effects coding rules
- Magnitudes are based on estimates of revenue or expenditure effects at the time of implementation, expressed in annual terms and at prevailing GDP.
- Follows Devries et al. (2011) convention: a permanent measure is recorded as having a positive budgetary impact when it comes into effect and zero thereafter.
- Announced but unimplemented measures are excluded. Partially implemented or delayed measures are coded taking implementation details into account.
- Two identified announced but not carried out cases in the sample: Uganda (2003/04) and Mozambique (2004).

### AI-assisted methodology and workflow
- An AI agent programmatically retrieved IMF staffreports, converted PDFs to machine-readable text via OCR (preserving page references), scanned documents for fiscal policy actions, applied predefined rules to classify motivation (structural, cyclical, commodity-related, unclear) and instrument type, and produced structured summaries with sentence-level evidence.
- The bespoke "fiscal consolidation scanner" returned strict JSON objects containing episode window, measures, computed size (percentage points of GDP), motivation, and evidence snippets.
- The agent combined semantic retrieval (keywords like “medium-term,” “fiscal rule,” “primary balance target”) with rule-based demotion of passages mentioning output gaps or commodity shocks.
- Intermediate JSON results were converted to CSV and Word narrative files; all scripts and prompts were version-controlled.
- Human oversight: all AI-derived episodes were cross-checked against manually extracted narratives compiled by the authors; discrepancies were reconciled and reclassifications applied where appropriate.

### AI validation and cross-checking examples
- Tanzania: agent flagged FY2011/12 as consolidation; manual review reclassified it as mainly cyclical tightening.
- Côte d’Ivoire: agent correctly identified episodes for 1994, 1995, 2017, 2018, 2019, 2021, 2023, and 2024; agent excluded 2007 and 2014 measures because they were offset by spending increases.
- Cross-comparison with balance-based studies:
  - Mozambique 2003: both narrative and cyclically adjusted primary balance methods confirm tightening; Mozambique 2002 flagged by balance-based approach was motivated by cyclical considerations and excluded from the narrative dataset.
  - Nigeria 2011: flagged by balance-based method but narrative approach found the tightening was motivated by demand pressures and rising oil prices → excluded.
  - Angola 2000: flagged by other authors but excluded in the narrative dataset as motivated by inflation stabilization (see Appendix B).

### Implementation environment and limitations
- Workflow implemented using an "API" tool for report retrieval and a command-line processing environment. The AI agent ran in a secure environment without internet access.
- Limitations and caveats:
  - OCR errors in older PDFs can obscure relevant passages.
  - Ambiguous language can lead to model misclassification between structural and cyclical motivations.
  - Some planned consolidations are announced but never implemented; identifying nonimplementation sometimes requires subsequent reports or external data.
  - Institutional changes in IMF report length over time could affect the richness of narrative evidence; the authors note this as a potential limitation for future investigation.
  - Future refinements could integrate actual fiscal outturns, debt dynamics, and political-economy variables (elections, conflict) to improve classification and explain failures of planned consolidations.

### The narrative dataset — key statistics and composition
- Total identified narrative fiscal consolidation episodes: 73 (1990–2024).
- Composition of measures (as reported):
  - 42 expenditure measures
  - 57 revenue measures
- Consolidation size statistics (reported):
  - Average consolidation size: about 0.95 percent of GDP (introductory section).
  - Standard deviation: about 0.85 percentage point (introductory section).
  - In Section 3: average fiscal consolidation size is 0.95 percent of GDP (considering only the non-zero observations), with a standard deviation of 0.86.
  - Median consolidation size: 0.77 percent of GDP.
  - 25th percentile: 0.35 percent of GDP.
  - 75th percentile: 1.1 percent of GDP.
- Distribution by size:
  - 28 episodes ≤0.5 percent of GDP (about 39%)
  - 21 episodes between 0.5 and 1 percent of GDP (29%)
  - 17 episodes between 1 and 2 percent of GDP (approximately 24%)
  - 6 episodes >2 percent of GDP (around 8%)
- Tax- vs. spending-based classification:
  - 38 tax-based consolidations
  - 32 expenditure-based consolidations
  - 2 balanced cases (Ghana 2015 and Mozambique 2023), where tax hikes and spending cuts contributed identically to budgetary savings and thus were not classified as either category
  - Both expenditure-based and tax-based episodes average around 0.9 percent of GDP in size
- Notable table summary: Table 1 lists the 73 episodes and their budgetary impacts (Tax, Spend, Total) by country-year pair (values expressed as percent of GDP). Example rows (preserving reported values):
  - Cameroon CMR 1991: Tax 0.65, Spend 0.13, Total 0.78
  - Côte d’Ivoire CIV 1994: Tax 3.10, Spend 2.00, Total 5.10
  - Ghana GHA 2015: Tax 2.00, Spend 2.00, Total 4.00
  - Kenya KEN 2011: Tax 1.10, Spend 0.00, Total 1.10
  - Uganda UGA 2021: Tax 0.35, Spend 1.20, Total 1.55
  - Note: Angola and Democratic Republic of the Congo reported as having no narrative episodes identified.
- Visualizations referenced in the text (figures not reproduced here): Figure 1 (average fiscal consolidation by country), Figure 2 (kernel density estimate of consolidation sizes), Figure 3 (timeline of episodes with marker sizes indicating magnitude), Figure 4 (share of tax hikes vs. spending cuts across countries).

*Source: wpiea2026011-source-pdf - 1.  Introduction; https://www.imf.org/-/media/files/publications/wp/2026/english/wpiea2026011-source-pdf.pdf*

### 4.  The Narrative Dataset versus Changes in the Cyclically Adjusted Primary Balance

### 4.  The Narrative Dataset versus Changes in the Cyclically Adjusted Primary Balance

### Methodology for CAPB construction and comparison
- CAPB estimates constructed following the conventional approach (Escolano, 2010) and based on the April 2025 vintage of the World Economic Outlook database.
- Revenue adjustment: government revenues adjusted using an elasticity of one with respect to the output gap.
- Price conversion: the GDP deflator is applied to express the adjusted series in nominal terms.
- Primary balance computation: the adjusted primary balance is obtained by subtracting interest revenue and primary expenditure from the adjusted revenue series and dividing the result by nominal GDP.
- Output gap computation: the output gap is computed based on real GDP data and the Hodrick-Prescott filter with a smoothing parameter of 6.25.
- Approximation noted in the source: "The approximation CAPB GDP = PB GDP −  G GDP ×Output Gap  yields very similar results."

### Data and sample
- Sample: 14 sub–Saharan African (SSA) economies.
- Narrative dataset: 72 fiscal actions identified through the narrative approach are displayed in Figure 5.
- Figure annotation: labels indicate cases where either the CAPB or the narrative approach identifies fiscal consolidation and the discrepancy between the two measures exceeds 2.5 percent of GDP. Crosses indicate observations for which neither the CAPB nor the narrative approach identify fiscal consolidation. The diagonal line indicates points along which the series are equal (45° line).

### Comparison and statistical results
- Bivariate regression of the CAPB measure on the narrative consolidations (both as share of GDP) shows a statistically significant positive relationship:
  - F-statistic = 10.15
  - p-value = 0.002
  - Interpretation: rejects the null hypothesis of no association at the 1 percent level; fiscal consolidations identified through the narrative approach are, on average, accompanied by increases in the CAPB-based measure.
- Despite statistical correlation, the fit is imperfect: many episodes exhibit substantive divergence between the two measures.

### Discrepancies: counts and characterization
- Large discrepancies: 17 cases defined where the difference between the two measures exceeds 2.5 percent of GDP; these are labeled in Figure 5 and detailed in Appendix C.
- Summary divergence counts:
  - Of the 72 narrative episodes, approximately 30 are not captured by the CAPB-based method ("false negatives").
  - About 164 of CAPB-based improvements lack narrative evidence ("false positives").
- Directional assessment:
  - Numerous CAPB-classified consolidations reflect cyclical or accounting factors (e.g., higher fiscal revenues from economic expansions) rather than deliberate discretionary policy actions.
  - In some instances the CAPB deteriorates (suggesting an increase in the fiscal deficit) while narrative evidence indicates a fiscal consolidation was implemented.
- Accuracy comparison: the authors report no cases in which the CAPB-based measure provides a more accurate identification than the narrative approach.

### Case examination and interpretation
- The 17 largest discrepancies generally attributable to:
  - CAPB capturing fluctuations in fiscal aggregates unrelated to discretionary actions (cyclical, accounting, commodity-related factors).
  - CAPB misrepresenting magnitude of fiscal tightening when policy responded to adverse cyclical conditions or emerging crises.
- Conclusion from case review: strong evidence that the narrative approach offers a more reliable measure of action-driven fiscal consolidation in the sample.

### Implications and recommendations
- Narrative identification advantage:
  - Grounded in contemporaneous policy documentation; identifies both intent and composition of fiscal measures.
  - Mitigates endogeneity concerns inherent in purely statistical approaches when used for identification (the analysis focuses on identification rather than causal inference).
- Limits of CAPB-based identification in emerging markets and developing economies:
  - Prone to misclassification due to data volatility, one-off budgetary operations, cyclical movements, accounting, or commodity-price effects.
- Suggested extensions and future work:
  - Continue updating and potentially expand the narrative dataset to additional SSA economies.
  - Extend narrative identification approach to other emerging and developing regions (e.g., Southeast Asia, the Pacific, the Middle East and North Africa) to fill gaps in well-identified exogenous fiscal actions.
  - Use the narrative dataset with econometric methods to assess impacts of narratively identified consolidations on fiscal outcomes (future causal analysis).

*Source: 4. The Narrative Dataset versus Changes in the Cyclically Adjusted Primary Balance (wpiea2026011-source-pdf)*

### Appendix  B.1.  ANGOLA

### Appendix  B.1.  ANGOLA

### Angola 2000 — Medium-term fiscal adjustment and tax reform
- A medium-term fiscal consolidation and reform program was introduced on the tax side; one main objective was to reduce inflation, and the program also included several tax-side stimulus measures.
- IMF Staff Country Report No. 00/111 (page 3): goal to “restore domestic and external equilibrium and create the conditions for sustained growth, especially by boosting growth of the non-oil sectors, lowering inflation eventually to single-digit rates, improving the efficiency and transparency of public sector operations, and enhancing the role of the private sector.”
- Tax measures introduced in 1999 (page 15):
  - Broadened the base of the income and sales taxes.
  - Lowered the maximum corporate income tax rate to 35 percent.
  - Overhauled the trade tax structure: maximum import duty reduced from 110 percent to 35 percent and the number of tariff bands from 43 to 8.
  - Export taxes reduced to 1-2 percent.
  - Began strengthening tax administration with emphasis on reducing large evasion of customs duties.

### Angola 2010 — Fiscal consolidation amid oil-price shock and arrears clearance
- Fiscal consolidation responded to an abrupt decline in oil prices at end-2008; consolidation was partly offset by increased spending to clear arrears from previous years; therefore not classified as a narrative fiscal action.
- IMF Country Report No. 11/346 (page 3): authorities responded with an adjustment program supported by an SBA; key components included strong fiscal adjustment, tighter monetary policy, reform of the foreign exchange auction system, intensified bank monitoring, PFM strengthening, and improved fiscal transparency and accountability of key public enterprises.
- Non-oil primary deficit (NOPD) cuts: “The non-oil primary deficit (NOPD) was cut sharply in 2009 and again in 2010 (cumulatively by 29.5 percentage points of non-oil GDP)” (page 3).
- Arrears clearance (IMF Country Report No. 11/51):
  - By end-year, cleared some 50 percent of the initial stock of verified arrears: about US$3.6 billion out of US$6.8 billion (including all arrears to “small” suppliers) (page 4).
  - Cash payments in Q3: about US$2.7 billion of the US$6.8 billion verified arrears; a further US$.9 billion cleared late in Q4; understandings reached to clear remaining arrears in Q1 2011 via mix of cash and securitizations (page 7).
  - Authorities intended to clear all verified arrears from 2008–09 by end-March 2011 (structural benchmark) (footnote no. 6, page 7).
- Expenditure restraint in 2010:
  - Significant expenditure restraint, especially in first half of 2010, with capital spending bearing the brunt; capital spending to be gradually increased as resources allow (Staff Appraisal, page 13).
- Later assessments:
  - 2012 Article IV Consultation (IMF Country Report No. 12/215): “Fiscal consolidation, critical in supporting macroeconomic stabilization during the crisis, was however partly reversed in late 2011.” (page 5) and “the fiscal stance was loosened toward end- 2011.” (page 22).

### Angola 2015 — Spending-side consolidation amid commodity volatility
- Fiscal consolidation implemented by reducing capital and current expenditures; tightening appears motivated by cyclical conditions, particularly commodity-price volatility.
- 2015 Article IV Consultation (IMF Country Report No. 15/301), Statement by Executive Director for Angola (October 28, 2015) (page 2):
  - Capital expenditure cuts: reached 5.5 percent of GDP, down from 10.1 percent of GDP in the initial budget.
  - Current expenditure revised down to 24.9 percent, from 28.5 percent of GDP in the initial budget.
  - Motivation: “The fiscal stance has been tightened to shield the economy against short-term vulnerabilities arising from commodity price volatility. . . the fiscal stance was calibrated to lessen the impact of fiscal risks due to significant losses in oil-revenues.”

### Angola 2018 — Frontloaded consolidation to restore stability and manage exchange-rate flexibility
- Fiscal consolidation aimed at ensuring macroeconomic stability and mitigating effects of greater exchange rate flexibility on inflation.
- 2018 Article IV Consultation (IMF Country Report No. 18/156) (page 4):
  - Macroeconomic stabilization program (MSP) envisaged: upfront fiscal consolidation, limit overall fiscal deficit to 3½percent of GDP in 2018 under a conservative oil price assumption; greater exchange rate flexibility; reduce public debt-to-GDP ratio to 60 percent over the medium term; improve public debt profile via liability management; settle domestic payment arrears; ensure effective implementation of AML/CFT legislation.
- Further detail (pages 7–8):
  - Non-oil primary fiscal consolidation enshrined in the 2018 budget; any fiscal revenue windfalls should be used to clear domestic payments arrears and/or retire public debt.
  - Under conservative oil price assumption (US$50/barrel), the 2018 budget targets reduction in overall fiscal deficit to 3½percent of GDP, consistent with a reduction of 2 percent of GDP in the non-oil primary fiscal deficit.
  - If oil prices are higher than assumed, the overall fiscal deficit could be reduced to 2 percent of GDP in 2018.
  - Rationale: limited fiscal space due to elevated public debt and large GFN; stance would create space to clear domestic payments arrears and/or retire public debt.
- IMF Country Report No. 18/370 (page 1): “Frontloading fiscal consolidation in 2018 to contain the increase in the public-debt-to-GDP ratio and mitigate the effects of greater exchange rate flexibility on inflation.”

### Angola 2019 — Continued consolidation amid oil-price volatility and VAT adoption
- Fiscal consolidation maintained in 2019 but responded to cyclical conditions, namely volatile oil prices.
- IMF Country Report No. 19/170 (page 2): “Fiscal consolidation will continue in 2019, under the recently approved supplementary budget. This is supported by a conservative expenditure envelope, which preserves social spending, and by non-oil revenue mobilization, including the adoption of a value-added tax in mid-2019...”
- Motivation (page 14 and page 62): supplementary budget is an adequate response to volatile oil prices; “Our supplementary budget for 2019 is a response to oil-price volatility.”

### Angola 2020 — Retrenchment after oil-price collapse and exchange-rate depreciation; debt peak and medium-term projection
- Fiscal consolidation responded to lower oil prices and resulting exchange rate depreciation.
- IMF Country Report No. 19/371 (page 66): fiscal policy aims at protecting fiscal and debt sustainability; targeted fiscal retrenchment in 2019 anchored on conservative supplementary budget and additional expenditure measures of about 0.8 percent of GDP; continue NOPFD retrenchment in 2020 and outer years; possible oil revenue windfalls in 2020 to be primarily used to pay down public debt and clear arrears.
- IMF Country Report No. 21/17 (page 35):
  - Collapse in oil prices in early 2020 and ensuing exchange rate depreciation led to increase in public debt.
  - Public debt expected to peak at 134 percent of GDP at end-2020, largely reflecting one-off impact of exchange rate depreciation and lower growth.
  - Debt projected to rapidly decline under the program to 63 percent of GDP by 2027, driven by structural fiscal consolidation and the large share of oil revenues as a natural medium-term hedge.
  - Previously agreed reprofiling helps assure financing in 2020 and reduces GFN to more manageable levels from 2021 onwards.
  - Assessment: Angola’s public debt remains sustainable although risks remain high; further debt relief may be needed if downside risks materialize.

### Angola 2022 — Claimed consolidation but large fiscal slippage occurred
- 2021 Article IV Consultation (IMF Country Report No. 22/11) on 2021 outcomes (pages 7–8):
  - Authorities saving virtually all fiscal windfalls in 2021.
  - Overall fiscal balance expected to be higher than budgeted by 5 percentage points of GDP, comparable to combined windfalls in oil revenue and interest bill.
  - Non-interest spending projected to be 1.8 percentage points of GDP lower than in 2020.
  - Result: substantial fiscal adjustment of 1.1 percentage points of GDP as measured by the NOPFD.
- Fiscal slippage in 2022 (IMF Country Report No. 23/334, page 1 and page 4):
  - Recovery continued through 2022 aided by high oil prices, but Angola faces challenges in 2023 including worsening oil-price outlook, lower oil production, and need to unwind 2022’s large fiscal loosening.
  - “Reversal of fiscal slippage, is critical.” (page 1).
  - “Fiscal loosening in 2022 and a worsening oil price outlook have reduced buffers against shocks.” (page 4).

