IMF Executive Board Concludes 2016 Article IV Consultation with Niger
January 27, 2017
On January 23, 2017, the Executive Board of the International Monetary Fund concluded the Article IV consultation [1] with Niger. The Board also approved a new three-year Extended Credit Facility Arrangement for Niger; a press release on this was issued separately.
Niger’s macroeconomic outcomes continue to be impacted by security and humanitarian shocks, weak commodity prices, and the reduction of trade flows to neighboring countries. For 2016, growth is projected at 4.6 percent, slightly higher than the 3.5 percent recorded in 2015, but still only just above the rate of population growth. Growth was driven by a strong harvest that also resulted in lower domestic food prices with consumer price inflation remaining subdued at around 1 percent a year, well below the West African Economic Monetary Union (WAEMU) convergence criterion.
Fiscal revenues have underperformed in 2016, reflecting weaknesses in tax and customs administrations, and difficulties in the mining, oil, and telecommunications sectors, as well as lower trade flows with Nigeria. Consequently, expenditures have been held below budget levels, while protecting priority spending.
The medium-term economic outlook is favorable, but remains subject to substantial external and domestic risks. Growth is projected to increase to 5.2 percent in 2017, and further to average 6.0 percent during 2018-21, mainly as a result of the expansion of the extractive industries sector and an increase in public and private investments. Key risks include negative externalities of regional conflicts, vulnerability to natural disasters, and the economic downturn in the sub-region.
Executive Board Assessment [2]
Executive Directors commended the authorities for maintaining macroeconomic stability and advancing the reform agenda despite persistent security concerns, the regional economic slowdown, and weak commodity prices. Directors noted the progress made in strengthening debt management, the business climate, and key social indicators. While the medium term outlook is favorable, challenges and risks remain. Going forward, Directors highlighted the need for strong commitment to the Fund supported program which supports the authorities’ Economic Development Document aimed at strengthening the macroeconomic framework, while creating fiscal space for the needed infrastructure and social spending. Progress on structural reforms will be key to reducing poverty and creating jobs.
Directors welcomed the approval of the 2017 budget which appropriately takes into account capacity constraints and sets a realistic basis for fiscal consolidation over the medium term. They highlighted the importance of improving revenue mobilization by broadening the tax base, including by reducing tax exemptions, and strengthening the efficiency of tax and customs administration. Directors also emphasized the importance of prioritizing public spending and enhancing expenditure control and liquidity management, while strengthening resilience to natural disasters.
Directors considered it important to strengthen capital project and debt management framework. They welcomed the authorities’ continued commitment to undertake a prudent debt policy, while improving project evaluation based on cost effectiveness, and encouraged them to exercise caution with regard to scaling up debt financed investments. Strengthening the transparent management of natural resources and the public private partnership framework will also be vital.
Directors underscored that financial sector deepening will play an important role in making growth more inclusive. They encouraged the authorities to step up the implementation of their Financial Inclusion Strategy and the National Financial Sector Development Strategy. At the same time, banking supervision should be strengthened in line with regional agreements.
Directors emphasized that giving priority to gender equity, disaster risk management, and harnessing the demographic dividend is critical for achieving Niger’s medium term growth potential, creating jobs, and reducing poverty. They welcomed recent initiatives in these areas and urged further actions, especially by passing swiftly the law on gender.
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Niger: Selected Economic and Financial Indicators, 2014-21 |
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2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
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|
|
Est. |
Est. |
Proj. |
Program |
Projections |
|||||||
|
(Annual percentage change, unless otherwise indicated) |
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|
National income and prices |
||||||||||||
|
GDP at constant prices |
7.0 |
3.5 |
4.6 |
5.2 |
5.5 |
5.4 |
7.4 |
6.2 |
||||
|
Non-resources GDP at constant prices |
7.9 |
4.1 |
4.3 |
5.0 |
5.6 |
5.5 |
6.0 |
5.7 |
||||
|
Oil production (thousand barrels per day) |
17 |
13 |
16 |
18 |
19 |
19 |
40 |
50 |
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|
GDP deflator |
-0.5 |
0.5 |
2.0 |
2.4 |
2.1 |
1.8 |
1.6 |
1.9 |
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|
Consumer price index |
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|
Annual average |
-0.9 |
1.0 |
1.1 |
2.0 |
2.1 |
2.0 |
2.0 |
2.0 |
||||
|
End-of-period |
-0.6 |
2.2 |
1.2 |
2.2 |
2.0 |
2.0 |
2.0 |
2.0 |
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|
External sector |
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|
Exports, f.o.b. (CFA francs) |
-8.8 |
-10.1 |
-10.7 |
13.7 |
12.3 |
12.3 |
33.4 |
17.8 |
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|
Of which: non-uranium exports |
-1.5 |
-15.2 |
-8.6 |
10.3 |
13.4 |
21.1 |
49.0 |
22.5 |
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|
Imports, f.o.b (CFA francs) |
7.0 |
9.6 |
-11.7 |
19.5 |
11.2 |
9.3 |
9.0 |
6.7 |
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|
Export volume |
11.1 |
-4.5 |
-19.0 |
6.6 |
9.1 |
14.1 |
42.6 |
13.9 |
