An International Monetary Fund (IMF) staff team led by Christoph A. Klingen
visited Niamey from October 23 to November 6, 2017 to conduct discussions
on the first review of the program supported by the Extended Credit
Facility (ECF) arrangement.
[1]
Niger’s program was approved by the IMF Board on January 23, 2017 (see Press Release no 17/18).
At the end of the visit, Mr. Klingen issued the following statement:
“The Nigerien authorities and the IMF team have reached staff-level
agreement for the completion of the first 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 14.1 million (about CFAF
10.97 billion). Executive Board consideration is currently scheduled for
January 2018.
“Niger’s overall macroeconomic performance remains satisfactory, despite
security challenges and unfavorable commodity prices, especially for
uranium. Benefitting from a good crop year and a rebound in oil production,
real GDP grew by 5 percent in 2016 and inflation remained contained at 0.2
percent. The current account deficit improved substantially to below 16
percent of GDP, as several import-intensive investment projects wound down.
Real GDP is expected to grow at 5.2 percent in 2017, driven mainly by the
hydrocarbon and service sectors, and supported by strengthening credit
growth. Inflation should remain well contained and the current account
deficit will likely improve further in 2017. Growth is expected to remain
at 5.2 percent in 2018, but over the medium run, government reform efforts
should be rewarded by a pickup in growth. Inflation should remain below
WAEMU’s convergence criterion of 3 percent and the international reserve
position is projected to strengthen starting from 2017.
“All quantitative performance criteria for the June 2017 test date have
been met. Fiscal deficit targets and the programmed reduction of domestic
payment arrears have been achieved. But revenues continue to fall short of
expectations, reflecting depressed trade with Nigeria, and delays in the
implementation of some high-yield reforms, notably at customs. Considering
the government’s strong commitment to prudent fiscal policy, the basic and
overall fiscal deficits should decline this year to 4 percent of GDP and
5.4 percent of GDP, respectively. Progress was made in implementing
structural reforms, although some structural benchmarks were not met in
full on time due to capacity constraints.
“For 2018, the government has put forward a strong fiscal program
underpinned by concrete measures to increase revenues, steps to contain
domestically-financed spending, and plans to raise the quality of public
spending. Programmed targets for the overall and basic fiscal balance keep
public finances on a path to reach the WAEMU convergence criterion for the
overall fiscal deficit of 3 percent of GDP by 2020, while expeditiously
eliminating remaining domestic arrears. The 2018 draft budget also aims for
fuller absorption of rising donor funds, providing a near-term boost to the
economy and substantially improving long-term prospects. A fiscal reform
agenda for 2018 has been agreed, centered on revenue mobilization and
improvements in public financial management.
“The authorities and the team also discussed policies to develop a strong
private sector and address fast population growth. They agreed that
progress on both fronts is essential for a sustained improvement of living
standards and poverty reduction. The agenda includes policies to grow the
financial sector, improve the business environment further, and steps to
diversify the economy inside and outside the mining sector.
“The team met with the President of the Republic, H.E. Mr. Issoufou
Mahamadou, and held sessions with the Minister of Finance, Mr. Massoudou
Hassoumi, Ministers in charge of Planning and Mines, the Minister Delegate
for the Budget, the National Director of the BCEAO, as well as other senior
government officials. Staff also met with representatives of civil society,
the private sector, and the donor community.
“The team would like to thank the authorities for their 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.
