Fiscal Sustainability in Heavily Indebted Countries Dependenton Nonrenewable Resources: The Case of Gabon

Joseph Ntamatungiro

No 2004/030, IMF Working Papers from International Monetary Fund

Abstract: This paper proposes a framework for assessing fiscal sustainability in heavily indebted countries dependent on exhaustible resources, with reference to Gabon. It finds that fiscal sustainability could be achieved by: (i) developing a fiscal rule for the non-oil primary fiscal balance compatible with an objective for reducing the debt-to-non-oil GDP ratio; (ii) introducing a constant oil-based income transfer per capita allowing intergenerational equity; and (iii) building up an oil savings fund. Long-term simulations show that Gabon's fiscal position is fragile and that a fiscal policy path consistent with the proposed framework could help achieve comfortable levels of net wealth.

Keywords: WP; fiscal policy; Gabon; oil; debt; fiscal sustainability; savings fund; intergenerational equity; oil GDP; oil revenue; debt ratio; debt reduction objective; FFG position; GDP debt ratio; net wealth; sustainability analysis; income transfer; Fiscal stance; Oil; gas and mining taxes (search for similar items in EconPapers)
Pages: 38
Date: 2004-02-01
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Citations: View citations in EconPapers (3)

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