## 1nerea2020003

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### Executive summary — context and headline findings
- Niger has one of the world’s lowest levels of human development with enormous needs and limited own resources.
- Key external and structural challenges: insecurity in the Sahel, climate change, and low prices for its uranium exports.
- Prior to the COVID-19 pandemic, GDP growth exceeded 6 percent; large foreign projects were attracted, notably a pipeline for the export of crude oil.
- A new government will take office in April 2021.

### Economic developments and outlook
- COVID-19 epidemiological situation:
  - "about 1,200 infections and under 100 deaths (pandemic described as contained)."
- 2020 macroeconomic impact and near-term outlook:
  - Growth cut to 1.2 percent in 2020 due to shutdowns and project implementation delays.
  - Growth per-capita corresponds to -2.6 percent in 2020.
  - Lockdown measures March–July 2020; borders closed on March 27; restrictions gradually lifted from mid-May; by August only closure of land borders and mask obligations remained.
  - Food-driven inflation rose to 5.7 percent in August 2020; annual average moved into positive territory after consumer prices had declined by 2.5 percent in 2019.
  - Early 2020 recovery signs from June, but activity remained below year-earlier levels.
  - Growth projected to rebound to 6.8 percent in 2021 (staff) and authorities project 6.9 percent in 2021.
  - 2022 projection: start of oil exports jolts growth to 12.8 percent; growth expected to remain in the double digits in 2023 as production volumes ramp up.
  - Inflation should gravitate back to its historical long-run average of some 2 percent; a transitory rise to 2.8 percent noted on food supply disruptions.
- Oil pipeline project specifics:
  - CNPC-led project: 2,000 km pipeline to Benin’s coast; project cost US$2.1 billion.
  - State of Niger contractual right to co-invest up to 45 percent; government locked in a 15 percent stake payable over 24 months (2.4 percent of GDP).
  - Start date for oil exports in mid-2022 remains within reach.

### Public finances, COVID-19 response, and fiscal projections
- 2019–2021 fiscal performance and budgets:
  - 2019 budget deficit widened to 3.6 percent of GDP from 3 percent of GDP in 2018 (against a programmed 2.8 percent of GDP).
  - Fiscal deficits projected to widen to 5.8 percent of GDP in 2020 and 4.4 percent of GDP in 2021.
  - Government’s medium-term framework foresees deficit reduction to below 3 percent of GDP in 2022, excluding final installment of 1 percent of GDP for pipeline participation.
- COVID-19 fiscal response:
  - Authorities prepared a comprehensive COVID-19 response plan costing CFAF 1,440 billion (18.5 percent of GDP).
  - June 2020 supplementary budget authorized new spending of 1.6 percent of GDP, revised down revenue projections by 2.6 percent of GDP, and cut non-priority spending by 1.3 percent of GDP.
  - A second planned supplementary budget will add another 0.6 percent of GDP in outlays.
- Specific support measures and fiscal cost breakdown (authorities/IMF staff calculations):
  - Banks incentivized under a CFAF 150 billion (2 percent of GDP) government-guaranteed credit scheme.
  - Total costs: 1,440 CFAF billions (18.5 percent of GDP).
  - Health sector costs: 167 CFAF billions (2.1 percent of GDP).
  - Support for vulnerable households: 487 CFAF billions (6.3 percent of GDP).
  - Reduction of economic and financial impact: 434 CFAF billions (5.6 percent of GDP).
  - Strengthening resilience in education: 210 CFAF billions (3.0 percent of GDP).
  - Strengthening resilience in agriculture: 331 CFAF billions (4.2 percent of GDP).
  - Pandemic spending: 580 CFAF billions (8.0 percent of GDP).
  - New spending (June supplementary): 122 CFAF billions (1.6 percent of GDP).
  - Revenue reduction (June supplementary): -199 CFAF billions (-2.6 percent of GDP).
  - Change in budget balance: -218 CFAF billions (-2.8 percent of GDP).
  - Cancelled spending: -103 CFAF billions (-1.3 percent of GDP).
- Financing developments in 2020:
  - IMF RCF and CCRT support (0.9 percent of GDP), external loan from Deutsche Bank contracted in January (1.9 percent of GDP), DSSI debt service relief, and sale of a telecom license (0.3 percent of GDP).
  - Authorities committed not to go beyond domestically financed spending envelope set in the second supplementary budget: CFAF 1,275 billion or 16.2 percent of GDP, except to the extent that budget grants exceed predictions (CFAF 198 billion or 2.5 percent of GDP).

### Program performance and structural reforms
- Performance vs end-December 2019 program targets:
  - Performance criteria (PCs): 3 of 4 met.
    - Met: avoidance of external payment arrears; clearance of remaining domestic payment arrears; contracting of new external public debt remained below the programmed ceiling.
    - Not met: domestic budget financing exceeded the program ceiling by 0.4 percent of GDP.
  - Indicative targets (ITs): 2 of 5 met.
    - Met: anti-poverty spending and exceptional expenditure.
    - Not met: fiscal revenue collections (shortfall of 0.2 percent of GDP) and basic fiscal balances (shortfall of 0.9 percent of GDP).
  - Structural benchmarks (SBs): 1 of 2 met for structural benchmarks; all but one recurrent SBs were met.
    - Met: decree establishing a dedicated debt management unit in the Treasury; debt management, treasury plans, and procedures for budget releases observed.
    - Not met: posting of asset declarations on an official website; tally of newly granted discretionary tax exemptions not furnished.
- Achievements during the ECF arrangement:
  - Clearance of domestic payment arrears.
  - Establishment of a Treasury Single Account.
  - Better debt management.
  - Progress in tax and customs administration (large taxpayer unit revamp, transaction valuation, new software, interconnectivity) though revenue mobilization disappointed.
  - Adoption of a new law governing PPPs and some governance improvements.
- Shortcomings and governance issues:
  - Revenue mobilization underperformed; deficit reduction mainly driven by higher grants rather than domestic revenue gains.
  - Special audit of military procurement uncovered alleged irregularities that could have led to a fiscal loss of one percent of GDP during 2014–18; case referred to the judiciary.

### Debt sustainability, DSA findings, and risks
- DSA summary and ratings:
  - Niger’s DSA deteriorates in the wake of the pandemic but staff judge it premature to change the debt distress rating from “moderate” to “high”.
  - Contributing factors to DSA deterioration: additional public borrowing (including first external commercial loan of US$250 million or 1.9 percent of GDP), weakening exports pushing external debt and external debt service indicators into high-risk territory during 2020-21.
  - Expected onset of crude oil exports during 2022 provides fundamental relief.
  - Authorities informed staff of an impending sharp upward revision of gold exports from late-2019 onward; due diligence confirms high likelihood that revisions would reduce breaches to a single and minor one.
- Key DSA indicators and projections (selected):
  - Public and publicly guaranteed (PPG) debt: 39.8 percent of GDP at end-2019.
  - PPG external debt 2019: 26.5 percent of GDP.
  - Real GDP growth (percent): 2019: 5.9; 2020: 1.2; 2021: 6.9; 2022: 12.8; 2023: 11.1.
  - PV of PPG external debt-to-exports: 2020: 257.3; 2021: 219.6; 2022: 145.0 (threshold 180 percent).
  - PPG debt service-to-exports: 2020: 11.4; 2021: 18.1; 2022: 12.7.
  - Nominal GDP (Million US$): 2019: 12,912; 2020: 13,720; 2021: 16,046; 2022: 18,639.
  - Gross external financing need (Million US$): 2019: 985.7; 2020: 1,411.6; 2021: 1,678.4; 2022: 1,723.5.
- Stress-test outcomes and scenarios:
  - Baseline: PV of PPG external debt breaches export-based threshold in 2020-21; improves with oil exports in 2022.
  - Commodity/export shock: breaches sustained; PV of external debt-to-exports peaks at 486 percent in 2022 under export shock.
  - Alternative with surge in gold exports (customs data): customs report 11.4 tons or CFAF 171 billion in H1 2020 vs CFAF 28 billion projected for all of 2020 in BOP; reconciling would materially improve export-based debt distress indicators.
- Policy recommendations from DSA context:
  - Implement reform program (fiscal consolidation after recovery, revenue mobilization, better quality of public spending).
  - Guard against PPP and SOE risks.
  - Pursue economic and export diversification.
  - Prioritize concessional loans and seek grants when contracting external debt.

### Revenue mobilization, expenditure quality, and prior actions
- Authorities’ priorities and structural measures:
  - Intensify domestic revenue mobilization to strengthen public finances and make room for development and social spending.
  - Structural constraints: large informal sector, little manufacturing, high fiscal pressure on those in the tax net.
- Prior actions and measures:
  - Sign and register contract for molecular marking of petroleum products to combat smuggling (prior action).
  - Issue a Ministry of Finance decree to establish a hub for surveillance and analysis of tax and customs exemptions (prior action).
  - Submit to Parliament a 2021 budget keeping domestically financed expenditure broadly flat at CFAF 1,270 billion (14.8 percent of GDP) as a prior action.
  - Prior actions expected to yield modest revenue: planned tax adjustments net impact expected to bring additional revenue of 0.06 percent of GDP.
- Expenditure control and quality improvements:
  - Strengthen realistic budgeting to reduce reliance on budget execution management.
  - Finalize World Bank work on new strategy, procedures, and manual for project selection.
  - Pilot double authorization of spending in six line ministries in the 2021 budget.
  - Subject PPPs to rigorous cost-benefit analyses and proceed only when clear positive net benefit for the public partner.

