## 1nerea2021001 ## Source details **Canonical URL:** [1nerea2021001](https://www.imf.org/-/media/files/publications/cr/2021/english/1nerea2021001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2021/english/1nerea2021001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2021/english/1nerea2021001.pdf.json) --- ### Executive summary — outlook, COVID-19, and program request - Real GDP growth fell from 5.9 percent in 2019 to 3.6 percent in 2020 (pre-pandemic estimate was 6 percent); projected: 5.4 percent in 2021, strengthen in 2022, and reach double-digit levels in 2023 and 2024 when the pipeline project comes on stream. - Inflation: rose to 3.1 percent in 2020; projected at 2.5 percent year-on-year in 2021 and then to fall to 2 percent. - Current account: deficit deteriorated to 13.5 percent of GDP in 2020. - SDR allocation equivalent to 1.2 percent of GDP (US$180 million) on-lent in CFAF as a 20-year loan carrying fixed interest of 0.05 percent per year. - COVID-19 (end-October 2021): 6,311 confirmed cases; 6,036 recovered; 212 died (3.4 percent). Vaccination: 1.6 percent fully vaccinated; 2.1 percent received at least one dose. - Poverty: World Bank estimates poverty increased to 42.9 percent, adding 685,000 people into extreme poverty. - Request: three-year ECF arrangement with semi-annual reviews and access of 150 percent of quota (SDR 197.4 million) to catalyze international assistance and preserve macroeconomic stability while accommodating elevated security spending. ### Social spending, education, health, and aid absorption - Social priorities: investments in education, health, and social protection to increase growth and reduce inequality of opportunity and income. - Aid absorption: substantial portion of aid flows to social sectors but persistent absorption capacity constraints; aid project success lower in fragile countries. - Education outcomes and challenges: - 8 percent of children enrolled in pre-schools nationally. - A fifth of children do not complete primary education; majority do not complete lower secondary school. - Adult literacy among women: 14 percent. - Health & nutrition: - 44 percent of under-5-year-old estimated to be stunted. - Recent cholera outbreak noted; low COVID-19 vaccination coverage presents persistent risk. - Program targeting: narrower definition of effective social spending focused on implementation of specific budgeted projects (IT, MEFP ¶38). ### Fiscal developments, revenue, and consolidation - Fiscal deficit: rose to a peak of 5.4 percent of GDP in 2020; crisis projected to lead to a fiscal deficit peaking at 6.6 percent in 2021 before returning toward WAEMU 3 percent over medium term. - July 2021 supplementary budget adds security allocations: 0.74 percent of GDP for military equipment and army personnel; 0.28 percent of GDP for construction of wells and food security. - Cash revenues persistently underperformed at just below 10 percent of GDP since 2016. - COVID-19 support: CFAF 150 billion financing mechanism; CFAF 17 billion (11 percent) used. - Immediate 2021 revenue measures: recover CFAF 69.7 billion in tax arrears to yield at least CFAF 8.1 billion in 2021; deployment of VAT invoicing machines (initial 500 taxpayers); other customs/tax regularization measures. ### Public financial management (PFM), transparency, and procurement - PFM reforms and transparency measures: - Publish with each Budget submission: Citizens’ Budget; triennial “Programme des investissements de l’État” (PIE); analysis of gaps between forecast and realized quantities for main revenue and expenditure aggregates. - Interim PIE for 2022 Budget to cover only domestically financed investment from five ministries in pilot. - From 2023, feasibility study required for any investment project of more than CFAF 5 billion prior to inclusion in the PIE. - Single Treasury Account (STA) established; expansion to local government administrations planned. - Paperless expenditure process accelerated; pilot double authorization (AE/CP) in five ministries from 2022. - Public procurement transparency: - Publish procurement plans, tender notices and final contract results on public procurement website. - Legal instrument to require collection and publication of beneficial ownership information for single tender or sole source contracts (except security/defense) — structural benchmark end-March 2022. - Prior action: regulation issued November 3, 2021 requiring beneficial ownership information for Covid-19-related procurement with publication on Public Procurement Portal. ### Tax administration, exemptions, and revenue mobilization reforms - Tax administration reforms: - Digitalized procedures enabling online tax reporting; interconnection of DGI and DGD platforms (“enclos fiscal”) to proceed into 2022. - Molecular marking of petroleum products begun; laboratory testing started July 2021 to deter smuggling. - Action plan to manage tax arrears to be agreed with AFRITAC West. - Exemptions and audits: - Audit of investment tax exemptions in extractive sector by Cour des Comptes; report committed for 2022. - Ministry of Finance to prepare a policy brief by end-2021 with quantified measures for rationalizing existing exemptions (SB, MEFP ¶28). - Semi-annual requirement to provide Fund staff a tally of newly granted or renewed tax exemptions with details and expiration dates (monitoring continuous/bi-annual). - Quantified 2022 revenue measures planned to increase revenues by 0.8 percent of GDP (deployment of VAT machines, nationwide SISIC, stricter exemption procedures, etc.). ### Natural resource (oil) management and local content - Oil pipeline and export timing: - Pipeline linking Agadem basin to Port of Sèmè expected; construction will continue until mid-2023 with startup of exports projected in 2023. - Government purchased 15 percent equity holding in WAPCO. - Oil revenue management: - Finalization of framework for transparent and efficient management of oil revenues scheduled no later than end-September 2022 (SB, MEFP ¶14). - MOF sole responsible for administration of oil revenues, supported by Ministry of Petroleum and SONIDEP. - Projected incremental revenues: additional oil resources expected to increase by at least 2 percent of GDP; projected sector contribution starting in 2023: close to 25 percent of GDP; 45 percent of tax revenues; 68 percent of exports; 8 to 12 percent of formal jobs. - Local content aim: increase Nigerien companies’ share from 4.5 percent to 20 percent within five years (exclusions noted). ### Financial sector, inclusion, and microfinance - Banking sector: well capitalized; solvency ratios above regional average; liabilities and assets increased ~10 percent despite pandemic. - Challenges: increases in NPLs; credit concentration; low credit to agriculture (1 percent of total credit). - Microfinance sector: fractured, fragile; ARSM oversees 37 decentralized financial companies but lacks resources; pandemic led to 5.7 percent decline in outstanding loans, shrinking deposits, and rising NPLs. - Policy actions: recapitalization and restructuring of BAGRI to increase agricultural credit; operationalize Financial Inclusion Development Fund (FDIF); FONAP for SMEs. ### Public and publicly guaranteed (PPG) debt, debt outlook, and DSA findings - PPG debt stock: 45.0 percent of GDP at end-2020. - External debt share: PPG external debt makes up 70 percent of total debt stock; multilateral creditors ~four-fifths of external debt. - Total public debt (2020 nominal): US$ 6,599 million — 100.0 percent of total debt. - External debt (2020): US$ 4,634 million — 70.2 percent. - Domestic debt (2020): US$ 1,965 million — 29.8 percent. - World Bank (2020): US$ 1,710 million — 25.9 percent. - DSA risk rating: moderate risk of overall and external debt distress; no breaches of PPG external and total public debt burden indicators in baseline. - Key DSA projections (selected): - Real GDP growth (DSA): 2018: 7.2; 2019: 5.9; 2020: 3.6; 2021: 5.4; 2022: 6.5; 2023: 10.4; 2024: 11.4; 2025: 8.5; 2026: 6.0; 2027-41: 6.1. - Inflation (CPI), DSA 2021: 2018: 2.8; 2019: -2.5; 2020: 2.9; 2021: 2.9; 2022: 2.5; 2023: 2.0; 2024: 2.0; 2025: 2.0; 2026: 2.0; 2027-41: 2.0. - Total revenue excluding grants (percent of GDP), DSA 2021: 2018: 12.1; 2019: 11.2; 2020: 10.8; 2021: 10.9; 2022: 11.5; 2023: 12.7; 2024: 13.4; 2025: 13.8; 2026: 14.0; 2027-41: 15.5. - Stress tests and vulnerabilities: - Export-related indicators exceed thresholds under export shocks; one-time depreciation can temporarily breach debt-service-to-revenue threshold. - Space to absorb shocks limited in 2021-22; building an adequate buffer is essential. - Program limits new PPG external debt (PV ceiling) consistent with authorities’ borrowing plan to avoid downgrade of the risk of debt distress. ### External financing needs and 2021–26 financing summary - Total Financing Requirement (CFAF billions): 2021: 1,469; 2022: 1,510; 2023: 1,406; 2024: 1,442; 2025: 1,558; 2026: 1,679. - Current account deficit (excl. grants) (CFAF billions): 2021: 1,456; 2022: 1,659; 2023: 1,364; 2024: 1,223; 2025: 1,233; 2026: 1,452. - Residual Financing Need (CFAF billions): 2021: 260; 2022: 281; 2023: 252; 2024: 283; 2025: 278; 2026: 296. - Budget support listed (CFAF billions): 2021: 213; 2022: 215; 2023: 221; 2024: 252; 2025: 278; 2026: 296. - 2021 external borrowing program (selected entries, CFAF billion / Percent): - Sources of debt financing: 626 / 100 (2021) and 347 / 100 (program). - Concessional debt, of which: 463 / 74 (2021) and 226 / 64 (program). - Multilateral debt: 427 / 68 (2021) and 203 / 58 (program). - IMF (o/w): 30 / 5 (2021) and 21 / 6 (program). - Non-concessional debt, of which: 163 / 26 (2021) and 121 / 36 (program). - Uses of debt financing: Infrastructure 333 / 53 (2021) and 220 / 58 (program); Social Spending 163 / 26 (2021) and 67 / 23 (program); Budget Financing 101 / 16 (2021) and 54 / 15 (program). ### Program modalities, disbursement phasing, and safeguards - Arrangement: SDR 197.4 — 150 percent of quota — three-year ECF. - Disbursement phasing stated: 30 percent of quota in 2021, 60 percent in 2022, 30 percent per year in 2023 and 2024 (Table 9). - Specific disbursement schedule (2021–24): - SDR 39.48 — 30 percent — Condition: Executive Board Approval — Date Available: December 8, 2021. - SDR 39.48 — 30 percent — Condition: Observance of December 31, 2021 performance criteria and first review — Date Available: April 29, 2022. - SDR 39.48 — 30 percent — Condition: Observance of June 30, 2022 performance criteria and second review — Date Available: October 31, 2022. - SDR 19.74 — 15 percent — Condition: Observance of December 31, 2022 performance criteria and third review — Date Available: April 28, 2023. - SDR 19.74 — 15 percent — Condition: Observance of June 30, 2023 performance criteria and fourth review — Date Available: October 31, 2023. - SDR 19.74 — 15 percent — Condition: Observance of December 31, 2023 performance criteria and fifth review — Date Available: April 30, 2024. - SDR 19.74 — 15 percent — Condition: Observance of June 30, 2024 performance criteria and sixth review — Date Available: October 31, 2024. - Total: SDR 197.4 — 150 percent. - Safeguards: assessment at regional central bank (BCEAO); one outstanding recommendation from 2018 to strengthen risk management function; overall strong control culture. ### Program monitoring, performance criteria, and structural benchmarks - Monitoring framework: - Semi-annual quantitative performance criteria (QPCs) for end-December 2021 and end-June 2022. - Quarterly indicative targets (ITs) for end-March and end-September 2022. - Structural benchmarks (SBs) with specific timetables (Table 3). - Key quantitative targets (selected, Billions of CFAF): - Ceiling on net domestic financing of the government, without IMF net financing (cumulative): - Proj. End-Dec. 2021: 371.4; Actual End-Dec. 2021: 90.5; Proj. End-Jun. 2022: 182.6; Proj. End-Sep. 2022: 310.1. - Memorandum: External budget support: - Proj. End-Dec. 2021: 213.5; Actual End-Dec. 2021: 15.6; Proj. End-Jun. 2022: 29.4; Proj. End-Sep. 2022: 48.7. - Continuous QPCs: - Accumulation of new external payments arrears: ceiling 0.0. - Present Value (PV) of new PPG external debt contracted from beginning of calendar year: 346.0; 402.0; 402.0; 402.0 (quarterly entries). - Selected structural benchmarks and timetables: - Prior Action: issue regulation requesting beneficial ownership information for all Covid-19-related procurement — Timetable: Prior Action. - End-December 2021: adopt policy brief with concrete/costed proposals to rationalize current exemptions; produce feasibility studies for 9 largest projects for 2022 PIE; publish audit report on 2020 COVID-19-related spending. - End-March 2022: adopt plan for completion of DGI–DGD digital platform integration; produce annual report on tax arrears; issue legal instrument requiring beneficial ownership info for single-tender/sole-source contracts. - End-June 2022: adopt roadmap for review and simplification of tax system; share status report of existing exemption agreements. - End-September 2022: adopt oil revenue management strategy with IMF TA. - End-December 2022: publish Auditor General audit on exemptions in extractive sector. ### Macroeconomic projections and selected indicators (headline series) - Real GDP growth (selected): - 2018: 7.2; 2019: 5.9; 2020: 1.0; 2021 (Est.): 1.2; 2022 (RCF Request): 3.6; 2023 (6th Review): 8.1; 2024 (Proj.): 6.9; 2025 (Proj.): 5.4; 2026 (Proj.): 6.5. - Oil production (thousand barrels per day): - 2018: 17; 2019: 18; 2020: 20; 2021 (Est.): 17; 2022: 17; 2023: 17; 2024: 74; 2025: 99; 2026: 108. - Consumer price index (annual average): - 2018: 2.8; 2019: -2.5; 2020: 4.4; 2021 (Est.): 2.8; 2022: 2.9; 2023: 1.7; 2024: 0.4; 2025: 2.9; 2026: 2.5. - External current account balance (excluding official grants, percent of GDP): - 2018: -14.6; 2019: -15.3; 2020: -17.4; 2021 (Est.): -15.6; 2022 (RCF Request): -15.6; 2023 (6th Review): -18.4; 2024 (Proj.): -18.4; 2025 (Proj.): -17.2; 2026 (Proj.): -18.0. - Government finances (percent of GDP): - Total revenue: 2018: 12.1; 2019: 11.2; 2020: 10.2; 2021 (Est.): 10.4; 2022 (RCF Request): 10.8; 2023 (6th Review): 12.2; 2024 (Proj.): 11.9; 2025 (Proj.): 10.9; 2026 (Proj.): 11.5. - Total expenditure and net lending: 2018: 21.1; 2019: 21.6; 2020: 22.6; 2021 (Est.): 23.4; 2022 (RCF Request): 22.9; 2023 (6th Review): 21.7; 2024 (Proj.): 22.8; 2025 (Proj.): 24.0; 2026 (Proj.): 22.7. - Overall balance (commitment basis, incl. grants): 2018: -3.0; 2019: -3.6; 2020: -5.0; 2021 (Est.): -5.8; 2022 (RCF Request): -5.3; 2023 (6th Review): -3.3; 2024 (Proj.): -4.4; 2025 (Proj.): -6.6; 2026 (Proj.): -5.4. ### Key risks and mitigation priorities - Balance of risks tilted to the downside: - Health: significant COVID-19 outbreaks given low vaccination coverage. - Pipeline construction delays vs. baseline assumption of completion by 2023. - Regional security deterioration, including phasing-out of Operation Barkhane. - Internal political tensions after 2021 election. - Climate change impacts: flooding, drought affecting agriculture and growth. - Policy priorities to mitigate risks: - Build adequate buffers; prioritize concessional borrowing; strengthen debt management; broaden and modernize tax base; improve PFM and spending quality; protect social spending while accommodating essential security expenditures. ### Annex I — Capacity development strategy and TA priorities - Overall priorities FY 2022: - Revenue mobilization: strengthen tax policy and administration; simplify tax policy in line with administrative capacity. - PFM and debt management: strengthen expenditure chain, budget preparation/execution, public investment management. - Natural resource revenue management: prepare capacity and a simple smoothing mechanism for oil revenue volatility. - Macro and financial statistics: improve national accounts, government finance, public sector debt statistics, and balance of payments. - Main risks to TA absorption: human resource constraints; bunching of TA delivery; remote environment; over-centralization; high turnover of senior staff. - Mitigation: greater use of Fund Institute for Capacity Development and Afritac West training. *International Monetary Fund — Executive Summary and selected sections (1nerea2021001).* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Outlook and Macroeconomic Projections - Real GDP growth fell from 5.9 percent in 2019 to 3.6 percent in 2020, compared to a pre-pandemic estimate of 6 percent. - Growth is projected to rebound: 5.4 percent in 2021, strengthen in 2022 and reach double-digit levels in 2023 and 2024 when the pipeline project to export oil through a pipeline to the Benin coast comes on stream. - Inflation rose to 3.1 percent in 2020 driven by food price increases; inflation is projected at 2.5 percent year-on-year in 2021 and then to fall to 2 percent. - The current account deficit deteriorated to 13.5 percent of GDP in 2020. - The SDR allocation equivalent to 1.2 percent of GDP (US$180 million) has been on-lent in CFAF as a 20-year loan carrying a fixed interest of 0.05 percent per year. ### Covid-19 Impact and Health Indicators - As of end-October 2021, Niger recorded 6,311 confirmed cases of COVID, of which 6,036 recovered and 212 died (3.4 percent). - Vaccination status as reported: 1.6 percent of the population are fully vaccinated, while 2.1 percent have received at least one dose. - World Bank estimates: poverty increased to 42.9 percent, drawing an additional 685,000 people into extreme poverty. - The report notes limited direct health impact so far but persistent risks due to low vaccination coverage and a recent cholera outbreak. ### Request for an Extended Credit Facility (ECF) Arrangement - Proposal: a three-year ECF arrangement with semi-annual reviews and access of 150 percent of quota (SDR 197.4 million). - Fund support is expected to help catalyze international assistance and preserve macroeconomic stability while accommodating elevated security spending. - The program aims to enhance fiscal space, broaden the tax base, strengthen tax and customs administration, and improve the quality of public spending. ### Context and Structural Challenges - Niger is consistently ranked around the bottom of the UNDP’s Human Development Index; real per capita GDP remains below its 1980 level. - Education: an average of 2 years of schooling for the population as a whole, with worse outcomes for females. - Demographics: the highest fertility rate in the world at 6.9 children per woman; 44 percent of under-5-year-old are estimated to be stunted. - Economic structure: agriculture accounts for 40 percent of GDP and is mostly rain-fed; between 60 and 90 percent of GDP is generated in the informal sector. - Extractive industries and large public works supported growth but did not generate sufficient employment to reduce widespread poverty. - Security risks and climate change exacerbate vulnerabilities: competition over scarce resources, increased fatalities linked to security incidents in the region, and pressures from flooding and drought. ### Recent Fiscal and Financial Developments - Fiscal deficit rose to a peak of 5.4 percent of GDP in 2020 due to revenue losses and pandemic-related spending; the July 2021 supplementary budget adds security-related allocations (0.74 percent of GDP for military equipment and army personnel) and construction of wells and food security (0.28 percent of GDP). - The pandemic and the closure of the Nigerian border contributed to revenue losses. - The crisis is projected to lead to a fiscal deficit peaking at 6.6 percent in 2021 before returning toward the WAEMU target of 3 percent of GDP over the medium term. - Oil pipeline completion in 2023 is expected to boost revenue by 1 percent of GDP in 2023 and a further 0.5 percentage points as exports continue to grow in 2024. - Cash revenues have persistently underperformed at just below 10 percent of GDP since 2016. - A CFAF 150 billion financing mechanism was set up to support the productive sector during COVID-19; CFAF 17 billion (11 percent of the total fund) were used. ### Program Objectives and Policy Priorities - Preserve macroeconomic stability while allowing essential security-related expenditures and protecting social spending and poverty reduction efforts. - Boost fiscal space through revenue mobilization reforms and by catalyzing donor flows; prioritize social spending. - Implement broader reforms in public financial management (PFM) and natural resource management to improve spending efficiency and transparency over the medium term. - Address constraints to the business environment and financial services to enhance private sector development, diversification, and reduce informality. - Strengthen anti-corruption efforts and governance to achieve higher standards of transparency and accountability. - Improve tax and customs administration and introduce new mechanisms to support improved financial intermediation to support private sector growth. ### Risks and Uncertainties - Balance of risks is tilted to the downside: - Health risks if significant COVID-19 outbreaks occur before vaccination coverage increases. - Potential pipeline construction delays; baseline assumes pipeline completion by 2023 but further delays cannot be ruled out. - Regional security deterioration, including the phasing-out of Operation Barkhane. - Internal political tensions following the 2021 election. - Climate change impacts, including flooding, that can threaten agricultural production and growth. _International Monetary Fund — Executive Summary (Niger), November 19, 2021_ ### 16. Social spending is a key driver for inclusive growth, but inefficiencies and aid ### 16. Social spending is a key driver for inclusive growth, but inefficiencies and aid absorptive capacity constraints remain ### Social spending and aid absorption - Investments in education, health, and social protection are crucial to increase growth and reduce inequality of opportunity and income. - Niger and other WAEMU countries receive a substantial portion of their overall aid flows in social sectors (Text Figure 5), but most continue to face absorption capacity constraints; aid project success is markedly lower in fragile countries than non-fragile ones. - Strengthening national PFM systems and scaling up IMF technical assistance in PFM are critical to removing absorption constraints (Annex I reference). ### Education and social outcomes - Only 8 percent of children in Niger are enrolled in pre-schools at the national level, with large rural–urban gaps. - A fifth of children do not complete primary education and the majority do not complete lower secondary school (UNICEF). - Adult literacy is extremely low and unequal across genders; only 14 percent of adult women are literate (UNICEF). - High drop-out and repetition rates, and shortages of sufficiently qualified teachers, lead to inadequate outcomes. - Government intends to improve the education system by: (i) improving teaching quality, (ii) increasing the enrollment of girls in school, and (iii) adapting the education offer to suit local market demand. - Program aims to target effective social spending via a narrower definition focusing on implementation of specific budgeted projects (IT, MEFP ¶38). ### Revenues, tax administration, and fiscal consolidation - Foundations laid for an overhaul of tax administration despite pandemic delays to IMF technical assistance. - Reforms undertaken: digitalized procedures enabling online tax reporting; connection of customs with internal tax collection systems to allow a global compliance assessment (the “enclos fiscal”). - Analytical capabilities developed at the Direction Générale des Douanes (DGD) to analyze data for customs reform proposals. - Completion of the “enclos fiscal” integration of DGI and DGD digital platforms will continue into 2022 (SB, MEFP ¶24). - Government requested technical assistance to review and adopt a roadmap to simplify the Tax Code (SB, MEFP ¶26). - Molecular marking of petroleum products begun; laboratory testing started in July 2021 to deter smuggling. - Action plan to manage tax arrears to be agreed with AFRITAC West (SB, MEFP ¶29). - Audit of investment tax exemptions to companies in the extractive sector being undertaken by the Cour des Comptes; report committed to be published in 2022 (SB, MEFP ¶33). - Ministry of Finance to formulate a policy brief by end-2021 with quantified measures for rationalizing existing exemptions (SB, MEFP ¶28). - Exemptions Committee to develop status of existing agreements showing amounts, expiration dates, and projected exemptions for 2022 (SB, MEFP ¶28). ### Public Financial Management (PFM) reforms and investment transparency - To strengthen spending quality, government will publish with each Budget submission: (i) the Citizens’ Budget; (ii) the triennial “Programme des investissements de l’État” (PIE); and (iii) analysis of trends in gaps between forecast and realized quantities for main revenue and expenditure aggregates and macro assumptions. - Interim measure: the PIE for the 2022 Budget will cover only domestically financed investment from five ministries in the pilot. - The Ministère du Plan will publish a summary of feasibility analyses for the 9 largest projects in the 2022 budget prior to inclusion in the PIE (SB, MEFP ¶31). - From the 2023 budget, a feasibility study is required for any investment project of more than CFAF 5 billion prior to inclusion in the PIE (SB, MEFP ¶31). ### Liquidity, debt, and SOE management - Single Treasury Account (STA) established; Public Administrative Entities largely integrated; next expansion to include local government administrations. - With World Bank and IMF assistance, government developing and publishing a medium-term debt strategy. - Reforms planned to support domestic financing, improve market communication and marketing, increase average tenor of issuances, and reduce refinancing risks. - Directorate for SOEs elevated to Directorate General; measures to improve centralized data collection, financial monitoring, and transparency; plans include an aggregate annual SOE report for internal use and eventual publication. - Prospective legislation to grant the Ministry of Finance a key role in creation of new SOEs and enhance financial oversight. ### Natural resource (oil) management and transparency - Impending start of oil exports necessitates a framework for transparent and efficient management of oil revenues; finalization scheduled for no later than end-September 2022 (SB, MEFP ¶14). - MOF to be solely responsible for administration of oil revenues, assessing financial implications of sector policy, with support from the Ministry of Petroleum and SONIDEP. - Framework should minimize volatility and ensure counter-cyclicality in spending. - Niger reintegrated into the EITI; government undertook reform of the national Permanent Secretariat of the EITI and adopted a fully costed work plan for 2020-2022 to improve transparency and publication of national EITI reports. - Niger officially returned to the EITI process following the board meeting held in Oslo on February 13, 2020. ### Business environment - Time and cost to start a business substantially reduced; now among the lowest in sub-Saharan Africa, though the survival rate of new businesses remains low. - New platform (e-SISIC) launched for online tax declaration and payment. - Initiatives: SMEs access to credit (FONAP); Charter of SMEs; Small Business Act to promote integration into mining and oil sectors. - Government plans to reform public–private consultation framework for more inclusive dialogue. - Persistent constraints: - Informality estimated at almost 60 percent in 2020, generating virtually no tax revenue and creating unfair competition for the formal sector. - Large infrastructure gap, notably electricity: need more abundant, reliable, and affordable power; for large projects, cost-benefit analyses to be public and reflected in power purchase agreements. - Weak human capital and skills mismatch constrain competitiveness. ### Financial sector and inclusion - Banks are well capitalized with solvency ratios above regional average; liabilities and assets of banks increased by around 10 percent despite the pandemic. - Financial sector challenges: (i) increases in non-performing loans (NPLs); (ii) credit concentration; (iii) low levels of credit to the agriculture sector (1 percent of total credit). - Government plans to encourage cash crop production and increase credit to agriculture through recapitalization and restructuring of the public bank for agriculture (BAGRI) with effective governance. - APBEF working to facilitate mobile banking and digital money to boost financial inclusion. - Microfinance sector: - Often the only access to credit and savings for the most vulnerable but remains fractured, fragile, and in need of restructuring. - ARSM oversees 37 decentralized financial companies but lacks resources to carry out activities. - During the pandemic the sector experienced: (i) a 5.7 percent decline in outstanding loans; (ii) shrinking deposits; and (iii) increase in NPLs. - Insecurity causes geographic concentration of microfinance activities, limiting access in insecure areas. - Government plans to implement its consolidation plan and operationalize the Financial Inclusion Development Fund (FDIF) created in 2020. ### Governance and anticorruption - Progress under previous administration: ratified international anti-corruption conventions; anti-corruption agency capacities reinforced; steps to strengthen AML/CFT framework though significant efforts remain to meet international standards; rejoined EITI. - Following recent financial irregularities at the ministries of Finance and Defense: administrative sanctions, legal actions, and adjustments to the expenditure chain (suspension of payments without prior payment orders). - Anti-corruption strategy adopted in 2018; asset declaration coverage extended to 2000 high-ranking public officials (from 50 previously). - Further efforts needed to reach WAEMU average standards in governance and fight against corruption (Text Figure 7). - Authorities committed to improve transparency of asset declaration regime by adopting and publishing a new template for members of government; progress expected during the program period (MEFP ¶43). - Measures planned to require provision of beneficial ownership information in COVID-19-related contracts. ### Program modalities, financing, and risks - Authorities requested an SDR 197.4 million three-year arrangement under the ECF (150 percent of quota). - Disbursement phasing as stated: 30 percent of quota in 2021, 60 percent in 2022, 30 percent per year in 2023 and 2024 (Table 9). - Fund resources to be made available as budget support to address protracted balance of payments and fiscal needs. - Estimated external financing needs in 2021-2024 are CFAF 1,076 billion (10.7 percent of average projected GDP in 2021-24). - The ECF arrangement would finance CFAF 154 billion and catalyze multilateral and bilateral donor support for the remaining balance. - Program fully financed with firm commitments for the first 12 months and good prospects for adequate financing of the remaining period; major donors have expressed intention to provide budget support conditional on appropriate macroeconomic policies. - External financing needs expected to gradually diminish relative to GDP with sustained reform implementation and strong resilient growth, though fragility, security, and climate challenges will persist. - Memo: Compound average GDP growth rate reported as 6.4%10.6%13.6%9.5% (table entries preserved as in source). *Source: IMF staff report (1nerea2021001 - Section 16).* ### 33. Program performance will be monitored through semi-annual quantitative ### 33. Program performance will be monitored through semi-annual quantitative performance criteria (QPCs), quarterly indicative targets (ITs), and a set of structural benchmarks (SBs). ### Program monitoring and structural reforms - Program monitoring instruments: - Semi-annual quantitative performance criteria (QPCs) with QPCs established for end-December 2021 and end-June 2022. - Quarterly indicative targets (ITs) with ITs for end-March and end-September 2022. - A set of structural benchmarks (SBs). - Objective of structural reform measures (Table 9): improve governance, transparency, revenue mobilization, and the efficacy of spending and economic management. ### Public and publicly guaranteed (PPG) debt and debt outlook - PPG debt stock: - PPG debt stood at 45.0 percent of GDP at end 2020 (Table 10). - PPG external debt makes up 70 percent of total debt stock, of which multilateral creditors represent around four-fifths. - Major creditors: - Niger borrows most from the World Bank (IDA) followed by the West African Development Bank (BOAD), African Development Bank, and the IMF. - Official bilateral debt represents around one-fifth of external debt. - Recent debt operation: - The government carried out a debt reprofiling operation in January 2020, borrowing CFAF 148 billion (1.9 percent of GDP) from Deutsche Bank to repay domestic debt. - Baseline projection: - Under the baseline scenario, the PPG external debt-to-GDP ratio is expected to follow a downward trajectory over the medium and long term as strong and resilient growth materializes and fiscal adjustment proceeds. ### Debt Sustainability Analysis (DSA) and risk assessment - Updated DSA finding: - Niger’s moderate risk of overall and external debt distress. - No breaches of PPG external and total public debt burden indicators in the baseline scenario. - Drivers and policy implications: - Concessional donor support and solid macroeconomic projections, including prospective oil exports, support sustainability. - External borrowing in 2021 remains focused on concessional and semi-concessional loans mainly from multilateral donors for infrastructure investment and social spending. - In 2022, external borrowing is expected to slightly increase in line with financing needs for large-scale projects and social development while concessionality remains high. - Given limited space to absorb shocks in the near term, building an adequate buffer is essential. - In line with the Fund Debt Limits Policy (DLP), the QPC on new PPG external debt is calibrated with the authorities’ borrowing plan to avoid downgrade of the risk of debt distress. - Medium- and long-term maintenance of debt sustainability depends on sustained commitment to sound macroeconomic policies, economic reforms, and strengthened debt management. ### External financing needs and 2021 borrowing program (summary points) - Text Table 2 (selected indicators presented in source): Total Financing Requirement for 2021–2026 (CFAF billions): - 2021: 1,469 - 2022: 1,510 - 2023: 1,406 - 2024: 1,442 - 2025: 1,558 - 2026: 1,679 - Current account deficit (excl. grants) (CFAF billions): - 2021: 1,456 - 2022: 1,659 - 2023: 1,364 - 2024: 1,223 - 2025: 1,233 - 2026: 1,452 - Residual Financing Need (CFAF billions): - 2021: 260 - 2022: 281 - 2023: 252 - 2024: 283 - 2025: 278 - 2026: 296 - Budget support listed for 2021–2026 (CFAF billions): - 2021: 213 - 2022: 215 - 2023: 221 - 2024: 252 - 2025: 278 - 2026: 296 - Selected entries from Text Table 3: Niger: 2021 External Borrowing Program (CFAF billion / Percent) - Sources of debt financing: 626 / 100 (2021) and 347 / 100 (program) - Concessional debt, of which: 463 / 74 (2021) and 226 / 64 (program) - Multilateral debt: 427 / 68 (2021) and 203 / 58 (program) - IMF (o/w): 30 / 5 (2021) and 21 / 6 (program) - Non-concessional debt, of which: 163 / 26 (2021) and 121 / 36 (program) - By creditor type: Multilateral 590 / 94 (2021) and 328 / 94 (program) - Uses of debt financing (CFAF billion / Percent): Infrastructure 333 / 53 (2021) and 220 / 58 (program); Social Spending 163 / 26 (2021) and 67 / 23 (program); Budget Financing 101 / 16 (2021) and 54 / 15 (program) ### Capacity to repay the Fund and