31 Jan 2016

The smallness of a country refers to its share as a supplier or consumer of a good or service in the global market, which makes it impossible to influence market supply or demand.

The Minister of Finance and Development Planning, Mr Kenneth Matambo, said this at the International Monetary Fund (IMF) high level conference of the small middle income countries.

“Admittedly, the countries we are focusing on are truly small on the basis of a number of measures and in terms of the population. The World Bank’s 2014 estimates indicated that of the 974 million people in the Sub-Saharan Africa, only 9.7 million, or 1 per cent of the total, live in the countries presented at this conference,” he said.

Minister Matambo said from this perspective, it should not be surprising that the collective and individual performance of these economies was influenced by external developments.

He noted that beyond the importance of external factors, countries also tended to face other common challenges related to their size.

“Domestic markets are small to absorb most of their products which together with a narrow resource base, in some cases, restricts options internally driven developments.

This factor also often limits the scope for inflow of foreign direct investment. No doubt, a combination of these factors pose major challenges to the development efforts of the countries,” he said.

Mr Matambo noted that small middle-income countries, despite the constraints, had moved from lower to the middle income status.

The minister  said the smallness of any country made it imperative to design and implement sound macroeconomic policies to promote domestic growth rather than depend on external influences.

“In contrast, large economies can be driven by their extensive domestic markets which attract investors. The size of domestic markets in large economies tends to provide protection against outside competition,” he said.

Mr Matambo said there was need for making extra effort to get the best possible outcomes from reliance on the rest of the world for development. Ends