### Financial sector and private sector development
- Financial sector implications of the pandemic:
  - BCEAO survey: banks becoming less pessimistic; most affected sectors: transport, hotel, and restaurant.
  - Banks’ profits will be sharply lower in 2020 than in 2019 but expected to remain positive.
  - Banks cautious in extending new credit; BCEAO region-wide payment deferral system and refinancing expected to prevent loan stock decline.
  - Proliferation of slow or non-operational credit promotion schemes is a concern.
- Private sector development recommendations:
  - "A much stronger private sector needs to be developed to sustainably support higher living standards."
  - Improve access to credit; consolidate not fully operational credit promotion schemes.
  - Press ahead with anti-corruption agenda and business environment reforms.
  - Operationalize a financial inclusion fund to consolidate existing initiatives and support microfinance and digital financial services.

### Governance, transparency, and anti-corruption commitments
- Authorities’ commitments and transparency measures:
  - Post asset declarations of government members on an official website within six months.
  - Audit Court to conduct and publish online an audit of pandemic-related spending by September 2021.
  - Publish pandemic-related procurement contracts online, including names of companies awarded, beneficial owners, and ex-post validation of delivery.
  - Once judicial process regarding alleged defense procurement irregularities is completed, conduct administrative review and implement reforms as needed.
  - Step up World Bank–supported efforts to strengthen public procurement framework and application.
- COVID-19 funds treatment:
  - All COVID-19 spending channeled through the budget and subject to standard safeguards; additional transparency steps agreed to reassure donors.

### Program modalities, IMF engagement, and staff recommendations
- Staff supports:
  - Waiver for non-observance of the end-December 2019 performance criterion on domestic budget financing.
  - Completion of the sixth review and disbursement of SDR 14.1 million (seventh tranche).
- Program financing and repayment capacity:
  - Niger’s capacity to repay the IMF remains adequate but subject to risks.
  - Peak IMF repayment pressure in 2020: 2.4 percent of tax revenues and 2.4 percent of exports (Table 8 referenced in source).
  - Program is fully financed for the remainder of the arrangement.
- Mission and process notes:
  - Discussions held remotely during September 9–29, 2020.
  - Mission team included Mr. Klingen (head), Mr. Staines, Mr. Kaho, Mr. Oubeid, Mr. Cangul (Resident Representative), Mr. Abdou (local economist) (all AFR), and Mr. de Bidegain (FAD); Ms. Pilouzoue (AFR) provided administrative assistance.
  - Approved by Vitaliy Kramarenko (AFR) and Martin Sommer (SPR) on October 9, 2020.

*IMF staff summary based on content unit 1nerea2020003.*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Context
- Niger has one of the world’s lowest levels of human development and thus enormous needs but limited own resources.
- Key external and structural challenges: insecurity in the Sahel, climate change, and low prices for its uranium exports.
- Prior to the COVID-19 pandemic, GDP growth exceeded 6 percent and large foreign projects were attracted, notably a pipeline for the export of crude oil.
- A new government will take office in April 2021.

### Economic developments
- COVID-19 epidemiological situation: about 1,200 infections and under 100 deaths (pandemic described as contained).
- 2020 macroeconomic impact:
  - Growth cut to 1.2 percent in 2020 due to shutdowns and project implementation delays.
  - Lockdown measures March–July 2020 included closure of all external borders on March 27; restrictions gradually lifted from mid-May; by August only closure of land borders and mask obligations remained.
  - Inflation: food-driven inflation rose to 5.7 percent in August 2020, pulling the annual average into positive territory (consumer prices had declined by 2.5 percent in 2019).
  - Early 2020 recovery signs from June, but activity remained below year-earlier levels.
- Outlook:
  - With projects resuming and renewed shutdowns unlikely, growth projected to rebound to 6.8 percent in 2021.
  - The oil pipeline project: China National Petroleum Company–led project connects eastern Niger oil fields via a 2,000 km pipeline to Benin’s coast; project cost US$2.1 billion; State of Niger contractual right to co-invest up to 45 percent, government locked in a 15 percent stake payable over 24 months (2.4 percent of GDP). Start date for oil exports in mid-2022 remains within reach.
- National accounts revision:
  - In early 2020 Niger revised official GDP estimates upward by 33 percent due to migration to SNA 2008 and broader national accounts updates (Statistical Office responsible for accuracy).

### Public finances and response to COVID-19
- Fiscal performance and budgets:
  - 2019 budget deficit widened to 3.6 percent of GDP from 3 percent of GDP in 2018 (against a programmed 2.8 percent of GDP).
  - The June 2020 supplementary budget authorized new spending of 1.6 percent of GDP, revised down revenue projections by 2.6 percent of GDP, and cut non-priority spending by 1.3 percent of GDP.
  - A second planned supplementary budget will add another 0.6 percent of GDP in outlays, mainly for road and water projects, and food security.
- Comprehensive vs. focused response:
  - Authorities prepared a comprehensive COVID-19 response plan costing CFAF 1,440 billion (18.5 percent of GDP).
  - Budgeted (focused) measures are more modest: June 2020 supplementary budget and a planned second supplementary budget (details above).
- Specific support measures:
  - Banks incentivized to extend credit under a CFAF 150 billion (2 percent of GDP) government-guaranteed scheme; take-up modest to date.
  - Measures included critical agricultural inputs, food aid, reduced utility bills, deferred tax payments.
- Fiscal cost breakdown (from authorities/IMF staff calculations):
  - Total costs: 1,440 CFAF billions (18.5 percent of GDP).
  - Health sector costs: 167 CFAF billions (2.1 percent of GDP).
  - Support for vulnerable households: 487 CFAF billions (6.3 percent of GDP).
  - Reduction of economic and financial impact: 434 CFAF billions (5.6 percent of GDP).
  - Strengthening resilience in education: 210 CFAF billions (3.0 percent of GDP).
  - Strengthening of resilience in agriculture: 331 CFAF billions (4.2 percent of GDP).
  - Pandemic spending: 580 CFAF billions (8.0 percent of GDP).
  - New spending (June supplementary): 122 CFAF billions (1.6 percent of GDP).
  - Revenue reduction (June supplementary): -199 CFAF billions (-2.6 percent of GDP).
  - Change in budget balance: -218 CFAF billions (-2.8 percent of GDP).
  - Cancelled spending: -103 CFAF billions (-1.3 percent of GDP).

### Program performance
- Performance against end-December 2019 program targets:
  - Performance criteria (PCs): 3 out of 4 met.
    - Met: avoidance of external payment arrears; clearance of remaining domestic payment arrears; contracting of new external public debt remained below the programmed ceiling.
    - Not met: domestic budget financing exceeded the program ceiling by 0.4 percent of GDP (reflecting spending overruns and revenue shortfalls).
  - Indicative targets (ITs): 2 out of 5 met.
    - Met: anti-poverty spending and exceptional expenditure.
    - Not met: fiscal revenue collections (shortfall of 0.2 percent of GDP) and basic fiscal balances (shortfall of 0.9 percent of GDP).
  - Structural benchmarks (SBs): 1 of 2 met for structural benchmarks; all but one recurrent SBs were met.
    - Met: decree establishing a dedicated debt management unit in the Treasury; debt management, treasury plans, and procedures for budget releases observed.
    - Not met: posting of asset declarations on an official website; tally of newly granted discretionary tax exemptions not furnished.
- Achievements during the ECF arrangement:
  - Clearance of domestic payment arrears.
  - Establishment of a Treasury Single Account.
  - Better debt management.
  - Progress in tax and customs administration (large taxpayer unit revamp, transaction valuation, new software, interconnectivity) though revenue mobilization disappointed.
  - Adoption of a new law governing PPPs and some governance improvements.
- Shortcomings:
  - Revenue mobilization underperformed.
  - Deficit reduction mainly driven by higher grants rather than domestic revenue gains.
  - Reform roll-out remains work in progress amid security challenges, low capacity, and adverse shocks (including border closure with Nigeria and low uranium prices).
  - A special audit of military procurement uncovered alleged irregularities that could have led to a fiscal loss of one percent of GDP during 2014–18; case referred to the judiciary.

### Policy discussions and recommendations
- Budget realism and execution:
  - The 2020 and 2021 budgets are based on realistic assumptions, reducing dependence on budget execution regulation to meet fiscal targets and strengthening spending control.
- Fiscal trajectory:
  - Fiscal deficits projected to widen to 5.8 percent of GDP in 2020 and 4.4 percent of GDP in 2021, reflecting pandemic-related revenue shortfalls and emergency and recovery spending.
  - High deficits must not become entrenched as they would quickly overwhelm Niger’s limited debt carrying capacity in terms of revenues and export proceeds.
- Policy priorities urged by staff:
  - Persevere with efforts to mobilize revenues.
  - Improve the quality of public spending.
  - Further strengthen governance.
  - Develop the private sector, including through better access to credit.

### Staff views and program modalities
- Staff supports:
  - Granting of a waiver for the non-observance of the December 2019 performance criterion on domestic budget financing.
  - Completion of the sixth review, resulting in the disbursement of SDR 14.1 million.

### Mission and process notes
- Discussions were held remotely during September 9–29, 2020.
- Mission team members included Mr. Klingen (head), Mr. Staines, Mr. Kaho, Mr. Oubeid, Mr. Cangul (Resident Representative), Mr. Abdou (local economist) (all AFR), and Mr. de Bidegain (FAD). Ms. Pilouzoue (AFR) provided administrative assistance.
- Approved by Vitaliy Kramarenko (AFR) and Martin Sommer (SPR) on October 9, 2020.