program risks - Capacity to repay: - Niger’s capacity to repay the Fund remains adequate, supported by program strength, favorable medium-term outlook, and DSA results (Table 8). - Given significant prior use of Fund resources, including the previous ECF arrangement and the RCF disbursement in 2020, credit outstanding to the Fund relative to quota will be among the highest past PRGT programs. - Repayment obligations: - Repayment obligations to the Fund peak at 1.4 percent of export and 2.1 percent of revenue in 2028—near the 75th percentile of other countries with PRGT arrangements. - Key risks and mitigation: - Key risks include continued debt accumulation due to weak policy implementation and limited debt management capacity. - Program measures to mitigate risks include building fiscal space, strengthening key institutions, and boosting growth’s resilience. ### Safeguards - Safeguard assessment: - Conducted at the level of the regional central bank (BCEAO). - The BCEAO has only one recommendation outstanding from the 2018 safeguards assessment: strengthening the risk management function, which is in process. - The assessment found that overall, the central bank has maintained a strong control culture. ### Staff appraisal: macroeconomic context, program purpose, and policy priorities - Economic context and challenges: - Niger has maintained political stability and economic growth despite regional security, climatic, health, and social challenges. - Average growth over the last decade: 5.9 percent. - Much of the population has seen limited benefit from this growth; priority is to ensure greater inclusiveness and address weak social indicators. - Advent of oil revenues provides potential to address poverty and lack of opportunity. - Program request and objectives: - The government has requested a three-year ECF arrangement to buttress efforts to address a protracted balance of payments problem and support progress toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - Short-term priorities: stabilizing the security situation and addressing the impact of the pandemic, including supporting the roll-out of the vaccine program. - The arrangement will support implementation of the 2022–2026 Social and Economic Plan (PDES); steadfast implementation and realistic, strategic budgeting are essential. - Fiscal policy and revenue mobilization: - Creating fiscal space is essential so medium-term consolidation does not come at the expense of development priorities. - The WAEMU fiscal deficit target: 3 percent of GDP—an important fiscal anchor underpinning debt sustainability. - Achieving this target over the medium term will require significant consolidation. - Elevated security expenditures make higher revenues essential to avoid crowding out development priorities. - Enhanced revenues from oil exports are one pillar but will not alone bring revenues closer to averages for Low-Income Countries (LICs); broader revenue efforts are needed to modernize and broaden the tax system using digital technology. - Technical assistance from the Fund and others will be necessary but not sufficient; authorities must take bold measures to mobilize stronger revenue streams. - Governance, public financial management, and transparency: - Good governance and careful management of public resources are critical given limited resources and sizeable development needs. - Public expenditure efficiency and careful project appraisal are paramount to enhance investment efficacy. - Improving budgeting, liquidity, and debt management will avoid arrears build-up; careful expenditure control will avoid leakages. - Authorities’ commitments noted by staff: - Require provision of beneficial ownership information in COVID-19-related contracts (PA, MEFP ¶43) and extend this requirement to non-competitive bidding areas (SB, MEFP ¶35). - Audit report of COVID-19-related expenditures to be completed by the Cour des Comptes and published end-December 2021 (SB, MEFP ¶43). - Extension of the Asset Declaration to cover 2,000 public officials is underway. - Ensuring oil revenues accrue to the Treasury and are used optimally will require strong governance. - Private sector and long-term growth: - Over the long term, the private sector must play a stronger role as an engine of growth. - This requires reducing the uneven playing field with the informal sector and restructuring the financial sector to support new and growing businesses. - The state should support development of human and physical capital to convert demographics into an asset rather than a hindrance. *Source: Niger authorities and IMF staff estimates as presented in the cited IMF document.* ### 43. Based on the authorities’ commitments to a strong program of reform, staff supports ### 1nerea2021001 - 43. Based on the authorities’ commitments to a strong program of reform, staff supports ### Program endorsement and financing - Staff supports the authorities’ request for a three-year ECF arrangement with access equivalent to SDR 197.4 million. - The Letter of Intent (LOI) and Memorandum of Economic and Financial Policies (MEFP) set out policies to achieve the program’s objectives. ### Disbursement schedule under the three-year ECF arrangement (2021–24) - SDR 39.48 — 30 percent — Condition: Executive Board Approval of the ECF Arrangement — Date Available: December 8, 2021 - SDR 39.48 — 30 percent — Condition: Observance of December 31, 2021 performance criteria, and completion of the first review under the arrangement — Date Available: April 29, 2022 - SDR 39.48 — 30 percent — Condition: Observance of June 30, 2022 performance criteria, and completion of the second review under the arrangement — Date Available: October 31, 2022 - SDR 19.74 — 15 percent — Condition: Observance of December 31, 2022 performance criteria, and completion of the third review under the arrangement — Date Available: April 28, 2023 - SDR 19.74 — 15 percent — Condition: Observance of June 30, 2023 performance criteria, and completion of the fourth review under the arrangement — Date Available: October 31, 2023 - SDR 19.74 — 15 percent — Condition: Observance of December 31, 2023 performance criteria, and completion of the fifth review under the arrangement — Date Available: April 30, 2024 - SDR 19.74 — 15 percent — Condition: Observance of June 30, 2024 performance criteria, and completion of the sixth review under the arrangement — Date Available: October 31, 2024 - SDR 197.4 — 150 percent — Total ### Recent economic developments and outlook — headline indicators and projections - Real GDP growth (selected years and projections shown in Table 1): - 2018: 7.2 - 2019: 5.9 - 2020: 1.0 - 2021 (Est.): 1.2 - 2022 (RCF Request): 3.6 - 2023 (6th Review): 8.1 - 2024 (Proj.): 6.9 - 2025 (Proj.): 5.4 - 2026 (Proj.): 6.5 - Oil production (thousand barrels per day): 2018: 17; 2019: 18; 2020: 20; 2021 (Est.): 17; 2022: 17; 2023: 17; 2024: 74; 2025: 99; 2026: 108 - GDP deflator (annual change): 2018: 2.4; 2019: 0.1; 2020: 2.4; 2021 (Est.): 2.8; 2022: 0.9; 2023: 2.0; 2024: 1.7; 2025: 2.7; 2026: 2.0 - Consumer price index (annual average): 2018: 2.8; 2019: -2.5; 2020: 4.4; 2021 (Est.): 2.8; 2022: 2.9; 2023: 1.7; 2024: 0.4; 2025: 2.9; 2026: 2.5 - External current account balance (excluding official grants, percent of GDP): - 2018: -14.6 - 2019: -15.3 - 2020: -17.4 - 2021 (Est.): -15.6 - 2022 (RCF Request): -15.6 - 2023 (6th Review): -18.4 - 2024 (Proj.): -18.4 - 2025 (Proj.): -17.2 - 2026 (Proj.): -18.0 ### Government finances — key aggregates and medium-term trajectory - Total revenue (percent of GDP): - 2018: 12.1 - 2019: 11.2 - 2020: 10.2 - 2021 (Est.): 10.4 - 2022 (RCF Request): 10.8 - 2023 (6th Review): 12.2 - 2024 (Proj.): 11.9 - 2025 (Proj.): 10.9 - 2026 (Proj.): 11.5 - Total expenditure and net lending (percent of GDP): - 2018: 21.1 - 2019: 21.6 - 2020: 22.6 - 2021 (Est.): 23.4 - 2022 (RCF Request): 22.9 - 2023 (6th Review): 21.7 - 2024 (Proj.): 22.8 - 2025 (Proj.): 24.0 - 2026 (Proj.): 22.7 - Overall balance (commitment basis, incl. grants) (percent of GDP): - 2018: -3.0 - 2019: -3.6 - 2020: -5.0 - 2021 (Est.): -5.8 - 2022 (RCF Request): -5.3 - 2023 (6th Review): -3.3 - 2024 (Proj.): -4.4 - 2025 (Proj.): -6.6 - 2026 (Proj.): -5.4 ### Fiscal composition (selected items, percent of GDP) - Current expenditure: - 2018: 6.0 - 2019: 2.3 - 2020: 17.0 - 2021 (Est.): 14.8 - 2022 (RCF Request): 12.4 - 2023 (6th Review): 3.7 - 2024 (Proj.): 9.1 - Capital expenditure: - 2018: 11.2 - 2019: 12.0 - 2020: 11.8 - 2021 (Est.): 12.3 - 2022 (RCF Request): 12.2 - 2023 (6th Review): 11.6 - 2024 (Proj.): 11.7 ### Monetary and credit environment - Broad money (annual percent change): - 2018: -2.1 - 2019: 15.0 - 2020: -0.7 - 2021 (Est.): 2.4 - 2022 (RCF Request): 17.0 - 2023 (6th Review): 13.1 - 2024 (Proj.): 11.9 - 2025 (Proj.): 11.6 - 2026 (Proj.): 14.9 - Credit to the economy (annual percent change): - 2018: -4.5 - 2019: 13.0 - 2020: 5.4 - 2021 (Est.): -0.3 - 2022 (RCF Request): 8.6 - 2023 (6th Review): 14.5 - 2024 (Proj.): 10.5 - 2025 (Proj.): 6.1 - 2026 (Proj.): 10.4 - Credit to the private sector (percent of GDP, memorandum): - 2018: 10.2 - 2019: 11.2 - 2020: 11.5 - 2021 (Est.): 10.7 - 2022 (RCF Request): 11.7 - 2023 (6th Review): 12.0 - 2024 (Proj.): 10.9 - 2025 (Proj.): 11.5 - 2026 (Proj.): 11.9 ### External accounts and reserves - Exports, f.o.b. (CFA francs, annual percent change): 2018: -5.2; 2019: -1.0; 2020: -3.9; 2021 (Est.): -6.6; 2022: -3.1; 2023: 20.7; 2024: 11.3; 2025: 3.7 - Imports, f.o.b. (CFA francs, annual percent change): 2018: 11.6; 2019: 7.9; 2020: 7.8; 2021 (Est.): -1.4; 2022: 3.8; 2023: 17.1; 2024: 26.2; 2025: 14.0 - Pooled gross international reserves, WAEMU (in CFAF billion) reported in Table 5: 8,561; 10,357; ...; 10,677 - Current account balance (in billions of CFA francs): - 2018: -903 - 2019: -951 - 2020: -1,180 - 2021 (Est.): -1,020 - 2022 (RCF Request): -1,066 - 2023 (6th Review): -1,431 - 2024 (Proj.): -1,404 - 2025 (Proj.): -1,311 - 2026 (Proj.): -1,519 ### GDP composition and structural features - GDP composition (selected sector shares, percent of GDP, 2010 and 2019 snapshots shown): - Agriculture and livestock continue to dominate; extractive industries’ share remains low and declined with lower international prices. - The share of extractive industries in GDP is low and further declined in response to lower international prices. - Growth volatility: - GDP growth is highly volatile and driven by climatic shocks on agriculture. - Per capita GDP growth is highly volatile and, due to high population growth, is on average low. ### Tax performance and revenue dynamics - Figure 3 shows cumulative tax and non-tax revenue dynamics (2017–21); visual panels indicate: - Total tax revenue and domestic taxes on goods and services trends across months (January–November) for years 2017–2021. - Extractive industries revenue series is tracked separately. ### Fund credit indicators and past experience - Figure 4 compares Niger’s Fund credit indicators to PRGT UCT-quality arrangements (2010–2020 comparators). Indicators presented include: - Debt Service to the Fund/Revenue - Fund Credit Outstanding/Quota - Debt Service to the Fund/Exports - Fund Credit Outstanding/GDP - Debt Service to the Fund/PPG External Debt Service - Fund Credit Outstanding/PPG External Debt - A list of historical country peaks in Fund credit outstanding and debt service to the Fund is shown, with Niger (NER2021) included in comparator sets. ### Public debt composition and debt service (Table 10, 2020–22) - Total public debt (2020 nominal): US$ 6,599 million — 100.0 percent of total debt - External debt (2020): US$ 4,634 million — 70.2 percent of total debt - Domestic debt (2020): US$ 1,965 million — 29.8 percent of total debt - Multilateral creditors (2020): US$ 3,697 million — 56.0 percent of total debt - World Bank (2020): US$ 1,710 million — 25.9 percent of total debt - AfDB (2020): US$ 424 million — 6.4 percent of total debt - Other multilaterals (2020): US$ 1,139 million — 17.3 percent of total debt - Bilateral creditors (2020): US$ 632 million — 9.6 percent of total debt - Commercial creditors (2020): US$ 305 million — 4.6 percent of total debt - Debt-service ratios and percent of GDP for 2020–22 are tabulated alongside the debt stock. ### Financial sector soundness indicators (selected, Dec. 2014–Dec. 2020) - Regulatory capital to risk-weighted assets: 2014: 16.2; 2015: 13.5; 2016: 13.9; 2017: 16.8; 2018 (Dec.): 13.3; 2019 (Dec.): 12.3; 2020 (Dec.): 14.8; 2020 (Jun.): 14.9; 2020 (Dec.1): 15.6 - Gross NPLs to total loans: 2014: 17.6; 2015: 15.5; 2016: 17.7; 2017: 18.8; 2018 (Dec.): 19.0; 2019 (Dec.): 17.0; 2020 (Dec.): 15.1; 2020 (Jun.): 16.1; 2020 (Dec.1): 12.6 - Provisioning rate: 2014: 66.8; 2015: 71.4; 2016: 66.5; 2017: 66.1; 2018 (Dec.): 65.9; 2019 (Dec.): 59.0; 2020 (Dec.): 58.2; 2020 (Jun.): 51.5; 2020 (Dec.1): 57.1 ### Key projections and memorandum items - GDP at current prices (CFA francs, selected years): - 2018: 7,134 - 2019: 7,565 - 2020: 7,830 - 2021 (Est.): 7,873 - 2022 (RCF Request): 7,909 - 2023 (6th Review): 8,633 - 2024 (Proj.): 8,559 - 2025 (Proj.): 9,301 - 2026 (Proj.): 10,471 - GDP at current prices (annual percentage change): 2018: 9.8; 2019: 6.0; 2020: 3.4; 2021 (Est.): 4.1; 2022 (RCF Request): 4.6; 2023 (6th Review): 10.3; 2024 (Proj.): 8.7; 2025 (Proj.): 8.2; 2026 (Proj.): 8.7 *Source: International Monetary Fund (extracted tables, figures, and text from the provided content).* ### Annex I. Niger Capacity Development Strategy ### Annex I. Niger Capacity Development Strategy ### Summary / Strategy - The strategy for Niger in FY 2022 extends the previous one with updates: - Continues to prioritize revenue mobilization by strengthening tax policy and revenue administration, including simplifying tax policy in line with administrative capacity. - Authorities requested a mission to evaluate the overall efficiency of their tax system to identify areas of streamlining. - Support to calibrate the balance between accommodative tax measures to support COVID recovery and preventing further erosion of the tax base by identifying effective measures from successful cases. - Greater emphasis on reforming the implementation of the expenditure chain toward more transparency and efficiency; strengthen budget preparation and execution in the context of the introduction of program budgeting, with greater attention to quality control, including a public investment management assessment and public expenditure review. - Support capacity to manage natural resource revenues in light of the large projected increase in oil output. - Continue to support improving macroeconomic and financial statistics, especially balance of payments and the nexus of government finance and monetary statistics. ### Overall priorities going forward - Tax policy and revenue administration - Domestic revenue mobilization. Helped by simplifying tax policy in line with revenue administration via a review of the taxation framework. - Calibration of measures to support recovery from COVID-19. - Public financial management and debt management - Improve expenditure chain transparency and efficiency; strengthen budget preparation, execution and control, including expenditure quality. - Natural resource revenue management - Strengthen capacity to manage natural resource revenues in view of the impending increase in oil output. - Consider implementing a basic, easy to implement smoothing mechanism to manage the additional volatility. - Macroeconomic and financial statistics - Improve national accounts, government finance and public sector debt statistics and balance of payments. ### Main risks and mitigation - Authorities welcome Fund TA and show strong determination to absorb and implement assistance. - Constraints to absorption: - Human resource constraints accentuated by a bunching of TA delivery. - Challenges of the remote environment. - Over-centralization of the reform effort. - High turnover of senior staff. - Mitigation: - Authorities could make greater use of training opportunities offered by the Fund’s Institute for Capacity Development and by Afritac West. ### Authorities’ views - Authorities welcome Fund TA and consider it appropriately targeted. - They welcome diagnostic TA from HQ and appreciate ongoing operational TA from Afritac West. - Concern expressed that the TA mission timetable is over-crowded at times with some missions that seem repetitive. ### Assessments and Priorities by Department - Fiscal Affairs — Effectiveness of past TA and training (ratings from 1 to 3; 1 worst, 3 best) - Revenue administration — Rating: 3 - Assessment: Authorities have made strong efforts to improve revenue administration, but the revenue yield has not reflected these efforts. More should be done to improve implementation. Support might be needed to optimize impact on the economy in the wake of recovery from COVID and private sector development. - Public financial management — Rating: 2-3 - Assessment: The large PFM TA program is bearing some fruit, but there has been some redundancy perceived by the authorities. It should be more focused toward niche topics, jointly identified with the authorities and the country team, to increase quality of spending. - Tax policy — Rating: 2-3 - Assessment: The TA on tax policy – reducing tax expenditures – was effective. The recommendations are being implemented, but more should be done to take systematic charge of exemptions. - Fiscal Affairs — Priorities - Revenue administration - Revenue mobilization remains the key program priority. - Consideration of quality of revenue collection and avoiding hurting private sector dynamism with excessive administrative measures, especially post-COVID. - Support to calibrate administrative measures to optimize recovery while minimizing further erosion of the tax base. - Support to strengthen capacity for natural resource revenue management. - Tax policy - Tax policy project ends in April 2019. - Follow-up mission on streamlining and systematic charge of tax exemptions is advisable. - TA