### Angola 2023 — Tightening after 2022 slippage; adjustment smaller than anticipated
- Fiscal consolidation in 2023 appears to have responded to economic conditions and 2022 slippages; fiscal gains were significantly lower than anticipated.
- 2023 Article IV Consultation — IMF Executive Board conclusion (IMF Country Report No. 24/80):
  - Angola’s recovery in 2021/22 nearly halted in 2023 by a double shock in H1: oil sector weakened and debt moratorium ended.
  - Growth estimated at 0.5 percent for 2023; oil sector contraction estimated at 6.1 percent; non-oil growth at 2.9 percent.
  - Headline inflation increased to 20.0 percent y/y at end-December 2023, driven by kwanza depreciation and cuts in fuel subsidy in mid-2023.
  - Authorities tightened fiscal stance in 2023H2 by cutting capital spending and related goods and services and implementing first phase of fuel subsidy reform in June 2023.
  - Resulting fiscal balances: overall fiscal balance of -0.1 percent of GDP and non-oil primary fiscal balance of -6.3 percent of GDP.
  - Public debt-to-GDP projected to have increased by 19 p.p. to about 84 percent of GDP in 2023, mainly driven by weaker exchange rate.
  - Depreciation of the kwanza in June 2023 helped adjustment and preserved international reserves, which remained at about 7 months of import coverage; exchange rate broadly stable thereafter.
- Staff Report (2023 Article IV) (page 7):
  - Authorities implemented significant spending adjustment of about 3 percent of GDP in 2023 H2, mainly through cuts in capital spending and related goods and services.
  - Resulted in overall and non-oil primary fiscal balances of -0.1 percent of GDP and -6.3 percent of GDP, respectively.
- 2024 Post-Financing Assessment (IMF Country Report No. 24/224) (pages 5–6):
  - Following significant loosening in 2022, authorities tightened fiscal stance in 2023, though gains from consolidation were less than anticipated.
  - Overall and non-oil primary fiscal balances estimated at -1.9 percent of GDP and -6.4 percent of GDP, respectively, in 2023 (Text Table 1).
  - Lower oil revenues in 2023 mainly reflected lower oil prices and production in H1 2023; non-oil revenues, especially income taxes, worsened due to weaker growth.
  - Authorities reduced expenditures in 2023 (estimated 0.2 percent of GDP), but adjustment was smaller than projected (initially forecasted to be 2.4 percentage points of GDP) because:
    - (i) tighter financing conditions in Q4 led to higher interest payments, especially on domestic debt which increased during this period;
    - (ii) net estimated savings from fuel subsidy reform were fully offset by higher-than-projected fuel consumption levels (particularly for diesel);
    - (iii) increased capital spending in the last quarter of the year.

*Source: Appendix B.1. ANGOLA (excerpted content from the supplied PDF).*

### Appendix  B.2.  CÔTE D’IVOIRE

### Appendix  B.2.  CÔTE D’IVOIRE

### Côte d’Ivoire 1994
- Fiscal consolidation: revenue-side 3.1 percent of GDP; spending-side 2 percent of GDP.
- Motivation: long-term objectives including fiscal sustainability; rapid restoration of conditions for sustained and equitable economic growth; accelerated progress toward domestic and external financial viability; consolidation of competitive position; strengthening public finances and reorientation of public expenditure; development of human resources with social safety nets.
- Key measures and outcomes:
  - Major restructuring of the tax system and fundamental reorientation of expenditure policies.
  - Reintroduction of levies on exports of cocoa and coffee driving revenue improvement.
  - Total revenue: increased from 19.6 percent of GDP in 1993 to 22.7 percent in 1994.
  - Total expenditure: declined from 33.5 percent of GDP in 1993 to 31.1 percent of GDP in 1994.
  - Primary expenditure: cut from 23.7 percent of GDP to 21.7 percent of GDP.
  - Wage bill: reduced by more than 3 percentage points of GDP to 8.7 percent of GDP in 1994 via limited wage increases and a 3 percent reduction in civil service size.
  - Public investment increased from 3.4 percent of GDP in 1993 to 5.2 percent of GDP in 1994.
  - Budget deficit: reduced to 7.6 percent of GDP in 1994 and expected to reach 4.5 percent in 1995.
  - Primary balance: turned positive to 1.7 percent of GDP in 1994; projected about 3 percent of GDP in 1995.
- Narrative recording: revenue-side action of 3.1 percent of GDP (primarily export levies on cocoa and coffee); spending-side action of 2 percentage points of GDP.

### Côte d’Ivoire 1995
- Fiscal consolidation: net 0.7 percent of GDP from spending-side (after offset).
- Motivation: reduce the deficit; bring the budget closer to sustainability and reduce domestic arrears.
- Key measures and outcomes:
  - Program target: reduce overall fiscal deficit by more than 2 percentage points, to 5.5 percent of GDP.
  - Revenue-to-GDP: projected slight decline from 22.5 percent to 22.2 percent in 1995 due to medium-term tax strategy.
  - Primary expenditure: programmed to fall from 21.8 percent of GDP to 20.8 percent of GDP.
  - Narrowly defined primary surplus: expected to improve from 3.2 percent of GDP in 1994 to 4.1 percent of GDP (performance criterion end-June 1995).
  - All outstanding arrears cleared by end-June 1995.
  - Tax strategy aims: rationalize tax system, strengthen administrative efficiency, reduce reliance on coffee and cocoa export taxes, progress toward common external and intra-regional customs tariff (WAEMU).
- Narrative accounting: primary expenditure reduction of 1 percent of GDP partially offset by 0.3 percent of GDP revenue loss → net budgetary saving recorded as 0.7 percent of GDP.

### Côte d’Ivoire 2007
- Fiscal consolidation measures: revenue-side 0.5 percent of GDP; spending-side 0.3 percent of GDP.
- Motivation: medium-term fiscal and debt sustainability; improved economic efficiency.
- Key measures and outcomes:
  - 2007 budget aimed to increase primary basic surplus to 1 percent of GDP (from 0.3 percent in 2006).
  - Revenue planned to rise by ½ percent of GDP through more efficient taxation of petroleum products, improvements in tax administration, and extension of tax collection.
  - Primary basic expenditure planned to decrease by 0.3 percent of GDP; increase in social and reunification spending.
  - Actual performance: year-end primary basic surplus 0.4 percent of GDP below target; tax revenue slightly above target due to advance tax payments (½ percent of GDP) mostly on cocoa export duties at a 7 percent rebate; non-tax petroleum revenue fell short.
  - Current spending overruns of 0.8 percent of GDP financed crisis-exit programs and investment; overruns driven by discretionary spending (presidency and prime minister’s office), military wages, frontline bonuses, housing allowances for primary school teachers; many expenditures via treasury advances.
  - Financing: accelerated repayment of domestic arrears by 1.5 percent of GDP (vs. 0.5 percent programmed) enabled by issuance raising 1.2 percent of GDP at 6½ percent interest.
- Narrative accounting: spending overruns were non-cyclical and fully offset the consolidation; no narrative fiscal action recorded for 2007.

### Côte d’Ivoire 2014
- Outcome: fiscal consolidation from tax and spending sides appears offset by increases in investment and poverty-related spending.
- Key outcomes:
  - Budget deficit declined from 4.1 percent of GDP in 2011 to 2.2 percent of GDP in 2014.
  - Spending to assist the poor rose from 7 percent of GDP in 2011 to 9.6 percent of GDP in 2014.
  - Public investment rate increased to 5.9 percent of GDP in 2014 versus 2.4 percent in 2011.

### Côte d’Ivoire 2017
- Fiscal consolidation: total 1.5 percent of GDP implemented; 0.8 percent of GDP recorded as discretionary fiscal consolidation; 0.7 percent of GDP considered cyclical/excluded.
- Motivation: medium-term fiscal and debt sustainability; limit fiscal impact of external shocks while responding to domestic social demands; converge to WAEMU norm of 3 percent of GDP by 2019.
- Key measures and outcomes:
  - Authorities cut the guaranteed cocoa producer price by 36.4 percent from April 2017 (prior action).
  - Reactivated fuel price adjustment mechanism; increased gasoline price by 4 percent in May.
  - Curtail current expenditure by 0.2 percent of GDP and cut domestic capital outlays by 0.6 percent of GDP.
  - These measures aimed to limit the fiscal deficit to 4.5 percent of GDP in 2017.
  - Executive summary: reduction of regulated cocoa producer price by 36½ percent and fiscal adjustment measures of about 1½ percent of GDP will limit fiscal deficit to 4.5 percent of GDP.
- Narrative accounting: record 0.8 percent of GDP (0.2 percent current expenditure cuts; 0.6 percent capital expenditure cuts) as discretionary fiscal consolidation; exclude 0.7 percent of GDP (fuel tax maintenance and price mechanism adjustments) as cyclical.

### Côte d’Ivoire 2018
- Fiscal consolidation: revenue-side 0.3 percent of GDP (net).
- Motivation: reduce the deficit to reach WAEMU norm by 2019.
- Key measures and outcomes:
  - Authorities committed to budget deficit targets of 3.75 percent of GDP in 2018 and 3 percent of GDP in 2019.
  - New revenue measures expected to yield about 0.3 percent of GDP in 2018.
  - Text Table 3 measures and yields:
    - New export tax on cashew nuts: 0.15 percent of GDP.
    - Optimization of tax and customs administration: 0.12 percent of GDP.
    - VAT and excise hikes and new taxes: 0.04 percent of GDP.
  - Fiscal gain: 0.31 percent of GDP; partially offset by social measures of 0.01 percent of GDP → net budgetary saving 0.3 percent of GDP.

### Côte d’Ivoire 2019
- Fiscal consolidation: spending-side 0.4 percent of GDP; tax-side 0.3 percent of GDP.
- Motivation: reduce the deficit to reach the WAEMU norm.
- Key measures and outcomes:
  - Fiscal deficit declined from 3.3 percent of GDP in 2017 to 2.3 percent of GDP in 2019 under the ECF and EFF-supported program.
  - Consolidation underpinned primarily by spending compression; tax policy reforms were more difficult to implement.
  - Authorities strengthened revenue administration, improved public finance and debt management, and restructured the energy sector.
  - Budget projections: total expenditure projected to decrease from 17.7 percent of GDP in 2018 to 17.3 percent of GDP in 2019; tax revenue projected to increase from 12 percent of GDP in 2018 to 12.3 percent of GDP in 2019.
- Narrative accounting: record 0.4 percent of GDP from the spending side and 0.3 percent of GDP from the tax side as fiscal consolidation.

### Côte d’Ivoire 2021
- Fiscal consolidation: tax-side 0.8 percent of GDP.
- Motivation: reduce the deficit; consolidate fiscal position following COVID-19 related widening of the deficit.
- Fiscal targets and policy aims:
  - Reduce overall budget deficit from 5.9 percent of GDP in 2020 to 4.6 percent of GDP in 2021; attain WAEMU threshold in 2023.
  - Improve tax revenue collection; control operating expenses while prioritizing COVID-19 and poverty-related spending; improve efficiency of capital expenditure; strengthen control of budgetary risks.
  - Aim to increase tax burden on an annual average basis by 0.5 percentage points over 2021-23 through tax and public finance management reforms and domestic revenue mobilization.
- Key 2021 fiscal measures (Box 5):
  - Rise in the rate of the cocoa registration fee from 1.5 percent to 3 percent on the CIF price incorporating the living income differential; measure to be ratified by interministerial decree no later than November 15, 2020; expected to generate an additional CFAF 45 billion.
  - Simplification of taxation of SMEs (application of ad valorem taxation, new SME segmentation, rise in sales turnover threshold for VAT liability).
  - Introduction of an excise duty of 10 percent on cosmetic products, expected to raise CFAF 10 billion.
  - Introduction of VAT at the lower 9 percent rate on luxury rice, expected to generate CFAF 20 billion.
  - Introduction of VAT at the lower 9 percent rate on meat, expected to bring additional CFAF (text truncated in source).

*Source: Appendix B.2. CÔTE D’IVOIRE (excerpt).*

### 7.4 billion; and

### wpiea2026011-source-pdf - 7.4 billion; and

### Côte d’Ivoire — Fiscal consolidation and revenue mobilization (2021–2024)
- 2021 outcomes and tax administration reforms:
  - The 2021 fiscal deficit fell to 5.1 percent of GDP, a½ percent improvement on what was targeted by the authorities (5.6 percent of GDP).
  - Tax revenues reached 13.1 percent of GDP in 2021, up from an average of 11.7 percent in the preceding 9 years, and from 12.3 in both 2019 and 2020.
  - Revenue gains reflected mainly improvements in customs collection and tax administration.

- 2023 fiscal consolidation (revenue-side emphasis):
  - Government commitment to increase total tax revenues by 1.1 percent of GDP to help reduce the overall fiscal deficit in 2023 by 1.6 percentage point of GDP relative to 2022 to 5.2 percent of GDP.
  - Implementation evidence (IMF Country Report No. 24/92): at end-December 2023, tax revenues stood at about 13.9 percent of GDP, in line with program targets, and a 1 percentage point increase over 2022.
  - Tables cited show tax revenue rising from 12.9 percent in 2022 to 13.9 percent in 2023 (an increase of 1 percent of GDP); another table shows an increase from 12.8 percent of GDP in 2022 to 13.9 percent in 2023 (an increase of 1.1 percent of GDP).

- 2024 fiscal consolidation (tax and spending measures):
  - Strong fiscal consolidation in 2024: tax revenue projected to increase to 14.5 percent of GDP.
  - 2024 budget aims to consolidate the fiscal deficit to 4 percent of GDP, 0.1 percentage point lower than initial program projections, and a 1.2 percentage point reduction in the deficit relative to the 2023 target.
  - Tax revenues projected to increase by 0.6 percent of GDP, of which 0.5 percent are associated with new high quality and permanent tax policy and tax administration measures; an additional 0.1 percent of GDP increase expected due to higher export tax revenue from improved terms of trade.
  - Planned fiscal consolidation from the tax side shown as 0.31 percent of GDP (tax policy) and 0.18 percent of GDP (tax administration).
  - Expenditure in the 2024 budget is 1.1 percent of GDP lower than 2023: a 1.4 percent of GDP fall in current expenditure offset by a 0.3 percent increase in capital expenditure.
  - Budgetary outcomes (IMF Country Report No. 25/91): Table 6 shows a 0.8 percent of GDP increase in tax revenue (from 13.6 percent in 2023 to 14.4 percent in 2024) and a 0.7 percent of GDP decrease in total expenditure (from 21.5 percent to 20.8 percent).
  - Table 10 documents revenue mobilization measures achieved in 2024, including Cabinet approval of a Medium-Term Revenue Mobilization strategy (MTRS) with revenue targets and timelines.

- Specific tax policy/administration measures mentioned for 2024:
  - Eliminating tax exemptions, particularly relating to VAT on non-staple food items and the investment code (end-September 2024 SB).
  - Tax administration reforms relating to property taxes.
  - Increasing the registration rate for cacao.
  - Tax administration enhancements: transfer pricing, tobacco traceability, automated management of VAT deduction collected at customs (end-June 2024 SB).

### Cameroon — Fiscal consolidation episodes and implementation evidence
- 1991/92 consolidation (spread across 1991 and 1992 due to fiscal year timing):
  - Implemented increase in non-oil revenue by 1.3 percent of GDP and reduction in primary expenditure by 0.25 percent of GDP.
  - Allocation across calendar years: 0.65 percent of GDP (0.5*1.3) from the tax side and 0.125 percent of GDP (0.5*0.25) from the spending side to each calendar year 1991 and 1992.
  - SM/93/162: revenue-enhancing measures expected to yield additional revenue amounting to CFAF 88 billion (3.0 percent of GDP) and reduce noninterest spending by CFAF 37 billion (1/4 percent of GDP).
  - Table 19 shows non-oil revenue increased from 11.1 percent of GDP in 1990/91 to 12.4 percent in 1991/92; narrative fiscal action from the tax side recorded as 1.3 percent of GDP in 1991/92.

- 1994/95 consolidation:
  - Fiscal consolidation of 0.8 percent of GDP from the tax side and 2.6 percent of GDP from the spending side.
  - Allocation by calendar year (due to fiscal year): 0.4 percent of GDP (0.5*0.8) tax-side and 1.3 percent of GDP (0.5*2.6) spending-side to each of calendar years 1994 and 1995.
  - SM/94/269: targets to reduce overall deficit to CFAF 263 billion (6.1 percent of GDP) in 1994/95 from CFAF 316 billion (9.5 percent of GDP) in 1993/94; revenue-to-GDP ratio to increase by 0.8 percentage point and total expenditure to be curtailed by 2.6 percentage points of GDP.
  - Tax measures with estimated yield CFAF 132 billion (3 percent of GDP) described (e.g., elimination of single tax and domestic production tax regimes; increase in turnover tax rate to 15 percent; taxation of timber exports at 25 percent f.o.b. value; temporary levy on exports at 15 percent; temporary tax on foreign exchange gains at 35 percent; 0.95 percent inspection fee on certain exports).
  - EBS/95/148 confirms implementation: Government’s overall fiscal deficit was more than halved, to below 5 percent of GDP; primary fiscal balance moved to a surplus of almost 3 percent of GDP from a deficit of more than 2 percent a year earlier.

- 1995/96 consolidation (follow-up and additional measures):
  - Fiscal consolidation of 2.5 percent of GDP from the revenue side and 0.5 percent of GDP from the spending side.
  - Allocation across calendar years: 1.25 percent (0.5*2.5) revenue and 0.25 percent (0.5*0.5) spending to each of 1995 and 1996.
  - Combined with earlier measures, total fiscal gain in calendar year 1995 amounts to 1.65 percent of GDP from the tax side and 1.55 percent of GDP from the spending side.
  - EBS/95/148: program calls for raising revenue/GDP by 2½ points and reducing expenditure/GDP by a half point; tax package includes adjustments in petroleum taxes, turnover tax rates, harmonization of export taxes, elimination of preferential tax regimes.

