Press Release: IMF Completes Sixth and Final Review Under Niger's PRGF Arrangement and Approves US$12.4 Million Disbursement
June 29, 2004
The Executive Board of the International Monetary Fund (IMF) has completed the sixth and final review of Niger's performance under a three-year, SDR 59.2 million (about US$86.8 million) Poverty Reduction and Growth Facility (PRGF) arrangement (see Press Release No. 00/69). This decision enables Niger to receive the final loan disbursement of SDR 8.44 million (about US$12.4 million).
In completing the review on June 28, 2004, the Executive Board also waived the nonobservance of the missed performance criterion for end-December 2003.
The Poverty Reduction and Growth Facility is the IMF's concessional facility for low-income countries. PRGF-supported programs are 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. 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.
Following the Executive Board's discussion of Niger's economic program, Agustín Carstens, Deputy Managing Director and Acting Chairman, made the following statement:
"The Nigerien authorities are to be commended for their overall strong policy performance under their three-year program supported by the Fund. Economic activity continued to be strong in 2003, with GDP growth benefiting from a good agricultural crop and sustained activity in the construction and trade sectors, along with improved economic policies. Inflation was below one percent for the second year in a row, and the external current account deficit was lower than envisaged in the program. There were some delays, however, in implementing structural and financial sector reforms.
"Looking ahead, Niger's main challenge is to sustain broad-based growth in a low inflation environment, in order to achieve a substantial reduction in poverty. This will require the pursuit of prudent macroeconomic policies, vigorous implementation of the structural reform agenda-especially in the public enterprise and financial sectors-and the development of a close dialogue with the private sector on economic policymaking.
"Against this background, the authorities' program for 2004 seeks to preserve macroeconomic stability and sustain strong growth, with a view to further reducing poverty. Continued fiscal consolidation is an essential element of the program. Achievement of the fiscal targets will require determined efforts to strengthen revenue mobilization and to closely monitor non-essential expenditure, so as to allow for adequate resources for the social sectors.
"The authorities also intend to expedite the privatization of the electricity and petroleum importing companies (NIGELEC and SONIDEP) and the state-owned Credit du Niger. Moreover, their structural reform agenda for 2004 includes measures to strengthen fiscal management, following the completion of a Public Expenditure Management and Financial Accountability Review with technical assistance from the World Bank. The authorities have reiterated their strong commitment to using the HIPC savings to further advance their poverty reduction program," Mr. Carstens said.