*IMF staff summary based on “EXECUTIVE SUMMARY” of content unit 1nerea2020003.*

### 11.      The pandemic is weighing strongly on economic activity this year. A delay in the

### 11.      The pandemic is weighing strongly on economic activity this year. A delay in the implementation of the large foreign projects, pandemic-related restrictions, and the weak global economy crimp growth.

### Economic outlook and projections
- Authorities and staff project GDP growth at 1.2 percent in 2020, which corresponds to -2.6 percent in per-capita terms.
- Inflation should see a transitory rise to 2.8 percent on food supply disruptions.
- Current account deficit is projected to remain largely unchanged at 13 percent of GDP in 2020, with both exports and imports down due to Nigeria’s border closure, weak external demand, and delays in import-intensive projects.
- 2021 projection: growth of 6.9 percent, slightly exceeding the pre-pandemic trend.
  - Drivers: resumption of foreign projects, assumed reopening of the border with Nigeria, likely absence of renewed lockdowns.
  - Current account expected to deteriorate in 2021 due to imports for large projects and some decline in grants.
- 2022 projection: start of oil exports during 2022 jolts growth to 12.8 percent.
  - Growth expected to remain in the double digits in 2023 as production volumes ramp up.
  - Current account sees a sharp improvement with oil exports.
- Inflation should gravitate back to its historical long-run average of some 2 percent.

### Risks and uncertainty
- Risks to the outlook are tilted to the downside; uncertainty around the baseline is unusually high.
- Staff-identified downside risks include:
  - Negative global risk balance.
  - Possible delays in pipeline construction.
  - Possible delays in reopening the Nigerian border to trade.
  - Tense Sahel security situation.
  - Tendency of more frequent natural disasters (e.g., recent floods).
- Authorities and staff will continue close engagement and discuss policy measures if downside risks materialize.
- Authorities saw upside to growth forecasts given Niger’s limited linkages to the global economy and large informal agricultural sector.

### Fiscal policy stance and public finances
- Deficits will reach record levels of 5.8 and 4.4 percent of GDP in 2020 and 2021, respectively.
- Government’s medium-term fiscal framework foresees a deficit reduction to below 3 percent of GDP in 2022, excluding the final installment of 1 percent of GDP for the state’s participation in the oil pipeline project.
- Fiscal position will benefit from additional oil revenues once exports ramp up during 2022, but staff cautioned the revenue boost is highly sensitive to international prices and modest at the current WEO forecast of around US$50 per barrel and initial export volumes.
- 2020 specifics:
  - Fiscal deficit expected to rise from 3.6 percent of GDP in 2019 to 5.8 percent of GDP in 2020, including a down-payment of 0.5 percent of GDP for pipeline participation.
  - Revenues benefitted from the sale of a telecom license (0.3 percent of GDP).
  - Additional financing sources in 2020: IMF under the RCF and the CCRT (0.9 percent of GDP), external loan from Deutsche Bank contracted in January (1.9 percent of GDP), and DSSI debt service relief.
  - Authorities committed not to go beyond the domestically financed spending envelope (excluding pipeline participation payment) set in the second supplementary budget: CFAF 1,275 billion or 16.2 percent of GDP, except to the extent that budget grants exceed predictions (CFAF 198 billion or 2.5 percent of GDP).
- 2021 budgetary stance:
  - Prior action: submit to Parliament a draft budget keeping domestically financed expenditure, excluding the second installment for pipeline investment, broadly flat in nominal terms at 2020 level (CFAF 1,270 billion or 14.8 percent of GDP).
  - Spending ratio declines to the level of 2019.
  - Financing need of 2.2 percent of GDP in domestic and regional markets (not taking into account a possible successor arrangement with the Fund).
  - Historical comparators: long-term average domestic financing 1.1 percent of GDP; 2.4 and 3.3 percent of GDP recorded in 2014 and 2015, respectively.

### Debt sustainability and DSA
- Niger’s DSA deteriorates in the wake of the pandemic but staff judge it premature to change the debt distress rating from “moderate” to “high”.
- Contributing factors to DSA deterioration:
  - Additional public borrowing during the crisis, including contracting a first external commercial loan of US$250 million or 1.9 percent of GDP.
  - Weakening of exports pushing external debt and external debt service indicators into high-risk territory during 2020-21 and 2020, respectively.
  - Expected onset of crude oil exports during 2022 provides fundamental relief.
- Authorities informed staff of an impending sharp upward revision of gold exports from late-2019 onward; staff due diligence confirms a high likelihood of revisions that would reduce breaches of thresholds to a single and minor one.
- Staff view: reclassification of debt distress rating would be premature and subject to likely reversal in a few months’ time.
- Policy recommendations in the DSA context: implement reform program (fiscal consolidation after recovery, revenue mobilization, better quality of public spending), guard against PPP and SOE risks, pursue economic and export diversification, prioritize concessional loans and seek grants when contracting external debt.

### Revenue mobilization, expenditure control, and governance
- Authorities prioritize better domestic revenue mobilization to strengthen public finances and make room for development and social spending.
  - Structural constraints: large informal sector, little manufacturing, high fiscal pressure on those in the tax net.
  - Planned prior actions to lay foundation without stepping-up fiscal pressures:
    - Sign and register a contract with a reputable provider for the marking of petroleum products to combat smuggling.
    - Issue a decree to establish a hub within the Ministry of Finance for surveillance and analysis of tax exemptions; hub to consolidate information and formulate recommendations, including (i) procedures and policies to prevent abuse of exemptions, (ii) recommendations to strengthen awarding process, and (iii) advice on reducing tax expenditures by setting an annual ceiling or limiting exemptions to certain tax types.
- Expenditure control measures:
  - Strengthen realistic budgeting to reduce reliance on budget execution management.
  - Inter-Ministerial Budget Regulation Committee introduced in 2016 made progress but has limitations when revenue projections are scaled back late or unexpected critical spending emerges.
  - 2020 revenues conservatively projected to decline in nominal terms by slightly more for the full year than in the first semester.
  - 2021 budget assumes lower budget grants than in 2020 and 2019; revenue increase reflects return to pre-pandemic ratios to GDP, reopening of Nigerian border, and modest delayed yields from 2020 measures.
- Improve quality of public spending:
  - Finalize work with the World Bank on new strategy, procedures, and manual for project selection (could be promulgated by decree).
  - Pilot double authorization (annual and for a three-year period) of spending in six line ministries in the 2021 budget.
  - Work with development partners on efficiency of social protection programs.
  - Subject PPPs to rigorous cost-benefit analyses and proceed only when clear positive net benefit for the public partner is demonstrated.
  - Government action on a PPP domestic pipeline distribution project will be an early test.

### Financial sector implications
- Pandemic affects the financial sector but impact appears manageable.
  - BCEAO survey indicates banks are becoming less pessimistic about crisis effects.
  - Most affected sectors: transport, hotel, and restaurant.
  - Banks’ profits will be sharply lower in 2020 than in 2019, but expected to remain positive.
  - Banks cautious in extending new credit, especially to problem sectors; BCEAO region-wide payment deferral system and refinancing should prevent loan stock decline.
  - Credit promotion funds and financial inclusion efforts continue, but proliferation of slow or non-operational schemes is a concern.

### Governance, anti-corruption, and transparency commitments
- Authorities committed to:
  - Post asset declarations of government members on an official website over the next six months (as envisaged under end-December 2019 SB).
  - Have the Audit Court conduct and publish online an audit of pandemic-related spending by September 2021.
  - Publish pandemic-related procurement contracts online, including names of companies awarded, their beneficial owners, and ex-post validation of delivery.
  - Once judicial process regarding alleged defense procurement irregularities is completed, conduct administrative review and implement reforms as needed.
- Authorities agreed to step up World-Bank-supported efforts to strengthen public procurement framework and application.
- For COVID-19-related spending, authorities noted it passes through the budget and is subject to the same safeguards, but agreed to additional transparency steps to reassure donors.

### Program modalities, IMF engagement, and repayment capacity
- Authorities committed to redress shortfalls in program implementation through more conservative budgeting in 2020 and 2021.
- Spending envelope of the 2021 draft budget is subject to a prior action.
- Authorities committed to improve domestic revenue mobilization, supported by two prior actions; requested a waiver for non-observance of the PC on domestic budget financing at end-December 2019.
- Niger’s capacity to repay the IMF remains adequate but subject to risks; program measures seek to mitigate these risks.
  - Peak IMF repayment pressure in 2020: 2.4 percent of tax revenues and 2.4 percent of exports (Table 8 referenced).
  - Key risks: security developments, climatic shocks, slowing external support, and implementation capacity.
  - Program is fully financed for the remainder of the arrangement.

### Staff appraisal and policy guidance
- Program performance was mixed against end-December 2019 targets:
  - Achievements: clearance of remaining domestic payment arrears, prudent external debt contracting, establishment of a dedicated public debt management unit.
  - Concerns: sizable fiscal spending overruns, continued challenges mobilizing domestic revenues, slower progress on governance frameworks.
- COVID-19 pandemic imposes a heavy economic toll in 2020, but indicators point to a rebound in 2021 given limited linkages to global economy and containment progress.
- Widening fiscal deficits to respond to the pandemic are appropriate but risk becoming entrenched; authorities’ commitment to not go beyond the second supplementary 2020 spending envelope and the prudent 2021 draft budget is welcomed.
- Imperatives emphasized by staff:
  - Mobilize domestic revenues and improve spending quality.
  - Swift implementation of long-standing reforms is crucial.
  - Authorities’ reaffirmation to engage in PPPs only with proven clear positive net benefit is important.
  - Conduct deeper analysis of limited progress in domestic revenue mobilization and pursue low-hanging fruits in the interim.