- 2005/06 episode — consolidation with medium-term offsetting by spending:
  - IMF Country Report No. 06/190: significant fiscal adjustment in 2005 allowed clearing domestic arrears and strengthening position vis-à-vis domestic banking; restraint on non-interest and non-HIPC-related current spending and improved non-oil revenue collection.
  - However, quantitative performance criterion on the primary fiscal surplus was not met; eight out of ten quantitative benchmarks, largely fiscal, were missed.
  - The medium-term outlook expected non-oil primary balance to deteriorate reflecting considerable social and infrastructure needs (page 39).
  - IMF Country Report No. 06/231: fiscal program for 2006 consolidates gains made in 2005 and allows for augmentation of poverty-related spending; total spending planned to increase from 14.3 percent of GDP in 2005 to 16.9 percent in 2006, with current spending from 11.8 percent to around 12.2 percent of GDP and poverty-reducing expenditures from 5.3 percent to 6.9 percent of GDP.

- 2017 fiscal consolidation (revenue-side):
  - Planned fiscal consolidation of just under 5 percent of GDP over three years, of which about 3 percent of GDP will be in 2017; measures include increasing revenue and rationalizing public expenditure.
  - IMF Country Report No. 17/185: projected increase in non-oil revenue of 0.3 percent of GDP between 2016 and 2017; recorded as a narrative fiscal action from the tax side of 0.3 percent of GDP in calendar year 2017.
  - IMF Country StaffReport No. 18/235 (2018 Article IV) confirms implementation but with lower-than-anticipated fiscal gains:
    - Overall deficit (including grants) declined from 6.2 percent of GDP in 2016 to 5.0 percent of GDP in 2017, falling short of the 3.1 percent of GDP program target.
    - Non-oil revenue overperformed by 0.7 percent of GDP, buoyed by strong VAT and trade taxes, and one-off gains from collection of tax arrears from SOEs (0.4 percent of GDP).
    - Spending accelerated at year-end; foreign-financed investment exceeded program target by 0.7 percent of GDP; expenditure arrears and float reached 3.6 percent of GDP in 2017.

- 2018 consolidation (revenue and spending):
  - IMF Country Report No. 18/9: 2018 budget aimed to reduce deficit from 3.1 percent of GDP in 2017 to 2.3 percent of GDP in 2018 by mobilizing additional non-oil revenue (up to 0.6 percent of GDP) and streamlining public expenditure (0.33 percent of GDP).
  - IMF Country Report No.19/247 (preliminary end-2018 data): overall fiscal balance declined to 2.5 percent of GDP (4.9 percent of GDP in 2017); increased mobilization of non-oil revenues (0.7 percent of GDP) covered higher-than-projected capital expenditures (approximately 1 percent of GDP). The non-oil primary deficit improved by 2 percent of GDP compared to 2017, reaching 3.9 percent of GDP.

- 2024 spending-side consolidation:
  - IMF Country Report No. 23/251 notes on page 9: “The authorities intend to further reduce the fiscal deficit in” [text ends in provided excerpt].
  - Narrative: fiscal consolidation amounting to 0.4 percent of GDP from the spending side is recorded, motivated by the objective of reducing the fiscal deficit.

*Source: Excerpts from the provided IMF PDF content.*

### 2024. Under current projections, the overall deficit would decline to 0.6 percent of GDP and the NOPB to a

### wpiea2026011-source-pdf - 2024. Under current projections, the overall deficit would decline to 0.6 percent of GDP and the NOPB to a

### Key fiscal projections and outcomes for 2024
- Overall deficit expected to decline to 0.6 percent of GDP.
- Non-oil primary balance (NOPB) expected to decline to a deficit of 1.7 percent of GDP.
- Additional fiscal consolidation measures envisaged:
  - Expenditure rationalization, including on the subsidies and transfers (around 1.1 percent of GDP).
  - Stronger non-oil revenue mobilization (around 0.3 percent of GDP) due to envisaged measures discussed in ¶24 (Text Table 2).
- Budget revenues expected to decline relative to GDP due to lower oil-related budget revenues (reflecting lower international oil prices).
- Mobilization of non-oil domestic revenues (0.3 percent of GDP) expected to help offset the revenue decline.
- Lower projected international oil prices expected to reduce fuel subsidy expenditures, opening up fiscal space for other expenditures, especially public investment.

### Comparisons across IMF Country Reports for 2024 projections
- IMF Country Report No. 24/237 (Table 1, p. 3):
  - Projected increase in non-oil revenue of 0.1 percent of GDP.
  - Projected decrease in total expenditure of 0.7 percent of GDP.
  - Projected improvement in the overall fiscal balance (payment order basis) and the non-oil primary balance in 2024.
- IMF Country Report No. 25/222 (Table 1, p. 3):
  - Reports no improvement in non-oil revenue for 2024.
  - Estimates a decline in total expenditure of 0.4 percent of GDP in 2024 compared with the 2023 estimates in IMF Country Report No. 25/71.
- IMF Country Report No. 24/226 (page 11):
  - Domestic fiscal deficit expected to narrow to 0.5 percent of GDP in 2024.
  - Tax revenue for 2024 revised upwards by 1.2 percentage points of GDP compared to the fifth review, driven primarily by a cyclical surge in CIT returns in the mining sector and higher copper prices bolstering non-tax revenue.
- IMF Country Report No. 25/23 (page 5):
  - Fiscal revenues expected to exceed projections for 2024.
  - Exceptional security-related expenditures projected to reach 2 percent of GDP in 2024.
  - Approved public sector wage increases and regularized recruitments estimated to add 0.5 percentage points of GDP to the wage bill in 2024.

### Congo, Democratic Republic — selected episodic summaries (2001–2024)
- 2001
  - Improvement in primary balance linked to fighting hyperinflation and demand management.
- 2002
  - Program objectives: average real GDP growth of about 5 percent; reduction in annual inflation rate to 5 percent; gradual increase in gross international reserves to more than two months of non-aid imports by 2005.
- 2004–2006
  - 2004: Improvement in primary balance partly due to 2002 program; security tensions led to program slippages.
  - 2005: Measures aimed at restoring macroeconomic stability; government committed to improve domestic fiscal balance by more than 1.5 percentage points of GDP in 2005.
  - 2006: Improvement in fiscal balances not linked to policy actions; program implementation weakened due to constitutional drafting and elections.
- 2010
  - Improvement in fiscal balance mostly due to cuts in spending motivated by need to reduce inflation; domestic fiscal balance shifted from a deficit of 2½ percent of GDP in 2009 to a surplus of about 0.9 percent of GDP in 2010.
  - Revenue measures in 2010 included higher enforcement and elimination of ad hoc exemptions contributing to revenue increases: revenue projected at 18.1 percent of GDP in 2010, 1.4 percentage points of GDP higher than originally programmed.
- 2015–2018
  - 2015: WEO data show improvement in primary balance; IMF report No. 15/280 lacks sufficient information on consolidation measures.
  - 2018: Fiscal improvement linked to cyclical factors—large increase in mining revenue; budget surplus of 0.4 percent of GDP for the year despite fiscal loosening toward end-2018.
- 2022
  - Initial measures aimed at mobilizing revenues to sustain recovery and generate fiscal space; later relaxation to respond to spillovers from War in Ukraine.
  - Fiscal policy under program calibrated flexibly to accommodate urgent spending needs and the unanticipated impact of the war in Ukraine.
- 2023
  - Fiscal tightening to curb inflationary pressures; authorities tightened fiscal and monetary policies to maintain macroeconomic stability and meet program commitments.
- 2024
  - Improvement in revenues driven by windfall mining revenue gains rather than policy actions.
  - Domestic fiscal deficit expected to narrow to 0.5 percent of GDP in 2024, with tax revenue revised up by 1.2 percentage points of GDP due to cyclical CIT returns in mining and higher copper prices.
  - Exceptional security-related expenditures projected at 2 percent of GDP in 2024; wage bill increases estimated at 0.5 percentage points of GDP.

### Ethiopia — selected episodic summaries (1994/95–2018/19)
- 1994/95
  - Revenue increase of 1.2 percent of GDP linked to cyclical factors: favorable non-agricultural sector developments, higher customs duties, and higher coffee export surtax.
  - Consolidated general government deficit (excluding grants) projected to fall to 6.8 percent of GDP from an estimated 9.6 percent in 1993/94.
- 2003
  - Fiscal consolidation from the tax side amounting to 0.5 percent of GDP due to VAT introduced in January 2003; motivated by need to ensure debt sustainability.
  - Over the medium term, overall fiscal deficit projected to be reduced from 8.5 percent of GDP in 2002/03 to 3.9 percent by 2005/06; tax revenues projected to increase from 16 percent of GDP in 2002/03 to 17.6 percent by 2005/06.
- 2008/09
  - Fiscal tightening (expenditure containment and revenue mobilization through administrative measures) alongside monetary tightening and fuel price adjustment in response to inflationary pressures.
  - Fiscal deficit (including grants) projected to decline to 2.5 percent of GDP in 2008/09 from 4.4 percent in 2007/08.
- 2010/11
  - Fiscal consolidation from the tax side amounting to 0.5 percent of GDP implemented but offset by higher public infrastructure investment.
  - Budget deficit set to rise from 2.1 percent to 3.4 percent of GDP in 2010/11.
- 2018/19
  - Fiscal consolidation from the spending side amounting to 0.3 percent of GDP via contraction of recurrent expenditure (administrative and travel costs, goods and services); motivated by desire to reduce debt levels.

*Source: wpiea2026011-source-pdf - 2024. Under current projections, the overall deficit would decline to 0.6 percent of GDP and the NOPB to a*

### 0.15 percent of GDP (0.5*0.3) in both calendar years 2018 and 2019.

### wpiea2026011-source-pdf - 0.15 percent of GDP (0.5*0.3) in both calendar years 2018 and 2019.

### Ethiopia 2018/19 — fiscal outturns and composition
- Narrative fiscal action recorded: 0.15 percent of GDP (0.5*0.3) in both calendar years 2018 and 2019.
- IMF Country Report No. 20/29 (2019 Article IV Consultation and Requests for Three-Year Arrangement under the Extended Credit Facility and an Arrangement under the Extended Fund Facility) findings (page 57):
  - General government fiscal deficit stood at 2.5 percent of GDP, lower than the budget target of 3.2 percent.
  - Government met 93 percent of its tax collection target.
  - Overall general government revenues increased slightly to 3.2 percent of GDP.
  - Import duties and indirect taxes underperformed; direct taxes were slightly above budget.
  - Tighter fiscal stance driven by a contraction of other recurrent expenditures by 0.3 percent of GDP, realized through targeted cost saving interventions (optimizing administrative and travel costs and spending on goods and services by federal Ministries).
- Tables in the same report:
  - Table 1 (page 29) and Table 2b (page 31) show tax revenue decreased by 0.7 percent of GDP, from 10.7 percent in 2017/18 to 10 percent in 2018/19.
  - Non-tax revenue remained stable at 1.6 percent of GDP over the same period.
- Conclusion from these data:
  - Only the spending-side fiscal consolidation of 0.3 percent of GDP appears to have generated budgetary savings in FY2018/19.

### Ethiopia 2018/19 — policy motivation
- IMF Country Report No. 20/29 (page 12) notes motivation: “Fiscal policies under the program aim to address debt vulnerabilities while bolstering poverty-targeted spending and financing the lifting of financial repression.”

### Ethiopia 2023/24 — fiscal consolidation measures and outturns
- Narrative fiscal action recorded for calendar years 2023 and 2024 (aligned with Ethiopia’s fiscal year):
  - Tax-side: 0.25 percent of GDP (0.5*0.5) in both calendar years 2023 and 2024.
  - Spending-side: 0.5 percent of GDP (0.5*1) in both calendar years 2023 and 2024.
- IMF Country Report No. 24/318 findings (page 10):
  - Preliminary fiscal outturns in 2023/24 were in line with expectations.
  - Fiscal deficit fell to 2.0 percent of GDP in 2023/24, down from 2.6 percent of GDP in 2022/23.
  - The 2023/24 overall deficit, capital spending, and NBE net advances were each 0.2 percent of GDP higher than expected at the time of program approval.
  - General government spending is estimated to have been cut from 10.8 to 9.8 percent of GDP.
  - General government tax revenue are expected to decline from 6.8 to 6.3 percent of GDP.
- Policy motivation (p. 49): “Fiscal consolidation will be maintained over the medium term to underpin sustainable public finances for long-term development.”

### Ghana — narrative episodes, motivations, and quantified measures
- Ghana 1994:
  - Proposed package aimed at raising total revenue by 4 percentage points of GDP in 1994 (SM/94/133, page 6), but likely motivated by cyclical considerations.
  - 1994 Article IV consultation staffreport (SM/94/133, page 5): program sought to bring inflation down to 5 percent and reduce external current account deficit to 4 percent of GDP by 1996; fiscal consolidation measures linked to cyclical considerations and excluded as narrative episode.
- Ghana 1995:
  - Expenditure cuts amounting to about 1 percent of GDP with the objective of reducing the fiscal deficit.
  - 1995 Article IV and program request staffreport (EBS/95/76, page 5): medium-term fiscal strategy geared to generating additional government savings to meet investment and external current account objectives.
  - Reported target: “Total government spending is targeted to be reduced by 1.2 percent of GDP in 1995” (page 6).
  - Table 20 (IMF StaffCountry Report No. 98/2, page 25) indicates total expenditures were reduced by about 1 percent of GDP in 1995.
  - Revenue measures announced amounted to about 2.8 percentage points of GDP, but some (including a 2.5 percentage points VAT rate increase) were reverted due to social backlash (EBS/95/76, supplement 1).
  - Table 21 (IMF StaffCountry Report No. 98/2, page 26) indicates tax revenues decreased in 1995 as a share of GDP relative to 1994; the increase in revenues was linked to an increase in non-tax revenues.
  - Quantified expenditure cut shock: 1 percent of GDP.
- Ghana 2000:
  - Improvement in the cyclically-adjusted primary balance in 2000 (David et al., 2023 database) but tightening likely motivated by cyclical considerations; fiscal policy tightened in the first half of 2000 in response to a severe terms of trade shock (IMF Country Report No. 01/141, page 7). Episode excluded as narrative consolidation.
- Ghana 2001:
  - Revenue measures amounting to 0.9 percent of GDP, motivated by the need to reduce government debt.
  - IMF Country Report No. 01/141 (page 13): medium-term macro strategy to reduce burden of government debt.
  - MEFP (June 11, 2001) described tax measures and expenditure cuts with an initial estimated effect of 1.9 percent of GDP (paragraph 15); revenue measures listed included multiple tax and levy changes and arrears collection.
  - Non-interest expenditure cuts of 1.9 percent of GDP discussed in paragraph 17 (freezing goods and services at 2000 levels and cutbacks in domestically-financed capital expenditures).
  - Implementation and yield issues (IMF Country Report No. 02/38, page 7): some adopted revenue measures had lower-than-expected yields or delayed implementation; total revenues for 2001 projected to come in about 3.5 percent below programmed level.
  - IMF Country Report 03/133 Table 4b indicates tax revenues increased by 0.9 percent of GDP when comparing 2001 to 2000; resulting adjustment in this dataset: revenue measures yield reduced to 0.9 percent of GDP.
  - Non-interest expenditures actually increased in 2001 compared to 2000 (IMF Country Report 03/133 Table 4b), indicating expenditure-side measures were not implemented.
- Ghana 2002:
  - Revenue measures with an estimated effect of 0.3 percent of GDP in 2002, motivated by the need to reduce debt.
  - Measures included: elimination of a range of tax and tariff exemptions; application of a 5 percent import duty rate to a set of major product lines that were previously zero-rated; application of a 1 percent processing fee on remaining zero-rated items and on items attracting a 10 percent concessionary rate.

### Key quantified fiscal figures cited across episodes
- Ethiopia 2018/19:
  - Recorded narrative fiscal action: 0.15 percent of GDP (0.5*0.3) in both calendar years 2018 and 2019.
  - General government fiscal deficit: 2.5 percent of GDP (2018/19).
  - Budget target deficit: 3.2 percent of GDP.
  - Government met 93 percent of tax collection target.
  - Overall general government revenues: 3.2 percent of GDP.
  - Contraction of other recurrent expenditures: 0.3 percent of GDP.
  - Tax revenue decline: 0.7 percent of GDP (from 10.7 percent in 2017/18 to 10 percent in 2018/19).
  - Non-tax revenue: 1.6 percent of GDP (stable).
- Ethiopia 2023/24:
  - Fiscal consolidation: 0.5 percent of GDP from tax side and 1 percent of GDP from spending side (policy motivation).
  - Recorded narrative actions: 0.25 percent of GDP (0.5*0.5) tax-side and 0.5 percent of GDP (0.5*1) spending-side in each calendar year 2023 and 2024.
  - Fiscal deficit: 2.0 percent of GDP in 2023/24 (down from 2.6 percent of GDP in 2022/23).
  - Overall deficit, capital spending, and NBE net advances: each 0.2 percent of GDP higher than expected at program approval.
  - General government spending: cut from 10.8 to 9.8 percent of GDP.
  - General government tax revenue: decline from 6.8 to 6.3 percent of GDP.
- Ghana episodes:
  - 1994: targeted revenue increase of 4 percentage points of GDP (proposed).
  - 1995: expenditure cuts about 1 percent of GDP; targeted reduction of 1.2 percent of GDP; announced revenue measures about 2.8 percentage points of GDP (some reverted).
  - 2001: initially estimated measures effect 1.9 percent of GDP; adjusted realized revenue increase 0.9 percent of GDP; non-interest expenditure cuts discussed 1.9 percent of GDP but not implemented.
  - 2002: revenue measures estimated effect 0.3 percent of GDP.

