IMF Executive Board Completes the Fourth Review Under the Extended Credit Facility Arrangement, Approves a US$47.0 Million Disbursement, and Concludes the 2019 Article IV Consultation with Niger

June 26, 2019

  • Program implementation as been broadly satisfactory with public finances strengthening as planned, progress with the implementation of the structural reform agenda, and some slippages in the clearance in domestic payment arrears.
  • Economic growth strengthened in 2018 and the outlook is promising thanks to the start of several large-scale projects by private investors and development partners.
  • The formal local private sector needs strengthening to ensure sustainably higher living standards and provide jobs for Niger’s rapidly growing labor force.

On June 26, 2019, the Executive Board of the International Monetary Fund (IMF) completed the fourth review of Niger’s economic and financial program supported under the Extended Credit Facility (ECF) framework. The completion of the review enables the disbursement of SDR33.84 million (about US$ 47.0 million), bringing total disbursements under the arrangement to SDR90.24 million (about US$125.4 million).

The Executive Board also approved the authorities’ request for a waiver of the nonobservance of the performance criterion on domestic payments arrears clearance, the modification of a performance criterion, the extension of the arrangement to April 22, 2020, and a rephasing of disbursements.

Niger’s three-year arrangement was approved on January 23, 2017 for SDR 98.7 million (about US$134.04 million) in support of the authorities’ national plan for economic development. It aims to enhance macroeconomic stability and foster high and equitable growth, boost incomes and create jobs, while strengthening the foundations for sustainable development. On December 10, 2018, the IMF Executive Board agreed to augment the overall amount of the ECF arrangement to SDR 118.44 million (about US$164.1 million, or 90 percent of Niger quota).

Following the Executive Board’s discussion on Niger, Tao Zhang, Deputy Managing Director and Acting Chair, issued the following statement:

“Niger’s performance under the ECF‑supported program has been broadly satisfactory despite a tense security situation and daunting development challenges. The authorities remain committed to implementing their reform agenda.

“The strengthening of public finances has been advancing largely as planned and the authorities are determined to continue along this path to comply with the West African Economic and Monetary Union’s fiscal convergence criterion next year. These efforts will help further entrench macroeconomic stability and the sustainability of public debt.

“The structural agenda underpinning fiscal strengthening is being implemented with a view to better mobilize revenues and lift the efficiency of public spending. However, there is room to go forward faster. It is also essential to take full advantage of better administrative arrangements to realize the new potential.

“The authorities are addressing the slippage in the clearance of domestic payment arrears. Much ground has been made up in recent weeks. Assurances are in place to complete the clearance program by this October.

“Implementing the authorities’ structural reform agenda should continue with vigor to support sustainably higher living standards and inclusive growth. Niger’s welcome efforts to foster good governance and step up the fight against corruption should also be strongly pursued.”

The Executive Board also concluded the 2019 Article IV Consultation with Niger [1]

Niger faces daunting development challenges, aggravated by terrorist incursions, low uranium export prices, and climate change. Nonetheless, GDP growth picked up to 6.5 percent last year and should average above 7 percent over the next five years thanks to reforms, substantial donor support, several large-scale projects, and a one-time boost from the projected commencement of crude oil exports in 2022.

Fiscal policy remains on consolidation course to keep public debt in check and with a view to complying with the West African Economic and Monetary Union’s ceiling of 3 percent of GDP for the fiscal deficit in 2020. The external deficit is large, reflecting Niger’s pressing development and security needs and donor support. It is set to widen further during the construction phase of major import-intensive projects but will decline sharply once they come on stream.

Executive Board Assessment [2]

Executive Directors welcomed the authorities’ progress in implementing their reform program, as well as their strong commitment, despite the difficult security situation. They were encouraged by the good economic growth performance last year and noted that the large projects underway should continue to drive economic growth in the period ahead. Directors highlighted the importance of structural reforms to tackle Niger’s difficult challenges, as well as continued support from the international community to help address its development and security needs, and well‑sequenced and coordinated technical assistance and capacity‑building.

Directors commended the authorities’ determination to meet the WAEMU convergence criterion on the fiscal deficit. In this context, they encouraged the speedy and rigorous execution of the fiscal structural agenda, to realize larger tangible gains in revenue mobilization, spending efficiency, and public financial management. They encouraged the authorities to carefully consider the planned foreign borrowing and strengthen public debt management and transparency. They also placed strong emphasis on the clearance of domestic arrears.