*International Monetary Fund*

### 30.      A much stronger private sector needs to be developed to sustainably support higher

### A much stronger private sector needs to be developed to sustainably support higher living standards

### Private sector development and institutional reforms
- Finding: "A much stronger private sector needs to be developed to sustainably support higher living standards."
- Recommendation: "This requires a sustained and focused approach to reforms by the government and development partners."
- Policy measures highlighted:
  - Improve access to credit, including by addressing the "growing number of not fully operational credit promotion schemes" and pursuing their consolidation.
  - "Pressing ahead with the implementation of the anti-corruption agenda is also critical."

### Fiscal correction, budgets, and revenue strengthening
- Finding: "The corrective actions taken and committed in the context of this review are an important step forward."
- Budget assessment:
  - "The budgets for 2020 and 2021 are based on realistic assumptions and therefore less prone to overruns than over-optimistic past budgets that ended up relying excessively on budget under-execution to meet targets."
- Revenue-strengthening measures:
  - "Concrete steps to combat the smuggling of petroleum products" are expected to strengthen revenues.
  - Development of "better analytical tools to inform policy decision on tax exemptions" should strengthen revenues going forward.

*Source: NIGER — INTERNATIONAL MONETARY FUND (excerpt).*

### 32.      Staff supports the authorities’ request for a waiver for the non-observance of the

### 32. Staff supports the authorities’ request for a waiver for the non-observance of the end-December 2019 performance criterion on domestic budget financing, the completion of the sixth program review, and the disbursement of the seventh tranche of SDR 14.1 million.

### Program status, waiver request, and Fund engagement
- Staff supports the authorities’ request for a waiver for the non-observance of the end-December 2019 performance criterion on domestic budget financing.
- Staff supports completion of the sixth program review.
- Staff supports the disbursement of the seventh tranche of SDR 14.1 million.
- The attached Letter of Intent sets out appropriate policies to achieve program objectives.
- Staff looks forward to continuing close engagement with the authorities and recommends that Niger’s next Article IV consultation be held on the standard 12-month cycle.

### Substantive findings from the accompanying data presentation
- Monetary and credit developments (figures presented cover Jan. 2013–June 2020): contribution to broad money growth, credit to the private sector, and inflation series are reported graphically for Jan. 2013–June 2020 and Jan. 2016–Aug. 2020 respectively.
- Fiscal developments (2010–19) are shown with detailed decomposition of total expenditure (external-financed investment, domestic-financed investment, current expenditure) and revenue (non-resource cash, resource-cash, non-cash, total revenue).
- GDP composition and output volatility: agriculture and livestock continue to dominate; extractive industries share remains low and has declined with lower international prices; GDP growth and per capita GDP growth are highly volatile and sensitive to climatic shocks.
- Tax performance: cumulative series for 2016–20 (December 2014 = 100, nominal GDP discounted) are presented for Total Tax Revenue, Non-Tax Revenue, Taxes on Income, Domestic Taxes on Goods and Services, Taxes on International Trade and Transactions, and Extractive Industries.

### Key program-linked policy elements (as stated)
- The Letter of Intent contains appropriate policies intended to achieve program objectives (specific policy measures are described in the Letter of Intent attached to the source document).

### Selected program-support actions and institutional recommendation
- Waiver for non-observance: requested and supported for the end-December 2019 performance criterion on domestic budget financing.
- Review and disbursement: staff supports completion of the sixth program review and disbursement of the seventh tranche of SDR 14.1 million.
- Surveillance cadence: staff recommends that Niger’s next Article IV consultation be held on the standard 12-month cycle.

*IMF staff report excerpt.*

### Appendix I. Letter of Intent

### Appendix I. Letter of Intent

### Political and program request
- Government preparing for first democratic transition of power with elections scheduled at the end of this year and "more than 7.4 million voters have been registered in the biometric registry."
- Requests:
  - Waiver for non-observance of the performance criterion (PC) on domestic budget financing.
  - Completion of the 6th review of the ECF arrangement.
  - Disbursement of the associated final tranche in the amount of SDR 14.1 million.
- Acknowledges IMF support earlier in the year: Rapid Credit Facility (RCF) liquidity support of 0.9 percent of GDP and CCRT debt relief.

### Recent economic developments and program performance
- 2019 macroeconomic and external performance:
  - GDP expanded by 5.9 percent in 2019.
  - Consumer prices declined by 2.5 percent.
  - Current account deficit remained at some 12 percent of GDP; overall external balance turned markedly positive because of high donor support and FDI.
- 2020 shock and near-term outlook:
  - Growth expected to decline to 1.2 percent in 2020 and recover to 6.9 percent in 2021.
  - Medium-term momentum supported by crude oil exports starting in 2022 and continued private investments, with growth averaging 9 percent (medium-term statement).
- Fiscal performance and indicators:
  - Budget deficit widened to 3.6 percent of GDP in 2019 from 3 percent of GDP in 2018; program target was 2.8 percent of GDP.
  - Domestic financing exceeded the PC by 0.4 percent of GDP in 2019.
  - Revenue and the basic fiscal balances fell short of indicative targets (ITs) by 0.2 and 0.9 percent of GDP, respectively.
  - Other PCs observed: external payment arrears avoided; domestic payment arrears cleared; contracting of new external public debt remained below program ceiling.
- Structural and governance actions:
  - Decree establishing a dedicated debt management unit at the Treasury issued.
  - A list of public officials subject to asset declaration requirements and the total value of assets they declared was included in the annual report of the Audit Court and published on its official website; individual declarations not yet posted.
  - Four recurrent SBs observed; two SBs related to debt management observed; a tally of newly granted discretionary tax exemptions is yet to be furnished.

### COVID-19 status and response plan
- Epidemiological status and containment:
  - "New cases are averaging around 1 per day, with 69 deaths and fewer than 1,200 cases in total."
- Health, social, and economic response measures:
  - Testing capacity increased; isolation centers set up.
  - Social measures: food aid to the vulnerable; water and electricity bills assumed for low-income households.
  - Economic measures: agricultural inputs and tax deferrals; CFAF 150 billion (2 percent of GDP) bank credit scheme backed by government guarantee funds deposited in banks to incentivize banks to extend credit to eligible businesses.
- Budgetary treatment and fiscal envelope:
  - Supplementary budgets in June and September authorized additional COVID-19 related spending; all COVID-19 spending channeled through the budget.
  - Government committed not to authorize spending beyond the CFAF 1,316 billion envelope for overall domestically financed expenditure (including the investment in the crude oil export pipeline) in 2020 unless budget grants exceed the anticipated amount of CFAF 198 billion.
  - This constraint will keep the deficit at 5.8 percent of GDP in 2020.
- Transparency measures for COVID-19 funds:
  - Court of Audit to conduct an independent audit of the use of committed funds; audit to be published online by the Court of Audit in its general public report by September 2021.
  - Government will publish procurement documents and contracts of large projects related to the pandemic, together with the names of companies awarded and their beneficial owners.

### Medium-term outlook and key projections
- Growth projections:
  - 2020: 1.2 percent (decline).
  - 2021: 6.9 percent (recovery toward trend).
  - 2022: 12.8 percent (with crude oil exports starting).
  - 2023: growth to remain in double digits as production volumes increase.
  - Medium-term growth averaging 9 percent (sustained by exports and private investments).
- External accounts:
  - Despite reviving exports, current account set to deteriorate as import-intensive projects resume and foreign grants start to normalize.
- Crude oil project and fiscal implications:
  - CNPC-led pipeline project to Benin’s coast; Niger opted for a 15 percent stake in the project (2.4 percent of GDP over two years).
- Fiscal path and targets:
  - 2021 deficit projected to retreat to 4.4 percent of GDP (including the pipeline) based on modest nominal reduction of domestically financed expenditure, avoiding tax cuts, and revenue recovery.
  - Medium-term fiscal deficit to converge to 3 percent of GDP, in line with the WAEMU convergence criterion.
  - Public investment expected to stay above 10 percent of GDP with overall domestic spending at 15.4 percent of GDP.
  - Revenue to GDP ratio projected to reach over 14 percent of GDP.
  - Government will consult IMF staff on developing an appropriate smoothing mechanism for oil revenue volatility.