*Content extracted from the provided source material.*

### introduction of a 10 percent withholding tax on rental income. Regarding motivation, IMF Country Report

### introduction of a 10 percent withholding tax on rental income. Regarding motivation, IMF Country Report

### Summary of fiscal measures and motivations (selected years)
- 2002: Fiscal program aims at reallocating expenditure toward social objectives, substantially reducing domestic arrears and keeping the stock of domestic debt on a clear downward path (IMF Country Report No. 02/38 page 10). MEFP Paragraph 16: measures “will be designed to place government finances on a sounder long-term footing by emphasizing efficient, broad-based taxation.” Estimated net revenue yield of 1 percent of GDP for 2002 (Page 11, IMF Country Report No. 02/38). IMF Country Report No. 03/133 page 7: one key revenue measure was not implemented; shortfall partly compensated by tax administration improvements, leading to an underlying improvement in tax revenues of some 0.3 percent of GDP.
- 2003: Revenue measures with an estimated effect of 2.8 percent of GDP in 2003 (0.5 percent of GDP+1.6 percent of GDP+0.7 percent of GDP), motivated by the need to reduce debt, were offset by an increase in expenditures amounting to 4 percent of GDP, resulting in no net consolidation. IMF Country Report No. 03/133 Page 16: fiscal policy will aim for a zero flow of net domestic financing in 2003.
- 2004: Continuation of effects of revenue measures adopted in 2003 amounting to 0.8 percent of GDP (0.5 percent +0.3 percent) was more than offset by increases in expenditure, resulting in a widening in the overall deficit excluding grants (IMF Country Report No. 06/228 tables 1 and 3).
- 2005: Revenue measures amounting to 0.5 percent of GDP, motivated by the need to reduce debt. IMF Country Report No. 04/210 page 15: fiscal policy should remain anchored on achieving the GPRS domestic debt reduction target. IMF Country Report No. 05/292 page 20: “Total revenue is expected to rise½percentage point of GDP to 30½percent,” driven by higher indirect taxes and full-year impact of the health levy; total expenditure will decline by 1½ percentage points of GDP to below 32 percent. Table 7 (IMF Country Report No. 05/292 page 34) indicates planned cuts in non-interest recurrent expenditure amounting to 1.1 percent of GDP for 2005. IMF Country Report No. 06/228 page 7: overall deficit (after grants) was 3 percent of GDP compared to the target of 2.6 percent; revenue shortfall mainly from VAT and trade taxes.
- 2009: Consolidation effort consisting of spending cuts motivated by cyclical considerations. IMF Country Report No. 09/256 page 6: “The 2009 budget targets a deficit of 9.4 percent of GDP, largely based on spending cuts and higher grant receipts.” Capital spending cut by 3 percent of GDP; energy sector subsidies projected to decline by more than 1 percent of GDP. Motivation linked to reducing inflation and rebuilding external reserves; planned deficit reduction to 4½percent of GDP in 2011 to address inflationary pressures.
- 2011: Revenue measures amounting to 0.8 percent of GDP motivated by the need to reduce deficits. MEFP (IMF Country Report No. 11/128 page 47): “Fiscal deficits will be reduced to levels that can be prudently financed.” Page 19: extension of the national stabilization levy and extension/coverage changes to generate combined yield of 0.2 percent of GDP; VAT and self-employed measures combined full-year yield of 0.2 percent of GDP. Oil windfall from higher oil price assumption generates revenue windfall of 1.3 percent of GDP, largely to be saved. Improved tax administration and streamlined exemptions projected to raise collections by 0.8 percent of GDP in 2011; one-off measures excluded and revenue-boosting actions amounting to 0.8 percent of GDP added to the narrative dataset. IMF Country Report No. 12/201 page 9: fiscal adjustment between 2010 and 2011 on a commitment basis was 5.3 percentage points of non-oil GDP, about 1.1 percentage points lower than envisaged.
- 2013: Revenue measures amounting to 0.5 percent of GDP, likely motivated by cyclical considerations. IMF Country Report No. 13/187 page 10: combined impact close to½percent of GDP for the six months starting in July to offset revenue shortfall through April. Motivation: restore macroeconomic stability; fiscal consolidation and a shift in composition of spending needed to support growth, reduce external pressures, and keep debt sustainable (page 8).
- 2014: Tax policy measures amounting to 2.5 percent of GDP; motivated by cyclical considerations and guided by gradual reduction in macroeconomic imbalances to preserve economic growth (IMF Country Report No. 14/129 page 11). Page 16: measures included VAT rate raised by 2.5 percentage points and broadened coverage; an ad valorem tax on fuel introduced; taxes raised on rent for non-residential accommodation, management and technical services fees, and free zone companies selling on the local market.
- 2015: Fiscal consolidation totaling 4 percent of GDP, with revenue measures amounting to 2 percent of GDP and expenditure measures of 2 percent of GDP, aiming at reducing debt levels (IMF Country Report 15/103 pages 12–13). Revenue measures included: Special Petroleum Tax of 17.5 percent, VAT on fee-based financial services and a 5 percent flat rate on real estate, extension of special import levy of 1–2 percent, and extension of National Fiscal Stabilization Levy. Expenditure measures: limit nominal increase in total wage bill to 10 percent; savings of about 2 percentage points of GDP from wage/salary and subsidy reforms. Additional cyclical measures to mitigate oil-price shock amounting to 2 percent of GDP not included in narrative dataset. IMF Country Report 16/16 page 5: “Tax revenues continue to overperform” due to policy and administration measures.
- 2016: 2016 budget aims at reducing the overall cash deficit by 2 percent of GDP (IMF Country Report 16/16 page 8); many 2016 fiscal measures described as mostly one-off.
- 2017: Fiscal adjustment consisting of revenue measures amounting to 0.4 percent of GDP and spending cuts of 0.8 percent of GDP, motivated by the need to reduce inherited deficits and debt levels. Box 4 (IMF Country Report No. 17/262 page 21): permanent measures to curtail tax exemptions (0.5 percent of GDP) and tighten compliance (0.3 percent of GDP); reduction in revenue by 0.4 percent of GDP from eliminating/reducing taxes perceived to hinder private sector activity; net effect 0.4 percent of GDP. MEFP (page 53) describes cuts to capital expenditures and mid-year downward adjustments in goods and services and capital expenditure of 0.8 percent of GDP. Letter of intent (page 47): measures to contain financing needs, stabilize public debt, and avoid arrears via enforcement of the Public Financial Management Act and expanded GIFMIS rollout. IMF Country Report No. 18/113 page 4: overall deficit reduced to 6 percent of GDP from 9.3 percent of GDP in 2016—below the 6.3 percent of GDP target.
- 2018: Fiscal adjustment consisting of revenue measures amounting to 0.33 percent of GDP, motivated by the need to reduce debt. IMF Country Report No. 17/262 page 53: plan to bring the deficit down from 6.3 percent in 2017 to 3.8 percent in 2018 and generate primary surpluses over the medium term. Box 3 (IMF Country Report No. 18/113 page 10): retained permanent measures excluding special audits (0.07 percent of GDP) and one-off sale of communication spectrum and telecom license (0.29 percent of GDP), leading to total estimated yield of 0.33 percent of GDP. IMF Country Report No. 19/97 page 7: a primary surplus of 1.7 percent of GDP by end-year, in line with program target, helped by mid-year revenue measures and intensified tax collection.
- 2021: Announced fiscal consolation measures amounting to 1.3 percent of GDP (0.9 percent of GDP in revenue measures and 0.4 percent of GDP in expenditure cuts) to guarantee macroeconomic stability (cyclical considerations) and not included as a narrative fiscal action. IMF Country Report 21/165 page 17: "The budget law introduces new revenue measures yielding

### Detailed measures and yields (selected items described in source)
- 2003 detailed measures (IMF Country Report No. 03/13 pages 17–18):
  - National Health Premium (NHP) of 2.5 percent on value added, expected to generate 0.5 percent of GDP in 2003 (1 percent in a full year; Table 4b). NHP administered on the same base and with same technical features as VAT; half of first-year proceeds devoted to start-up costs of national health insurance scheme. Allocation: 0.5 percent of GDP to 2003 and 0.5 percent of GDP to 2004.
  - Debt Recovery Levy (DRL) equal to 640 cedis per liter on petroleum products, estimated to generate 1.6 percent of GDP in 2003 (1.9 percent in a full year). Allocation: 1.6 percent of GDP to 2003 and 0.3 percent of GDP to 2004.
  - Other revenue measures (combined net yield 0.7 percent of GDP): (i) extension of the National Reconstruction Levy for one additional year, (ii) increase in the road levy on petroleum to fund higher allocations for road maintenance, and (iii) rise in stumpage fees and opening up of timber concessions to public auction.
- 2011 measures and yields (IMF Country Report No. 11/128):
  - Combined yield from extension of national stabilization levy and extended coverage of communication service tax: 0.2 percent of GDP.
  - VAT extension to fee-based financial services and enhanced presumptive taxation of self-employed: combined full-year yield of 0.2 percent of GDP.
  - Oil windfall from higher oil price assumption: revenue windfall of 1.3 percent of GDP (largely to be saved).
  - Projected revenue gain from improved tax administration and streamlined exemptions: 0.8 percent of GDP in 2011 (authorities confident they can exceed this goal). One-off measures excluded; narrative dataset adds revenue boosting actions amounting to 0.8 percent of GDP.
- 2014 measures (IMF Country Report No. 14/129 page 16):
  - VAT rate raised by 2.5 percentage points and coverage broadened.
  - Ad valorem tax on fuel introduced.
  - Taxes raised on rent for non-residential accommodation, management and technical services fees, and free zone companies selling on the local market.
  - Expected revenue contribution from these measures: 2.5 percent of GDP.
- 2015 revenue and expenditure package (IMF Country Report 15/103 pages 12–13):
  - Revenue measures estimated impact: about 2 percent of GDP. Specifics include: Special Petroleum Tax of 17.5 percent; VAT on fee-based financial services; 5 percent flat rate on real estate; extension of special import levy of 1–2 percent; extension of National Fiscal Stabilization Levy.
  - Expenditure measures: nominal increase in total wage bill limited to 10 percent; discontinuation of 10 percent Cost of Living Allowance; strict limits on net hiring (frozen except in education and health); full elimination of subsidies for utilities and petroleum products via tariff/price adjustment mechanisms. Expected savings: about 2 percentage points of GDP.
- 2017 revenue composition (IMF Country Report No. 17/262 Box 4):
  - Curtailing tax exemptions: estimated yield 0.5 percent of GDP.
  - Tightening compliance: estimated yield 0.3 percent of GDP.
  - Elimination/reduction of taxes perceived to hinder private sector activity: revenue reduction 0.4 percent of GDP.
  - Net effect of revenue measures: 0.4 percent of GDP.
- 2018 retained permanent revenue measures (IMF Country Report No. 18/113 Box 3):
  - Total estimated permanent yield retained: 0.33 percent of GDP after excluding special audits (0.07 percent of GDP) and one-off sale of communication spectrum and telecom license (0.29 percent of GDP).

### Observed outcomes, implementation notes, and administration effects
- Implementation shortfalls and offsets:
  - 2002–2003: non-implementation of a key revenue measure in 2002 partly offset by tax administration improvements (0.3 percent of GDP improvement).
  - 2003: revenue measures of 2.8 percent of GDP were offset by expenditure increases of 4 percent of GDP, resulting in no net consolidation.
  - IMF Country Report No. 03/395: delays in implementation of tax measures offset by improvements in revenue administration; however, revenue measures offset by increases in investment spending amounting to 3.5 percent of GDP and increase in the wage bill of 0.5 percent of GDP in 2003. Total capital expenditures budgeted to rise to almost 9.5 percent of GDP in 2003, from just over 6 percent of GDP in 2002.
  - 2005: revenues fell short of expectations; overall deficit after grants was 3 percent of GDP vs target 2.6 percent (shortfall mainly from VAT and trade taxes).
  - 2017–2018: despite revenue underperformance, authorities reduced overall deficit to 6 percent of GDP in 2017 from 9.3 percent in 2016 and achieved a primary surplus of 1.7 percent of GDP in 2018.
- Administration measures often accompanied revenue measures:
  - Strengthening tax administration and streamlining exemptions are recurrently cited as contributors to improved collections (examples: 2002 shortfall partly offset by administration improvements; 2011 projected 0.8 percent of GDP gain from administration and exemptions; 2015–2016 overperformance in tax revenues attributed to policy and administration measures).

### Policy objectives and stated motivations
- Recurrent motivations across episodes:
  - Reduce domestic debt burden and place government finances on a sounder long-term footing through efficient, broad-based taxation (2002).
  - Reduce debt levels and achieve debt sustainability (2003, 2005, 2015, 2017, 2018).
  - Support monetary objectives and reduce domestic financing needs (2003).
  - Restore macroeconomic stability and reduce vulnerabilities to support private investment and growth (2013).
  - Preserve economic growth by gradually reducing macroeconomic imbalances (2014).
  - Reduce fiscal deficits to levels that can be prudently financed without crowding out private sector credit and to progressively reduce debt-GDP ratios (2011).
  - Address cyclical pressures such as lower oil prices and reduce inflationary pressures (2009, 2015 cyclical measures, 2021 announced measures for macroeconomic stability).

*IMF Country Report excerpts and internal references as provided in the source content.*

### 1.4 percent of GDP, including VAT and NHIS rate hikes, higher fuel excises, a new bank profit levy, and

### wpiea2026011-source-pdf - 1.4 percent of GDP, including VAT and NHIS rate hikes, higher fuel excises, a new bank profit levy, and

### Ghana: 2021 fiscal package and assessment
- Budgetary package: 1.4 percent of GDP, including VAT and NHIS rate hikes, higher fuel excises, a new bank profit levy, and more effective tax administration thanks to large taxpayer audits (especially in mining sector), and the establishment of special courts to speed up case settlements and payment collections.
- Offsetting items: reduction in COVID-related spending by 1.3 percent of GDP compared to 2020, offset by domestic arrears clearance of 0.9 percent of GDP and higher interest payments.
- Staff adjustment to revenue yields: staff projects a 0.5 percentage point of GDP lower yield from tax administration measures compared to the budget law, due to past compliance experience and complexity/delays in large taxpayer audits.
- Authorities’ stated motivation: large fiscal deficits reflected a decision to protect lives and livelihoods, with commitment to follow through on a fiscal consolidation agenda to guarantee macroeconomic stability.
- IMF Country Report 23/168 Table 1: confirms an improvement in the primary balance in 2021 of 4 percent of GDP relative to the 2020 numbers reported in IMF Country Report 21/165, including an increase in revenues of 2.4 percent of GDP and reductions in expenditure of 0.8 percent of GDP.

### Ghana: 2022–2024 developments and motivations
- 2022 outcomes and assessment (IMF Country Report 23/168, page 6):
  - Some fiscal adjustment occurred, but initial consolidation objectives were not achieved.
  - Revenue improved slightly owing to higher oil prices; non-oil revenues were significantly below targets with large underperformance of the new controversial e-levy.
  - Government unable to enforce announced across-the-board spending cuts due to large extra-budgetary commitments by ministries, departments, and agencies (MDAs).
  - Primary balance (commitment basis) improved by over 1 percentage points of GDP, but the overall fiscal deficit still amounted to 11 percent of GDP (compared to a mid-year budget objective of 6.3 percent of GDP).
- 2023 measures:
  - Revenue measures amounting to 1 percent of GDP for 2023 were treated as motivated by cyclical considerations (response to loss in investor confidence and tighter global financing) and therefore not included as narrative fiscal actions.
  - Letter of intent (page 53 of IMF Country Report 23/16) attributes measures to cyclical shocks: COVID-19 pandemic and the war in Ukraine, tightening of financing conditions, loss of international market access, difficulties rolling over domestic public debt, decreasing international reserves, Cedi depreciation, rising inflation, and plummeting investor confidence making public debt unsustainable.
  - Authorities’ program focus (PC-PEG): ensure public finance sustainability while protecting the vulnerable; bolster credibility of monetary and exchange rate policies; preserve financial sector stability; promote entrepreneurship and private investments; improve governance and transparency.
- 2024 stance (IMF Country Report 24/030, page 9):
  - Authorities launched a large and front-loaded fiscal adjustment program coupled with debt restructuring to restore confidence and sustainability.
  - Government target: achieve a primary balance on a commitment basis of 1.5 percent of GDP by 2025.
  - This entails an adjustment of about 6 percentage points of GDP over three years, with about two thirds of the fiscal effort implemented in 2023.

### Kenya: summary of selected fiscal consolidation episodes and classifications
- General note: Kenya’s fiscal year runs from July 1st to June 30th. Calendar-year allocations of multi-year measures are split as described in the source.

- Kenya 1993/94:
  - Fiscal consolidation measure: 1.1 percent of GDP from the revenue side and 3.1 percent of GDP from the spending side, motivated by reducing the fiscal deficit.
  - Allocation: ½ of gains (0.55 percent of GDP revenue; 1.55 percent of GDP spending) to calendar year 1993 and the remaining ½ to calendar year 1994.
  - 1993 Article IV (EBS/93/191): 1993/94 budget aims to reduce the overall deficit by 4.3% of GDP to 6.1% of GDP; interest payments were 10.5% of GDP. Planned revenue increase of 1.1% of GDP to 23.2% of GDP via widening the tax base and improvements in tax administration; expenditure cuts of 3.1% of GDP.

- Kenya 1994/95:
  - Two announced measures (temporary drought levy of 2.5 percent of GDP and fall in total expenditure by 5.6 percent of GDP) were excluded from the dataset because the tax measure was cyclically driven and the expenditure measure included significant non-policy components.

- Kenya 1995/96:
  - Tax-based fiscal consolidation amounting to 1.8 percent of GDP, motivated by reducing the fiscal deficit. Recorded as 0.9 percent of GDP in both calendar years 1995 and 1996.
  - Measures include expansion of VAT coverage, reintroduction of presumptive income tax on agricultural income, elimination of some customs exemptions, cuts in customs duty rates, commencement of Kenya Revenue Authority operations (July 1, 1995), limits on allowances to 3 percent of the wage bill, and net domestic repayments equivalent to 0.6 percent of GDP plus reduction in pending bills of 0.4 percent of GDP.
  - Footnote: additional measures adopted in August expected to yield 1.8 percent of GDP.