to simplify tax policy in line with administrative capacity based on an evaluation of the tax system. - Support for natural resource revenue management, including a possible, simple to implement smoothing mechanism. - Public financial management - Increase efficiency and transparency in the expenditure chain. - Strengthen budget preparation and execution in the context of program budgeting. - Missions should be focused on niche, technical topics to improve expenditure quality. - Follow-up missions to monitor advice from the public investment management assessment (PIMA) could be helpful. - Monetary and Capital Markets - Debt management — Rating: 3 - Assessment: Authorities have made good progress on the institutional framework and strategy. - Priorities - Further TA needed to strengthen capacity to manage public debt and prepare a public debt plan consistent with broader investment strategy and fiscal planning. - Statistics — Effectiveness of past TA and training - Strengthen macroeconomic and financial statistics — Rating: 2 - Assessment: TA has been provided on national accounts, government finance statistics, external sector statistics. The statistics remain weak and further support is needed. - Priorities - Strengthening government finance statistics, public sector debt statistics, and national accounts remains a priority. - The project on external statistics ends in April 2019; further support is needed especially in the area of BOP. - Monetary and financial statistics TA is needed to help reconcile monetary and fiscal data on banking sector net credit to government to aid program monitoring of public finances. ### Three-Year Arrangement Under the Extended Credit Facility — Key provisions and disbursements - Letter dated November 19, 2021 from the Minister of Finance requests a three-year arrangement under the Extended Credit Facility (ECF). - Arrangement entitlement and phasing: - Niger has the right to obtain disbursements in a total amount equivalent to SDR 197.4 million, subject to availability of resources in the PRG Trust. - Disbursements shall not exceed the equivalent of SDR 118.44 million during the first 12 months of the arrangement, and the equivalent of SDR 157.92 million during the first 24 months of the arrangement. - Scheduled disbursements during the arrangement: - First disbursement: equivalent to SDR 39.48 million, available upon approval of the arrangement, at the request of Niger. - Second disbursement: equivalent to SDR 39.48 million, available on or after April 29, 2022 at the request of Niger and subject to paragraphs 4 and 5. - Third disbursement: equivalent to SDR 39.48 million, available on or after October 31, 2022, at the request of Niger and subject to paragraphs 4 and 5. - Conditions and phasing - Niger’s right to request further disbursements during the second and third years is subject to phasing and conditions determined in the context of reviews under the ECF arrangement. - Niger will not request the second or third disbursements if: - The Managing Director finds that, with respect to the second disbursement, the data as of December 31, 2021, and with respect to the third disbursement, the data as of June 30, 2022, indicate that the ceiling on the net domestic financing of the government, without IMF net financing, as set out in Table 1 of the MEFP and further specified in the TMU was not observed; or - Until the Trustee has determined that the relevant program review (first program review for second disbursement; second program review for third disbursement) has been completed. - Niger will not request a disbursement at any time during the arrangement if: - The ceiling on the accumulation of new external payments arrears on government debt is not observed; or - The ceiling on Present Value of new external debt contracted or guaranteed by the government from the beginning of the relevant calendar year is not observed; or - Niger imposes or intensifies restrictions on the making of payments and transfers for current international transactions; or - Niger introduces or modifies multiple currency practices; or - Niger concludes bilateral payments agreements inconsistent with Article VIII; or - Niger imposes or intensifies import restrictions for balance of payments reasons. - If prevented from requesting disbursements under these paragraphs, disbursements may be made available only after consultation between the Trustee and Niger and understandings have been reached. - Information and consultation - Niger will provide the Trustee with information requested regarding progress in implementing the program. - Niger shall remain in close consultation with the Trustee and consult on adoption of measures or revisions of policies in the MEFP as specified. ### Appendix I — Letter of Intent (key points) - Date and signatory: Niamey, November 19, 2021; signed by Dr Ahmat Jidoud, Minister of Finance. - Program context and objectives: - Historic democratic transfer of power to President MOHAMED BAZOUM; program based on Renaissance Program Act III. - Renaissance Program Act III ambition: stabilize macroeconomic framework, strengthen governance, transform economic fabric to reduce poverty and create jobs for youth and women. - Government General Policy Statement (DPG) adopted May 16, 2021. - Program emphasis: - Create fiscal space by strengthening revenue mobilization and improving spending efficiency. - Use fiscal space to address development challenges, notably investments in education and strengthening security spending. - Promote good economic and financial governance. - Strengthen private sector, including improving access to finance. - Strengthen social safety net to ensure inclusive development. - Request and rationale: - Government requests a three-year arrangement under the ECF for an amount equivalent to SDR 197.4 million (150 percent of quota) and disbursement of SDR 39.48 million (30 percent of quota) upon approval. - Niger faces acute and protracted balance of payment and fiscal needs to support COVID-19 recovery, address security situations, and fulfill development needs while supporting resilient and inclusive growth. - Commitments: - Government will provide IMF with all TMU information on agreed dates. - Government consents to publication of IMF staff report, the letter of intent, the MEFP and the TMU on the IMF website. ### Attachment I — Memorandum of Economic and Financial Policies (MEFP): Introduction (key points) - Political and program context: - Successful democratic transition and peaceful transfer of power; President Mohamed Bazoum’s program focuses on consolidation and continuity. - Government's general policy declaration adopted on May 26, 2021 covers seven main intervention areas: (i) security and social peace; (ii) good governance and consolidation of institutions of the Republic; (iii) development of human capital; (iv) modernization of the rural world; (v) development of economic infrastructure; (vi) tapping of economic potential; and (vii) solidarity and socioeconomic inclusion of vulnerable segments of the population. - Review of recent performance: - Over 2017-19, macroeconomic stability remained firmly established, supported by prudent fiscal policy. - Growth remained strong due to large-scale projects and fiscal policy balancing social priorities and macro stability. - Inflation remained low over the period, below the WAEMU standard of up to 3 percent. - In 2020, the Covid-19 pandemic significantly weighed on the economy amid persistent climate and security shocks. *Source: Annex I. Niger Capacity Development Strategy (IMF PDF).* ### 2. Although the government’s reform program is ambitious, it is built on solid ### 2. Although the government’s reform program is ambitious, it is built on solid ### Foundations of the reform program - Planned actions grouped around three priorities: - Mobilize resources needed to finance essential expenditure in the areas of security, basic social infrastructure and development. - Improve the quality and effectiveness of expenditure. - Transform the economy. - Government reform commitments: - Digitalize tax collections, expand the tax base, streamline tax and customs exemptions, enhance internal and border controls, and optimize the tax system. - Computerize the expenditure process, enhance planning, programming, control and execution of expenditures, and improve public procurement procedures. - Develop the country’s formal private sector by removing constraints hampering SME and SMI development and encouraging formalization. ### COVID-19 response and resilience measures - Five-part operational program of economic and social resilience: - (i) health management of the pandemic; - (ii) strengthening of the resilience of the education system; - (iii) support for vulnerable persons; - (iv) mitigation of the economic and financial impact; - (v) strengthening of the resilience of producers in the agriculture and livestock sector. - Government implemented tax, fiscal and financial measures to limit the economic and social impact of the pandemic. - Implementation of this plan enabled Niger to better contain the crisis than other countries in the region and around the world. ### Objectives of the new three-year arrangement (2021-2024) - Program objectives: - (i) consolidate macroeconomic stability; - (ii) improve the mobilization of domestic resources; - (iii) improve the effectiveness of public expenditure with an emphasis on social spending and poverty reduction; - (iv) promote good governance to build foundations for private sector-led growth. - Government committed to fully implementing the program despite challenges from deteriorating security (Diffa and Maradi regions and the three borders area), climate shocks, and persistence of the COVID-19 crisis. - The MEFP describes recent developments, results under the previous program, short- and medium-term outlook, and policies and structural reforms planned for 2021-2024. ### Performance under the previous ECF-supported program - Macroeconomic outcomes and reforms: - Maintained macroeconomic stability; growth sustained; inflation contained. - Indicative targets for the poverty reduction expenditure program met in all reviews. - Average growth rate of 5.4 percent over 2017-2020. - Attracted large-scale foreign projects and reduced poverty. - Public finance management reforms implemented: - Introduction of the Single Treasury Account. - Implementation of program budgeting. - Deployment of IT systems: SISIC for the General Directorate of Taxation and ASYCUDA for the General Directorate of Customs; migration of SIGMAP from version 1 to version 2. - Consolidation and streamlining of exemptions. - Introduction of performance plans in the tax and customs administrations. - Direct deposit of government payments and taxes. - Introduction of the valuation of import transactions for tax purposes. - Centralization of debt management in a single unit with a front-middle-back office structure. - Clearing of domestic payments arrears, including arrears to public utilities. - Improved fiscal transparency: online publication of a simplified “citizen budget” and analytical reports on the public debt. - Business environment improved; substantial investments in health, education and food and nutritional security; economic infrastructure investments linked to the 2019 African Union Summit in Niamey. ### Box 1 — Key structural reforms implemented under the previous program - General Directorate of Taxation: - Development of performance plans based on revenue targets and operational indicators. - Direct deposit of tax payments. - Introduction of the Integrated Tax and Taxpayer Monitoring System (SISIC) and implementation of eSISIC for electronic payments and electronic filing. - Interconnection of the DGI and DGD IT systems. - Expansion of the jurisdiction of the Enterprise Directorate to the entire country. - Launching of the Arbitration Committee for Tax Appeals (CARFI). - Deployment of VAT invoicing machines. - General Directorate of Customs: - Completion of interconnection of all bureaus to ASYCUDA WORLD and interconnection with customs administrations of Benin, Togo and Burkina Faso. - Preparation of performance plans. - Direct deposit of customs revenues collected. - Implementation of the transaction value for imports. - Signing of the contract for the marking of petroleum products. - General Directorate of the Treasury and Public Accounting (DGTCP): - Preparation of cash flow plans alongside the commitment plans. - Preparation of annual and quarterly public debt reports validated by the Technical Committee. - Establishment of the Single Treasury Account. - Participation in the BCEAO SICA and STAR payments systems. - Direct deposit of wages and bonuses for contractual workers. - Centralization of debt management functions in a single unit with a front-middle-back office structure. - Launching of the Interministerial Committee for Monitoring the Government Borrowing and Budgetary Aid Negotiation Policy (CISPEE/NAB). - General Directorate of the Budget: - Quarterly release of appropriations in the first month of the quarter based on proposals from the Budgetary Regulation Committee. - Implementation of program budgeting for all ministries/institutions. - Reduction of payment order delays for expenditures. - Computerization of the clearance of expenditures involving delegated appropriations. - Other structural reforms: - Adoption of a new law on public-private partnerships (PPP) that aligns with the Investment Code and the Organic Law on Budget Laws. - Deployment of SIGMAP, version 2. - Adoption of a national strategy on inclusive finance and launching of the Executive Secretariat responsible for its implementation. - Establishment of an SME/SMI Support Fund (FONAP). ### Areas with mixed or limited results - Limited progress in mobilization of domestic revenues due to: - Size of the informal economy. - Impact of exemptions. - Volatility of commodity prices. - Persistence of the difficult security situation. - Closing of the border with Nigeria. - COVID-19 health crisis. - Limited success in broader structural reforms: - (i) development of a strong private sector to improve living standards and create jobs; - (ii) expansion of the financial sector and financial inclusion to promote the private sector. ### Recent economic developments (2020) - Overall slowdown: - Growth declined in 2020 after 5.9 percent in 2019, mainly due to COVID-19 containment measures. - Annual average inflation rate stood at 2.9 percent in 2020, as compared to -2.5 percent in 2019 (WAEMU community standard of 3 percent). - Sectoral developments: - Primary sector: - Estimated to have increased by 8.3 percent in 2020 to 40.8 percent of GDP, compared to a 3.4 percent increase in 2019. - Change largely due to 7.7 percent increase in production of major grains despite flooding affecting some crops. - Secondary sector: - Represents 19.8 percent of GDP. - Estimated to have increased 1.9 percent in 2020 as compared to 8.7 percent in 2019. - Decline explained by reduced mining production owing to cessation of COMINAK operations, lower oil production (about 17,000 barrels/day as against a capacity of 20,000 barrels/day), and declining manufacturing activity due to COVID-19. - Tertiary sector: - Accounts for 41.1 percent of GDP. - Estimated to have recorded -0.7 percent real growth in 2020 as against 7.0 percent in 2019. - Result of declining activity in transport (-3.8 percent in 2020 compared to 7.6 percent in 2019), hotel sector (-3.2 percent in 2020 compared to 10 percent in 2019), and a decrease in taxes on goods (-6.8 percent in 2020 compared to 4.2 percent in 2019). ### Monetary aggregates and credit (2020) - Money supply: - Expected to total CFAF 1,516.2 billion in 2020, or 18.8 percent of GDP, as against 17 percent in 2019. - Driven by consolidation of bank deposits (+20.9 percent) and currency in circulation (9.8 percent). - Credit to the economy: - Expected to represent 13.0 percent of GDP, a growth rate of 8.6 percent. - Based on net lending to trading companies, construction companies and mobile telephone companies. ### External sector and balance of payments (2020) - Foreign trade affected by pandemic measures and Nigeria border closure (August 2019). - Decline in FDI due to delays in shipment of equipment for works. - Travel revenues declined due to slowdown in hotel and transport sectors and cancelled conferences. - Lower remittances and NGO receipts also contributed to weakness. - Reduced purchases of capital and intermediate goods and merchandise freight partly mitigated current and capital account deterioration. - Balance of payments: - Expected to show a deficit of CFAF 81.5 billion in 2020, following a surplus of CFAF 317.7 billion in 2019. ### Public finances (2020) and financing - Fiscal pressures: - Fiscal deficit (including grants) expected to deteriorate to 5.2 percent of GDP in 2020, as against 3.5 percent of GDP in 2019. - Budgetary support mobilized: CFAF 403.6 billion (CFAF 163.8 billion in grants and CFAF 239.9 billion in loans) expected to reduce pressure on expenditures. - Closing of the border with Nigeria, terrorist attacks and COVID-19 hampered revenue collection and increased expenditures. ### Macroeconomic outlook and medium-term agenda (2021 onward) - Growth outlook: - Strong growth in 2021 expected at a rate of 5.4 percent with gradual lifting of COVID-19 restrictions and ongoing vaccination program. - Real GDP growth should average 8.2 percent over the medium term. - Inflation: - Expected to continue to decline owing to base effects in the near term and remain below WAEMU community standard of 3 percent. - External position: - Execution of large projects will push up imports and lead to deterioration of the external position, with worsening external deficit, but expected gradual improvement starting in 2023 when oil exports start up. - Credit and financial deepening: - Measures to improve access to credit should allow private credit to outpace nominal GDP growth