Directors encouraged the authorities to stay the course in implementing their broader structural reform agenda. They recommended prioritizing the development of the formal local private sector, which holds the key for sustainably higher living standards and inclusive growth and providing jobs for Niger’s rapidly growing labor force. Improving the business environment, supporting private sector development, and deepening the financial sector and enhancing financial inclusion will all be crucial.

Directors welcomed Niger’s efforts to foster good governance and step up the fight against corruption and urged bold efforts. They noted that many of the measures under Niger’s reform program, such as more competitive public procurement and reducing tax exemptions, should help reduce vulnerabilities to corrupt practices. Directors took positive note of the progress in strengthening the legal and institutional framework and urged the authorities to tackle implementation challenges. They highlighted the importance of transparency in the oil sector. They also encouraged the authorities to implement the recommendations of the recent National Risk Assessment Report on AML/CFT.

Niger: Selected Economic and Financial Indicators, 2016-24

2016

2017

2018

2019

2020

2021

2022

2023

2024

(Annual percentage change)

National income and prices

GDP at constant prices

4.9

4.9

6.5

6.3

6.0

5.6

11.9

6.1

6.8

Export volume

-3.3

19.2

-3.8

14.0

5.5

2.7

81.1

10.1

12.4

Import volume

-14.3

7.3

12.8

14.7

15.0

-7.2

3.7

0.3

6.2

CPI (annual average)

0.2

0.2

2.7

1.6

2.5

2.0

2.0

2.0

2.0

CPI (end-of-period)

-2.2

1.8

1.6

2.9

2.0

2.2

2.0

2.0

2.0

Money and credit

Broad money

8.7

-4.9

-2.1

8.4

5.0

8.9

17.7

16.8

13.6

Domestic credit

14.2

11.4

11.4

10.4

6.1

12.3

10.0

9.0

8.3

Credit to the government (net)

605.7

48.1

127.8

8.0

-14.2

10.3

-2.0

-10.9

-20.2

Credit to the economy

5.5

7.7

-4.5

11.2

12.5

12.8

12.8

13.1

12.9

(Percent of GDP)

Government finances

Total revenue

14.3

14.4

16.7

16.0

17.2

17.8

19.3

19.7

19.9

Total expenditure and net lending

26.3

26.8

29.2

28.9

28.4

27.6

28.1

28.0

27.7

Current expenditure

14.0

14.1

13.7

13.5

12.9

13.3

13.9

14.2

14.3

Capital expenditure

12.3

12.7

15.5

15.4

15.5

14.3

14.2

13.7

13.5

Basic balance (excl. grants)

-4.2

-5.0

-4.0

-3.0

-1.1

-1.0

-0.7

-0.9

-0.7

Overall balance (incl. grants)

-6.1

-5.7

-4.1

-4.1

-3.0

-2.7

-2.4

-2.3

-2.0

Gross investment

38.4

40.0

42.9

45.3

47.9

44.4

36.3

34.1

33.0

Non-government investment

26.0

27.3

27.5

30.0

32.4

30.1

22.1

20.4

19.6

Government investment

12.3

12.7

15.5

15.4

15.5

14.3

14.2

13.7

13.5

External current account balance (incl. grants)

-15.5

-15.7

-18.2

-19.8

-22.4

-19.4

-14.5

-12.9

-11.8

External current account balance (excl. grants)

-17.4

-18.5

-20.9

-22.8

-24.8

-21.6

-16.4

-14.9

-13.7

Total public and publicly-guaranteed debt

44.6

54.4

53.8

54.2

52.7

51.0

47.0

45.3

43.3

Public and publicly-guaranteed external debt

33.5

35.3

35.0

36.5

37.1

37.1

35.3

35.1

34.7

NPV of external debt

25.5

23.1

24.5

26.2

26.4

26.3

24.9

24.7

24.4

Public domestic debt

11.1

19.1

18.8

17.8

15.6

13.9

11.7

10.2

8.6

(Billions of CFA francs)

GDP at current market prices

4,511

4,726

5,163

5,571

6,056

6,527

7,402

8,011

8,721

Sources: Nigerien authorities; and IMF staff estimates and projections.


[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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