Welcome from ECA

Dear participants,

Welcome to the online discussion on pro-poor macroeconomic policies in Africa. We are very pleased that you are willing to contribute and are looking forward to learning from your experiences.

Pro-poor macroeconomic policies are of specific importance to most African countries in order to reach the MDGs. Continued consolidation of macroeconomic stability and improving macroeconomic management in most countries has contributed to the relatively high growth rates of above 5 per cent since 2004. But in most countries increased growth hasn’t been sufficiently translated into job creation and poverty reduction. Likewise the public expenditure for health and education often falls behind the goals agreed by African countries.

Thus in this first week of the online discussion we would like to know your opinion of what goals and targets macroeconomic policies do have in specific African countries and whether they are appropriate? Do they play a role in PRSPs or other development frameworks? Is growth the major goal or should equality play an equally important role?

For example should inflation be below 5 percent at all times and should the inflation target have priority over all other targets like better health and education or employment creation? Or put differently how should countries deal with the trade offs between macroeconomic stability and social objectives and how relevant are these trade offs?

I am looking forward to your contributions.

Susanna Wolf

Economic Affairs Officer

UNECA

Trade, Finance & Economic Development Division (TFED)

PO Box 3001

Addis Ababa, Ethiopia

Phone: 251-11-5443172

Fax: 251-11-5513038

Email: SWolf@uneca.org

Main macroeconomic target in Africa?  How to reduce poverty!
 
This is a very interesting discussion. We heard of it only yesterday, and now we are preparing a paper to be posted next week. We will take Namibia as an example and use our macroabc economic model simultaneous with Micromacrosim, the poverty module to Macroabc Namibia to find out what mixture of policy measures is needed to reduce poverty by half in Namibia in 2015. We think of a mixture of:
1. export growth
2. increased area productivity in self subsistence agriculture
3. higher wage rate
4. higher old age allowances
5. a basic income grant
 
Each of those measures on its own is not enough or not feasible.(higer exports growth will provide higher tax revenues, to finance  the basic income grants, but does not reduce  poverty itself directly). So it is  the package that works.
More: next week.
 
Stephen Chong MA and dr. Marein van Schaaijk, see shareware macroabc Namibia and  photos on www.micromacroconsultants.com