The Freetown Declaration: Countercyclical Policy for Africa

In August 2009 the African finance ministers issued the Freetown Declaration, in which they committed their governments to “implement fiscal stimulus measures” to counter the effects of the international financial crisis on their economies.  This paper analyzes the feasibility of realizing this commitment. It considers the availability of policy instruments in the sub-Saharan countries for countercyclical intervention.  On the basis of this, the paper proposes a fiscal stimulus tailored to the conditions and constrains of the countries of the region.  In a majority of the countries the fiscal expansion could be financed domestically, in other countries governments would require additional external funding, and only for a few countries would a stimulus not be appropriate.

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