- Kenya 2010–2012:
  - Fiscal stimulus in 2009/10 of 2.1 percent of GDP to support activity; withdrawal planned starting in 2010/11 to reduce deficit from 6 percent to 4.5 percent of GDP by 2011/12; medium-term net debt-to-GDP target of 40 percent.
  - Annex Table A1 (IMF Country Report No. 10/224, page 144): increase in revenue of 0.7 percent of GDP; reduction in government wage bill to 6 percent of GDP; increase in development expenditure to 9.8 percent of GDP by 2012 alongside poverty-related outlays. Planned consolidation measures were accompanied by offsetting stimulus measures and thus treated as non-narrative where motivated by cyclical considerations.

- Kenya 2011:
  - Fiscal consolidation from the tax side amounting to 1.1 percent of GDP, driven by increases in income tax and VAT, motivated by reducing the fiscal deficit and public debt and enhancing fiscal sustainability.
  - IMF Country Report No. 11/48: program targets reduction in central government primary deficit to 1.2% of GDP in 2013/2014 (from 3.8% in 2010/11) through tax reform and control of current spending; target net debt-to-GDP of 45% by end of program.
  - Table 2 (IMF Country Report No. 11/165): increase in tax revenues of 1.1% of GDP in FY 2010/11 (income tax and VAT each 0.5% of GDP); nontax revenues increased by 1.5% of GDP (not counted as narrative fiscal shock).

- Kenya 2012:
  - Planned medium-term fiscal consolidation measures were front-loaded to temper domestic demand and thus excluded from the narrative dataset because motivated by cyclical considerations.
  - IMF Country Report No. 12/14 (page 14): authorities target bringing debt-to-GDP to about 41 percent by FY 2014/15.

- Kenya 2023/24:
  - Fiscal consolidation measures: tax increase of 0.9 percent of GDP and spending cuts amounting to 1.2 percent of GDP, motivated by ensuring debt sustainability.
  - Allocation for calendar years: half of savings (0.45 percent of GDP tax; 0.6 percent of GDP spending) assigned to both 2023 and 2024.
  - IMF Country Report No. 22/382 (page 57): FY2023/24 target fiscal deficit of 4.4 percent of GDP, a 1.4 percentage point reduction; total revenue and grants projected to reach 17.8% of GDP supported by a comprehensive tax package of 0.9% of GDP; total expenditure expected to decline by 1.2% of GDP.
  - Parliament approved Budget FY2023/24 and the 2023 Finance Bill on June 22 (IMF Country Report No. 23/266, footnote 9, p. 13).
  - Motivation emphasized: continued strong commitment to fiscal consolidation to reduce debt vulnerabilities (Press Release PR22/445 and report text).

- Kenya 2023 (supplementary):
  - A consolidation of 0.2 percent of GDP from the spending side resulted from non-implementation of development project funds due to capacity constraints and did not reflect a genuine policy action aimed at reducing an inherited deficit or ensuring debt sustainability.
  - IMF Country Report 23/266: cuts of 0.2 percentage points of GDP mainly for undisbursed development project funds; authorities implementing the 2023 Medium-Term Debt Management Strategy (MTDS).

*Source: wpiea2026011-source-pdf.*

### Appendix  B.8.  MAURITIUS

### Appendix  B.8.  MAURITIUS

### Fiscal action: 1996/97 — Sales tax reform
- Type: Fiscal consolidation from the tax side.
- Size: 2 percent of GDP.
- Motivation: Desire to reduce the fiscal deficit.
- Timing allocation: Because Mauritius’s fiscal year runs from July 1st to June 30th, the budgetary impact is allocated ½ of the measure to calendar year 1996 and ½ to calendar year 1997, with each year accounting for 1 percent of GDP (0.5*2).

### Context and interpretative notes on CAPB and subsequent years
- The fiscal year in Mauritius runs from July 1st to June 30th.
- Calculations of the cyclically-adjusted primary balance (CAPB) based on WEO data point to fiscal consolidation efforts in 2006 and 2016 (David et al., 2023). Yet, no evidence of narrative fiscal actions is found for those years.
- 2005/06: Investigation indicates the fiscal position was expected to deteriorate in 2005/06, with no genuine consolidation taking place. Public Information Notice (PIN) No. 06/01 (January 3, 2006) notes: "The slowdown of economic activity and the suspension of periodic adjustments of retail petroleum prices have negatively affected Mauritius’ fiscal position...While the central government deficit was kept at about 5 percent of GDP during 2004/05, the State Trading Company (STC) incurred a rising deficit owing to the lack of adjustment of retail petroleum prices since early 2005. Unless corrective action is taken, the overall fiscal position during 2005/06 is expected to deteriorate further, owing to lower than originally projected revenue collections associated with lackluster activity and a further increase of the STC’s deficit as the gap between retail prices and import costs of petroleum products widens...Directors urged the authorities to take steps to stem a further deterioration of the fiscal position in 2005/06."
- 2016: The apparent improvement in the CAPB in 2016 most likely reflects stronger economic growth and higher non-tax revenue, rather than a deliberate fiscal consolidation. The Economist Intelligence Unit report of November 6, 2015 (p. 5) notes: "The fiscal year 2015/16 (July-June) budget projects that revenue will grow by 14% in nominal terms compared with the 2014 outcome...However, the budget includes no new tax measures. Indeed, the finance minister, Seetanah Lutchmeenaraidoo, referred to it as a "no-tax budget". The revenue projection is based on the economy growing by 5.3%, thus increasing the tax collection volume...Expenditure will grow in light of announced measures to boost social spending, particularly on health and education."

### Fiscal action: 2007 — Tax reform
- Type: Fiscal consolidation from the revenue side (tax reform).
- Size: 1 percent of GDP.
- Motivation: Desire to reduce the fiscal deficit and improve economic efficiency.
- Evidence: IMF Country Report No. 08/238 highlights: “The overall fiscal position has improved as revenues have risen strongly (by about 1 percent of GDP) in response to tax reforms and expenditure has been contained (Table 3). The overall deficit is projected to decline to about 3.0 percent of GDP in 2007/08, with a primary surplus of about 1.7 percent, and public sector debt falling to about 59 percent of GDP. Tax reform has made the tax regime more progressive, easier to administer, and broadened the base (Box 1).”
- Measures cited: Introduction of a single flat tax rate on personal and corporate income; introduction of a National Resident Property Tax (NPRT) on high-income earners to improve progressivity (Text Table 1).
- Timing note: Although the tax reform process began in 2006, revenue increases associated with the reform are recorded in fiscal year 2007/2008; therefore the narrative fiscal action is recorded in calendar year 2007.

*Source: Appendix B.8. MAURITIUS, wpiea2026011-source-pdf*

### 2004. The overall deficit, after grants, however, would increase to 4.1 percent of GDP in 2004 from 3.2 percent

### wpiea2026011-source-pdf - 2004. The overall deficit, after grants, however, would increase to 4.1 percent of GDP in 2004 from 3.2 percent

### 2004 fiscal program: targets and composition
- Overall deficit, after grants, projected to increase to 4.1 percent of GDP in 2004 from 3.2 percent in 2003 owing to a shift in external assistance from grants to concessional loans.
- Fiscal program consistent with a reduction in the net indebtedness of the government to the banking system.
- Total revenue projected to rise by 0.3 percentage point of GDP in 2004 to 14.7 percent of GDP because of:
  - the full-year effect of the adjustment in specific fuel taxes implemented in May 2003;
  - further increases in the collection of income and indirect taxes due to improvements in tax administration;
  - an automatic mechanism to adjust fuel taxes on a quarterly basis to prevent erosion by inflation (to be introduced early in 2004).
- Total expenditure projected to decline slightly to 27.8 percent of GDP in 2004.
- Wage policy and payroll measures:
  - agreed to limit the wage increase for government employees to projected inflation (9 percent);
  - stricter control over expenditure commitments at the subnational level, including rationalizing temporary employment in some provinces;
  - expected reduction in the government’s wage bill from 7.8 percent of GDP in 2003 to 7.5 percent in 2004 after allowing for increases in permanent employment in some priority areas.
- Pension and transfers:
  - initiation of a process of verifying and rationalizing pension beneficiaries to permit a slight decline in transfers to the private sector.
- Election costs:
  - 2004 budget incorporates national elections cost estimated at US$20 million, of which US$15 million would be financed with external grants.

### IMF Country Report No. 04/342 spending-side projections (as referenced)
- Fiscal program calls for a reduction in the domestic primary deficit to 3.3 percent of GDP.
- Overall deficit after grants projected to decline to 3.8 percent of GDP, from 4.9 percent in 2003 (net external financing expected to more than cover this deficit).
- Total current expenditure programmed to decline to 15.6 percent of GDP in 2004.
- Government wage bill projected to fall from 7.5 percent of GDP in 2003 to 7.3 percent in 2004.
  - Average wage increase effective April 1, 2004 limited to projected inflation (11 percent).
  - Wage bill projection includes impact of an increase of close to 7,200 in the number of permanent government employees in priority sectors.
- Budget incorporates US$20 million for general elections scheduled for November 2004.
- Spending on PARPA priorities projected to increase to 65 percent of total primary expenditure in 2004, from 64.1 percent in 2003.

### Revenue shortfall and program underperformance (IMF Country Reports Nos. 05/168, 05/313, 05/318)
- Through September 2004, fiscal performance adversely affected by a significant revenue shortfall relative to program projections.
- Government’s domestic primary deficit for 2004 projected at 3.6 percent of GDP (program: 3.3 percent).
- Total revenue expected to have declined to 14.0 percent of GDP in 2004, compared with 14.6 percent of GDP in the program.
- Consequences and staff assessments:
  - Envisaged fiscal consolidation not achieved; delays in implementation of structural reforms noted.
  - Fiscal performance below expectations because of a shortfall in revenues.
  - Revenue-to-GDP ratio reported as decreasing from 12.9 percent of GDP in 2003 to 12.3 percent of GDP in 2004 and falling short by 1.1 percent of GDP of the program indicative floor for end-December 2004.
- Authorities’ explanations for revenue shortfall included:
  - higher-than-projected VAT reimbursements related to megaprojects;
  - delays by corporations in complying with the payments calendar under the new corporate income tax code;
  - impact of the appreciation of the metical;
  - weakening of tax collection during the transition period leading to the nomination of a new government.
- Offsetting actions:
  - Revenue shortfall partially offset by cuts in current expenditures, negatively affecting the composition of total expenditure and reducing the share of priority expenditures to about 63 percent.
  - Domestic primary deficit fell short of program target by 0.7 percent of GDP; overall fiscal deficit after grants slightly higher than envisaged (using the new GDP series).

### Medium-term revenue and spending strategy (PARPA II and 2007–2008 programming)
- Authorities programmed an annual average revenue increase of 0.5 percent of GDP (medium-term objective) to be achieved by broadening the tax base and improving revenue administration.
- 2007 budget envisaged scaling-up of aid-financed expenditures supported by a continued 0.5 percent of GDP rise in domestic revenue.
- Composition of the envisaged 2007 revenue rise (IMF Country Report No. 07/36 and No. 07/38):
  - rationalization of unwarranted tax exemptions (e.g., VAT, interest income on treasury bills);
  - collection of new tax arrears amounting to about 0.2 percent of GDP;
  - resumption of quarterly updating of the specific fuel tax rate including recovering real reduction due to non-indexation in 2005;
  - higher non-tax revenues related to buoyant commodity prices;
  - continued improvement in tax administration in line with Fund Technical Assistance.
- 2007 projected increases in priority public investments largely financed by foreign grants; wage bill to increase to 7.5 percent of GDP including hiring about 10,000 teachers and 3,000 health workers.
- 2008 program objectives (IMF Country Report No. 08/15 and No. 08/220):
  - domestic revenue effort of 0.5 percent of GDP and allocating most of the increase in foreign aid toward achieving the Millennium Development Goals (MDGs);
  - measures to strengthen the central revenue authority and public financial management, including a prudent wage policy and decentralization strategy;
  - fine-tuning monetary and exchange rate policy to anchor inflationary expectations in single digits;
  - acceleration of PARPA II reforms.
- 2008 budget envisaged no recourse to domestic bank financing and efforts to increase revenues by 0.5 percent of GDP while mitigating trade liberalization losses (0.4 percent of GDP) by bringing off-budget items on budget.
- 2008 revenue measures listed with yields: revisions to personal and corporate income tax codes (0.2 percent of GDP), reduction in VAT exemptions (0.1 percent of GDP), collection of tax arrears (0.1 percent of GDP), continued adjustment of fuel taxes (0.1 percent of GDP), and increasing the number of taxpayers by 100,000. (Note: collection of tax arrears excluded from the narrative database as one-off.)

### Fiscal stance and consolidation in 2010–2011 (supporting monetary tightening)
- 2010: Primary domestic fiscal deficit projected to narrow to 4.1 percent of GDP; NCG target at 0.3 percent of GDP.
  - Measures required: enhance tax collections and reduce non-priority spending; prepared to forgo executing domestically financed capital spending and current spending if necessary.
- 2011: Fiscal policy aimed to step up contribution to containing inflation:
  - reduce the domestic primary fiscal deficit by 0.9 percentage points to 3.3 percent of GDP;
  - virtually zero recourse to domestic financing.
  - Program’s indicative revenue floor prudently set ½ percent of GDP below the 2011 budget law objectives; Revenue Authority instructed to collect full revenue target under the budget law (19½ percent of GDP referenced; other text cites 20.2 percent of GDP and 20.7 percent of GDP in different projections).

### Corrective fiscal measures in 2023 and revenue administration reforms
- 2023 corrective consolidation amounting to 1.2 percent of GDP (0.6 percent of GDP from both the tax and spending sides) to ensure fiscal sustainability.
- Fiscal outturns and projections (IMF Country Report No. 23/255):
  - primary balance after grants, on a modified cash basis, expected to reach MT 5.4 billion (0.4 percent of GDP) compared to a projection of a primary deficit after grants of MT 9.1 billion (0.7 percent of GDP) in 2023;
  - overall deficit after grants projected at MT 45.1 billion (3.9 percent of GDP) in 2023, reflecting projected budget support grants including US$200 million from the World Bank, use of MT 5.7 billion of the 2021 SDR allocation, and less reliance on domestic debt.
- Fiscal restraint in 2023Q1–Q3 reduced domestic primary expenditure by 43 percent on average compared to 2022Q4; interest payments projected at 2.5 percent of GDP in 2023 (compared to 2.1 percent in 2022).
- Revenue increased by 27 percent in 2023Q3 compared to 2022Q4 reflecting higher income tax receipts and non-tax measures.
- Remedial measures addressing wage bill overrun from the Tabela Salarial Única (TSU) implementation (Statement by the Executive Director, July 6, 2023):
  - reduction in nominal wage levels relative to original TSU;
  - freezing new hires in special sectors;
  - canceling the 13th paycheck;
  - introducing the payroll of the special sectors into the system;
  - audit of all civil servants including special sectors to eliminate irregularities (including potential ghost workers);
  - monitoring instruments: monthly wage bill reporting, regular audits, and proof of life.
  - Authorities seek to reduce the wage bill from 16.4 percent to 14.6 percent of GDP by end-2023 and aim for around 10 percent of GDP over the medium term.
- Tax administration strengthening measures:
  - reforming VAT, phasing out some VAT exemptions and domestic zero-ratings, broadening the VAT base;
  - enhancing links and interoperability with other public registries to boost revenue collection;
  - cleaning and updating the taxpayer registry, including removing duplicated taxpayers;
  - implementing an integrated electronic tax filing system (e-tributação) to collect receipts from VAT and income taxes;
  - adopting best international practices in determining the tax base for the mining industry.
- IMF Country Report No. 24/219 (Table 2b, p. 32) reports tax revenue rose by 0.6 percent of GDP (from — [table data referenced]).

*Source: wpiea2026011-source-pdf - 2004. The overall deficit, after grants, however, would increase to 4.1 percent of GDP in 2004 from 3.2 percent*

### 20.3 to 20.9 percent) and primary expenditure fell by 0.6 percent of GDP between 2022 and 2023, while total

### Appendix B.10. NIGERIA and Appendix B.11. SENEGAL

### Nigeria — Overview of episodes and motivations
- 1994: VAT reform introduced in 1994 replacing state sales tax; Federal Government retained 20 percent of total VAT revenue and state governments retained 80 percent.
- 1994 fiscal outcomes:
  - Federally collected revenue fell from 27.6 percent of GDP in 1993 to 18.3 percent of GDP in 1994.
  - State and local government revenue fell from 10.8 percent of GDP in 1993 to 8.5 percent of GDP in 1994.
  - Overall fiscal deficit reached some N 79 billion (8.8 percent of GDP), largely financed by central bank credit.
  - Primary fiscal balance recorded an estimated deficit of one percent of GDP.
- 1995: Reduction in the fiscal deficit largely driven by higher oil prices, not discretionary consolidation.
  - Budget aimed to reduce deficit from 9 percent of GDP in 1994 to 2.5 percent of GDP in 1995, predicated on more than doubling of federal government revenue via oil price and petroleum product price increases (domestic transfer price of crude oil from US8 per barrel to US17 per barrel at the official exchange rate).
  - Staff warned improvements may not be sustained due to planned spending from the Petroleum Trust Fund, pressures to accelerate capital expenditure, distribution of intervention profits of the Central Bank, and potential revenue shortfalls.
- 2011: Authorities planned fiscal consolidation (on the order of 6 to 7 percent of non-oil GDP) to rebuild buffers and support monetary policy; however, the observed reduction in the overall fiscal deficit from 7.7 percent of GDP in 2010 to about 0.2 percent of GDP in 2011 was driven by higher oil prices rather than intentional policy actions.
  - Executive Board: Directors supported planned fiscal consolidation and efforts to strengthen nonoil revenues.
- 2013: Fiscal consolidation from the spending side amounting to 1 percent of GDP in 2012-2013, motivated by rebuilding buffers and keeping debt sustainable.
  - General government expenditure declined by about 1 percentage point of GDP in 2012-2013 through measures controlling personnel expenses (limiting compensation increases, consolidating pay bonuses, enhancing payroll administration).
  - Table evidence: reduction in expenditure of around 2 percent of GDP in 2012 and projected reduction of 1 percent of GDP in 2013.
- 2014: Fiscal consolidation implemented as a response to cyclical decline in oil prices and thus characterized as non-discretionary.
  - Authorities adopted an adjustment in the official foreign exchange rate and band, tightened monetary policy rates, and proposed spending cuts totaling 1.7 ppts of GDP in the proposed 2015 budget.
  - Staff projects oil revenue will drop by 2.4 percentage points of GDP relative to 2014; MTEF envisages non-oil revenue increase of 0.1 percent of GDP in 2015 and a reduction in expenditure of 1.7 percent of GDP (1 percent from lower fuel subsidies, 0.2 from lower capital spending, and 0.5 from adjustment by SLGs).
  - Projected consolidated government deficit impact: increase of 0.3 percentage points of GDP.
  - Staff recommends additional contingency measures to contain recurrent expenditures and boost non-oil revenues in 2015, such as accelerating potential reforms to VAT and CIT.

