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Capital-Market Controls and Credit Rationing in Mali and Senegal

Published online by Cambridge University Press:  11 November 2008

Susan Hickok  and
Clive S. Gray
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Extract

In the course of several field studies carried out during 1978–9 on behalf of the Working Group on Recurrent Costs established by the Comité Inter-états de Lutte contre la Sécheresse dans le Sahel and the Club du Sahel, it became clear that imperfect functioning of domestic capital markets hampers the efforts of Sahelian governments to raise domestic non-tax resources for budget finance. Inasmuch as the operation and maintenance of development projects compete for a severely limited pool of uncommitted government revenues – that is, revenues not committed to debt service, meeting the civil service payroll, and other inflexible obligations – reforms that augment this pool are of particular interest from the viewpoint of ensuring that these projects function properly once established.

Type
Articles
Information
The Journal of Modern African Studies , Volume 19 , Issue 1 , March 1981 , pp. 57 - 73
Copyright
Copyright © Cambridge University Press 1981

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References

page 58 note l World Bank, World Development Report, 1980 (Washington, D.C., 1980), p. 110.Google Scholar

page 58 note 2 Ibid.

page 63 note 1 World Development Report, 1979, p. 134, and 1980, p. 118.

page 64 note 1 Nominal annual rates divided by 4, less a weighted average of current and past inflation rates for 3 quarters (using distributed lags).

page 64 note 2 French money-market rate, which generates a negative coefficient corresponding to the fact that money invested in France disappears from domestic circulation, is taken net of domestic (Malian or Senegalese) inflation, on the assumption that the higher the inflation rate, the higher the return from holding domestic non-monetary assets as compared to holding French francs. Given the support by the French Government for currency parity, the market largely discounts the possibility of devaluation, or the need to hedge against this by holding French francs.

page 67 note 1 Comparable data with which to conduct a similar analysis for Mali were not available.

page 68 note 1 Senegal's industrial output grew at only 3·9 per cent per annum during 1970–8; Mali's rate of 92 per cent proceeded from a much smaller base, and currently shows signs of tailing off. World Development Report, 1980, p. 112.

page 70 note 1 Conducted by the Bureau africain de recherche appliquée on behalf of U.S.A.I.D.

page 70 note 2 The subject of a feature article in Jeune Afrique (Paris. 1979.Google Scholar