and contribute to financial deepening. ### Oil sector prospects and management (startup delayed but significant) - Pipeline and production: - 2000 km oil pipeline linking the Agadem oil basin to the Port of Sèmè expected to increase oil production and exports from 20,000 barrels/day to 97,000 barrels/day once construction is completed. - CNPC construction slowed by COVID-19; construction will continue until mid-2023. - Government actions and expectations: - Government purchased a 15 percent equity holding in the oil pipeline operating company (WAPCO). - Government will prepare an oil revenue management strategy with IMF technical assistance [structural benchmark for end-September 2022]. - Additional oil resources expected to increase by at least 2 percent of GDP. - Projected oil sector contribution starting in 2023: - Close to 25 percent of GDP. - 45 percent of tax revenues. - 68 percent of exports. - 8 to 12 percent of formal jobs. - Local content and institutional framework: - Legislation on local content aims to increase Nigerien companies’ share from 4.5 percent to 20 percent within five years (excluding core expenditures such as transport, food, security, etc.). - Aim for all oil-related revenues to remain under exclusive control of the Treasury at all times. - Ministry of Finance to play a key role in management of oil financial flows. - Government will seek technical assistance from the IMF and development partners. - Fiscal and expenditure caution: - A portion of additional revenues will be channeled to development, mindful of potential supply bottlenecks, limited administrative capacity to rapidly increase expenditures without jeopardizing quality, and volatility of oil revenues. - Recommendation for well-designed medium-term public finance and expenditure plans and prudent budgetary rules. ### Fiscal outlook for 2021 - 2021 budget aims to reduce the deficit while supporting the economy, but recovery of revenues is slow and social and security spending needs increased. - Supplementary budget adopted by the National Assembly calls for an increase in current and capital expenditures. - These measures will widen the fiscal deficit, including grants, to 6.6 percent of GDP. - Government financing strategy: combination of budgetary support and issuance of long-term securities on the regional market to cover additional financing needs. ### Financial sector and inclusion challenges - Financial sector resilient to pandemic impact, but financial deepening and inclusion remain challenges: - Very limited contribution of the banking sector. - Weak microfinance services supply. - Limited contribution by mobile telephone financial services. - Insufficient and poor-quality data for financial inclusion indicators. - Planned measures to address weaknesses: - Exploit potential of new financing mechanisms: financial leasing, warrantage, and support for agriculture via making FISAN fully operational. - Tap FONAP, the BCEAO regional financing arrangement, and loans co-financed via the Maison de l’Entreprise to support the private sector. - Popularize new bank and mobile payment options, improve interconnection, and fill infrastructure deficits. - Implement the new national inclusive finance strategy following the donors’ roundtable held on July 1, 2021. - Entry into operation of the Inclusive Finance Development Fund (FDIF) created by Decree No. 2020-514/PRN/MF of July 3, 2020. _International Monetary Fund_ ### 18. The 2021 fiscal policy focuses on management of the COVID-19 health crisis and the ### 1nerea2021001 - 18. The 2021 fiscal policy focuses on management of the COVID-19 health crisis and the economic recovery. ### 2021 fiscal policy focus and budget orientation - Fiscal policy focuses on implementing economic recovery actions while pursuing a fiscal policy anchored in prudent recourse to borrowing, with an emphasis on concessional resources and BOOT-type public-private partnerships. - The budget was written taking into account the policy directions of the Renaissance Program and the strategic choices and priorities defined by the government, particularly in the 2017-2021 PDES. - The government is committed to keeping public expenditures consistent with the fiscal deficit target of 6.6 percent of GDP in 2021. ### Budget amendment and expenditure priorities (2021) - The 2021 budget law was amended following government reconfiguration and to respond to additional requirements, particularly in security. - Changes to budget expenditure essentially involved investment in security, Niger’s participation in the construction of the pipeline for crude oil exports, roads projects, and the replenishment of the food security buffer stock. - A list of lower-priority projects totaling CFAF 50 billion has been identified and appropriations frozen to help achieve the deficit objective. ### Tax policy measures in the 2021 supplementary budget - Certified invoicing: strengthening the current arrangement to ensure more efficient implementation. - Taxation regimes: specifying the nature of sole proprietorships (businesses operated by individuals). - Reduction in the scope of the tax on incoming international calls (TATTIE) to align the General Tax Code with the Sahel G5 decision on elimination of roaming charges and ECOWAS Regulation C/REG.21/12/17 of December 16, 2017. - Reduction of the domestic tax on petroleum products (TIPP) from 12 percent to 7.5 percent to account for the cost of molecular marking of hydrocarbons and the increase in per liter prices following revision of the marketing agreement among SORAZ, SONIDEP and the government. ### Immediate revenue-increasing measures (Box 2) — actions with immediate effect during remainder of 2021 - Collection of DGI tax arrears: tackle recoverable tax arrears in the amount of CFAF 69.7 billion in the fourth quarter of 2021, which will bring in at least CFAF 8.1 billion in revenues for this year alone, and establishment of collection strategies for the balance. - Deployment of VAT invoicing machines: initial phase covering 500 taxpayers, with efforts to expand to all taxpayers subject to VAT. - Regularization of T1s for vehicles that have not arrived: DGD to channel imported vehicles to SONILOGA sites for customs clearance. - Regularization of Simplified Declarations: immediate release facilities granted by the DGD to certain categories of goods. - Exclusion of revenue-generating products from bulk goods from Asia and Nigeria: DGI identified a list of 11 revenue-generating products to be excluded from bulk goods; customs administration to step up controls, activating inspection units and ex post inspections. - Implementation of performance contracts between the Director General of Customs and inspectors from full-service bureaus in Niamey to increase revenue levels; expansion to other full-service bureaus in the interior. ### Fiscal consolidation path and targets (2022–2024) - Fiscal policy objective: bring the fiscal deficit in line with the maximum of 3 percent of GDP agreed in the WAEMU Convergence, Stability, Growth and Solidarity Pact by 2024. - Draft budget law for 2022: forecast deficit of 5.4 percent of GDP as against 6.6 percent in 2021. - Mobilizing revenues and consolidating expenditure control and effectiveness are the primary bases for fiscal consolidation. - Increased revenues from substantial rise in oil production starting in 2023 will further reduce the deficit, with these revenues to be used primarily to respond to Niger’s urgent development needs. ### Planned measures to increase revenues in 2022 (quantified) - Specific tax and administrative measures are planned to increase revenues in 2022 by 0.8 percent of GDP. - Measures include wider use of VAT invoicing machines consistent with certified electronic invoicing provisions; effective implementation of marking of oil products; revision of exemption conditions requiring payment of duties and taxes prior to refund applications; strict application of standard tax regime to government entities; taxation of amounts placed in free reserves subject to IRVM; establishment of one set of formalities for property registration and advertisement; revision of the special re-export tax (TSR) on sugar and fabric (TSR set at 20 percent for sugar under tariff position 17.01 and at 15 percent ad valorem for the tariff positions for fabric); deployment of SISIC nationwide; obligation to produce a certified invoice for orders and public procurement; increase in the abatement rate on the taxable value of vehicles by 10 to 15 additional percentage points; exclusion within customs boundaries of locally produced/manufactured/available goods from national budget exemptions; continuation of reforms to automate and modernize tax and customs procedures. ### Tax and customs administration reforms — achievements and implementation - Integration of the DGI and DGD digital platforms to enable full automation of processes without human intervention: generation/updating/publication of compliant taxpayer list; forwarding to ASYCUDA; ASYCUDA tracking and automatic rejection of inconsistencies; real time notification to DGI; immediate transfer of taxpayer account information including VAT to be deducted. Government to adopt detailed implementation plan consistent with IMF technical assistance [structural benchmark for end-March 2022]. - Deployment of SISIC to all DGI units with entry into operation and use of all functionalities. - Establishment of the One-Stop Shop for Foreign Trade (GUCE) to fully automate pre-clearance and clearance and improve tracking of foreign trade operations. - Digitalization of the tax system with new electronic filing and payment platform; improved interconnection between tax and customs IT systems to allow automatic transmission and automated processing by SISIC. ### Expanding the tax base and formalization measures - Actions to expand the tax base (with implementation timetable to be provided): - Creation of new units by redrawing areas covered by some tax centers and tax collection agencies; establishment of units in communes with tax potential. - Creation of new land registry offices in regional capitals currently without such services. - Completion of digitization of the property registry. - Deployment of SISIC in departments and communes with tax centers and tax collection agencies. - Completion of the “Enclos Fiscal” (ring-fencing) project. - Continuation of in-community registration operations. - General Directorate of Taxation to enhance internal and external communications to improve visibility and transparency of tax legislation, doctrine, procedures, and reforms. ### Tax system simplification and technical assistance - Government will prepare a roadmap with IMF technical assistance for revision and simplification of the tax system to improve tax compliance, eliminate unproductive taxes, encourage formalization, and mobilize revenues progressively and favorably to development [structural benchmark for end-June 2022]. - Revision of the General Tax Code should follow technical assistance recommendations. ### Petroleum sector measures - Implementation of molecular marking of petroleum products: specifications to be finalized by SONIDEP and the service provider for marking hydrocarbons intended for domestic consumption directly on the SORAZ Zinder platform. - Inspection operations covering all regional capitals to begin by end-December 2021. ### Exemptions, arrears management, and benchmarks - Government to share a status report on existing agreements with IMF indicating amounts of exemptions by type of tax since beginning of 2019 and their expiration dates, plus exemption projections for 2022 [structural benchmark for end-June 2022]. - Half-yearly status reports on new or renewed tax exemptions, including details and expiration dates [continuous structural benchmark]. - Ministry of Finance to prepare a policy brief with specific, quantified proposals for streamlining existing exemptions and tightening procedures for granting exemptions in consultation with IMF staff [structural benchmark for end-December 2021]. - Annual report on tax arrears committed by the government to describe: (i) stocks and flows of tax arrears by tax year and type and degree of recoverability; (ii) a timetable with quantitative targets for reduction based on recoverability analysis; and (iii) a detailed plan to be agreed with AFRITAC containing specific DGI actions [structural benchmark for end-June 2022]. ### Public borrowing policy and debt management - Government will pursue a prudent external borrowing policy and consolidate public finance management reforms to keep borrowing sustainable. - Measures include modernizing institutional framework for public debt management and prioritizing concessional financing and growth- and development-oriented projects to keep borrowing level below 70 percent as agreed in the WAEMU Pact. - Given scarcity of concessional resources, recourse may be made to semi- or nonconcessional financing while respecting the agreed foreign debt ceiling and PDES. - CISPEE/NAB will continue to approve new foreign commitments before signature; CISPEE/NAB Technical Committee will validate quarterly and annual public debt reports. - Government will continue to publish annual public debt reports on the Ministry of Finance website and prepare annual borrowing plans based on medium-term debt strategy; emphasis on evaluating financing sources and instrument mix to optimize costs, reduce liquidity risks and protect against debt distress. ### Improving public investment quality - Detailed multiyear budgets will be published with the budget law, along with feasibility study results underpinning project selection. - For 2022 budget: feasibility studies for the 9 largest projects prior to inclusion in the Government Investment Program (PIE) [structural benchmark for end-December 2021]. - Starting in 2023: all investment projects totaling more than CFAF 5 billion will be subject to feasibility studies, with summaries published on the Ministry of Planning website prior to inclusion in the PIE [continuous structural benchmark]. - Government will provide sufficient funds for feasibility studies for large projects; sectoral ministries may conduct feasibility studies for small projects. ### Fiscal transparency and reporting - Government undertakes to: - Continue to publish the citizen budget with the budgetary documents for the same year. - Each year publish the Government Investment Program along with the budget showing annual maximum capital appropriations for each of the three years of the investment planning horizon. - Include a brief analysis of performance gaps for main fiscal aggregates and macroeconomic variables in the Multiyear Economic and Fiscal Programming Document (DPBEP) and other relevant budget documents. ### Digital payments and public financial management modernization - Government will continue reforms for digitalization of payments; a draft law will be submitted to the National Assembly authorizing adoption of digital payments by the central government. - Progress with Single Treasury Account (CUT) implementation continues; expansion to local governments and externally financed public programs/projects to be studied with gradual inclusion principle and initial pilot covering Niamey. - Development of the DGTCP banking function as a major reform component linked to effective electronic payment solutions to serve as point of entry for collection and payments. ### CUT/GIM-WAEMU implementation remaining actions - Niger joined the GIM-WAEMU electronic payment platform; certification tests of the GIM-WAEMU prepaid extranet have been completed. - Remaining actions for project implementation: - receipt of the pilot electronic payment terminals and cards; - purchase of ABMs/ATMs; - launching of the publicity program (communications agency); - training on accounting arrangements; - testing of online payments; - availability of a foreign currency payment account for transactions outside the WAEMU; - entry into operation following validation of the various tests. ### Natural resource revenue governance - Strengthening the framework for management of natural resource revenues is a priority to ensure oil export growth results in commensurate increase in tax revenues. - Return to the Extractive Industries Transparency Initiative (EITI) is an important step; 2010-2014 audits and the compliance audit for 2015-2016 conducted by the Audit Office will help improve sector governance. - Audit of exemptions in the extractive industries sector included in the Audit Office annual work program for 2021; report to be published in strict compliance with the Office’s prerogatives and independence [structural benchmark for end-December 2022]. - Information on contracts and roadmap for publication of beneficial owners of extractive industry companies to be published on the EITI website. - Government to prepare an oil revenue management strategy with IMF technical assistance [structural benchmark for end-September 2022]. - SONIDEP’s role to be strengthened as the government corporation fully involved in oil operations; SONIDEP prohibited from acting as fiscal agent for the government. *Source: 1nerea2021001 (IMF)* ### 36. Improvement of the quality and effectiveness of expenditure will facilitate fiscal ### 36. Improvement of the quality and effectiveness of expenditure will facilitate fiscal adjustment and ownership of the fiscal reforms. ### Public procurement and paperless expenditure processes - Competitive bidding will be prioritized and brought up to the WAEMU threshold of 95 percent. - Procurement procedural improvements: - Download public procurement plans in SIGMAP and publish them on the public procurement website (www.marchespublics.ne). - Publish related tender notices and final contract results on the public procurement website. - Publish the beneficial owners of companies awarded single tender or sole source contracts on the public procurement website, with the exception of contracts related to