### Nigeria — Key quantitative outcomes and staff assessments (selected)
- 1994: Overall fiscal deficit ~ N 79 billion (8.8 percent of GDP); primary fiscal balance deficit ~ 1 percent of GDP.
- 1993–1994 revenue changes: federal revenue 27.6 percent → 18.3 percent of GDP; state and local 10.8 percent → 8.5 percent of GDP.
- 2010–2011 deficit change: 7.7 percent of GDP (2010) → about 0.2 percent of GDP (2011), attributed to higher oil prices.
- 2012–2013 expenditure: general government expenditure declined by about 1 percentage point of GDP; Table shows ~2 percent of GDP reduction in 2012 and projected 1 percent of GDP reduction in 2013.

### Senegal — Overview of episodes and motivations
- 1995/96: Fiscal consolidation over 1995-96 motivated by reducing the fiscal deficit.
  - Program aims: reduce overall fiscal deficit (commitment basis excluding grants) from 5.7 percent of GDP in 1994 to 2.6 percent in 1995 and to 2 percent in 1996.
  - Planned fiscal measures over 1995-96:
    - Government revenue programmed to increase by the equivalent of 1.5 percent of GDP.
    - Total expenditure programmed to be cut by 2.2 percent of GDP over the two-year period.
  - Implementation details:
    - Total revenue in 1995 expected to increase by 23 percent to CFAF 371.2 billion.
    - Total expenditure in 1995 expected to increase by about 2 percent to CFAF 434.9 billion, with tight wage bill control (wage bill ceiling of CFAF 160 billion; no general wage increase in 1995; recruitment strictly limited).
    - Capital expenditure in 1995 foreseen at CFAF 116 billion.
    - Program measures included reducing tax exemptions, broadening the VAT base, strengthening customs and tax administrations, civil service audit, and measures to balance the National Retirement Fund from June 1995.
  - Later staffreports quantitative confirmation:
    - IMF Staff Country Report No. 99/5 (Table 24) shows an increase in tax revenue of 1.5 percent of GDP and a decrease in total expenditure and net lending of 1.2 percent of GDP between 1994 and 1995.
    - IMF Staff Country Report No. 00/91 (Table 33) records an increase in tax revenue of 1.6 percent of GDP and a decrease in total expenditure and net lending of 1.1 percent of GDP over the same period.
- 2002: Fiscal consolidation motivated by reducing the fiscal deficit.
  - Authorities sought to reduce government deficit before grants from an estimated 3.9 percent of GDP in 2001 to 2.6 percent in 2002; basic fiscal balance to shift from deficit of 0.8 percent of GDP in 2001 to surplus of 1.3 percent in 2002.
  - Measures and outcomes:
    - 10 percent increase in tax revenue to 17.7 percent of GDP in 2002 (unification of VAT rates in September 2001 and strong collection efforts).
    - Total expenditure and net lending contained at 20.2 percent of GDP in 2002, down from 21.7 percent in 2001.
    - Overall government operations, including grants, moved to a surplus of 0.4 percent of GDP in 2002, from a deficit of 2 percent in 2001.
    - Table 3 records increase in tax revenue of 0.6 percent of GDP and reduction in total expenditure and net lending of 1.5 percent of GDP between 2001 and 2002.
- 2013: Fiscal consolidation of 0.4 percent of GDP from the tax side, motivated by ensuring debt sustainability.
  - Measures expected to generate at least 0.4 percent of GDP in revenue include a new tax on cosmetic products, increase in tax on tobacco, inclusion in the VAT base of certain telecommunication activities, end of some VAT exemptions for activities financed by external resources, and advanced payment on income tax at importation stage.
  - Cabinet approved a supplementary budget for 2013 reflecting these changes.
  - IMF Country Report No. 14/4 notes revenue shortfalls in 2013 (text ends mid-sentence in supplied content).

### Senegal — Key quantitative outcomes and staff assessments (selected)
- 1994–1995 program targets: revenue increase of 1.5 percent of GDP and expenditure cut of 2.2 percent of GDP over 1995-96 (allocated as 0.75 percent of GDP revenue and 1.1 percent of GDP spending to each calendar year for the two-year period).
- 1995 projections and amounts: total revenue CFAF 371.2 billion (expected 23 percent increase); total expenditure CFAF 434.9 billion (about 2 percent increase); wage bill ceiling CFAF 160 billion; capital expenditure CFAF 116 billion.
- 1994–1995 ex post changes (staff reports): tax revenue increase 1.5 percent of GDP and total expenditure/net lending decrease 1.2 percent of GDP (Staff Country Report No. 99/5); alternative table records tax revenue increase 1.6 percent of GDP and expenditure/net lending decrease 1.1 percent of GDP (Staff Country Report No. 00/91).
- 2001–2002 outcomes: tax revenue +0.6 percent of GDP; total expenditure and net lending -1.5 percent of GDP; overall government operations including grants: surplus 0.4 percent of GDP in 2002 (from deficit of 2 percent in 2001).

*Source: excerpted content from the supplied PDF content unit.*

### 5.4 percent of GDP will require expenditure restraint. A revenue shortfall amounting to about 0.5 percent of

### wpiea2026011-source-pdf - 5.4 percent of GDP will require expenditure restraint. A revenue shortfall amounting to about 0.5 percent of

### Senegal — 2013 fiscal shortfall and policy response
- A revenue shortfall amounting to about 0.5 percent of GDP was incurred in the first half of the year, mostly in the first quarter.
- Drivers of the shortfall:
  - A more-generous-than-expected reduction of the personal income tax.
  - Transitory VAT collection shortfalls reflecting the phasing out of VAT withholding by government agencies.
  - Disappointing non-tax revenue.
  - The power sector’s tight financial situation continued to weigh on revenue collection.
- Projection and authorities’ response:
  - Revenue collection is expected to improve in the second half of 2013, but not enough to prevent a significant shortfall at year end.
  - The authorities intend to meet the deficit target through savings on the wage bill, interest payments, and the deferral of a few budgeted investment projects.

### Senegal — 2014 policy package and objectives
- Fiscal consolidation composition:
  - 0.3 percent of GDP from the tax side.
  - 0.8 percent of GDP from the spending side.
- Objectives:
  - Reduce the fiscal deficit and preserve debt sustainability.
  - Secure the revenue base to avoid recurrent revenue shortfalls that complicate fiscal management and require inefficient expenditure cuts.
- Tax-side measures and administration reforms:
  - Complete the major tax reform launched in 2013, including introduction of cash refunds for VAT credits and completion of all implementing regulations.
  - Stabilize the tax system and focus on complementary tax administration reforms:
    - Changes to the remuneration of tax inspectors to encourage broadening the tax base.
    - Increased staffing to resolve existing tax arrears, conduct a comprehensive audit of VAT credits, and intensify use of various sources of information.
  - Expected outcome: increase the tax revenue ratio by 0.3 percent of GDP in 2014.
  - An indicative revenue target introduced in the program; authorities committed to taking early corrective measures if a shortfall is expected at the time of the 7th review.
- Spending-side measures:
  - Substantial current expenditure streamlining: decrease in the current expenditure ratio of 0.8 percentage point of GDP.
  - Protect and increase investment ratio and develop key components of the social safety net (Family Security Allowance) and progress towards universal health coverage.
  - Target areas for streamlining:
    - Government utility bills.
    - Wage bill (focus on wage moderation to offset impact of new hiring).
    - Transfers, e.g., agriculture.
    - Higher education: improve targeting of scholarships and increase tuitions.
  - Restructuring of public agencies may produce medium-term savings but could generate short-term costs related to contract terminations and employee reallocation.
- Deficit target adjustments:
  - Overall deficit target somewhat higher than projected at the previous review by 0.2 percent of GDP, at 4.9 percent, to accommodate additional public investment and possible costs from agency restructuring.
- Medium-term objective:
  - Reduce budget deficit to 4.9 percent of GDP in 2014 and to less than 4 percent in 2015 through increased revenue and rationalized expenditure with emphasis on current expenditure efficiency.

### Senegal — 2014–2016 fiscal outcomes and 2016 measures
- IMF Country Report No. 15/2 executive summary: overall deficit expected to fall to about 5 percent of GDP in 2014 owing to stronger revenue performance and expenditure control.
- 2016 consolidation implemented:
  - 1.4 percent of GDP on the tax side (increase in revenues).
  - 1 percent of GDP on the spending side (lower public consumption).
- Fiscal outcomes noted in IMF Country Report No. 17/230 (p. 7):
  - Fiscal deficit declined from 5.5 percent of GDP in 2013 to 4.2 percent of GDP in 2016.
  - Revenue increased by 1.4 percent of GDP in 2016.
  - Public consumption fell by 1 percent of GDP in 2016.
  - Consolidation created fiscal space for investment in human capital (education, health, social safety nets) and critical public infrastructure (railways, roads, energy).
  - Improvements attributed to good tax administration performance and improved customs tax collection, particularly during the second half of 2016.
  - Authorities will continue efforts to increase revenue collection and rationalize public consumption, including controlling the wage bill, to meet the 3 percent of GDP WAEMU target by 2018.
- Tables cited:
  - Table 5 (IMF Country Report No. 17/230 and No. 18/8): tax revenue rose by 0.7 percent of GDP while expenditure increased by 1.1 percent of GDP between 2015 and 2016.

### Senegal — 2018 measures, revenue performance, and limits of consolidation
- 2018 consolidation focus:
  - About 0.3 percent of GDP on the spending side, motivated by meeting the WAEMU 3 percent of GDP ceiling.
  - Expenditure measures focused on reducing inefficient and low-priority domestically-financed capital expenditures.
- Specific 2018 spending actions (IMF Country Report No. 18/211):
  - Reduce goods and services across ministries by 0.1 percent of GDP.
  - Reduce investment by 1.0 percent of GDP via:
    - Holding off new domestically-financed investment projects not started (0.5 percent of GDP).
    - Delaying low-priority investment projects and cancelling inefficient projects (0.5 percent of GDP).
  - Ensure domestically-financed investment vetted through the newly created project bank and provide counterparty funding to avoid delays for priority development projects.
- Tax modernization and revenue mobilization measures:
  - Modernize tax and customs administration, strengthen tax policy, streamline tax expenditure.
  - Finalize report on pilot program to audit supporting documentation for approvals; implementation could bring CFAF 15 billion in 2018.
  - Limit discretionary measures in favor of comprehensive rules published on the internet (structural benchmark for the seventh review).
  - Amend General Tax Code with measures including:
    - Merging CODETTE and the telecommunications tax (Prélèvement sur les Télécommunications—PST).
    - Increasing tax rate on tobacco from 50 percent to 65 percent.
    - Raising the tax on alcoholic beverages from 40 percent to 50 percent.
    - Increasing tax on cosmetics from 10 percent to 15 percent.
    - Introducing a tax on insurance premiums similar to the PST.
  - Proposal of a new assessment criterion on the floor on tax revenue starting from end-June 2018 (replaces the related IT).
- Evidence of revenue shortfall and authorities’ actions (IMF Country Report No. 19/27, pp. 6-7):
  - Corporate taxes trending below projections.
  - New measures in the 2018 Budget and June 2018 Supplementary Budget had not yet yielded expected results (implementation started in March 2018 and July 2018).
  - Rationalization of exemptions and improved tax collection not forcefully implemented.
  - Before new policy measures, revenues projected to be below the end-year target by about 0.9 percent of GDP.
  - Expenditure expected to increase by another 0.2 percent of GDP, mainly higher transfers to the education sector.
  - Authorities decided to cut low-priority domestically-financed capital expenditure and non-wage current spending as needed to stay within the agreed fiscal envelope while protecting social outlays.
  - Authorities agreed to compensate above the line for “below-the-line” financing operations exceeding the program target, i.e., adding some 0.15 percent of GDP in spending cuts.
- Fiscal outcome comparisons across reports:
  - Table 5 (IMF Country Report No. 19/27, p. 35): projected decline in tax revenue of 0.2 percent of GDP and projected decline in expenditure of 0.2 percent of GDP between 2017 and 2018.
  - Table 5 (IMF Country Report No. 20/11, p. 30): decrease in tax revenue of 0.1 percent of GDP and a decrease in expenditure of 0.3 percent of GDP over the same period.
  - Conclusion: no fiscal gain realized on the tax side, and the spending-side gain was limited to about 0.3 percent of GDP.
- Official fiscal projection and collections (IMF Country Report No. 19/27, p. 54):
  - At end of the first half of 2018, collections amounted to 1065.3 billion and increased by 61.8 billion, or 6.2 percent in relative value, compared with the same period of the previous year.
  - Fiscal deficit projected to decline from 3.5 percent of GDP in 2018 to 3.0 percent in 2019, and stabilize at 3 percent for the medium term based on increased revenue mobilization and greater efficiency in public spending.

### South Africa — 1993/94 VAT increase and motivation
- Measure implemented:
  - Fiscal consolidation from the tax side amounting to 1.5 percent of GDP through an increase in the VAT rate.
  - Allocation to calendar years (due to fiscal year timing): 0.75*1.5 = 1.12 percent of GDP to calendar year 1993, and 0.25*1.5 = 0.38 percent of GDP to calendar year 1994.
- Motivation:
  - Desire to reduce the deficit after fiscal discipline had been eased considerably after 1990 and the central government deficit rose from 3 percent of GDP in 1990/91 to 8½ percent in 1992/93.
  - The replacement of the general sales tax with VAT at a lower rate had caused a decline in revenue from 5.9 percent of GDP in 1991/92 to 5 percent in 1992/93; raising the VAT rate to 14 percent in 1993/94 reversed the decline and collections reached 6.5 percent of GDP.

### South Africa — 1994/95 temporary surcharge and fiscal outcome
- Temporary measure:
  - A temporary surcharge of 5 percent on annual personal and corporate incomes exceeding R 50,000 to finance transition costs.
  - Projected yields: 0.6 percent of GDP in 1994/95 and 0.2 percent of GDP in 1995/96.
- Outcome:
  - Transition costs related to the elections offset consolidation efforts, resulting in no net budgetary savings.

### South Africa — 2016/17 fiscal episode (Eskom recapitalization effects)
- Fiscal change due to unwinding of a one-off recapitalization of Eskom; episode not included in the database.
- IMF Article IV (2017, No. 17/189) notes:
  - Fiscal policy stance moderately tightened in FY2016/17.
  - Headline deficit reduced to 3.9 percent of GDP from 4.5 percent the previous fiscal year.
  - Expenditures declined as a share of GDP, and remained broadly stable excluding the one-off recapitalization of Eskom that occurred during the previous fiscal year.
  - Gross tax revenues as a share of GDP remained stable in FY2016/17 despite considerable tax measures, as economic growth and revenue buoyancy fell short of expectations.
- Table 2 (p. 36): total expenditure decreased from 33.1% of GDP in 2015/16 to 32.8% in 2016/17; expenditures remained broadly constant when excluding the effects of the one-off operation.

### South Africa — 2018/19 fiscal measures and subsequent deterioration
- 2018 measures:
  - Fiscal consolidation from the tax side amounting to 0.7 percent of GDP in new revenue measures in 2018/19, including:
    - Increase in the VAT rate.
    - Limiting personal income tax bracket adjustments for inflation.
    - Increase in the fuel levy and excise duties.
  - Overall expenditure ceiling revised downward by R5.8 billion or 0.1 percent of GDP after reprioritization of spending.
  - Under baseline growth scenario, non-interest government spending targeted to remain at 26.6 percent of GDP.
  - Aim to stabilize the debt ratio at around 56.2 percent of GDP in 2022/23.
- Subsequent developments and projections:
  - IMF Country Report No. 20/33 (Press Release No. 20/23, p. 1) notes: "Fiscal deficits have been persistently large due to continued high expenditure despite weakening revenue performance and state-owned enterprise (SOE) bailouts. The government deficit is projected to reach 6½ percent of GDP in FY19/20, resulting in significant debt accumulation— projected to exceed 60 percent of GDP in FY19/20—and leaving South Africa with no fiscal space."
  - Report shows a projected deterioration with no projected increase in revenue, a projected increase in expenditure and net lending, and a projected deterioration of the overall and primary balance.
  - IMF Country Report No. 22/39 (Table 2, p. 44): shows an increase in revenue including grants of 0.5 percent of GDP but an increase in expenditure and net lending of 1.5 percent of GDP, and a deterioration in the overall and primary balances.

