Press Release No. 16/208

Press Release: IMF Staff Completes Review Mission to Niger

May 10, 2016

An International Monetary Fund (IMF) staff mission led by Cheikh Anta Gueye visited Niamey from April 25 to May 9, 2016 to conduct discussions on the eighth review of the program supported by the Extended Credit Facility (ECF) arrangement.¹ The program was approved by the IMF Board on March 16, 2012 (see Press Release no. 12/90).

At the end of the mission, Mr. Gueye issued the following statement:

“The Nigerien authorities and the IMF team reached a staff-level agreement for completing the eighth review of the ECF-supported program. Subject to approval by IMF management and the Executive Board, Niger could be entitled to a disbursement of SDR 12.34 million (about CFAF 10.28 billion). The Executive Board consideration of Niger’s eighth review report is expected in July 2016.

“Niger’s overall macroeconomic performance has remained satisfactory, despite the security and humanitarian shocks and the unfavorable commodity prices. After accelerating to 7 percent in 2014, driven by agriculture and services, gross domestic product (GDP) growth is estimated at 3.5 percent in 2015 due to a slower growth in agriculture and a lower production in the oil and mining sectors. Annual average inflation, which was negative in 2014 (-0.9 percent), remained contained in 2015 (1 percent).

“Weak revenue collections partly reflecting lower commodity prices and economic problems in the sub-region, unanticipated security expenditure, and an acceleration of domestically financed capital expenditures and pressure on the wage bill all adversely impacted fiscal outcomes including the accumulation of domestic arrears; as a result, most of the program’s fiscal targets for end-2015 were missed.

“The fiscal situation improved in the first quarter of 2016, reflecting low execution of domestically financed capital expenditure. As a result, the end-March 2016 program targets on net government domestic financing and the reduction of domestic payments arrears were met. The government has also made progress in implementing structural reforms, and maintained an adequate level of priority spending.

“In that context, the government plans to submit to the National Assembly a draft supplementary budget for 2016 consistent with its development priorities and to gradually begin taking steps to address fiscal imbalances in order to preserve fiscal sustainability. A revised structural reform agenda for the remainder of 2016 was agreed, centered on revenue mobilization, debt and expenditure management, natural resource management, and the business environment.

“The economic outlook for the medium-term is favorable, but remains subject to substantial external and domestic risks. Real GDP growth is projected to increase to 5.2 percent in 2016, driven by agriculture and reflecting an expected pick-up in mining and oil production. Inflation is expected to remain contained below 2 percent. Real GDP growth is expected to average 6.0 percent during 2017- 2021, mainly as a result of the expansion of the extractive industries sector and an increase in public and private investments. Inflation is expected to remain around 2 percent, well below the 3 percent WAEMU convergence criterion. Key risks include negative externalities of regional conflicts, vulnerability to natural disasters, and the economic turmoil in the sub-region.

“The mission met with President Issoufou and Prime Minister Rafini. The mission also held working sessions with the Minister of Finance, Mr. Sidibe, other Ministers in charge of Planning, Energy and Petroleum, Commerce and Private Sector Development and Mines and Industry, the National Director of the BCEAO, Mr. Karim, as well as other senior government officials. The staff also met with representatives of civil society, the private sector, and the donor community.

“The IMF mission would like to thank the authorities for their warm hospitality and for the constructive discussions.”

¹ The Extended Credit Facility (ECF) is the IMF’s main tool for medium-term financial support to low-income countries. Financing under the ECF carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years.