News Brief: IMF Completes Review Under Niger's PRGF Arrangement and Approves USS$11 Million Disbursement for Niger
February 8, 2002
The Executive Board of the International Monetary Fund (IMF) today completed the second review of Niger's performance under the three-year Poverty Reduction and Growth Facility (PRGF)1 arrangement. As a result, Niger will be able to draw up to SDR 8.46 million (about US$11 million) immediately.
Niger's three-year PRGF arrangement was approved on December 14, 2000 (see Press Release No. 00/69), for SDR 59.2 million (about US$74 million). So far, Niger has drawn SDR 16.92 million (about US$21 million) under the arrangement.
After the Executive Board's discussion on Niger, Mr. Aninat, Deputy Managing Director and Acting Chairman, stated:
"Niger's economic activity recovered in 2001 after two years of decline. The economic growth rate, estimated at 5 percent, benefited from a turnaround of agricultural production, fostered by good climatic conditions, and the efforts of the authorities to improve the economic environment, preserve political stability in the country, and restore full relations with the donor community. Year-on-year inflation was brought under 4 percent, preserving Niger's external competitiveness, and the current account deficit was lower than expected in the program.
"The corrective measures taken by the authorities to compensate for some fiscal slippages in the first half of 2001 were successful in bringing the government's program back on track. All the program targets at end-September 2001 were achieved, except for a small accumulation of external payments arrears, that was corrected before end-December 2001. The basic fiscal deficit was lower than programmed as a result of a satisfactory revenue performance and appropriate expenditure reductions in light of delays in disbursements of budgetary assistance. The government also continued its policy of reducing domestic payments arrears. The Fund welcomes the authorities' success in bringing the program back on track, and Directors were encouraged that the Fund's assistance, with its catalytic role, has helped Niger during this difficult time.
"The Fund endorses Niger's economic and financial program for 2002, which aims at further economic adjustment and reflects the authorities' poverty reduction strategy. The program provides for higher spending on poverty related programs, continued sound fiscal policy, a further reduction in domestic payments arrears in 2002, and measures to strengthen cash and debt management.
"The Fund welcomes the new momentum given to the government's structural reform program in 2001, with the petroleum product pricing and taxation mechanism that was introduced in August 2001, and the privatization of the telecommunications company. In the months ahead, the government will implement reforms to strengthen the soundness of the financial system, continue its divestment from large public enterprises, and deepen the reforms of the expenditure process and treasury operations. Directors called upon Niger's development partners to coordinate their efforts, and to make timely and full delivery of external project and budgetary assistance pledges.
"The Fund welcomes the completion of the poverty reduction strategy paper (PRSP) and the intensive participatory process on which it has been based. With the finalization of the full PRSP and the start of its implementation in 2002, Niger has made good progress toward reaching the completion point under the enhanced Initiative for Heavily Indebted Poor Countries in early 2003," Mr. Aninat said.
1 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 in 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. In the case of Niger, a full PRSP, prepared through an extensive participatory approach, has been finalized. 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.