News Brief: IMF Completes Review Under Niger's PRGF and Approves US$11 Million Disbursement
August 3, 2001
The Executive Board of the International Monetary Fund (IMF) today completed the first review of Niger's arrangement under the Poverty Reduction and Growth Facility (PRGF)1. As a result, Niger will be able to draw up to SDR 8.46 million (about US$11 million) under the arrangement immediately.
Niger's three-year PRGF arrangement was approved on December 14, 2000 (see Press Release 00/69), for SDR 59.2 million (about US$75 million). So far, Niger has drawn SDR 8.46 million (about US$11 million) under the arrangement.
After the Executive Board's discussion on Niger, Shigemitsu Sugisaki, Deputy Managing Director, and Acting Chairman, made the following statement:
"Niger's performance under the PRGF-supported program has been broadly satisfactory despite the difficulties of the country's circumstances. Following a weakening of program implementation in early 2001, the authorities have taken corrective measures. The Fund welcomes, in particular, their strong commitment to enhance administrative capacity.
"In view of these encouraging steps, the Executive Board completed the first review under the arrangement. Directors granted waivers for the non-observance of a number of performance criteria under the program, as well as for a minor incident of misreporting relating to a prior action involving the closing of the 1998 and 1999 budgetary accounts.
"Progress under the revised program for 2001 is encouraging thus far. The authorities are firmly committed to implementing their strategy to reduce domestic payments arrears, and on August 1, they took the important step of introducing a new petroleum product pricing and taxation system that is transparent, automatic, and flexible. Building up Niger's administrative and institutional capacity—including revenue and expenditure control systems—is essential, and technical assistance will play an important role in this regard. In collaboration with the World Bank, the authorities have embarked on a reform of the financial sector, while continuing privatization of the main remaining public enterprises.
"The steps taken to elicit broad participation of civil society in the preparation of the poverty reduction strategy paper (PRSP) are welcome. It will now be important to build on the new momentum toward reform, in particular by strengthening the implementation and coordination capacity needed for the effective use of HIPC assistance, consistent with the priorities of the PRSP," Mr. Sugisaki said.
1 On November 22, 1999, the IMF's facility for low-income countries, the Enhanced Structural Adjustment Facility (ESAF), was renamed the Poverty Reduction and Growth Facility (PRGF), and its purposes were redefined. It is intended that PRGF-supported programs will in time be based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners and articulated in a Poverty Reduction Strategy Paper (PRSP). This is intended to ensure that each PRGF-supported program is consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. The Nigerien authorities intend to complete the preparation of their full PRSP by end-2001. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5 ½ year grace period on principal payments.