Development Finance International
7 October: IMF WEO: capital flows surge to LAC / SSA recovery accelerates
The October 2010 edition argues that a resurgence in FDI, portfolio, and other flows to the LA-5 (Brazil, Chile, Colombia, Mexico and Peru) is providing cheap and ready finance to boost domestic demand, but simultaneously risks overheating, lost competitiveness, higher sterilisation costs, and boom-bust. SSA growth is accelerating, and although FDI and remittances were less affected by the crisis than feared, remittances remain vulnerable to global conditions. Prospects across both regions vary by country.
6 October - FPC Country Profiles Series Launched
The first set of Country Profiles has been uploaded for countries participating in the FPC CBP. These are presently available for Bolivia, Burkina Faso, The Gambia, Ghana, Nicaragua, Tanzania, Uganda, and Zambia, with more countries to follow. Each Profile summarises institutional arrangements and cooperating partners; latest FPC, investor perception and CSR data and analysis; FPC CBP support and country achievements; progress made and future priorities in building capacity; and a list of further reading. They may be downloaded via the Where We Work page, and the FPC Assessing Country Capacity pages. Profiles will be updated on an ad hoc basis, subject to developments in each country, and announced on this page.
5 October - Tax - Global Forum Report Published
The Global Forum on Transparency and Exchange of Information for Tax Purposes has published phase 1 reviews on legal and regulatory frameworks in 8 countries including Bermuda, Botswana, Cayman Islands, Jamaica and Panama. Common deficiencies relate to access to information on nominees, trusts and the need to maintain good accounting records. Phase 2 reviews examining exchange of information practices will take place by 2012. Botswana and Panama will have to address phase 1 recommendations before proceeding to a phase 2 review. More than 100 jurisdictions and observers are now part of the Global Forum.
5 October - Gambia Achieves Timely Quarterly BOP Dissemination
The Central Bank of The Gambia has published quarterly BOP data online, covering Q2 2009 - Q2 2010. This is within the IMF GDDS timeliness guidelines of 6-9 months. Items covered include FDI liabilities (split into equity and reinvested earnings), other investment liabilities (distinguishing trade credits), other investment assets (distinguishing currency and deposits), and investment income on direct equity and portfolio investment.
5 October - Zambia Survey - How Commercial Banks Determine Lending Rates
Bank of Zambia analysis shows that banks generally determine lending rates based on cost of funds, economic and market conditions and political risks. Factors vary among banks according to their impact on the cost of funds and the bottom line. Decisions made in setting and adjusting base lending rates are largely decided qualitatively. Factors contributing to high rates include default risk, information asymmetries, operational inefficiencies and the need for high returns on shareholders equity. The interbank rate is not a significant factor. The report identifies conditions for an effective interest rate targeting framework, and makes recommendations covering efficiency, consistent use of macroeconomic factors in determining lending rates, development of formal frameworks for the interest rate decision making process, and more competition among banks.