### Economic policies, revenue mobilization, and reforms (prior actions and commitments)
- Budget discipline and prior action:
  - As a prior action for the review, government submitted to parliament a 2021 budget with an envelope for domestically financed expenditure of no more than CFAF 1,270 billion (TOFE definition, including special accounts and OPs, excluding investment in the crude-oil export pipeline).
  - Envelope could be adjusted in supplementary budgets if budget grants deviate from the anticipated amount of CFAF 151 billion (Table 3).
  - Government will refrain from tax cuts.
- Revenue measures and expected yield:
  - Planned measures include:
    - Adjustment of certain custom duty rates of taxpayers without VAT machines.
    - Limiting the professional tax exemption for mining companies to the first 5 years of production.
    - Giving tax exemptions to importers and exporters of agricultural products.
    - Adjustment of tax rates on re-exportation.
  - Net impact of these measures expected to bring additional revenue of 0.06 percent of GDP.
- Corrective actions on exemptions and petroleum products (prior actions):
  - Minister of Finance issued a decree assigning responsibility for surveillance and analysis of tax and customs exemptions to a designated pole, with terms of reference (prior action for review).
    - The unit will systematically record, monitor, and analyze discretionary tax exemptions and prepare tax expenditure reports.
    - The unit will compile a coherent and consolidated list by beneficiary of all discretionary exemptions granted since the beginning of 2019, including legal basis and estimated revenue loss.
  - Government signed and registered, as a prior action, a contract with a reputable provider to molecularly mark petroleum products according to product type and destination and completed all legal requirements for the contract to become effective.
- Measures to reduce informality and modernize tax administration:
  - In-depth study with IMF staff to identify root causes of weak revenue mobilization.
  - Medium-term comprehensive approach to reduce informality combining incentives (training, certification, credit, matching with external firms) and deterrents.
  - Progressive digitalization of tax declarations and payments, starting with select large firms and to be broadened.
- Public expenditure quality and PPPs:
  - Work with the World Bank on a new strategy, procedures, and manual for better project selection to be promulgated by decree before year-end.
  - Pilot double authorization (AE/CP) of spending in six line ministries in the 2021 budget.
  - Update social spending tracking system established in the context of the 5th program review.
  - Commitment to publish new PPPs attached to the budget and to engage only in PPPs with clear positive net benefit; cost-benefit analysis for pipeline distribution project completed and shared with IMF and World Bank staff.
- Private sector development and financial inclusion:
  - Operationalize establishment of the financial inclusion fund; consolidate existing initiatives under one umbrella to rebuild the microfinance industry.
  - Fund to provide equity, loans and grants and to support digital financial services development.
- Governance and transparency commitments:
  - Parliament adopted a law in January 2020 widening asset declaration requirements to top civil servants; law remains to be promulgated pending review.
  - Government will publish on an official website the declarations of all members of government within 6 months.
  - Procurement irregularities at the Ministry of Defense were transmitted to the judiciary following an administrative investigation; once judicial process is complete, the government will review and strengthen procurement procedures.

### Engagement with the IMF
- Government commits to continued cooperation with the IMF after the current program expires in October 2020 and to assess with IMF staff the optimal form of future support.

*Letter of Intent, Niamey, October 9, 2020.*

### 27.      In keeping with our longstanding commitment to transparency, we agree to the

### 1nerea2020003 - 27.      In keeping with our longstanding commitment to transparency, we agree to the

### Quantitative Performance Criteria and Indicative Targets (March-December 2019)
- Table reports program (Prog.), actual, and status (Met/Not Met) for end-Mar., end-Jun., end-Sept., and end-Dec. 2019.
- A. Quantitative performance criteria and indicative targets (ceiling on the cumulative from beginning of year) highlights:
  - Net domestic financing of the government, without IMF net financing: Prog. and Actual values shown across quarters (examples: Prog. 69.7 / Actual 74.0; end-Sept. Prog. 113.1 / Actual -47.6).
  - Adjustments include: shortfall in external budget support; reduction of stock of unpaid payment obligations; borrowing under PBG operation.
  - Adjusted net domestic financing of the government, without IMF net financing:
    - End-Mar.: Prog. 69.7, Actual 29.0, Status Met
    - End-Jun.: Prog. 143.3, Actual 122.6, Status Met
    - End-Sept.: Prog. 175.3, Actual 199.4, Status Not Met
    - End-Dec.: Prog. 20.5, Actual 51.2, Status Not Met
- Memorandum items:
  - External budget support (excluding net financing from the IMF): End-Mar. actual 0.0; End-Jun. actual 16.0; End-Sept. actual 28.2; End-Dec. actual 8.0; further entries include 28.2, 35.7, 316.9, 304.0 as shown in table.
- B. Continuous quantitative performance criteria:
  - Accumulation of external payments arrears: ceiling 0.0 with Actual 0.0 across quarters, Status Met.
  - Stock of outstanding domestic payment arrears on government obligations:
    - End-Mar. ceiling 5.0, Actual 43.0, Status Not Met
    - End-Jun. ceiling 5.0, Actual 14.5, Status Met
    - End-Sept. ceiling 25.0, Actual 8.9, Status Met
    - End-Dec. ceiling 5.0, Actual 0.0, Status Met
  - Present Value (PV) of new public and publicly-guaranteed (PPG) external debt contracted from January 1, 2019:
    - Ceiling 225.0 with Actuals by quarter (examples: Actual 11.9, 116.5, 155.5) and End-Dec. ceiling 325.0 / Actual 267.5, Status Met.
- C. Indicative targets (cumulative from beginning of year):
  - Basic budget balance (commitment basis, excl. grants), floor:
    - End-Mar.: Prog. -56.1, Actual -51.0, Status Met
    - End-Jun.: Prog. -99.0, Actual -69.4, Status Met
    - End-Sept.: Prog. -124.7, Actual -163.1, Status Not Met
    - End-Dec.: Prog. -201.6, Actual -267.5, Status Not Met
  - Basic budget balance (commitment basis, incl. budget grants), floor:
    - End-Mar.: Prog. -56.1, Actual -43.0, Status Met
    - End-Jun.: Prog. -70.8, Actual -61.4, Status Met
    - End-Sept.: Prog. -96.5, Actual -135.4, Status Not Met
    - End-Dec.: Prog. -3.1, Actual -74.4, Status Not Met
  - Total fiscal revenue, floor:
    - End-Mar.: Prog. 195.2, Actual 205.6, Status Met
    - End-Jun.: Prog. 417.6, Actual 438.1, Status Met
    - End-Sept.: Prog. 652.1, Actual 639.2, Status Not Met
    - End-Dec.: Prog. 866.2, Actual 848.5, Status Not Met
  - Spending on poverty reduction, floor:
    - End-Mar.: Prog. 150.7, Actual 152.2, Status Met
    - End-Jun.: Prog. 301.4, Actual 311.1, Status Met
    - End-Sept.: Prog. 452.2, Actual 454.1, Status Met
    - End-Dec.: Prog. 602.9, Actual 605.3, Status Met
  - Ratio of exceptional expenditures on authorized spending (percent), ceiling 5.0:
    - End-Mar. Actual 3.2 Met; End-Jun. Actual 3.3 Met; End-Sept. Actual 2.6 Met; End-Dec. Actual 4.0 Met
- Notes and specific adjusters:
  - From October 1, 2019 onward, the ceiling on net domestic financing lowered by amount of borrowing under the PBG operation.
  - Ceiling on domestic financing will be adjusted pro tanto up to a maximum of CFAF 30 billion if external budgetary assistance disbursements fall short.
  - From end-June 2019, ceiling on domestic financing adjusted by reduction/increase in stock of outstanding domestic payment obligations since end-2018; adjuster capped at CFAF 50 billion.

### Recurrent Structural Benchmarks for the Program, December 2019 – December 2020
- Measures, timetable, progress, and macroeconomic rationale:
  - Release the quarterly budget allocation in the first month of each quarter based on the proposal of the regulation committee.
    - Timetable: Quarterly
    - Progress: Met for 2019Q4, 2020Q1, and 2020Q2
    - Rationale: Improve budget and cash flow management.
  - Prepare a quarterly commitment plan consistent with the corresponding cash plan.
    - Timetable: Quarterly
    - Progress: Met for 2019Q4, 2020Q1, and 2020Q2
    - Rationale: Improve budget and cash flow management.
  - Prepare quarterly debt management reports to be validated by the National Public Debt Management Committee.
    - Timetable: Quarterly
    - Progress: Met for 2019Q4, 2020Q1, and 2020Q2
    - Rationale: Improve debt management.
  - Hold at least quarterly meetings of the Inter-Ministerial Debt Management Committee; publish decisions, list of newly approved loans, and Ministry of Finance view in quarterly debt management reports.
    - Timetable: Quarterly
    - Progress: Met for 2019Q4, 2020Q1, and 2020Q2
    - Rationale: Safeguard control over contracting of new public debt.
  - Provide Fund staff with a tally of newly granted tax exemptions.
    - Timetable: Quarterly
    - Progress: Not met
    - Rationale: Protect revenue base.

### Proposed Prior Actions and Structural Benchmarks, December 2019 – October 2020
- Prior actions (examples and rationale):
  - Submission to parliament of a 2021 budget with an envelope for domestically financed expenditure of no more than CFAF 1,270 billion (TOFE definition, including special accounts and OPs, excluding investment in the crude-oil export pipeline). — Rationale: Improve spending control.
  - Issuance of a Ministry of Finance decree to establish a hub for monitoring and analyzing tax and customs exemptions within an existing or newly established unit within the Ministry of Finance; decree to specify mission and tasks. — Rationale: Protect the fiscal base.
  - Signature and registration of a contract with a reputable provider to molecularly mark petroleum products according to product type and destination; completion of legal requirements for contract to become effective. — Rationale: Strengthen the fiscal base.
- Public Financial Management prior action:
  - Put required legal and organizational arrangements in place for a debt management unit inside the Treasury with front-middle-back office to start operating by end-2019.
    - Timetable: End-December 2019
    - Progress: Met
    - Rationale: Improve the management of public debt.
- Other structural reform prior action:
  - Publish on an official website the list of high-ranking public officials mentioned in Art. 51 and Art. 78 of the constitution detailing compliance or non-compliance with declaration requirements and their last two filings as required in the constitution.
    - Timetable: End-December 2019
    - Progress: Not met
    - Rationale: Improve governance and transparency.