*Italic: Content extracted from the supplied source text.*

### Appendix  B.13.  TANZANIA

### Appendix  B.13.  TANZANIA

### Overview of fiscal consolidation episodes and motivations
- Consolidation episodes documented across fiscal years: 1994/95, 1995/96, 2000/01, 2007/08, 2011/12, and 2023/24.
- Recurrent motivations cited in source documents:
  - Ensuring fiscal sustainability and fiscal equilibrium.
  - Ensuring debt sustainability.
  - Sustaining medium- and long-term fiscal stability.
  - Responding to inflationary pressures (FY2011/12) — noted as endogenous to cyclical conditions and not treated as a narrative fiscal action.
  - Creating fiscal space to finance priority investment and social spending while safeguarding debt sustainability (FY2023/24).

### Tanzania 1994/95 — revenue-side consolidation (2.8 percent of GDP)
- Fiscal gain and allocation:
  - A fiscal consolidation amounting to 2.8 percent of GDP from the revenue side.
  - In line with Tanzania’s fiscal year, allocate ½ of the fiscal gain, amounting to 1.4 percent of GDP, to each calendar year (1994 and 1995).
- Objectives stated in EBS/94/210 (pages 11-12):
  - Achieve a modest overall budget surplus (checks issued, after grants) of 0.2 percent of GDP, implying an overall deficit (excluding grants) of 8.6 percent of GDP, compared with 11 percent (excluding grants) in 1993/94.
  - Generate government recurrent savings of 1.5 percent of GDP.
  - Make a net repayment of 1.5 percent of GDP by the Government to the banking system.
- Revenue strategy and measures (effective July 1, 1994):
  - Total government revenue projected to increase to T Sh 329 billion, or by 3.5 percentage points of GDP, to 24.5 percent of GDP.
  - Revenue measures expected to yield additional revenue of T Sh 37 billion in 1994/95, or 2.8 percent of GDP.
  - Measures included: extending sales taxes to a wide range of services; levying an import duty of 10 percent on imported crude oil; introducing a withholding tax on interest income from treasury bills; raising road tolls and a majority of fees and charges; increasing the maximum tariff rate from 40 percent to 50 percent.
  - Strengthening customs administration, enforcing strict control over bonded warehouses and transit trade, and introducing a taxpayer identification number system in 1994/95.
  - Preparatory steps toward the introduction of the value-added tax (VAT) by January 1996.
  - Elimination of most tax exemptions that had led to sizable revenue losses.

### Tanzania 1995/96 — spending-side consolidation (0.7 percent of GDP)
- Fiscal gain and allocation:
  - A fiscal consolidation from the spending side amounting to 0.7 percent of GDP.
  - Resulted from cuts in recurrent expenditure (1.1 percent of GDP), partially offset by an increase in development expenditure and net lending (0.4 percent of GDP).
  - Motivated by ensuring fiscal sustainability.
  - In line with Tanzania’s fiscal year, allocate ½ of the fiscal gain, amounting to 0.35 percent of GDP, to each calendar year 1995 and 1996.
- Context and measures (SM/95/291; EBD/96/140):
  - Objective: rectify major imbalances generated largely by weak fiscal performance; focus on major strengthening of the fiscal position in 1995/96.
  - 1995/96 budget aimed to improve tax compliance; initial tax rate reductions without administrative improvements led to revenue losses.
  - New government (November 1995) introduced revenue-enhancing measures and substantial cuts in recurrent expenditure focused on low priority areas.
  - Stringent cash management and strengthened expenditure control procedures applied.
  - Result: fiscal performance improved markedly in the second half of the fiscal year.
  - Inflation decline: year-end inflation declined to 18.0 percent by August 1996, from a peak of 38 percent for the year ended February 1995, and an annual average of almost 30 percent in 1992/93-1994/95.
- Fiscal accounts (IMF Staff Country Report No. 99/24, Table 18, p. 61):
  - Decrease in total expenditure and net lending of 0.7 percent of GDP, mainly driven by a decline in recurrent expenditure of 1.1 percent of GDP, partially offset by an increase in development expenditure and net lending of 0.4 percent of GDP between 1994/95 and 1995/96.
  - Total revenue increased by 0.7 percent of GDP over the same period, entirely due to a rise in nontax revenue; tax revenue remained unchanged at 11.3 percent of GDP.

### Tanzania 2000/01 — spending-side consolidation (0.2 percent of GDP)
- Fiscal gain and allocation:
  - A fiscal consolidation from the spending side amounting to 0.2 percent of GDP.
  - Motivated by ensuring debt sustainability.
  - In line with Tanzania’s fiscal year, allocate ½ of the fiscal gain, amounting to 0.1 percent of GDP, to both calendar years 2000 and 2001.
- Outcomes and drivers (EBS/01/153, Staff Report for 2001 Article IV Consultation and Third Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, pp. 5-6 and Table 5, p. 33):
  - Government revenue attained the equivalent of 12.2 percent of GDP, compared with 11.8 percent targeted and 11.3 percent in 1999/2000.
  - Income tax revenue more buoyant than expected, more than compensating for lower-than-expected collections from VAT and excises on domestically produced goods.
  - Petroleum sector revenue increased from about T Sh 103 billion in 1999/2000 to over T Sh 190 billion in 2000/01.
  - Government expenditure lower than programmed, mainly due to lower-than-expected foreign-financed development expenditure.
  - Wage bill declined from 4.2 percent of GDP in 1999/2000 to 4 percent in 2000/01.
  - Recurrent expenditure on priority sectors increased from the equivalent of 4.1 percent of GDP in 1999/2000 to 4.6 percent in 2000/01.
  - Table 5 shows a decrease in total expenditure mainly due to a decline in foreign-financed development expenditure (1.7 percent of GDP), while wages and salaries decreased by 0.2 percent of GDP.

### Tanzania 2007/08 — revenue-side consolidation (1 percent of GDP)
- Fiscal gain and allocation:
  - A fiscal consolidation from the revenue side amounting to 1 percent of GDP.
  - Motivated by ensuring medium- and long-term fiscal sustainability.
  - In line with Tanzania’s fiscal year, allocate ½ of the fiscal gain, amounting to 0.5 percent of GDP, to each calendar year (2007 and 2008).
- Measures and administration improvements (IMF Country Report No. 08/9, p. 36; Statement by Executive Director for Tanzania and Senior Advisor, Dec 21, 2007):
  - Programme projects revenue would reach 16.0 percent of GDP for 2007/08; substantial increase reflects specific measures expected to yield about 1 percent of GDP and continued strengthening of tax administration.
  - Policy measures: indexation of specific excise duty rates; adjustment of forestry and hunting fees; adjustment of the fuel levy and road user charges.
  - Revenue administration measures: strengthen audits in key areas including mining; progress on introduction of electronic filing; tightening procedures for medium taxpayers by establishing specialized units in district offices; improved customs processes to enhance control of fuel products.
  - Government to publish the list of tax exemption beneficiaries each quarter.
- Outcomes (IMF Country Report No. 09/13, Table 3, p. 27; IMF Country Report No. 09/179, Table 4, p. 35):
  - Improvement in the overall balance, before grants (2.1 percent of GDP) and after grants (4.1 percent of GDP) in one report; another shows before grants (2 percent of GDP) and after grants (4 percent of GDP).

### Tanzania 2011/12 — contractionary fiscal policy responding to inflationary pressures
- Characterization:
  - Fiscal policy in FY2011/12 was contractionary and responded to inflationary pressures.
  - Because it was endogenous to cyclical conditions, this episode is not considered a narrative fiscal action.
- Measures and effects (IMF Country Report No. 12/23, p. 4):
  - Authorities eliminated non-priority recurrent spending and delayed some development spending to next year.
  - Projected overall fiscal deficit reduced from a budgeted 7½ percent of GDP to 6½ percent of GDP for the current fiscal year.
  - Recommendation: further tightening of fiscal policies in the 2012/13 budget to further reduce the overall deficit and keep net domestic financing at low levels; focus on strengthening the revenue base and streamlining recurrent spending.

### Tanzania 2023/24 — combined tax and spending consolidation (1.5 percent of GDP)
- Fiscal gain and allocation:
  - A fiscal consolidation amounting to 0.5 percent of GDP from the tax side and 1 percent of GDP from the spending side.
  - Motivated by ensuring fiscal and debt sustainability.
  - In line with Tanzania’s fiscal year, allocate ½ of the fiscal gain, amounting to 0.25 percent of GDP from the tax side and 0.25 percent of GDP from the spending side, to each calendar year 2023 and 2024.
- Planned adjustment and projections (IMF Country Report No. 23/153, pp. 11-13; MEFP references):
  - Draft FY2023/24 budget is tighter than ECF program expectations, targets a primary deficit of 0.7 percent of GDP (tighter by 0.5 ppts of GDP than ECF program projections), corresponding to a 1 ppt of GDP consolidation compared to the current fiscal year budget.
  - Expected to be achieved through improvements in revenue collections (about 0.5 ppts of GDP) and cuts in non-priority expenditure (about 0.5 ppts of GDP).
  - Revenue projected to increase by about 0.5 ppts of GDP to 14.9 percent, supported by new tax measures planned to be instituted and implemented in FY2023/24.
- Tax policy and administration measures (IMF Country Report No. 23/153, p. 13):
  - Authorities plan tax policy and administration measures, including on indirect taxes (with estimated revenue yield of 0.3 percent of GDP), interfacing the IT system of the Revenue Authority with those of prioritized government institutions, and other administrative measures with a combined estimated revenue yield of about 0.5 ppts of GDP a year effective in FY2023/24.
  - Staff recommendations: additional reforms to broaden the tax base, modernize tax administration, reduce compliance costs, and rationalize tax exemptions; expedite verification and payment of VAT refunds through leveraging technology to clear backlog of VAT refund arrears and reduce cost of compliance.
- Implementation and outcomes (IMF Country Report No. 24/349, pp. 5 and 67):
  - Fiscal consolidation was achieved in FY2023/24 through both improvements in revenues and adjustments in spending.
  - Domestic primary balance improved by 1.4 ppts of GDP, slightly better than the budget estimate and the program target.
  - Domestic revenues improved by 0.4 ppts of GDP compared to FY2022/23.
  - Adjustment included a significant adjustment to primary current spending (by 1 ppts of GDP) and a modest improvement in domestic revenue mobilizations (by 0.4 ppts of GDP).
  - Priority social spending was increased by 0.7 percentage points of GDP in line with program targets.
  - Staff view: fiscal consolidation, if executed as planned, will help buttress fiscal sustainability.

*wpiea2026011-source-pdf - Appendix  B.13.  TANZANIA*

### Appendix  B.14.  UGANDA

### Appendix  B.14.  UGANDA

### Uganda 1993/94
- Fiscal consolidation from the tax side offset by increased spending on high-priority areas and civil service salaries.
- Principal tax measures (as described):
  - Enlarged income tax coverage incorporating allowances and benefits as part of taxable income; reduced number of tax brackets; increased threshold for income tax; reduced top marginal rate of income tax from 40 percent to 30 percent for incomes above U Sh 4,200,000.
  - More effective taxation of rental income from real estate at a rate of 20 percent on 80 percent of gross rent in excess of U Sh 840,000 per annum.
  - Increased import duties and indirect taxes on fuel and other imports including the reimposition of a minimum 10 percent customs tariff on raw materials.
  - Higher domestic indirect taxes on beer, cigarettes, and soft drinks.
  - Rationalized structure of customs tariffs from a six-rate (with duty rates ranging from zero to 30 percent) and a reduction in exemptions.
  - Streamlined investment incentives combined with a reduction of the rate of corporate income tax from 35 percent to 30 percent.
  - Removal of controls on pump prices of petroleum products (implementation timetable under consideration).
- Budget targets:
  - Revenues targeted to increase by 34 percent to 9.5 percent of GDP.
  - Expenditure and net lending budgeted to increase by 18 percent to 21.1 percent of GDP.
  - Overall deficit lowered to 11.6 percent of GDP, compared with 12.1 percent in 1992/93.

### Uganda 1994/95
- Fiscal consolidation from the tax side amounting to 1 percent of GDP; implemented in response to a temporary coffee price boom and therefore not classified as a narrative fiscal action.
- Program targets and discretionary measures:
  - Overall deficit target reduced to 7.7 percent of GDP.
  - Total revenues (including discretionary measures) expected to increase by 1 percentage point to 9.5 percent of GDP.
  - Discretionary revenue measures included:
    - Increase in withholding tax on commercial transactions from 2 percent to 4 percent.
    - A 2 percentage point increase in the rate of the sales tax, except essential foods.
    - Extension of the commercial transactions levy (CTL) to road transport.
    - Introduction of a withholding tax on interest earned on deposits from financial institutions.
    - Shift of collection of "other nontax" revenues to the Uganda Revenue Authority (URA) and a special unit in the Uganda Development Bank (UDB).
    - Actions to remove discretionary exemptions and improve customs duty collection.
    - Elimination of exemptions granted to parastatals from paying taxes.
    - Increase in fees and charges on motor vehicles by 50 percent.
    - Reduction of the excise duty on beer and soft drinks by 10 percentage points.
    - Imposition of a stabilization (graduated windfall) tax on coffee: 20 percent when price is between U Sh 1,100 and 2,200 per kilogram; 40 percent when price exceeds U Sh 2,200 per kilogram.
- Context and motivation:
  - Average price for Ugandan coffee increased by over 120 percent from US$1.14 per kg in 1993/94 to US$2.52 in 1994/95, yielding a windfall equivalent to about 3.7 percent of GDP.
  - Government sterilized inflows (treasury bill sales and windfall tax) and pursued expenditure restraint to contain exchange rate appreciation and inflation.
  - Adjustment was cyclical and motivated by a coffee price boom; therefore not a narrative fiscal shock.

### Uganda 1995/96 (VAT reform and subsequent years)
- Planned fiscal consolidation from the tax side amounting to 1.1 percentage points was initially programmed; implementation issues limited actual revenue gains.
- VAT implementation:
  - Broad-based VAT announced for implementation during 1995/96; implementing committee constituted; legislation to be drafted by end-December 1994; rate to be set consistent with medium term revenue objectives.
  - VAT introduced on July 1, 1996 with a single positive rate of 17 percent, replacing a sales tax at rates between 12 percent and 30 percent.
- Operational problems after introduction:
  - Number of potential VAT taxpayers larger than planned; resistance escalated into a strike in late September to early October 1996.
  - Installed computer system not adaptable enough for VAT management.
  - Response to the strike and subsequent administrative priorities exacerbated compliance problems.
  - As a result, compliance was poor during the first few months and remained below expectations during the first year.
- Revenue outcomes and attribution:
  - Table 23 shows tax revenue increased by 0.5 percent of GDP in 1995/96, reaching 10.4 percent of GDP, and by 0.5 percent of GDP again in 1996/97, reaching 10.9 percent of GDP.
  - Given timing and compliance issues, the fiscal gain is attributed to FY1996/97 as a narrative fiscal shock from the tax side amounting to 0.5 percent of GDP.
  - Allocation to calendar years (Uganda fiscal year July 1–June 30):
    - 0.25 percent of GDP (½ of 0.5 percent) to calendar year 1996.
    - 0.25 percent of GDP to calendar year 1997.

### Uganda 2002/03
- Fiscal consolidation from the spending side amounting to 0.4 percent of GDP implemented in FY2002/03.
- Narrative fiscal action recorded as 0.2 percent of GDP in each calendar year 2002 and 2003 (half-year allocation in line with fiscal year).
- Policy motivation and outcomes:
  - Fiscal policy aimed to reconcile resources for poverty reduction with financial sustainability; overall deficit before grants targeted to fall over 2002/03–2004/05.
  - Budget for 2002/03 envisaged reduction in deficit (before grants) of 2.2 percent of GDP to 10.4 percent of GDP.
  - Domestic budget deficit projected to fall by about 1.7 percent of GDP to 4.9 percent of GDP in 2002/03.
  - IMF reporting indicates a substantial fiscal adjustment achieved in 2002/03: overall fiscal deficit before grants narrowed by 1.4 percentage points to 11.4 percent of GDP; government revenues steady at 12.3 percent of GDP.
  - Reduction attributed to expenditure restraint: 0.4 percent of GDP from current spending and 0.6 percent of GDP from reduced payments on outstanding domestic arrears.
- Only the 0.4 percent of GDP reduction from current spending qualifies as a policy-driven consolidation.

### Uganda 2005/06
- Fiscal consolidation from the tax side amounting to 0.5 percent of GDP, motivated by reducing donor dependency and improving economic efficiency.
- Allocation to calendar years (Uganda fiscal year):
  - 0.25 percent of GDP (½ of 0.5 percent) to calendar year 2005.
  - 0.25 percent of GDP to calendar year 2006.
- Supporting context:
  - Fiscal consolidation through end-June 2005 greater than programmed mainly because pace of foreign-financed development spending was slower than envisaged; domestic financing was well below program ceiling.
  - Medium-term strategy targets continued expenditure restraint and an increase in domestic revenue by about 0.5 percent of GDP a year through tax measures or improved collection efficiency.
  - Projections envisaged reducing overall deficit excluding grants to 6.6 percent of GDP by 2007/08 from 8.8 percent in 2005/06.
  - 2005/06 developments: overall deficit ratio excluding grants declined by 1 percentage point to 7.5 percent of GDP, reflecting both higher tax revenues and lower donor-financed development expenditures; budget grants fell by more than 1 percent of GDP.