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|
Import volume |
5.5 |
7.3 |
-12.6 |
17.1 |
8.9 |
7.3 |
6.8 |
4.5 |
||||
|
Terms of trade (deterioration -) |
-19.4 |
-7.5 |
7.3 |
0.1 |
1.6 |
-3.6 |
-9.1 |
-1.8 |
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|
Government finances |
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|
Total revenue |
13.6 |
7.6 |
-12.0 |
13.9 |
12.4 |
11.8 |
18.9 |
14.9 |
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|
Total expenditure and net lending |
22.7 |
9.8 |
-15.3 |
14.1 |
4.7 |
4.0 |
7.1 |
1.9 |
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|
Of which: current expenditure |
16.3 |
11.0 |
-3.5 |
9.2 |
5.1 |
5.1 |
5.3 |
6.1 |
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|
Of which : capital expenditure |
28.9 |
8.7 |
-25.9 |
19.9 |
4.2 |
2.9 |
9.1 |
-2.7 |
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(Annual change, in percent of beginning-of-period broad money, unless otherwise indicated) |
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|
Money and credit |
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|
Domestic credit |
7.2 |
17.2 |
10.9 |
11.5 |
6.7 |
6.2 |
6.0 |
1.4 |
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|
Credit to the government (net) |
1.1 |
10.4 |
4.3 |
6.4 |
1.7 |
1.6 |
0.6 |
-3.5 |
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|
Credit to the economy |
6.1 |
6.8 |
6.6 |
5.1 |
5.0 |
4.6 |
5.4 |
4.9 |
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|
Net domestic assets |
5.2 |
15.9 |
7.9 |
11.9 |
7.0 |
6.5 |
6.2 |
1.7 |
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|
Broad money (percent) |
25.7 |
3.6 |
11.3 |
11.1 |
10.9 |
10.6 |
10.3 |
8.2 |
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|
Velocity of broad money (ratio) |
3.7 |
3.7 |
3.5 |
3.4 |
3.3 |
3.2 |
3.1 |
3.1 |
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(Percent of GDP, unless otherwise indicated) |
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|
Government finances |
||||||||||||
|
Total revenue |
17.5 |
18.1 |
15.3 |
16.1 |
16.8 |
17.5 |
19.1 |
20.3 |
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|
Total expenditure and net lending |
31.0 |
32.7 |
26.5 |
28.1 |
27.3 |
26.4 |
26.0 |
24.4 |
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|
Current expenditure |
14.6 |
15.6 |
14.4 |
14.6 |
14.2 |
13.9 |
13.4 |
13.2 |
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|
Capital expenditure |
16.4 |
17.1 |
12.1 |
13.5 |
13.1 |
12.5 |
12.5 |
11.3 |
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|
Basic balance (excluding grants)1 |
-6.4 |
-7.5 |
-4.4 |
-4.9 |
-4.0 |
-2.8 |
-0.9 |
1.5 |
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|
Basic balance (WAEMU definition; including grants) 2 |
-4.8 |
-5.7 |
-2.9 |
-3.8 |
-2.8 |
-1.7 |
0.0 |
2.1 |
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|
Overall balance (commitment basis, including grants) |
-8.0 |
-9.1 |
-6.5 |
-7.4 |
-6.0 |
-4.7 |
-2.9 |
-0.9 |
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|
Gross investment |
39.3 |
42.6 |
39.5 |
42.0 |
42.8 |
43.0 |
40.1 |
37.9 |
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Of which : non-government investment |
22.9 |
25.4 |
27.4 |
28.4 |
29.7 |
30.5 |
27.5 |
26.7 |
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|
government |
16.4 |
17.1 |
12.1 |
13.5 |
13.1 |
12.5 |
12.5 |
11.3 |
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|
Gross national savings |
23.8 |
24.5 |
24.1 |
24.0 |
24.3 |
24.5 |
24.6 |
24.6 |
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|
Of which: non-government |
18.7 |
20.3 |
21.3 |
20.9 |
20.2 |
19.4 |
17.7 |
16.5 |
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|
Domestic savings |
21.4 |
20.0 |
19.8 |
19.8 |
20.3 |
20.6 |
20.9 |
21.0 |
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|
External current account balance |
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|
Excluding official grants |
-17.7 |
-19.7 |
-17.3 |
-19.5 |
-20.0 |
-20.0 |
-16.7 |
-14.3 |
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|
External current account balance (including grants) |
-15.4 |
-18.1 |
-15.4 |
-18.0 |
-18.5 |
-18.5 |
-15.4 |
-13.3 |
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Debt-service ratio as percent of: |
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|
Exports of goods and services |
4.2 |
5.5 |
7.2 |
7.7 |
6.3 |
5.9 |
4.4 |
4.8 |
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|
Government revenue |
5.0 |
5.7 |
8.1 |
8.4 |
6.7 |
6.2 |
5.1 |
5.6 |
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|
Total public and publicly guaranteed debt |
33.7 |
41.9 |
47.0 |
51.1 |
53.0 |
53.9 |
52.4 |
50.3 |
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|
Public and publicly guaranteed external debt |
25.1 |
30.4 |
34.1 |
35.8 |
37.1 |
38.1 |
38.5 |
39.0 |
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|
NPV of external debt |
22.1 |
22.1 |
24.4 |
25.4 |
26.2 |
26.8 |
27.1 |
27.4 |
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|
Public Domestic debt |
8.7 |
11.5 |
12.9 |
15.3 |
15.9 |
15.8 |
13.9 |
11.4 |
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|
Foreign aid |
8.9 |
10.4 |
9.5 |
8.9 |
8.4 |
8.1 |
7.5 |
7.0 |
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|
(Billions of CFAF) |
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|
GDP at current market prices |
4,077 |
4,242 |
4,432 |
4,773 |
5,146 |
5,524 |
6,025 |
6,523 |
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Sources: Nigerien authorities; and IMF staff estimates and projections. |
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1 Revenue minus expenditure net of externally-financed capital expenditure. |
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2 Revenue (including budgetary grants) minus expenditure net of externally-financed capital expenditure. |
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[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm .
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