### Proposed Disbursements Scheduled Under the ECF Arrangement 2017–20
- Disbursement schedule (Amount in SDR and conditions):
  - SDR 14.1 — Executive Board Approval of the ECF Arrangement — January 23, 2017
  - SDR 14.1 — Observance of continuous and end-June 2017 performance criteria, and completion of the first review under the arrangement — December 15, 2017
  - SDR 14.1 — Observance of continuous and end-December 2017 performance criteria, and completion of the second review under the arrangement — June 1, 2018
  - SDR 14.1 — Observance of continuous and end-June 2018 performance criteria, and completion of the third review under the arrangement — December 10, 2018
  - SDR 33.84 — Observance of continuous and end-December 2018 performance criteria, and completion of the fourth review under the arrangement — June 26, 2019
  - SDR 14.1 — Observance of continuous and end-June 2019 performance criteria, and completion of the fifth review under the arrangement — January 8, 2020
  - SDR 14.1 — Observance of continuous and end-December 2019 performance criteria, and completion of the sixth and last review under the arrangement — June 27, 2020
  - Total SDR 118.44 (proposed)

### Debt Sustainability Analysis — Key Messages and Risk Assessment
- Risk ratings:
  - Risk of external debt distress: Moderate
  - Overall risk of debt distress: Moderate
  - Granularity in the risk rating: Moderate risk tool: Limited space to absorb shocks
  - Application of judgement: Yes
- Recent developments and implications:
  - Niger’s risk of external and overall public debt distress has increased but remains “moderate.”
  - COVID-19 response required higher borrowing and entailed a sharp fall in export earnings; closure of Nigeria border further affected trade.
  - Two debt indicators breach thresholds in the baseline:
    - PV of PPG external debt relative to exports breaches threshold for 2020-21.
    - PPG debt service-to-exports ratio breaches threshold for two years in 2020-21 and one year in 2021, until the onset of crude oil exports during 2022 via a new pipeline.
  - Pending sharp upward revision of gold exports could remove most breaches:
    - Customs data and independent information on surge of artisanal gold production suggest a revision scale that would leave only one minor threshold breach.
  - DSA predicated on government implementing reform program and timetable for start of oil exports holding.
- Identified weaknesses and policy priorities:
  - Strengthen debt management.
  - Reduce fiscal risks from SOEs and PPPs.
  - Prioritize concessional borrowing.
  - Strengthen private-sector development to support economic diversification.
- Note on debt-carrying capacity:
  - Niger’s debt-carrying capacity remains rated “medium” with composite indicator value of 2.94 (October 2019 WEO vintage).

### Public Debt Coverage and Contingent Liability Stress Test Design
- Coverage:
  - DSA covers central government, excludes local governments and social security fund; no extra-budgetary funds.
  - State guarantees to private and public sectors for external borrowing included.
  - Publicly-guaranteed private debt limited to guarantee issued to CNPC for loan financing government’s minority stake in SORAZ.
- SOEs and on-lending:
  - SOEs do not directly borrow from abroad; they benefit from on-lending by central government (included in central government debt statistics). Entities include NIGELEC, SPEN, Niger Telecom, ABK (Kandadji dam project).
  - Absence of reliable data prevents explicit accounting for domestic SOE debt; authorities working with World Bank to improve SOE financial information. A dedicated directorate general established in Ministry of Finance in late 2019.
- Contingent liability stress test calibration (default shocks used):
  - Other elements of general government not captured in baseline stock: default 1.0 percent of GDP, used in analysis as 0.0.
  - SOE debt (guaranteed and not guaranteed): default 2 percent of GDP, used 2.0.
  - PPP: default 35 percent of PPP stock, used 0.0.
  - Financial market shock: default 5 percent of GDP, used 5.0.
  - Total contingent liability shock (2+3+4+5): 7.0 percent of GDP.
- Rationale for deviations from defaults:
  - Strong financial position of CNSS (social security fund) and absence of extra-budgetary funds remove material fiscal risks.
  - Local governments contract only short-term domestic banking sector debt, which is small.
  - PPPs under new law (May 2018) do not involve government financing; recent Niamey airport concession fully privately financed.
  - Small size and depth of financial sector (credit to the economy 12.7 percent of GDP) supports using default 5 percent of GDP for financial market contingent liability risk.

### Background — Evolution and Composition of Debt
- Debt levels and composition:
  - Public and publicly guaranteed (PPG) debt: 39.8 percent of GDP at end-2019.
  - External public debt history:
    - Dropped from average 52.7 percent of GDP during 2000–05 to 11.3 percent of GDP in 2006 after HIPC debt relief.
    - Hovered around 12–13 percent of GDP until increasing markedly from 2015.
  - Domestic debt trend:
    - Declined since 2000, averaged 2.8 percent of GDP over 2008–14, rose from 2015.
    - Domestic debt includes debt associated with commercial PPPs from 2017; in 2019 these stood at 2.7 percent of GDP.
  - External public debt composition (2019):
    - PPG external debt comprised two-thirds of total debt stock in 2019.
    - Multilateral creditors dominate external debt; main lenders World Bank (IDA) and West African Development Bank (BOAD).
    - External debt average weighted interest rate 1.6 percent and remaining maturity 23 years at end-2019.
  - Domestic debt composition (2019):
    - Mostly short- and medium-term Treasury securities held by banks in Niger or rest of WAEMU.
    - First-time 2019 syndication placement worth 3.9 percent of GDP at seven-year tenor.
    - Average remaining maturity of domestic debt rose to 2.9 years.
    - Average weighted interest rate 5.7 percent in 2019.
- Text Table 2 selected figures (PPG debt summary, 2017–19):
  - Total PPG debt:
    - 2017: CFAF 2,371 billion, 36.5 percent of GDP
    - 2018: CFAF 2,633 billion, 36.9 percent of GDP
    - 2019: CFAF 3,011 billion, 39.8 percent of GDP
  - PPG External Debt:
    - 2017: CFAF 1,668 billion, 25.7 percent of GDP
    - 2018: CFAF 1,808 billion, 25.3 percent of GDP
    - 2019: CFAF 2,007 billion, 26.5 percent of GDP
  - Multilateral creditors (2019): CFAF 1,596 billion, 21.1 percent of GDP
    - of which IMF: CFAF 149 billion, 2.0 percent of GDP
    - of which World Bank: CFAF 310 billion, 10.6 percent of GDP
    - of which BOAD: CFAF 257 billion, 3.4 percent of GDP
  - Official bilateral (2019): CFAF 374 billion, 4.5 percent of GDP
    - Paris Club (France) 61.0 (percent of GDP notation in table)
    - China (2019): CFAF 191 billion, 1.6 percent of GDP
  - Publicly-guaranteed private debt (2019): CFAF 41.0 billion, 1.0 percent of GDP
  - Domestic debt (2019): CFAF 1,004 billion, 13.3 percent of GDP
    - Tbills and bonds (2019): CFAF 712.0 billion, 9.4 percent of GDP
    - Bank loans (2019): CFAF 100.1 billion, 1.3 percent of GDP
    - Domestic arrears (2019): CFAF 230.3 billion, 3.0 percent of GDP
    - Other (2019): CFAF 30.8 billion, 0.4 percent of GDP

### Macroeconomic Forecast and Key Assumptions (Baseline, 2017–40)
- Framework assumptions and outlook:
  - Assumes sharp but temporary slowdown in 2020 from COVID-19: contraction of export earnings and increase in external financial assistance.
  - Fiscal consolidation assumed in line with government reform program, aiming to meet WAEMU deficit target of 3 percent of GDP by 2023 (one year later than previous DSA).
  - Security-related spending increased to over 3 percent of GDP and the equivalent of some 20 percent of domestic revenues.
  - Bounce-back of revenues expected as health crisis abates, Nigeria border reopens, and revenue measures regain traction.
  - Important additional oil-related revenues expected in 2022 when export pipeline becomes operational; deficit of some 2.5 percent of GDP projected from 2023 onward.
  - Economic growth: recent pickup to some 6 percent per year; including oil export spike, average 7.4 percent annually during 2019-24s.
  - Exchange rate peg keeps inflation well-contained throughout projection period.
- Key macroeconomic assumptions (selected rows from Text Table 3, DSA 2020):
  - Real GDP growth (percent):
    - 2017-2018: 6.1
    - 2019: 5.9
    - 2020: 1.2
    - 2021: 6.9
    - 2022: 12.8
    - 2023: 11.1
    - 2024: 6.7
    - 2025: 6.3
    - 2026-2040: 6.1
  - Inflation (CPI):
    - 2017-2018: 1.5-2.5
    - 2019: 2.8
    - 2020: 0.4
    - 2021: 2.0
    - 2022: 2.0
    - 2023: 2.0
    - 2024: 2.0
    - 2025: 2.0
    - 2026-2040: 2.0
  - Primary fiscal balance (percent of GDP) DSA 2020:
    - 2017-2018: -2.7
    - 2019: -2.6
    - 2020: -3.4
    - 2021: -3.6
    - 2022: -1.9
    - 2023: -1.3
    - 2024: -1.3
    - 2025: -1.3
    - 2026-2040: -1.1
  - Total revenue excluding grants (percent of GDP) DSA 2020:
    - 2017-2018: 11.3
    - 2019: 11.2
    - 2020: 10.4
    - 2021: 11.9
    - 2022: 12.6
    - 2023: 13.6
    - 2024: 13.9
    - 2025: 14.2
    - 2026-2040: 15.3
  - Exports of goods and services (percent of GDP) DSA 2020:
    - 2017-2018: 12.4
    - 2019: 11.3
    - 2020: 11.1
    - 2021: 9.3
    - 2022: 10.1
    - 2023: 14.0
    - 2024: 16.6
    - 2025: 16.6
    - 2026-2040: 15.4
  - Oil export price (US dollars per barrel) DSA 2020:
    - 2017-2018: 57.5
    - 2019: 58.3
    - 2020: 34.4
    - 2021: 35.7
    - 2022: 38.8
    - 2023: 41.4
    - 2024: 43.7
    - 2025: 45.8
    - 2026-2040: 53.9
  - Uranium price (Thousands of CFAF per kg) DSA 2020:
    - 2017-2018: 44.2-45.0
    - 2019: 45.0
    - 2020: 45.0
    - 2021: 46.1
    - 2022: 50.2
    - 2023: 50.3
    - 2024: 50.4
    - 2025: 50.4
    - 2026-2040: 50.4