### Uganda 2006/07
- Fiscal consolidation from the tax side amounting to around 0.5 percent of GDP was planned, but offset by increased expenditures including emergency energy-related spending and infrastructure investment.
- Revenue expectations:
  - Tax revenues targeted to increase by about 0.5 percent of GDP through URA efficiency gains and broadening of tax bases.
  - Domestic revenue collections expected to rise by 0.4 percent of GDP on the basis of efficiency gains and increases in some taxes and fees.
  - IMF technical assistance estimated URA modernization could yield 1½ to 3 percent of GDP in revenue gains over the next five years.
- Offsetting expenditures and fiscal impact:
  - Overall deficit excluding grants expected to widen by over 1 percent of GDP primarily due to energy crisis spending; excluding energy crisis spending the deficit projected to remain almost unchanged compared with 2005/06.
  - Domestic financed energy crisis spending of 1 percent of GDP, about one half earmarked for a ring-fenced energy fund.
  - Foreign financed energy crisis spending about 0.3 percent of GDP.
  - Other expenditures: increase in primary school teacher salaries and provisions to start universal post primary education; onetime spending for October 2007 Commonwealth Heads of Government Meeting; doubling of provisions for domestic arrears clearance to 0.8 percent of GDP; negative net domestic financing of about 1 percent of GDP.
  - Main new electricity-related spending of 1.1 percent of GDP, about 0.5 percent of GDP earmarked for a new Energy Fund; remainder to subsidize new thermal generators.
  - Additional investment in roads; near doubling in budgeted allocation for domestic arrears payments to U Sh 149 billion; provisions for Commonwealth meeting.

### Uganda 2007/08
- The previously discussed fiscal consolidation from the tax side amounting to 0.5 percent of GDP is maintained.
- Revenue collection outcome:
  - Revenue collection exceeded initial projections, with a total yield of 0.7 percent of GDP.
  - Allocation to calendar years (Uganda fiscal year): ½ of the budgetary saving (0.35 percent of GDP) to each calendar year.

*Source: Appendix  B.14.  UGANDA (excerpt from wpiea2026011-source-pdf)*

### 0.3 percent of GDP. Accordingly, the end-June assessment criterion on net credit to government was met.”

### 0.3 percent of GDP. Accordingly, the end-June assessment criterion on net credit to government was met.

### 2007/08 — Revenue targets and tax administration
- Government targeted an improvement in domestic revenue by 0.7 percentage point of GDP, to 14.1 percent of GDP.
- Targeted reduction in the deficit excluding grants.
- Rationale for feasibility: better-than-expected tax revenue performance during the last quarter of 2006/07 and the first quarter of 2007/08, tight control over nonpriority spending, and continued efforts to improve tax administration.
- Policy of annually increasing tax collections by 0.5 percent of GDP remains in place.
- On track in 2006/07, raising the ratio by 0.3 percentage points despite the electricity crisis; modernization at the Uganda Revenue Authority and a few tax changes approved by Parliament planned to keep on track.
- Plan to produce a tax procedure code to help individuals and businesses better understand their tax obligations.
- Statistical tables in subsequent reports confirm an increase in tax revenue of about 0.7 percent of GDP during 2007/08.
- Implementation risk noted: high cost of electric power and temporary excise tax refunds on fuel used for large commercial generators could adversely affect near-term implementation.

### 2011/12 — Contractionary fiscal policy to support disinflation
- Fiscal policy designed to support monetary policy in reducing inflation.
- Overall deficit (including grants) brought down to 3.8 percent of GDP in FY2011/12, compared to 7.2 percent in FY2010/11.
- Comparable figures excluding exceptional security spending: 3.2 and 4.7 percent of GDP, respectively.
- Reduction in current spending by 4.2 percentage points of GDP (excluding exceptional security spending, reduction by 2.3 percentage points of GDP).
- Increase in development spending by 0.8 percentage points of GDP.
- Adjustment implies a contractionary fiscal impulse.
- Growth forecast for FY2011/12 cut from 5 to 4¼percent due to weak external environment and tight fiscal and monetary policies.
- Government target: reduce inflation to single digits by end of calendar year 2012, and to 5 percent for core inflation by the middle of calendar 2013.
- Root causes of inflationary pressures: higher food prices and pass-through of exchange rate depreciation.

### 2012/13 — Reallocation: current spending down, capital up for Karuma
- Fiscal program projects overall fiscal deficit to decline by 1¼ percentage points to 3½ percent of GDP, while accommodating a 1 percent of GDP increase in capital spending.
- Adjustment to be funded mainly by 2 percentage points of GDP savings from compression of current expenditure—about 1½ percentage points from cessation of one-off outlays on exceptional security procurement, power sector subsidies, and clearance of power sector arrears.
- Capital spending dominated by start of Karuma hydropower project, projected to absorb almost 2 percent of GDP (35 percent of total domestically funded investment), funded by accumulated savings in the Petroleum Fund.
- Evidence indicates overall expenditure increased rather than declined in FY2012/13:
  - Projected increase in expenditures and net lending of 1.3 percent of GDP, to 19.9 percent in 2012/13 (Table 2b, IMF Country Report No. 13/25).
  - Actual increase of 0.9 percent of GDP to 16.5 percent in 2012/13 (Table 2b, IMF Country Report No. 15/175).
- Underperformance on Karuma project (slow preparation and procurement irregularities investigation) led to a lower-than-expected deficit.
- Financing of the deficit came mainly from external sources.
- Stock of arrears and payment delays remained broadly stable compared to end-June 2011.
- Conclusion: the fiscal adjustment of 2 percent of GDP from current expenditure compression was offset by increased capital spending linked to Karuma; statistical fiscal operations tables do not reflect budgetary savings from the fiscal consolidation.

### 2014/15 — Revenue-enhancing measures implemented in response to cyclical conditions
- Authorities embarked on an ambitious revenue enhancing program that yielded tax revenue beyond expectations.
- Expenditures kept below budget level due to delays in external disbursements for HPPs.
- A supplementary budget to reallocate resources did not add expenses to the budget but, together with delays in HPPs, tilted spending toward current spending.
- Earlier projection: revenue measures and improved tax administration expected to add about ½ percent of GDP in tax revenue in the next fiscal year.
- Fiscal response accompanied monetary policy measures to address volatile foreign exchange flows, declining commodity prices, and complex geopolitical environment.

### 2015/16 — Tax-side consolidation partly offset by increased public investment
- FY2015/16 budget increased overall fiscal deficit to 7 percent of GDP, largely financed by NCB on favorable terms.
- Deficit expansion explained by boost in public investment (mainly infrastructure financed by NCB with a grant element of about 11½ percent) and an increase in interest payments, partially offset by additional tax revenue gains.
- Revenue-to-GDP ratio set to rise by 0.6 percentage points through policy measures and efficiency gains:
  - Increase in excise taxes: 0.2 percent
  - Expansion in scope of withholding taxes: 0.1 percent
  - Imposition of VAT on discounted taxable supply of services at fair market value: 0.1 percent
  - Increase in fees and stamp duties: 0.1 percent
  - Improved compliance data use and better collaboration among ministries and private sector: 0.1 percent

### 2021/22 — Large consolidation focused on spending and revenue mobilization
- Total fiscal consolidation of 3.1 percent of GDP:
  - Spending-side fiscal adjustment: 2.4 percent of GDP (0.7 percent of GDP reduction in non-priority current spending; 1.7 percent of GDP cut in capital expenditures).
  - Tax-side adjustment: 0.7 percent of GDP from implementation of the Domestic Revenue Mobilization Strategy (DRMS).
- Narrative fiscal shock recorded as 1.55 percent of GDP in each calendar year 2021 and 2022 (1.2 percent from spending side and 0.35 percent from tax side per year).
- Non-recurrence of one-off items to contribute: recapitalization of the Bank of Uganda (0.3 percent of GDP) and on-lending to the Uganda Development Bank (0.3 percent of GDP).
- Decline in security spending by around 1 percent of GDP in FY21/22 to create room for higher social spending (including vaccinating another 20 percent of the population).
- Motivation: ensure debt sustainability and promote economic efficiency.
- Revenue mobilization measures under DRMS expected yields:
  - 0.7 percent of GDP in FY21/22 and 0.5 percent of GDP on average per year over the medium term.
  - Tax exemption rationalization plan to identify at least 0.1 percent of GDP in tax exemptions that can be rationalized in FY 2022/23 and at least 0.2 percent of GDP in subsequent years.
- Additional cost-saving measures: align spending priorities with NDPIII, apply new project selection criteria, cut projects not appraised or without identified funding.
- Planned IMF technical assistance: public investment management assessment expected in the first half of 2022.

### 2023/24 — Small spending-side consolidation to preserve debt sustainability
- Fiscal consolidation amounting to 0.6 percent of GDP from the spending side.
- Allocation in calendar years (per fiscal year alignment): ½ of the budgetary savings, amounting to 0.3 percent of GDP, to each calendar year (2023 and 2024).
- DRMS target: increase in revenue-to-GDP ratio of 0.5 percentage point per year.
- Authorities identified additional administrative and tax policy measures expected to increase FY23/24 tax revenue ratio by 0.6 percentage point relative to FY22/23.
- New grant commitments and higher-than-expected non-tax revenues (mainly due to stronger enrollment in higher education) expected to raise total government revenues in FY23/24 by 0.3 percent of GDP relative to the combined 2nd-3rd reviews.
- Debt-to-GDP level expected to stay below levels projected at combined 2nd-3rd reviews, helped by higher nominal GDP in FY22/23 and stronger fiscal consolidation in FY23/24.
- Actual composition of fiscal adjustment differed from original plan:
  - ECF envisaged consolidation of 5.4 percent of GDP driven by higher domestic revenues, reduction in current and domestically-financed development spending, and increase in externally-financed development spending.
  - Actual improvement of 4.8 percent of GDP was mainly driven by a decrease in both domestically- and externally-financed development spending (close to 5 percent of GDP) and small gains in domestic tax revenues, partly offset by an increase in current spending (1.1 percent of GDP).
- Table 2b shows:
  - Decline in tax revenue by 0.4 percent of GDP.
  - Decrease in expenditure and net lending by 0.9 percent of GDP, of which a decrease in externally-financed development expenditures of 0.3 percent of GDP.
- Recorded spending-side fiscal consolidation: 0.6 percent of GDP.

*Source: wpiea2026011-source-pdf - 0.3 percent of GDP. Accordingly, the end-June assessment criterion on net credit to government was met.*

### Appendix  C.  Comparison of Narrative Deficit-driven Shocks and CAPB

### Appendix C. Comparison of Narrative Deficit-driven Shocks and CAPB

### Overview
- This appendix examines 17 cases where the discrepancy between fiscal policy changes identified through the narrative approach and those derived from changes in the CAPB exceeds 2.5 percent of GDP.
- In all but four instances—Ghana (2018), Nigeria (2013), and Senegal (1995/96)—the increase in the CAPB is larger than the fiscal consolidation identified in the historical policy record.
- CAPB data source: the April 2025 vintage of the WEO database. CAPB estimates are unavailable for several years across the 1990-2024 sample of 14 SSA economies; the authors construct their own measure based on the conventional procedures (Escolano, 2010).

### Cases where CAPB indicates larger improvements than the narrative approach (CAPB likely overstates consolidation or reflects cyclical/policy-mixing factors)
- Angola, 2000
  - Narrative: No evidence of discretionary fiscal consolidation undertaken by policymakers with long-term objectives exogenous to contemporaneous economic conditions.
  - CAPB: Improvement of 9.1 percent of GDP.
  - Assessment: Medium-term tax reform aimed mainly at reducing inflation and included tax-side stimulus measures; observed CAPB improvement largely reflects cyclical or policy-mixing factors rather than a genuine consolidation effort.

- Angola, 2010
  - Narrative: No evidence of a discretionary, deficit-driven fiscal consolidation motivated by long-term fiscal sustainability objectives and independent of cyclical developments.
  - CAPB: Improvement of 9.52 percent of GDP.
  - Assessment: Fiscal tightening in 2010 was primarily a response to cyclical conditions (sharp decline in oil prices at the end of 2008). Temporary fiscal restraint was offset by increased spending to clear arrears and higher capital expenditures; episode reflects procyclical adjustment and expenditure reallocation rather than deficit-driven consolidation.

- Angola, 2015
  - Narrative: No discretionary fiscal consolidation for a long-term objective and exogenous to contemporaneous economic conditions.
  - CAPB: Improvement of 3.45 percent of GDP.
  - Assessment: Consolidation on the spending side (reductions in capital and current expenditure) was motivated by cyclical conditions, particularly commodity price volatility.

- Angola, 2018
  - Narrative: No discretionary fiscal consolidation implemented by policymakers motivated by a long-term objective and exogenous to contemporaneous economic conditions.
  - CAPB: Improvement of 9.07 percent of GDP.
  - Assessment: Consolidation implemented to preserve macroeconomic stability, notably to mitigate inflationary effects of greater exchange rate flexibility.

- Cameroon, 2005/06
  - Narrative: No discretionary fiscal consolidation consistent with a long-term or exogenous policy objective.
  - CAPB: Improvement of 3.41 percent of GDP in 2005 and 24.75 percent of GDP in 2006.
  - Assessment: Fiscal adjustment was implemented but fiscal gains were largely offset by substantial increases in social and infrastructure spending in subsequent years; CAPB improvement overstates true extent of discretionary tightening.

- Ghana, 2014
  - Narrative: No discretionary fiscal consolidation motivated by long-term objectives and exogenous to contemporaneous conditions.
  - CAPB: Improvement of 2.52 percent of GDP.
  - Assessment: Fiscal tightening implemented in 2014 was motivated primarily by cyclical considerations, not medium-term fiscal sustainability objectives.

- Ghana, 2021
  - Narrative: No evidence of a discretionary fiscal consolidation motivated by long-term fiscal objectives.
  - CAPB: Improvement of 6.25 percent of GDP.
  - Assessment: Policymakers announced measures totaling 1.3 percent of GDP (0.9 percent revenue increases and 0.4 percent expenditure cuts); actions aimed at maintaining macroeconomic stability in the face of short-term pressures and therefore cyclically motivated.

- Ghana, 2023
  - Narrative: No evidence of a discretionary, deficit-driven fiscal consolidation motivated by long-term objectives.
  - CAPB: Improvement of 4.12 percent of GDP.
  - Assessment: Fiscal consolidation implemented with revenue measures amounting to 1 percent of GDP, but adjustment was motivated by cyclical factors (response to deterioration in investor confidence following tighter global financing conditions).

- Mozambique, 1995
  - Narrative: No evidence of a discretionary fiscal consolidation motivated by long-term fiscal objectives.
  - CAPB: Improvement of 2.75 percent of GDP.
  - Assessment: Fiscal adjustment undertaken—3.4 percent of GDP on the revenue side and 4.8 percent on the spending side—but measures were explicitly motivated by inflation concerns rather than deficit reduction or debt sustainability.

- Mauritius, 2021
  - Narrative: No evidence of an implemented fiscal consolidation.
  - CAPB: Improvement of 5.88 percent of GDP.
  - Assessment: Improvement in the deficit reflects mostly receipts from the sale of government assets to a central bank corporation. Noted in the 2022 Staff Report (IMF Country Report 22/223): “(...) Deficit reduction has been helped by receipts from quasi-fiscal operations although it remains burdened by the pandemic and renewed pressures on current spending. (...) The improvement is mostly due to the sale of shares of Airport Holdings Ltd to the BOM-owned Mauritius Investment Corporation (MIC).”

- Nigeria, 1995
  - Narrative: No evidence of a discretionary fiscal consolidation exogenous to contemporaneous economic conditions.
  - CAPB: Improvement of 4.45 percent of GDP.
  - Assessment: Improvement attributed to higher oil prices boosting revenues and reducing the fiscal deficit; CAPB change does not reflect deliberate fiscal consolidation.

- Nigeria, 2011
  - Narrative: No evidence of a discretionary fiscal consolidation motivated by long-term objectives.
  - CAPB: Improvement of 3.55 percent of GDP.
  - Assessment: Authorities planned to reduce the fiscal deficit from 6.1 percent of GDP in 2010 to 2.7 percent in 2013, but adjustment was largely driven by cyclical considerations. Overall deficit decline in 2011 was primarily the result of higher oil prices, not discretionary fiscal measures.

### Cases where the narrative approach identifies discretionary consolidations missed or understated by CAPB
- Ghana, 2018
  - Narrative: Identify a discretionary fiscal consolidation implemented by policymakers.
  - CAPB: Deterioration of 2.7 percent of GDP (implying a worsening of the fiscal deficit).
  - Assessment: Authorities implemented revenue-based measures amounting to 0.33 percent of GDP, motivated by the need to reduce debt. CAPB understates the fiscal tightening effort.

- Nigeria, 2013
  - Narrative: Identify a discretionary fiscal consolidation undertaken by policymakers.
  - CAPB: Deterioration of 1.86 percent of GDP (implying a rise in the deficit).
  - Assessment: Authorities implemented a spending-based consolidation of 1 percent of GDP, motivated by debt sustainability and strengthening the medium-term fiscal position. CAPB fails to reflect the true policy stance.

- Senegal, 1995/96
  - Narrative: Identify a discretionary fiscal consolidation implemented by the authorities.
  - CAPB: Deterioration of 4.71 percent of GDP in 1995 and 1.65 percent of GDP in 1996 (both suggesting larger deficits).
  - Assessment: Historical record shows government implemented a fiscal consolidation totaling 3.7 percent of GDP—1.5 percent from the revenue side and 2.2 percent from the spending side—motivated by the need to reduce the fiscal deficit. CAPB fails to capture this substantial consolidation effort documented in official sources.

### Key patterns and assessments
- Many large CAPB improvements reflect cyclical factors (e.g., commodity price swings, higher oil revenues), one-off receipts (e.g., asset sales), or policy-mixing (simultaneous stimulus measures), rather than discretionary, deficit-driven consolidations motivated by long-term fiscal sustainability objectives and exogenous to contemporaneous economic conditions.
- In a minority of cases, the narrative approach documents deliberate consolidation efforts (revenue or expenditure measures) that the CAPB either understates or records as deteriorations.
- The comparison underscores the importance of complementing CAPB-based assessments with narrative evidence to distinguish genuine, action-driven fiscal consolidations from cyclical revenues, one-off operations, and reallocation of spending.

*Source: Appendix C. Comparison of Narrative Deficit-driven Shocks and CAPB — A Narrative Fiscal Consolidation Dataset for Sub-Saharan Africa, Working Paper No. WP/2026/011*

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_Source: https://www.imf.org/-/media/files/publications/wp/2026/english/wpiea2026011-source-pdf.pdf_