security and national defense. [continuous structural benchmark] - A legal instrument requiring collection of information on beneficial owners of companies awarded single tender or sole source contracts (except security and national defense) will be issued and information published on the public procurement website. [structural benchmark for end-March 2022] - Paperless expenditure process to be accelerated through: - Revising legislation and regulations to cover digital and electronic transactions. - Completing interconnection of IT systems involved in the process (CEGIB, SISIC, ASYCUDA, SIGMAP). - Introducing paperless expenditure payment procedures (from commitment through to payment authorization). - Double authorization framework (AE/CP) for budgetary appropriations will begin with the 2022 budget in five pilot ministries: - Ministry of National Education - Ministry of Public Health, Population and Social Affairs - Ministry of Infrastructure - Ministry of Agriculture - Ministry of Water Resources - Decentralization of payment orders will begin with the 2022 budget in two pilot ministries: - Ministry of Public Health, Population and Social Affairs - Ministry of National Education - Government will place emphasis on competitive bidding for PPP contracting and reaffirm commitment to subject PPP projects to more rigorous analysis before contracts are signed. ### Security, defense, and related spending - Continue financing and strengthen operational capacity of the security and defense forces (FDS) by: - Creating a denser territorial network. - Increased recruitment. - Creation and training of special units in various corps. - Complete necessary FDS recruitment and training; purchase logistical and physical resources such as armored vehicles and air delivery systems. - Improve security governance to reconcile accountability with military secrecy in resource management. - Capacity-building measures accompanied by initiatives to improve FDS living conditions: - Construction of social housing. - Creation of a school for wards of the state. - Implementation of the Waqf fund for dependents of fallen soldiers. - Strengthen military cooperation with allies for training, equipment provision, information sharing and air support. - Continue coordination to combat terrorism and organized crime with neighboring countries in G5 Sahel Joint Force, Multinational Joint Task Force of the Lake Chad basin countries, and joint cross-border patrols between Niger and Nigeria. ### Education priorities and reforms - Education prioritized in use of available fiscal space to address access, quality, apprenticeship system, and alignment with labor market needs. - Planned actions to improve quality of education: - Gradually end the contract system. - Reserve access to teacher training colleges for students who have completed at least secondary school. - Establish a career plan to provide teachers with career prospects. - Implement ongoing training plans (in-person or remote), particularly following teacher evaluations. - Increase capacity of school infrastructure and equipment by absorbing makeshift classrooms. - Strategies to encourage scientific education and ensure education for children in emergency situations and insecure zones, and for young girls, including construction of school boarding facilities. ### Social protection and poverty reduction - For 2021 and 2022, minimum amounts will be implemented in budgets in favor of the poorest: - 80 billion FCFA (for 2021) and 76.5 billion FCFA (for 2022). (Indicative targets at the end of December 2021 and end of September 2022) - Emphasis on programs with significant impact on resilience of the most vulnerable, focusing on emergency social safety nets and social capital–strengthening programs, including: - Rebuilding food security stock. - Humanitarian emergency. - Free healthcare for children aged 0 to 5. - Hygiene and sanitation in rural areas. - Prevention of malnutrition targeting children first 1000 days of life and pregnant women. - Deployment of social centers for prevention, promotion and protection of the child in fragile areas. - Improvement of maternity and neonatal care quality and offer. - Community health, school canteens, support for female entrepreneurship. - Support for the agricultural campaign, boarding schools for young girls, construction of hydro-agricultural facilities, construction of classes. - Strengthen mechanism for targeting vulnerable areas and populations and promote risk prevention approaches for sustainable recovery and advance response to multiple shocks. ### Food security, climate change, and green economy - Step up implementation of the 3N Initiative (Nigeriens Feeding Nigeriens). - Create conditions to modernize agriculture/livestock by removing obstacles to production, storage, processing and marketing. - Promote green economy to address desertification, climate change and biodiversity protection; leverage Food and Nutritional Security Investment Fund (FISAN). - Prepare a financing framework for agricultural subsectors incorporating principles and facilities promoted under the inclusive green economy. ### COVID-19 vaccination strategy and targets - Government to ensure vaccines are available and administered; mass vaccination favored to provide herd immunity and resume economic activities. - Niger is a member of the COVAX facility and will work with partners to access necessary doses, prioritizing the most vulnerable. - National vaccination plan: - Covers the entire country and targets 47.8 percent of the total population. - Prioritized groups: health care personnel, persons with a co-morbidity condition, individuals over the age of 60, defense and security forces, pilgrims, persons traveling outside the country, teachers, pupils and students, and government officials and assistants. - Communications strategy to encourage hesitant populations through social mobilization and community engagement. - Monitoring and evaluation mechanism at district, regional, central levels to assess overall impact and adjust strategies. - Vaccination timetable divided into five phases covering two main waves. - COVAX facility targets 20 percent of the total population and will finance the first three phases from March 2021 to February 2022. - Final two phases, covering March 2022 to October 2022 and targeting 27.7 percent of the total population, will be financed by the government and other partners. ### Private sector development and broader structural reforms - Create conditions to transform the economy, strengthen and diversify the nonoil private sector alongside oil sector expansion. - Draft laws prepared: Small business Charter and Small Business Act. - Plan to create a National Framework for Public-Private Dialogue as a stakeholder platform. - Government will implement a critical mass of specific, measurable reforms with established deadlines and monitor implementation, with consultations for corrections and program expansion. - Enhance incentives for local private sector formalization: access to credit, training, certification and partnerships with foreign companies. - Prepare ex post cost-benefit analyses for two thermal power plants in Niamey and Zinder to assess budgetary risks. ### Financial sector development and inclusion - Establishment of SME/SMI National Support Fund (FONAP) to mobilize resources for financing small businesses, facilitate access to bank credit, and build technical and managerial capacity. - Create and institutionalize a Financial Inclusion Development Fund (FDIF) under the National Inclusive Finance Strategy; FDIF created by Decree No. 2020-514/PRN/MF of July 3, 2020. - Donor roundtable on July 1, 2021 announced resources covering 174.2 percent of the provisional budget for implementation of the strategy. - Continue consolidation plan for microfinance sector, involving: - Rehabilitating the Savings and Loan Association Movement (MCPEC) and strengthening Union of Credit Unions of Niger (UCMN). - Dealing with microfinance institutions in difficulty. - Strengthening and consolidating the microfinance sector. - Providing capacity-building for the supervisory authority. ### Governance, anticorruption, and transparency measures - Emphasis on: - Evaluating and strengthening measures to combat corruption and similar offenses. - Leading by example at highest levels and all levels of government in public affairs management. - Conducting systematic unscheduled inspections followed by sanctions at all levels of central government and agencies. - Raising awareness of government officials regarding ethics, conduct and morality. - Ensure funds allocated to combating COVID-19 are spent effectively: - Audit Office audit report on the 2020 COVID-19 expenditures will be published online as part of its General Public Report. [structural benchmark for end-December 2021] - A regulation will be issued to require information on beneficial owners of bidding companies for all public procurement relating to COVID-19, with beneficial ownership information of awarded companies published on the public procurement website. [prior action] - Administrative investigation identified irregularities in payment of some expenditures; report forwarded to courts and pretrial investigation under way. - Government suspended payment of expenditures without prior payment orders and established a committee to review the instruction on execution of public expenditures. - Accelerate and finalize revision of framework governing asset declarations by senior government officials to ensure greater transparency and broader coverage; draft law adopted in 2020 extends obligation to a larger number of public officials; a decree established a new model and content for asset declarations this year. - Audit Office will publish asset declarations of members of government on an official internet site based on the new model, in accordance with recommendations of the High Authority for the Protection of Personal Data (HAPDP) and international best practices. ### Public sector effectiveness and public enterprises governance - Reforms to improve public sector effectiveness: - Effective implementation of program budgeting. - Deployment of a system to manage positions and skills in main public service sectors. - Systematic introduction of paperless government procedures. - Strengthening of social security system for government employees. - Governance and efficiency reforms for public enterprises include: - Amendment of the law on public enterprises based on relevant provisions of the OHADA Code to include currently uncovered categories, clarify development mission, and strengthen accountability and control mechanisms. - Continued publication online of financial statements of large public enterprises. - Revision of method of appointment of members of boards of directors of public enterprises in accordance with their objectives. - Establishment of a performance contract system for public enterprises to which a portion of managers' remuneration will be indexed. - Creation of a high-level accountability framework to promote high performance and propose corrective measures for poorly performing companies. ### Program monitoring, performance criteria, and targets (selected figures from Table 1) - Program monitoring based on performance criteria and structural benchmarks as defined in the Technical Memorandum of Understanding (TMU). Authorities will submit statistical data and information in accordance with the TMU. - IMF Executive Board will monitor program through half yearly reviews: - First review based on performance criteria and data through end-December 2021; second review covers performance criteria and data through end-June 2022. - First and second reviews to be completed on or after April 29, 2022 and October 31, 2022, respectively. - Semi-annual reviews based on performance criteria at end-June and end-December, and indicative targets at end-March and end-September. Selected numeric targets and actuals from Table 1 (Billions of CFAF, unless otherwise indicated): - Ceiling on net domestic financing of the government, without IMF net financing (Cumulative from beginning of year): - Proj. End-Dec. 2021: 371.4 - Actual End-Dec. 2021: 90.5 - Proj. End-Jun. 2022: 182.6 - Proj. End-Sep. 2022: 310.1 - Adjustment for shortfall in external budget support: ............ - Adjusted ceiling on net domestic financing of the government, without IMF net financing: - 371.4; 90.5; 182.6; 310.1 (matching the ceiling entries) - Memorandum items: External budget support: - Proj. End-Dec. 2021: 213.5 - Actual End-Dec. 2021: 15.6 - Proj. End-Jun. 2022: 29.4 - Proj. End-Sep. 2022: 48.7 - Continuous quantitative performance criteria: - (Ceiling) Accumulation of new external payments arrears: 0.0; 0.0; 0.0; 0.0 - Present Value (PV) of new public and publicly-guaranteed (PPG) external debt contracted from the beginning of the relevant calendar year: - 346.0; 402.0; 402.0; 402.0 - Indicative Targets (Cumulative from beginning of year): - Basic budget balance (commitment basis, excl. grants), floor: - Proj.: -484.6 - Actuals / intermediate: -87.8; -182.0; -298.8 - Basic budget balance (commitment basis, incl. budget grants), floor: - Proj.: -340.0 - Actuals / intermediate: -73.3; -156.3; -253.9 - Cash revenue, floor: - Proj.: 846.4 - Actuals / intermediate: 222.3; 469.0; 715.6 - Floor on social protection spending: - Proj.: 80.0 - Actuals / intermediate: 18.0; 45.0; 76.5 - Ratio of exceptional expenditures on authorized spending (percent), ceiling: - 5.0; 5.0; 5.0; 5.0 *Source: Niger — IMF staff report content (selected chapter text and Table 1 data).* ### 1. Provide Fund staff on a semi-annual ### 1. Provide Fund staff on a semi-annual ### Semi-annual and immediate structural measures (March–July 2022) - 1. Provide Fund staff on a semi-annual basis, starting in March 2022, with a tally of newly granted or renewed tax exemptions with their details and expiration dates. - Rationale: Protect revenue base and improve domestic revenue mobilization. - Monitoring: Continuous, monitored on a bi-annual basis. - 2. Publish procurement plans, tender notices and final contract award results on the Public Procurement Portal, starting in March 2022. - Rationale: Improve public expenditure management. - Monitoring: Continuous, monitored on a bi-annual basis. - 3. Produce a feasibility study for any investment project of more than CFAF 5 billion, the summary of which will be published on the website of the Ministry of Planning, prior to its inclusion in the Plan d’Investissement de l’Etat from the 2023 budget, starting in July 2022. - Rationale: Improve the efficiency of public spending. - Monitoring: Continuous, monitored on a bi-annual basis. ### Table 3: Proposed Prior Action and Structural Benchmarks (December 2021—December 2022) - Prior Action - Issue a regulation requesting beneficial ownership information of companies submitting bids for all Covid-19-related public procurement, with the beneficial ownership information of the winning company to be published on the Public Procurement Portal. - Rationale: Ensure greater transparency in the awarding of public contracts. Reduce risk of conflict of interest. - Timetable: Prior Action. - Structural Benchmarks (selected items and timetables) - 2. Adopt a policy brief containing concrete and costed proposals to rationalize current exemptions and tighten procedures for granting new exemptions, in consultation with IMF staff. - Rationale: Protect revenue base and improve domestic revenue mobilization. - Timetable: End-December 2021. - 3. Produce feasibility studies for the 9 largest investment projects prior to their inclusion in the 2022 Plan d’Investissement de l’Etat. - Rationale: Improve public investment management and efficiency of public spending. - Timetable: End-December 2021. - 4. Publish the audit report by the Auditor General (Cour des Comptes) on 2020 COVID-19-related spending. - Rationale: Improve governance and transparency. - Timetable: End-December 2021. - 5. Adopt a plan for the completion of the integration of the digital platforms of the DGI and the DGD, indicating the key milestones to complete the actions described in paragraph 24 of the MEFP consistent with IMF technical assistance advice. - Rationale: Protect revenue base. - Timetable: End-March 2022. - 6. Produce an annual report describing: - (i) stocks and flows of tax arrears by fiscal year and by type, as well as by degree of collectability; - (ii) a timetable with quantitative targets to reduce arrears stocks based on the recoverability analysis and a prioritization scheme; and, - (iii) a detailed plan, containing specific actions to achieve these objectives. - Rationale: Improve domestic revenue mobilization. - Timetable: End-March 2022. - 7. Issue a legal instrument requiring the collection of beneficial ownership information of companies awarded single tender or sole source contracts, except defense and security-related contracts, and their publication on the Public Procurement Portal. - Rationale: Ensure greater transparency in the awarding of public contracts. Reduce risk of conflict of interest. - Timetable: End-March 2022. - 8. Adopt a roadmap, with technical assistance from the IMF, for the review and simplification of the current tax system. - Rationale: Improve domestic revenue mobilization and business environment. - Timetable: End-June 2022. - 9. Share with the IMF a status report of existing agreements, showing for each agreement the amounts of exemptions by tax type since the beginning of 2019, expiration dates, and available information on projected exemptions for 2022. - Rationale: Improve domestic revenue mobilization. - Timetable: End-June 2022. - 10. Adopt an oil revenue management strategy with technical assistance from the IMF. - Rationale: Enhance governance and transparency of oil revenue allocation. - Timetable: End-September 2022. - 11. Publish the audit by Auditor General (Cour des Comptes) on exemptions in the extractive sector. - Rationale: Improve governance