*Prepared by the staffs of the International Monetary Fund and the International Development Association. October 9, 2020.*

### 8.      The continued decline in Niger’s exports since 2016 is a key factor undermining the

### 1nerea2020003 - 8.      The continued decline in Niger’s exports since 2016 is a key factor undermining the

### Exports and external-debt implications
- Exports dropped from 13.6 of GDP in 2016 to 11.3 percent in 2019 and are projected to recede further in 2020 and 2021 to 11.1 and 9.3 percent of GDP, respectively.
- Decline mainly driven by lower performance of uranium exports.
- Since 2018, sharp increase in gold exports recorded by customs has created uncertainties in export figures; authorities project an intensification of these exports in 2020 and 2021.
- IMF to support authorities via its statistics department to improve balance-of-payments statistics and finalize reconciliation.

### Domestic financing and rebalancing of budget financing
- Policy aim: keep reliance on domestic financing limited to extend maturities, reduce roll-over risk, and create space for banks to lend to the private sector.
- Share of domestic sources in total budgetary financing was around 40 percent before 2019; brought down sharply in 2019 and 2020.
- Domestic financing was close to zero in 2019 due to surging donor support.
- January 2020 “debt reprofiling” operation: borrowed 1.9 percent of GDP commercially from abroad to repay domestic debt.4
- With continued strong donor support, domestic financing likely to remain negligible in near term; assumed to remain moderate for next couple of years and, in the very long run, gradually rise to cover slightly more than a fifth of fiscal financing needs.

### Borrowing terms assumptions
- Foreign borrowing: new disbursements expected to follow historical financing patterns; longer run shifts toward less concessional financing and toward commercial loans.
- Domestic borrowing: assumed gradual shift from T-bills to medium- and long-term bonds.
- Average interest rate on domestic bonds assumed at 6.25, 6.5, and 7.5 percent for bonds maturing in 1 to 3, 4 to 7 years and over 7 years, respectively.
- Interest rate on T-bills set to 6 percent.

### DSA realism checks and macro drivers
- Evolution of total public debt dominated by primary fiscal deficit and real GDP growth; projections place higher contribution from growth and lower contribution from primary deficit versus past five years.
- Public debt ratio stabilizes at around 36 percent of GDP, almost the same level as in the previous DSA.
- In the very long run, external public debt declines to about 18.7 percent of GDP, essentially unchanged from previous DSA.
- Projected 3-year fiscal adjustment in the primary balance equals 0.3 percentage point of GDP; lies below top quartile of past adjustments (above 2 percentage points of GDP) for LICs.
- Public investment expected to remain above 10 percent of GDP over the medium term.
- Projected GDP growth averages 6.5 percent over the projection horizon.

### Country classification and CI score
- Debt-carrying capacity rated “medium” (October 2019 WEO vintage).
- Composite indicator (CI) value of 2.94 falls within 2.69 < CI ≤ 3.05.
- CI component contributions: CPIA 44 percent; international reserves 33 percent; country and global real growth rates 6 and 16 percent, respectively.
- Text Table 4 shows CI Score 2.94 and CI rating Medium.

### Stress tests and scenario results
- DSA uses six standardized stress tests plus a tailored commodity price shock stress test (relevant because commodities accounted for 55.4 percent of Niger exports of goods and services over 2017-2019).6
- Under baseline:
  - PPG external debt expected to increase from 26.5 to 29.4 percent of GDP over 2019-20 and decline to 18.7 percent of GDP by 2040.
  - Total external debt rises from 48.4 percent of GDP in 2019 to 49.7 percent in 2020, then declines to 24.8 percent of GDP in 2040.
- Export-related indicators breach thresholds under baseline:
  - PV of external debt-to-exports breaches threshold for two years (2020-21); reaches 257.3 percent in 2020 (threshold 180 percent), 219.6 percent in 2021, and improves with onset of crude-oil exports in 2022 and Imouraren uranium in 2025.
  - PPG external debt service to exports breaches threshold for one year in 2021.
- Under commodity/ export shock scenarios:
  - Breaches are sustained; PV of external debt-to-exports peaks at 486 percent in 2022 under export shock and remains above threshold through projection period.
  - Alternative scenario without crude-oil exports would prolong breaches.
- Alternative scenario with surge in gold exports (customs data):
  - Customs data show exports of 11.4 tons or CFAF 171 billion in the first half of 2020 vs CFAF 28 billion projected for all of 2020 in the balance-of-payments.
  - Reconciling balance-of-payments with customs data would materially improve export-based debt distress indicators: PV of PPG external debt would exhibit only a small breach in 2020; PPG external public debt service would remain in moderate risk territory throughout.
  - Accordingly, premature to reclassify Niger from moderate to high risk of debt distress pending finalization of gold export data.7

### External and public debt outlook
- Remaining two PPG external debt indicators (PV of debt-to-GDP and debt service-to-revenue) are below thresholds:
  - PV of debt-to-GDP: small uptick to 23.9 percent in 2020, expected fall to 13.8 percent in very long term.
  - Debt service-to-revenue projected to peak at 15.3 percent in 2021 and decline to 6.5 percent in the long run.
  - Even without G20 DSSI, debt service-to-revenue would not breach its threshold in 2020.
- Total public debt:
  - After pandemic increase to 42.1 percent of GDP in 2021, public debt projected to decline to 36 percent of GDP by 2040.
  - Fiscal consolidation from 2022 and higher oil revenues underpin decline.
  - Recent shift from domestic to external financing extends maturities and reduces roll-over risks.

### Risk rating, vulnerabilities, and contingencies
- Niger’s risk of external and overall debt rated “moderate”; debt deemed sustainable.
- Conditions supporting sustainability:
  - Non-explosive debt trajectories; overall public debt sustainability solid even under adverse shocks.
  - Expected export rebound with reopening of Nigeria’s border in 2021 and onset of crude oil exports in 2022.
  - Liquidity risk remains low due to WAEMU membership and access to pooled external reserves.
  - Continued significant financial assistance from donors expected in coming years.
- Debt sustainability is contingent on near-term evolution of COVID-19 and long-term implementation of policy reforms built into baseline.

### Policy recommendations (areas for authorities’ focus)
- Domestic revenue mobilization:
  - Critical for fiscal consolidation and funding future debt service.
  - Additional oil revenues should not be fully spent; use to contribute to fiscal consolidation.
- Fiscal risks and spending quality:
  - Mitigate risks from possible mismanagement of large investments by SOEs or PPPs.
  - Emphasize proper evaluation, good governance, and higher spending efficiency.
- External borrowing:
  - Prioritize concessional loans and seek grants until export prospects are closer and more certain.
- Economic diversification:
  - Address narrow economic base and low development level.
  - Develop the small formal local private sector to improve revenue mobilization and sustainable growth.

*Source: IMF staff report excerpt (1nerea2020003).*

### 22.      The authorities were pleased that Niger’s moderate rating for debt distress is maintained

### 22.      The authorities were pleased that Niger’s moderate rating for debt distress is maintained

### Authorities' assessment and immediate actions
- Authorities noted the moderate rating for debt distress is maintained despite the dip in exports in the wake of the COVID-19 pandemic.
- Planned actions:
  - Gold exports will be swiftly examined in more detail and then integrated into the Balance of Payments and the macroeconomic framework.
  - Technical assistance from the IMF’s Statistics Department would to be helpful in this context.

### Policy priorities and borrowing stance
- Export diversification remains a priority despite the revision of gold exports.
- Until more progress is achieved on export diversification, external borrowing will remain prudent with an emphasis on securing concessional loans and grants.
- The policy reforms upon which the DSA projections are based will be delivered and the assumed timetable for the crude-oil export project should hold.

### DSA / stress-test context (as presented)
- The document includes indicators of Public and Publicly Guaranteed (PPG) External Debt under alternative scenarios and stress tests for 2020–31, including:
  - Commodity price, exports, and combination shocks featuring prominently as most extreme shocks for different debt indicators.
  - Stress-test methodology notes: “The most extreme stress test is the test that yields the highest ratio in or before 2030. Stress tests with one-off breaches are also presented (if any), while these one-off breaches are deemed away for mechanical signals.”
  - Borrowing assumptions for stress tests assume all additional financing needs generated by shocks are covered by PPG external MLT debt in the external DSA; default terms of marginal debt are based on baseline 10-year projections.

