Press Release: Statement at the Conclusion of an IMF Mission to Niger
August 29, 2011Press Release No. 11/317
August 29, 2011
An International Monetary Fund (IMF) mission led by Mr. Richard Harmsen visited Niger during August 17–28, 2011 in order to conduct the 2011 Article IV Consultation. The mission met with the Minister of Finance, Mr. Mahamadou Ouhoumoudou, State Minister Amadou Boubacar Cissé, several other ministers, the National Director of the Central Bank of West African States (BCEAO), senior officials, the business and diplomatic communities, civil society organizations, and development partners. The discussions focused on economic and financial developments in 2011, the outlook for 2012, the 2012 budget and its financing, and the medium-term prospects. At the end of the mission, Mr. Harmsen issued the following statement:
“After a period of slow growth and severe food shortages, economic activity recovered quickly in the second half of 2010, thanks to an excellent harvest and the expansion of trade and transport activities related to agriculture. For the year as a whole, real gross domestic products (GDP) growth was estimated at 8 percent in 2010, against -0.9 percent in 2009. Fiscal operations were conducted according to projections, with a deficit (on a commitment basis and including grants) of 2.5 percent of GDP.
“Despite the repercussions of the Libyan crisis and the deteriorating security situation in the country, growth remained strong in the first half of 2011. Expansion of mining, trade, and services offset the slight contraction in agricultural output and the expected impact of the decline in remittances, as tens of thousands Nigerien workers have been leaving Libya to return to Niger since February 2011. For 2011, GDP growth could reach 3.8 percent. The impact of rising global food prices on domestic inflation remained modest, given the very favorable harvest in 2010.
“The ongoing expansion of the oil and mining sectors brightens the prospects for 2012 and the medium term. Two large projects are expected to enter into their production phase in the next few years: an integrated oil project, that includes an oil field, a refinery, and a pipeline linking the two, in 2012; and a new uranium mine, in 2014, which will make Niger the world’s second largest uranium producer. As a result, oil and mining exports are projected to triple between 2011 and 2016, while total government revenue from natural resources is expected to increase by about 3½ percent of GDP during this period.
“The mission concurred with the authorities that the key medium-term challenge is to achieve faster and more inclusive economic growth, in order to reduce unemployment and poverty. The mission encouraged the authorities to (i) maintain a prudent fiscal stance for the remainder of 2011 and for 2012; (ii) fully implement the strategy to eliminate subsidies to petroleum products by 2012 to create more room for resources for health, education, and other social spending; (iii) continue to improve governance and the business climate, and efforts to further deepen the role of the financial sector; and (iv) avoid over-reliance on natural resources revenue by continuing the reform effort to improve revenue collection. The mission underscored the importance of continuing to pursue a prudent borrowing policy to finance public investment projects that would help preserve fiscal and debt sustainability and maintain economic stability.”
It is expected that the IMF’s Executive Board will discuss the 2011 Article IV Consultation with Niger in October 2011. The mission wishes to thank the authorities for their hospitality, the constructive discussions, and the excellent cooperation during the mission.