and transparency of the extractive sector. - Timetable: End-December 2022. ### Technical Memorandum of Understanding — Definitions and monitoring framework - Purpose: Defines performance criteria and indicative targets of Niger’s program under the Extended Credit Facility (ECF) arrangement for Q4-2021 to Q3-2022. Performance criteria and indicative targets are set out in the MEFP; structural benchmarks appear in Tables 2 and 3. - Key definitions: - Government: central government of the Republic of Niger; excludes political subdivisions, public entities, or central bank with separate legal personality. - Debt: current liability created under a contractual arrangement requiring payments of assets or services per schedule; includes loans, suppliers’ credits, and leases (present value at inception). - Present value (PV) of new public and publicly-guaranteed external debt contracted: discounts at a five percent annual rate future payment stream, except for loans with a negative grant element, where PV equals the loan value. - Domestic payment arrears: domestic payments owed by the government but not paid; include committed and authorized fiscal year expenditures not paid within 90 days. - Government obligation: any financial obligation of the government accepted as such by the government (including any government debt). ### Quantitative performance criteria and adjustments - Net Domestic Financing of the Government (definition and scope) - Defined as sum of: - (i) net bank credit to the government; - (ii) net nonbank domestic financing, including government securities issued in CFAF on the WAEMU regional financial market and not held by resident commercial banks, proceeds from sale of government assets, and privatization receipts. - Net bank credit to the government = balance of government claims and debts vis-à-vis national banking institutions. Government deposits with commercial banks are excluded when used solely to finance externally financed capital expenditure. - Net nonbank domestic financing includes: - (i) change in the stock of government securities (Treasury bills and bonds) issued in CFAF on the WAEMU regional financial market and not held by resident commercial banks; - (ii) change in the balance of Treasury correspondents’ deposit accounts; - (iii) change in the balance of various deposit accounts at the Treasury; - (iv) change in the stock of claims on the government forgiven by the private sector. - Adjustments to the ceiling on net domestic financing: - Ceiling subject to adjustment if disbursements of external budgetary support net of external debt service, external arrears payments, and net financing from the IMF fall short of program projections. - If disbursements of external budgetary support fall short of projected amounts at the end of each quarter, the corresponding quarterly ceilings will be raised pro tanto, up to a maximum of CFAF 30 billion. - Reporting requirement: - Detailed data on domestic financing of the government provided monthly, within six weeks after the end of each month. ### New external payment arrears on government debt - Definition: - Government undertakes not to accumulate new external payment arrears on its debt (including Treasury bills and bonds issued in CFAF on the WAEMU regional financial market), except external payment arrears arising from debt being renegotiated with external creditors, including Paris Club and other bilateral official creditors. - Reporting requirement: - Data on the stock, accumulation, and repayment of external payment arrears provided monthly, within six weeks after the end of each month. ### Present value of new public and publicly-guaranteed external debt contracted - Contract and guarantee timing: - Debt deemed contracted or guaranteed when signed by the government, adopted by parliament by law and ratified by the President; for monitoring, deemed contracted on date of ratification. - External debt definition: - Debt contracted or serviced in a currency other than CFAF, except BOAD borrowing (considered external despite being local-currency-denominated). - Performance criterion (PC) scope: - Ceiling applies to PV of all new external debt (concessional or non-concessional) contracted or guaranteed, including commitments contracted or guaranteed for which no value has been received. - Exclusions: (a) short-term supplier or trade-related credit with maturity up to three months; (b) rescheduling agreements; (c) IMF disbursements. - Currency denomination and PV calculation: - Value in CFAF of new external debt of 2021 and 2022 calculated using exchange rates for end September 2021 in the IMF’s IFS database. - PV calculated by discounting all projected disbursements and debt service payments at a program discount rate of 5 percent, accounting for loan conditions (disbursements, maturity, grace period, payment schedule, front-end fees, management fees). - For loans with grant element zero or less than zero, PV set equal to nominal value. - Reference rates and spreads: - Program reference rate for six-month USD LIBOR is 1.81 percent and will remain fixed for the duration of the program. - Spread of six-month Euro LIBOR over six-month USD LIBOR: -200 basis points. - Spread of six-month JPY LIBOR over six-month USD LIBOR: -200 basis points. - Spread of six-month GBP LIBOR over six-month USD LIBOR: -100 basis points. - For interest rates on currencies other than Euro, JPY, and GBP, the spread over six-month USD LIBOR is -100 basis points. - Exchange rates (as reported) - CFAF/SDR 798.1337 - U.S. Dollar/SDR 1.408871 - Euro/SDR 1.216747 - Japanese Yen/SDR 157.6668 - U.K. Pound Sterling/SDR 1.048658 - U.A.E. Dirham/SDR 5.174080 - Reporting requirement: - Authorities to inform IMF staff of any planned external borrowing and the conditions before loans are contracted or guaranteed and to consult with staff on potential debt management operations. ### Indicative targets, fiscal definitions, and reporting - Definitions: - Cash revenue: includes tax, nontax, and special accounts revenue; excludes proceeds from settlement of reciprocal debts between government and enterprises and non-cash revenue. - Basic fiscal balance: difference between (i) total revenue (cash revenue + non-cash revenue) and (ii) total fiscal expenditure excluding externally financed investment expenditure but including HIPC-financed expenditure. Two indicative targets set: one including budget grants and one excluding budget grants. - Floor on social spending: defined as expenditures from the Government's own resources allocated to the social sectors and those directly benefiting vulnerable groups; to be coded in the budget per UNICEF recommendations for tracking. - Limit on exceptional procedures: - A limit is set on expenditures paid through exceptional procedures (without prior commitment) excluding debt service payments and expenditures linked to tax exemptions: 5 percent of total authorized expenditures during the quarter for which the target is assessed. - Reporting requirements: - Information on basic budget revenue and expenditures: monthly, within six weeks after the end of each month. - Information on UPL expenditures: quarterly, within six weeks after the end of each quarter. - Information on exceptional expenditure: quarterly, after six weeks after the end of the quarter. ### Additional information for program monitoring — Government finance - Authorities will provide to IMF staff: - Detailed monthly estimates of revenue and expenditure, including priority expenditure, payment of domestic and external arrears, and a breakdown of customs, DGI, and Treasury revenue. - The Table of Government Financial Operations with comprehensive monthly data on domestic and external financing of the budget, and changes in arrears and Treasury balances outstanding; provided monthly, within six weeks after the end of each month. - Comprehensive monthly data on net nonbank domestic financing: (i) change in stock of government securities (Treasury bills and bonds) issued in CFAF on the WAEMU regional financial market and not held by resident commercial banks; (ii) change in balance of various deposit accounts at the Treasury; (iii) change in stock of claims on the government forgiven by the private sector. - Quarterly data on expenditure for UPL lines (statement of appropriations approved, disbursed, and used). - Quarterly reports on budget execution, including rate of execution of poverty-reducing expenditure and use of appropriations by National Education, Public Health, Equipment, Agriculture, Livestock ministries. - Monthly data on Treasury balances outstanding, by reference fiscal year, with breakdown of maturities of more than and less than 90 days. - Monthly data on effective debt service (principal and interest) compared with the programmed maturities provided within four weeks after the end of each month. - List of external loans contracted in process of negotiation and projected borrowing in the next six months, including financial terms and conditions. ### Codification of social spending activities (budget activity codes) - Non-Social 00 - Social-Health 11 - Social-Education 12 - Social-Social Protection 13 - Social-Nutrition 14 - Social-Hydraulics/Sanitation 15 - Social-Others 19 *Source: Technical memorandum of understanding and Table 3 from the Niger ECF program documentation (December 2021).* ### 30. The authorities will provide the following information each month, within eight weeks ### 30. The authorities will provide the following information each month, within eight weeks ### Monetary and Financial Data - Monthly, within eight weeks following the end of each month: - Consolidated balance sheet of monetary institutions and, where applicable, the consolidated balance sheets of individual banks. - Monetary survey (provisional data). - Borrowing and lending interest rates. - Customary banking supervision indicators for banks and nonbank financial institutions (where applicable, these same indicators for individual institutions may also be provided). ### Balance of Payments - The authorities will provide IMF staff with: - Any revision of balance of payments data (including services, private transfers, official transfers, and capital transactions) whenever they occur. - Preliminary annual balance of payments data, within six months after the end of the reference year. - Reporting requirements (summary): - Balance of payments: Annual, End-year + 6 months. - Balance of payments revisions: Variable, At the time of the revision. ### Real Sector - The authorities will provide IMF staff with: - Disaggregated monthly consumer price indexes, within two weeks following the end of each month. - The national accounts, within six months after the end of the year. - Any revision of the national accounts. - Reporting requirements (summary): - National accounts: Annual, End-year + 6 months. - Revisions of the national accounts: Variable, 8 weeks after the revision. - Disaggregated consumer price indexes: Monthly, End-month + 2 weeks. ### Structural Reforms and Other Data - The authorities will provide IMF staff with: - Any study or official report on Niger’s economy, within two weeks after its publication. - Any decision, order, law, decree, ordinance, or circular with economic or financial implications, upon its publication or, at the latest, when it enters into force. - Any draft contract in the mining and petroleum sectors, including production and sales volumes, prices, and foreign investment. - Any agreement with private sector stakeholders having economic or financial repercussions for the government, including in the natural resources sector. ### Government Finance and Fiscal Reporting (selected items and deadlines) - Monthly, End-month + 6 weeks (unless noted otherwise): - Net government position vis-à-vis the banking system. - Complete monthly data on net nonbank domestic financing: (i) change in the stock of government securities (Treasury bills and bonds) issued in CFAF on the WAEMU regional financial market and not held by resident commercial banks; (ii) change in the balance of various deposit accounts at the Treasury; (iii) change in the stock of claims on the government forgiven by the private sector. - Provisional TOFE, including a breakdown of revenue (DGI, DGD and DGTCP) and expenditure, including the repayment of domestic wage and nonwage arrears, as at end-1999, and the change in Treasury balances outstanding. - Data on Treasury balances outstanding (RAP), by reference fiscal year (total and RAP at more than 90 days). - Monthly statement of Treasury correspondents’ deposit accounts. - Table of fiscal expenditure execution, unified list expenditure, and HIPC-financed expenditure. - Monthly statement of the balances of accounts of the Treasury and of other public accounts at the BCEAO (provisional: End-month + 6 weeks; final: End-month + 10 weeks). - Petroleum products pricing formula, petroleum products tax receipts, and pricing differentials. - Quarterly: - Execution of the investment budget: End-quarter + 6 weeks. - Banking supervision prudential indicators: Quarterly, End-quarter + 8 weeks. - External debt reporting: - Stock and repayment of external arrears: Monthly, End-month + 6 weeks. - Breakdown of all new external loans signed and projected borrowing, including the financial terms and conditions: End-month + 6 weeks. - Table on the monthly effective service of external debt (principal and interests), compared with the programmed maturities: Monthly, End-month + 4 weeks. ### Debt Sustainability Analysis — Key Findings and Indicators - Risk ratings: - Risk of external debt distress: Moderate. - Overall risk of debt distress: Moderate. - Noted context and drivers: - The response to the COVID-19 pandemic required higher borrowing and the shock entailed a sharp fall in exports, exacerbated by Nigeria border closure in 2019. - Debt indicators remain below thresholds thanks to concessional financing from donors and prospective post-COVID rebound. - Sustainability should be buttressed by implementation of the government’s reform program and the onset of crude oil exports via a new pipeline. - Policy priorities to strengthen sustainability: - Further strengthening debt management. - Mitigating fiscal risks from SOEs and PPPs. - Prioritizing concessional borrowing. - Strengthening private-sector development to support economic diversification. ### Public Debt Coverage and Contingent Liabilities - Coverage: - DSA covers central government, excludes local governments and the social security fund. - State guarantees to private and public sectors for external borrowing are included. - Publicly-guaranteed private debt example: guarantee to China National Petroleum Company (CNPC) for loan to finance government minority stake in SORAZ. - SOEs do not directly borrow from abroad; on-lending by central government captures such debt in central government borrowing statistics. - Absent reliable data, the DSA cannot explicitly account for domestic SOE debt; authorities to publish certified financial statements for 2020 of at least nine out of 11 largest SOEs. - Specific contingent liabilities and shocks used in stress test (Text Table 1 defaults and used values): - Other elements of the general government not captured in 1.0 percent of GDP: Default 1.0 percent of GDP; Used for the analysis 0.0. - SoE's debt (guaranteed and not guaranteed by the government): Default 1/2 percent of GDP; Used for the analysis 2.0. - PPP: Default 35 percent of PPP stock; Used for the analysis 0.0. - Financial market (default minimum value 5 percent of GDP): Default 5 percent of GDP; Used for the analysis 5.0. - Total (2+3+4+5) (in percent of GDP): 7.0. - Rationale and notes: - The contingent liabilities shock from SOE debt is set at the default value of 2 percent to reflect risks associated with their domestic borrowing. - PPPs under the new PPP law of May 2018 do not involve government financing; contingent liability stress test for PPPs is not indicated at this time. - Credit to the economy is 13.2 percent of GDP as of 2020; default value of 5 percent of GDP for contingent liability risk appears adequate. ### Evolution and Composition of Debt (selected statistics) - Public and publicly guaranteed (PPG) debt: 45.0 percent of GDP at end-2020. - PPG external debt composition: - PPG external debt makes up 70 percent of Niger’s total debt stock in 2020. - Multilateral creditors represent around four fifths of external debt. - External debt terms and risk: - External debt average weighted interest rate: 1.2 percent (at end-2020). - External debt average remaining maturity: 23 years (at end-2020). - External debt exposed to exchange rate risk: around one third of external debt. - Domestic debt: - Domestic debt average remaining maturity: 5.4 years (at end-2020). - Domestic debt average weighted interest rate: 4.1 percent (at end-2020). - Domestic debt consists mostly of short- and medium-term Treasury securities, predominantly held by banks in Niger or in WAEMU. - Notable operations and amounts: - Debt reprofiling operation in January 2020: borrowed CFAF 148 billion (1.9 percent of GDP) commercially from abroad to repay domestic debt. - In 2019 Niger placed government paper worth 3.9 percent of GDP through syndication at seven years. - CNPC extended a US$880 million (7.0 percent of GDP) loan for the construction of SORAZ refinery in 2008, of which US$352 million (2.8 percent of GDP) is guaranteed by the government. The outstanding stock of US$87.3 million (1.1 percent of GDP) at end-2020 is included in the baseline stock of debt and is expected to be fully repaid by 2023. - Loan contracted in January 2020 with Deutsche Bank for euro 225 million, of which euro 179 million (1.5 percent of GDP) have been drawn; used to repay a set of five Treasury bills and one Treasury bond. - Data gaps and actions: - Estimation and analysis of private external debt complicated by data issues; BCEAO does not yet compile private external debt stock statistics. - Authorities working with the World Bank to improve SOE financial information; a dedicated directorate general established in the Ministry of Finance in late 2019. ### Macroeconomic Forecast and Assumptions (Text Table 2 — selected series, 2018–2041) - Real GDP growth (percent), DSA 2021: - 2018: 7.2 - 2019: 5.9 - 2020: 3.6 - 2021: 5.4 - 2022: 6.5 - 2023: 10.4 - 2024: 11.4 - 2025: 8.5 - 2026: 6.0 - 2027-41: 6.1 - Inflation (CPI), DSA 2021: - 2018: 2.8 - 2019: -2.5 - 2020: 2.9 - 2021: 2.9 - 2022: 2.5 - 2023: 2.0 - 2024: 2.0 - 2025: 2.0 - 2026: 2.0 - 2027-41: 2.0 - Primary fiscal balance (percent of GDP), DSA 2021: - 2018: -2.1 - 2019: -2.6 - 2020: -3.4 - 2021: -3.6 - 2022: -2.0 - 2023: -1.3 - 2024: -1.3 - 2025: -1.3 - 2026: -1.3 - 2027-41: -1.1 - Total revenue excluding grants (percent of GDP), DSA 2021: - 2018: 12.1 - 2019: 11.2 - 2020: 10.8 - 2021: 10.9 - 2022: 11.5 - 2023: 12.7 - 2024: 13.4 - 2025: 13.8 - 2026: 14.0 - 2027-41: 15.5 - Exports of goods and services (percent of GDP), DSA 2021: - 2018: 11.3 - 2019: 10.8 - 2020: 16.6 - 2021: 14.5 - 2022: 14.5 - 2023: 17.3 - 2024: 19.5 - 2025: 20.8 - 2026: 19.6 - 2027-41: 18.8 - Oil export price (US dollars per barrel), DSA 2021: - 2018: 64.9 - 2019: 58.3 - 2020: 39.2 - 2021: 62.4 - 2022: 61.3 - 2023: 58.2 - 2024: 56.1 - 2025: 54.5 - 2026: 53.5 - 2027-41: 62.9 - Uranium price (Thousands of CFAF per kg), DSA 2021: - 2018: 40.8 - 2019: 44.0 - 2020: 48.7 - 2021: 46.9 - 2022: 46.2 - 2023: 46.1 - 2024: 46.0 - 2025: 46.0 - 2026: 46.0 - 2027-41: 46.0 ### Additional Macro and Financing Notes - Baseline scenario assumptions reflect recent developments and policy measures, pandemic response, and expected start of oil exports now projected in 2023. - Growth projected to pick up in 2021 onward with a long-run growth projection of 6.1 percent. - Gold exports projections revised upwards due to artisanal gold activity and improved data compilation; gold exports by Nigerien refineries recorded as service exports per TA recommendation. - Authorities aim to maintain limited reliance on domestic financing: - Share of domestic sources in total budgetary financing: lower than 5 percent in 2019 and 2020. - Projected to remain below 40 percent over the medium term (slightly below the 2013–18 average of 42 percent). - In the very long run, highly concessional donor support assumed to gradually decline as domestic financial market deepens. - Debt-carrying capacity: - Niger’s debt-carrying capacity remains rated “medium” with a composite indicator value of 2.96. *Prepared by the staffs of the International Monetary Fund and the International Development Association; November 19, 2021.