IMF is combatting Niger famine, Letter to the Editor, By Thomas C. Dawson, Director, External Relations Department, IMF

August 5, 2005

Letter to the Editor
By Thomas C. Dawson
Director, External Relations Department
International Monetary Fund
The Independent
August 5, 2005

Sir: I must take the strongest possible exception to the accusation that the IMF contributed to the crisis in Niger ("IMF and EU are blamed for starvation in Niger", 1 August).

The country is facing severe crop shortfalls because of a lengthy drought, limited irrigation, and a plague of locusts. The IMF is working closely with other international donors to mobilise additional resources to address the food shortages. Niger's Fund-supported programme fully accommodates famine-related government spending, and we are prepared to increase Niger's access to Fund financing if grant aid is insufficient. In addition, the IMF has been at the forefront in stressing the need to increase investment in irrigation infrastructure to reduce Niger's vulnerability to drought.

With regard to the specific allegations raised in the article, the IMF has never supported or encouraged the abolition of government grain reserves. In fact, the grain reserve is in place and has been used, to the best of our knowledge, to relieve the current food shortage.

The expansion of Niger's poverty-reduction programmes requires a gradual increase in domestic revenue to supplement assistance from development partners. In 2003, the government and Fund staff explored various options, including steps to expand agricultural production. This January, the government introduced some revenue measures, including the extension of VAT to milk, sugar and wheat flour. IMF staff specifically recommended that a poverty- impact assessment of the proposed measures be carried out. At any rate, the VAT extension was soon rescinded because of public protests and could have had little effect on the crisis, the causes of which are more fundamental.


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