### Key macroeconomic and debt-related figures (selected from the baseline tables)
- Real GDP growth:
  - 2019: 5.9 percent
  - 2020: 1.2 percent
  - 2021: 6.9 percent
  - 2022: 12.8 percent
  - 2023: 11.1 percent
  - Long-run projection examples: 2024: 6.7 percent; 2025: 6.3 percent; 2030: 6.0 percent
- External debt (nominal) and PPG shares:
  - External debt (nominal) 2019: 48.4 percent of GDP; 2020: 49.7 percent of GDP; 2021: 46.3 percent of GDP
  - Public and publicly guaranteed (PPG) external debt 2019: 26.5 percent of GDP; 2020: 29.4 percent of GDP; 2021: 28.9 percent of GDP
- Identified net debt-creating flows (examples):
  - 2020: 8.8 percent of GDP
  - 2021: 6.0 percent of GDP
  - 2022: 2.7 percent of GDP
- Non-interest current account deficit:
  - 2019: 11.9 percent of GDP
  - 2020: 12.5 percent of GDP
  - 2021: 15.9 percent of GDP
- Exports and imports (percent of GDP):
  - Exports 2020: 9.3 percent of GDP; 2021: 10.1 percent of GDP; 2022: 14.0 percent of GDP
  - Imports 2020: 24.7 percent of GDP; 2021: 28.4 percent of GDP; 2022: 26.4 percent of GDP
- Net FDI (negative = inflow):
  - 2019: -5.3 percent of GDP
  - 2020: -3.6 percent of GDP
  - 2021: -7.5 percent of GDP
- Sustainability indicators (selected):
  - PV of PPG external debt-to-GDP ratio (examples): 2020: 23.9 percent; 2021: 22.1 percent; 2022: 20.2 percent
  - PV of PPG external debt-to-exports ratio (examples): 2020: 257.3; 2021: 219.6; 2022: 145.0
  - PPG debt service-to-exports ratio (examples): 2020: 11.4; 2021: 18.1; 2022: 12.7
  - PPG debt service-to-revenue ratio (examples): 2020: 10.2; 2021: 15.3; 2022: 14.1
- Gross external financing need (Million of U.S. dollars):
  - 2019: 985.7
  - 2020: 1,411.6
  - 2021: 1,678.4
  - 2022: 1,723.5
- Key assumptions and other figures:
  - GDP deflator in US dollar terms (change in percent) 2020: 5.0 percent; 2021: 9.4 percent; 2022: 3.0 percent
  - Effective interest rate (percent) 2020: 0.9 percent; 2021: 1.3 percent; 2022: 1.5 percent
  - Growth of exports of G&S (US dollar terms, in percent) 2020: -11.0 percent; 2021: 26.8 percent; 2022: 60.8 percent
  - Grant element of new public sector borrowing (in percent) examples: 2021: 26.7 percent; 2022: 36.8 percent; 2023: 36.6 percent
  - Government revenues (excluding grants, in percent of GDP) 2020: 10.4 percent; 2021: 11.9 percent; 2022: 12.6 percent
  - Aid flows (Million of US dollars) 2020: 1,384.7; 2021: 1,489.2; 2022: 1,422.3
  - Nominal GDP (Million of US dollars) 2019: 12,912; 2020: 13,720; 2021: 16,046; 2022: 18,639; 2030: 37,056

### Executive summary context (authorities’ statement excerpts)
- Authorities welcomed constructive policy discussions and expressed deep appreciation for Fund support, including Rapid Credit Facility disbursement and CCRT debt service relief that helped finance the Covid-19 response plan.
- They emphasized commitment to reforms to accelerate growth, create jobs, and preserve macroeconomic stability.
- Noted challenges: insecurity in the Sahel region, floods, low world prices of uranium, socio-economic impact of Covid-19, closing of the border with Nigeria, and delays in large-scale project construction.
- Growth for 2020 is projected at 1.2 percent against 5.9 percent in 2019.

*Source: Excerpt from IMF staff report and associated debt sustainability analysis tables and figures.*

### 2019. Inflation should rise to 2.8 percent due mainly to disruptions in food supply.

### 1nerea2020003 - 2019. Inflation should rise to 2.8 percent due mainly to disruptions in food supply.

### Macroeconomic outlook and key statistics
- Inflation should rise to 2.8 percent due mainly to disruptions in food supply.
- The fiscal deficit is expected to widen from 3.6 percent of GDP in 2019 to 5.8 percent of GDP in 2020 on account of shortfalls in revenue and increases in expenditure to fight the pandemic.
- The current account deficit is expected to stand at 12 percent of GDP owing to the drop of exports due to weak external demand.
- Real GDP growth in 2021 is expected to return to the pre-pandemic trend at 6.9 percent.
- The construction of the 2,000 km-long pipeline to transport crude oil through Benin’s coast has started and is expected to be an important driver of growth and revenues over the medium-term.
- The fiscal deficit is projected to decrease from 5.8 percent of GDP in 2020 to 4.4 percent in 2021.
- Over the medium-term, the fiscal deficit should converge to 3 percent of GDP, in line with the WAEMU convergence criterion.
- The Court of Audit will conduct an independent audit of the use of committed resources and its report will be posted online by September 2021.

### Covid-19 response, financing, and transparency measures
- The Covid-19 response plan has been implemented steadfastly by the authorities, helping to contain the spread of the virus, protect the population, and support vulnerable populations and businesses.
- In addition to emergency financing and debt relief from the Fund and other development partners, the authorities adopted two supplementary budgets in June and September 2020 to finance the riposte plans.
- All outlays related to Covid-19 will be channeled through the budget and subjected to strict safeguards.
- Additional measures will be enforced to ensure Covid-19 funds are spent efficiently for their purposes.
- Procurement documents and contracts related to the fight against the pandemic will be published.

### Program performance (end-December 2019)
- Performance criteria met:
  - Non-accumulation of external arrears.
  - Clearance of domestic arrears.
  - Contracting of new external public debt below the program’s ceiling.
- Performance criterion breached:
  - Domestic budget financing exceeded the program’s ceiling by a small margin.
- Indicative targets observed:
  - Anti-poverty spending.
  - Exceptional expenditure.
- Shortfalls:
  - Fiscal revenue collection fell short due to the impact of lockdown measures.
  - Basic fiscal balances fell short due to the impact of lockdown measures.
- Structural benchmarks:
  - Decree establishing a debt management unit in the Treasury: met.
  - Asset declarations by public officials: total value included in the annual report of the Audit Court, but not yet posted on an official website.
  - Structural benchmarks related to debt management, treasury plans and procedures for budget statements: observed.
  - Efforts underway to meet the structural benchmark on granted discretionary tax exemptions.

### Risks to the outlook
- Downside risks recognized by the authorities include:
  - Insecurity in the Sahel region.
  - The lingering Covid-19 pandemic.
  - Closure of the border with Nigeria.
  - Weak external demand for Niger’s exports.
- The materialization of these risks could weigh heavily on economic activity and the balance of payments.
- Lower imports stemming from delays in import-intensive projects and closure of the border with Nigeria would not offset the significant decline in exports.

### Fiscal policy and reform priorities
- Objective: reinforce fiscal and debt sustainability while supporting economic recovery.
- Key targets and commitments:
  - Not exceeding the spending envelopes agreed in the second 2020 supplementary budget and the draft 2021 budget.
  - Intensify efforts to enhance domestic revenue mobilization and further reduce domestically-financed expenditure.
- Measures to strengthen revenue mobilization:
  - A decree assigning responsibility for surveillance and analysis of tax and customs exemptions to a designated unit has been issued.
  - Digitalization of tax declarations and payments initiated with select firms will be gradually extended.
  - Authorities agree on the need to undertake a deeper analysis of the limited progress in domestic revenue mobilization to date.
- Measures to improve expenditure quality:
  - Continue collaboration with the World Bank on a new strategy, procedures, and manual to improve project selection.
  - Rigorously implement PPP procedures, including cost-benefit analyses and comprehensive risk assessments prior to approval.
  - Publish new PPPs attached to the budget.
  - Commit to undertaking only PPPs with a clear positive net benefit.

### Financial sector promotion and inclusion
- Authorities welcomed BCEAO measures to support the financial system and provide liquidity to banks.
- Objectives and planned actions:
  - Provide affordable credit to the domestic formal private sector to foster economic diversification.
  - Operationalize the financial inclusion fund and consolidate various existing credit schemes to help rebuild the microfinance industry.
  - Use the new framework to disseminate know-how, foster transparency, and support development of digital financial services.

### Private sector development
- To sustain growth, foster job creation, and reduce informality, the authorities plan to:
  - Revamp the reform of the business environment.
  - Improve the private sector’s access to credit.
  - Promote development of public infrastructure and services.
  - Ensure a more equitable tax burden.
  - Effectively implement the anti-corruption agenda to promote a vibrant private sector.
- Implementation will require far-reaching reforms with support from development partners.

### Governance and transparency enhancements
- Good progress made strengthening governance and transparency in public resource use.
- Actions and developments:
  - National Assembly adopted in January 2020 a law widening asset declaration to top civil servants; the law will be promulgated after a comprehensive review for effective implementation.
  - Authorities intend to publish asset declarations of all government members on an official website.
  - Report on procurement irregularities at the Ministry of Defense has been transmitted to the judiciary; after judicial completion, there will be a review to further strengthen procurement procedures.

### Conclusion and program request
- Authorities remain committed to prudent policies and reforms to strengthen macroeconomic stability and unleash growth potential.
- Engagement with the Fund will be maintained after the expiration of the current ECF-supported program to preserve reform momentum.
- In light of satisfactory progress in implementing the ECF-supported program, the authorities are requesting:
  - Completion of the sixth and final review.
  - Approval of a waiver for the non-observance of the end-December performance criterion on domestic budget financing.
- The authorities hope for the Executive Board’s support.

*Source: 1nerea2020003 - 2019. Inflation should rise to 2.8 percent due mainly to disruptions in food supply.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1nerea2020003.pdf_