IMF Executive Board Completes the First Review Under the Extended Credit Facility Arrangement for Niger, and Approves US$52.6 Million Disbursement
June 29, 2022
- The unfolding acute food crisis and the deteriorating security situation in the Sahel region have increased fiscal pressures. The war in Ukraine is exacerbating these challenges.
- A temporary deviation from fiscal targets over 2022-23 is therefore appropriate. Stepped-up efforts to improve domestic revenue mobilization and enhance spending quality will be key.
- Program performance has been broadly satisfactory with all quantitative performance criteria and indicative targets (ITs) at end-December 2021 met. The implementation of the structural reform agenda is advancing well.
Washington, DC: Today, the Executive Board of the International Monetary Fund (IMF) completed the first review of Niger’s economic and financial program supported under the Extended Credit Facility (ECF) arrangement. The completion of the review enables the disbursement of SDR 39.48 million (about US$52.62 million), bringing total disbursements under the arrangement to SDR 78.96 million (about US$105.24 million). Niger’s three-year ECF arrangement was approved on December 8, 2021 for SDR197.4 million (about US$275.8 million at the time of program approval or 150 percent of quota) for Niger (see press release PR21/366). The arrangement is expected to catalyze additional bilateral and multilateral financial support.
Following the Executive Board discussion, Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair, made the following statement:
“The near and medium-term economic outlook for Niger is broadly favorable with growth projected to bounce back this year and accelerate thereafter with the start of oil exports through the new pipeline. However, the country is facing an acute food crisis caused by adverse climate conditions and a deterioration of the security situation to which the authorities are responding with the support of donors. The impact of the war in Ukraine on food and fertilizer prices is further magnifying these challenges.
“Overall program performance has been broadly satisfactory with all quantitative performance criteria and indicative targets (ITs) at end-December 2021 met, but three ITs were missed at end-March 2022. The structural reform agenda is also advancing well.
“A temporary deviation from fiscal targets over 2022-23 is warranted to accommodate urgent spending needs related to the food crisis and lower budget-support grants from donors. However, the authorities remain committed to reverting to the WAEMU fiscal deficit norm in 2024.
“Domestic revenue mobilization is critical to create the fiscal space needed for priority spending. The authorities plan to take steps to reduce tax exemptions and evasion, revise the tax code to simplify the system and broaden the tax base, and strengthen revenue administration through digitalization. The authorities are also implementing reforms to enhance spending quality to improve the provision of public goods. Strengthening public financial management is essential to scale-up and better target spending on education and social programs, which are necessary to build human capital and improve protection of the vulnerable.
“Rising financial sector vulnerabilities, including those related to deteriorating asset quality, particularly in the microfinance sector, will need to be carefully monitored. Further efforts to foster financial inclusion are also needed.
“Authorities should continue to make progress on the governance agenda. They are committed to strengthen the AML/CFT framework, steadfastly implement the new asset declaration template, reinforce control mechanisms of the expenditure chain to reduce its vulnerability to corruption and embezzlement risks, and systematically prosecute public officials suspected of corruption.”
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Niger: Selected Economic and Financial Indicators, 2018-22 |
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