IMF urges Albania to step up reforms, alleviate risks

IMF urges Albania to step up reforms, alleviate risks | Bruno Sanchez-Andrade Nuño

The Albanian government should push for reforms to alleviate risks arising from high public debt, non-performing loans (NPLs) in the financial sector, difficult investment climate and weak rule of law, the International Monetary Fund (IMF) said.

In a press release on Tuesday, the IMF said that “Albania is enjoying one of the fastest economic growth rates in the region. The macroeconomic and political environment is stable.” Policymakers should use these good times to push for reforms, the Fund added.

The statement was issued after the conclusion of a two-week visit within the framework of the first Post-Program Monitoring (PPM) mission.

According to the IMF mission, there are key priorities that include: advancing fiscal consolidation; enhancing the efficiency of public investment spending; strengthening the institutional framework for bank supervision and NPLs resolution; and removing bottlenecks in business/investment environment through judicial and anti-corruption reforms.

Also, the report said that Albania needs to address many structural impediments to attract higher investment and achieve faster convergence. It went on to say that weak property rights and a corrupt, inefficient judiciary are frequently identified as the main obstacles to attracting investment.

Moreover, the IMF stressed that the lack of infrastructure connectivity, high informality, difficulty in accessing finance and weak human capital further undermine competitiveness.

Albania has been attempting to make reforms, latest of which was in the beginning of 2018. In February 2018, Albanian lawmakers passed a law to screen police officers in a bid to clamp down on corruption and links to organized crime.

The new law calls for the 13,000 police officers in the country of 3.2 million people to be screened for their competences and integrity. With the law, Albanian Interior Minister Fatmir Xhafaj said he hopes to "clean police ranks of incompetent [officers] or persons suspected to have been involved in crime or corruption."