## IMF Survey: Better Business Climate Can Soften Crisis Impact on Africa

_IMF News, April 22, 2012_

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## Bibliographic details
- Published: April 22, 2012

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### Overview: ministers' assessment and priorities
- African finance ministers at the 2012 IMF-World Bank Spring Meetings said faster domestic policy reforms that encourage foreign investment would help maintain sustainable and inclusive growth.
- Ministers highlighted that rising global commodity prices were making Africa’s food and energy imports significantly more expensive.
- Policy responses emphasized:
  - Improving the business climate through fiscal reforms.
  - More efficient domestic farm production to replace imported foodstuffs.
  - Enhanced regional integration and intraregional trade to accelerate import substitution.

### Country reports and specific developments
- Mozambique (Finance Minister Manuel Chang):
  - Reported lower foreign trade volumes, declining export prices, a drop in foreign investment, reduced aid flows, and falling remittances as a result of the global economic crisis.
  - Response: addressing falling foreign investment by improving the business climate through fiscal reforms; stimulating startups and job creation to counter falling remittances.
  - Noted membership: Southern African Development Community promotes intraregional trade.

- Mauritius (Finance Minister Xavier-Luc Duval):
  - Mauritius sends 65 percent of its exports of sugar and textiles to European consumers, who were reducing demand.
  - Expected subdued tourism and foreign investment for the year.
  - Government actions: diversified the economy and reformed the tax structure to make conditions more business friendly.
  - Result cited: Mauritius being the first African country to make the top 10 in the Heritage Foundation-Wall Street Journal Index of Economic Freedom.

- Burundi (Finance Minister Tabu Abdallah Manirakiza):
  - Experiencing impacts on growth and budget from the global financial crisis.
  - Authorities advancing a second-generation poverty reduction strategy and focusing on tourism development.
  - Noted improvement: rising in the rankings of the World Bank’s Doing Business report.

- Burkina Faso (Finance Minister Lucien Marie Noel Bembamba):
  - Promoting growth via a new Strategy for Accelerated Growth and Lasting Development.
  - Recent successful donors conference interpreted as a sign of international confidence in government policies.
  - Reforms include strengthening economic governance and promoting efficient management of government spending.
  - Observed policy aim: reduce operating costs to free up resources.
  - Noted link: membership in the West African Economic and Monetary Union represents a link to the euro area.

### Policy recommendations and measures highlighted
- Business-climate reforms:
  - Fiscal reforms to improve investment conditions.
  - Tax-structure reforms to make conditions more business friendly.
- Agricultural and trade policy:
  - Increase efficiency of domestic farm production to substitute for imported foodstuffs.
  - Maximize intraregional trade to protect from global crises and accelerate import substitution.
- Regional integration and investment promotion:
  - Speed regional integration and remove nontrade barriers.
  - Implement double taxation agreements and investment promotion pacts between countries.
  - Encourage inter-Africa trade via regional economic groupings (e.g., Southern African Development Community).

### Key messages
- Faster domestic reforms that encourage foreign investment are central to maintaining sustainable and inclusive growth.
- Diversification, fiscal and tax reforms, and regional integration are presented as primary tools to soften crisis impacts and foster resilience.
- Intraregional trade and improved domestic production can mitigate higher import costs from rising global commodity prices.

*IMF Survey: Better Business Climate Can Soften Crisis Impact on Africa — April 22, 2012*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [IMF Country Focus](https://www.imf.org/en/news/country-focus)
- [In The News](https://www.imf.org/en/news/search)
- [Watch ministers webcast](https://www.imf.org/external/mmedia/view.aspx?vid=1575484134001)
- [West Africa growth on rebound](https://www.imf.org/external/pubs/ft/survey/so/2012/INT032212A.htm)
- [African integration benefits](https://www.imf.org/external/pubs/ft/survey/so/2012/CAR031512A.htm)
- [Africa’s new optimism](https://www.imf.org/external/pubs/ft/survey/so/2011/car121411a.htm)
- [Blog: inclusive African growth](http://blog-imfdirect.imf.org/2011/10/19/how-to-make-economic-growth-in-sub-saharan-africa-more-inclusive/)
- [Private sector to drive Africa](https://www.imf.org/external/pubs/ft/survey/so/2012/NEW032212A.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar042112b_