* ### 11. The terms of foreign and domestic borrowing are assumed to shift over time to lower ### 11. The terms of foreign and domestic borrowing are assumed to shift over time to lower ### Terms of foreign and domestic borrowing - Foreign debt: - New disbursements are expected to be covered by external funding sources based on historical financing patterns. - Over the longer run, weights of external creditors are adjusted so that external borrowing moves very gradually toward less concessional financing and toward commercial loans. - Domestic debt: - Debt instruments are assumed to gradually shift from T-bills to medium- and long-term bonds. - Average interest rate on government bonds is assumed at 5.5, 6, and 6.5 percent for bonds maturing in 1 to 3, 4 to 7 years and over 7 years, respectively. - Interest rate on T-bills is set to 5 percent. - Concessional financing definition (footnote): - Concessional financing is defined as the one with grant element (GE) exceeding 35 percent of the face value. ### SDR allocation and on-lending - The SDR allocation has given Niger access to more beneficial financing. - The SDR allocation was on-lent in CFAF to member states by the BCEAO in the form of a 20-year loan carrying a fixed interest rate of 0.05 percent. - Compared to the 2009 SDR allocation terms (10-year repayment period with a three-year grace period and an interest rate of 3 percent), the current on-lending is more concessional. - The arrangement is treated as domestic debt and evaluated in nominal terms in the DSA. - Expected impact: improve the overall debt profile by replacing more expensive domestic borrowing. ### DSA tool kit assessment of macroeconomic forecast realism - Drivers of debt dynamics: - Total public debt evolution dominated by primary fiscal deficit and real GDP growth. - Compared to the past five years, projections put the contribution of growth higher and the one for the primary deficit lower. - Public debt ratio stabilizes at around 40 percent of GDP, slightly higher than in the previous DSA. - External public debt projected to peak at 32.7 percent of GDP in 2021, and decline to 16.5 percent in 2041. - Past forecast errors: unexpected changes in residuals chiefly responsible for total public debt errors; primary deficit and current account residuals chiefly responsible for external public debt errors. - Magnitude of past errors comparable to those in other low-income countries (LICs). - Realism of planned fiscal adjustment: - Projected three-year fiscal adjustment in the primary balance is 1.3 percentage point of GDP. - This lies slightly below the top quartile of past adjustments (above 2 percentage points of GDP) for a sample of LICs. - Realism predicated on recovery from the pandemic, improvements in non-oil revenue mobilization, reducing tax expenditure, expanding tax base, and revenue boost from start of crude-oil exports in 2023. - Consistency between fiscal adjustment and growth: - Projected growth path for 2021 to 2022 driven by recovery from the pandemic, removal of remaining restrictions, full opening of the border with Nigeria, and resumption of all infrastructure projects. - Impact of fiscal adjustments ranges from -0.5 to 0.5 percent of GDP based on different fiscal multipliers. - Much of fiscal adjustment driven by higher oil-related revenues, so consolidation impact on growth likely to be muted. - Consistency between public investment and growth: - Tool shows a similar share of public investment in GDP in previous and current DSAs. - Private investment expected to scale up in projected years. ### Country classification and stress test scenarios - Debt-carrying capacity: - Niger’s debt-carrying capacity remains rated “medium”. - Composite indicator (CI) value of 2.96 based on April 2021 WEO vintage. - CI components contribution: CPIA 44 percent; international reserves 34 percent; country and global real growth rates 6 and 14 percent, respectively. - CI falls within medium thresholds defined as 2.69 < CI ≤ 3.05. - The CPIA score is 3.42 in 2020. - Stress tests: - DSA relies on six standardized stress tests and a tailored commodity price shock stress test. - Standardized stress tests use default settings. - Niger does not qualify for the market financing shock stress test. - Commodity price shock stress test is relevant because commodities accounted for 75.0 percent of Niger exports of goods and services over 2018-20; under the DSA a country with commodities ≥ 50 percent of exports is subject to this stress test. - CI Score components (Text Table 3) — exact values preserved: - CPIA: Coefficient 0.385, 10-year average value 3.402, CI Score components (A*B) = 1.314, Contribution of components 44% - Real growth rate (in percent): Coefficient 2.719, 10-year average value 6.983, CI Score components (A*B) = 0.196, Contribution 6% - Import coverage of reserves (in percent): Coefficient 4.052, 10-year average value 45.974, CI Score components (A*B) = 1.866, Contribution 63% - Import coverage of reserves^2 (in percent): Coefficient -3.990, 10-year average value 21.136, CI Score components (A*B) = -0.84, Contribution -29% - Remittances (in percent): Coefficient 2.022, 10-year average value 0.813, CI Score components (A*B) = 0.021, Contribution 1% - World economic growth (in percent): Coefficient 13.520, 10-year average value 3.137, CI Score components (A*B) = 0.421, Contribution 14% - CI Score: 2.96, CI rating Medium ### External debt sustainability (A) - Projections: - PPG external debt-to-GDP expected to remain flat in 2021 then decline to 16.5 percent of GDP in 2041 under baseline. - Total external debt projected to decline to 24.0 percent of GDP in 2041. - Non-interest current account deficit remains main driver of external debt dynamics. - Goods and services balance projected to deteriorate until 2022 due to high imports related to large projects: Kandadji dam, a cement factory, a uranium mine, the oil export pipeline, and MCC-funded investments in agriculture. - Production from these projects coupled with growth in gold exports expected to improve current account sharply when they come on stream. - Around half of the increase in exports by 2026 is explained by the oil export pipeline. - Indicators and relief: - PV of debt-to-GDP projected to trend downward. - PV to exports ratio remains slightly below threshold in 2021 and 2022 despite COVID-19 impact, then declines as exports strengthen. - Debt service to official creditors low in 2021 benefiting from DSSI and CCRT, which amount to 0.4 percent of GDP in 2020-21 and 0.3 percent of GDP through 2020-22, respectively. - Debt service to exports and revenue ratios expected to enter downward trajectory in medium- and long-run after spikes in 2022. - Stress tests outcomes: - Two export-related indicators (PV of PPG external debt to exports ratio and debt service to exports ratio) exceed their threshold under export shocks. - One-time depreciation shock temporarily brings debt service-to-revenue ratio above its threshold. - Exchange rate risk considered contained due to currency union and CFAF peg to the euro. - PV of debt-to-GDP and exports ratios pick up later under the historical scenario which captures large shocks and may exaggerate severity. - Granularity assessment: - Space to absorb shocks limited in 2021-22, unchanged from previous DSA update. - PV of debt-to-exports ratio falls into limited space in 2021 and 2022. - Debt service-to-exports and revenue ratios enter limited space in 2022, later moving to substantial space as exports pick up and revenue mobilization materializes. ### Total public debt sustainability (B) - Projections: - Public sector debt increases during and after the pandemic to 49.8 percent of GDP in 2022, then projected to decline and stabilize around 41.3 percent of GDP in the long run. - Decline driven by growth recovery, fiscal consolidation, and higher oil revenues. - Improved domestic revenue mobilization, higher spending efficiency, and better expenditure control expected to reduce the primary deficit. - Gradual shifts toward lower concessionality and longer maturities would marginally increase interest costs; extension of maturities reduces rollover risks. - PV of public debt: - PV of public debt-to-GDP ratio is below the benchmark under baseline in 2021 and projected to decline. - Benchmark is 55 percent of GDP. - An adverse commodity price shock would put PV of debt and debt-service on a diverging path absent compensating fiscal and other policy measures. - Note on mechanics: the DSA mechanics could exaggerate adverse effect of a commodity price shock by setting growth of primary expenditure relative to historical averages for 2022 and 2023, neglecting high growth in the baseline. ### Risk rating and vulnerabilities (C) - Overall assessment: - Niger’s risk of external and overall debt is rated “moderate” and debt is deemed sustainable. - Justification: - No PPG external or public debt indicator breaches its threshold under the baseline scenario. - Debt indicators remain on steady trajectories and public debt sustainability remains solid even under adverse shocks. - Economy expected to rebound supported by onset of crude oil exports in 2023 and revenue mobilization measures. - Liquidity risk is low due to WAEMU membership and access to pooled external reserves. - Continued significant donor financial assistance expected in coming years. - Program safeguard: - In line with the Fund Debt Limits Policy (DLP), a debt limit on new PPG external borrowing is embedded in program conditionality to build an adequate buffer to avoid a downgrade of the risk of debt distress. - Key vulnerabilities and policy priorities: - Domestic revenue mobilization: - Public debt relative to domestic revenues compares unfavorably to WAEMU and Sub-Saharan Africa peers. - Non-oil revenue mobilization is fundamental; reduce tax expenditures and increase tax base. - Additional oil revenues in coming years should not be fully spent to support fiscal consolidation. - Fiscal risks and spending quality: - Mismanagement of large investments by SOEs or under PPPs could add substantially to government debt. - Need for proper evaluation, good governance, and raising efficiency of public spending which remains low. - Economic diversification: - Narrow economic base and low development level hinder revenue mobilization and sustainable growth. - Develop local private sector including SMEs and tackle informality. - External borrowing: - Until export prospects are certain, prioritize external financing in concessional loans and grants. - Favor euro-denominated debt given the CFAF's peg to the currency to reduce exchange rate risk. - Domestic borrowing: - Medium- and long-run need for dedicated market communication and marketing to increase average tenor of issuances and reduce refinancing vulnerability. - Implement structural program of swaps of securities close to maturity with longer maturities. - Financing plan: - To avoid liquidity shortfalls and minimize financing costs, prepare annual financing plan specifying overall volumes, issuance schedule, and effective instruments. - Integration with annual cash flow plan is essential. *Source: NIGER — INTERNATIONAL MONETARY FUND (extracted content).* ### 24. The authorities agreed the conclusions of the DSA. They were pleased that Niger’s moderate ### The authorities agreed the conclusions of the DSA ### DSA conclusions and overarching assessment - Niger’s moderate rating for debt distress is maintained thanks to concessional financing from donors and the prospective post-COVID rebound. - Authorities agreed it is essential to build an adequate buffer given the limited space to absorb shocks in the coming years. - Medium- and long-run priorities: further strengthening debt management, and sustained commitment to sound macro. policies and reforms. ### Key macroeconomic outcomes and risks - Real GDP growth (historical and projections): 7.2 (2018); 5.9 (2019); 3.6 (2020); 5.4 (2021); 6.5 (2022); 10.4 (2023); 11.4 (2024); 8.5 (2025); 6.0 (2026); 5.9 (2027); 6.1 (2028); 6.0 (2029); 6.0 (2030); 6.0 (2031); 6.5 (2041 average); 5.7 (average projection). - Inflation / GDP deflator in US dollar terms: 7.2 (2018); -5.1 (2019); 2.9 (2020); 7.5 (2021); 3.2 (2022); 3.5 (2023); 3.2 (2024); 3.1 (2025); 2.8 (2026); 2.0 (2027–2031 repeated); 3.9 (2041 average); 0.3 (average projection). - Pandemic and vaccination status: as of November 23, 2021, 1.6 percent of the population are fully vaccinated, and 2.1 percent have received at least one dose. - Downside risks identified: security in the Sahel, recurrent flooding and climate shocks, volatile oil and minerals prices, and trade disruptions with Nigeria. ### Fiscal stance, priorities and targets - Fiscal outturns and path: - Fiscal deficit: 5.2 percent of GDP in 2020; expected to increase to 6.6 percent of GDP in 2021. - Authorities aim to achieve the WAEMU’s 3-percent fiscal deficit target by 2024. - 2021 budget priorities: fight the pandemic; maintain fiscal discipline; rely on concessional loans and BOOT-type PPPs where possible. - Revenue mobilization measures (selected): - Recovering tax arrears by Direction Générale des Impôts. - Increasing VAT collection with billing machines. - Regularizing and simplifying customs clearance; improving tax control. - Implementing performance contracts in customs; enforcing vehicles’ electronic declaration. - Streamlining tax exemptions and regularly communicating the list of exemptions to Fund staff. - Government revenues (excluding grants): 12.1 (2018); 11.2 (2019); 10.8 (2020); 10.9 (2021); 11.5 (2022); 12.7 (2023); 13.4 (2024); 13.8 (2025); 14.0 (2026); 14.2 (2027); 14.4 (2028); 14.7 (2029); 14.9 (2030); 15.1 (2031); 16.5 (2041 average); 11.6 (historical average); 13.6 (projection average). ### Debt dynamics, indicators and stress tests (summary) - External debt (nominal) and public share: - External debt (nominal): 45.5 (2018); 47.3 (2019); 50.5 (2020); 50.5 (2021); 49.0 (2022); 45.6 (2023); 42.0 (2024); 39.4 (2025); 38.0 (2026); 36.9 (2027); 35.9 (2028); 34.9 (2029); 34.0 (2030); 33.1 (2031); 24.3 (2041). - Of which: public and publicly guaranteed (PPG): 25.3 (2018); 26.5 (2019); 31.6 (2020); 32.8 (2021); 32.2 (2022); 30.0 (2023); 27.9 (2024); 26.3 (2025); 25.5 (2026); 24.9 (2027); 24.3 (2028); 23.7 (2029); 23.1 (2030); 22.6 (2031); 17.9 (2041). - Change in external debt: -2.2 (2018); 1.8 (2019); 3.2 (2020); 0.0 (2021); -1.5 (2022); -3.4 (2023); -3.6 (2024); -2.6 (2025); -1.4 (2026); -1.0 (2027); -1.0 (2028); -1.0 (2029); -0.9 (2030); -0.9 (2031); -1.2 (2041). - Identified net debt-creating flows: 3.1 (2018); 7.0 (2019); 7.9 (2020); 8.3 (2021); 8.3 (2022); 3.9 (2023); 1.0 (2024); 1.2 (2025); 2.9 (2026); 2.6 (2027); 2.7 (2028); 2.6 (2029); 2.7 (2030); 2.1 (2031); 2.6 (2041); 5.4 (historical avg); 3.5 (projection avg). - Endogenous debt dynamics (contribution): -5.8 (2018); 0.2 (2019); -2.6 (2020); -1.9 (2021); -2.5 (2022); -3.9 (2023); -4.1 (2024); -2.8 (2025); -1.8 (2026); -1.7 (2027); -1.7 (2028); -1.6 (2029); -1.6 (2030); -1.5 (2031); -1.2 (2041). - Contribution components (examples): - Contribution from nominal interest rate: 0.4 (2018); 0.4 (2019); 0.4 (2020); 0.5 (2021); 0.5 (2022); 0.5 (2023); 0.5 (2024); 0.4 (2025); 0.4 (2026); 0.4 (2027); 0.4 (2028); 0.3 (2029); 0.3 (2030); 0.3 (2031); 0.3 (2041). - Contribution from real GDP growth: -3.0 (2018); -2.7 (2019); -1.6 (2020); -2.4 (2021); -3.0 (2022); -4.5 (2023); -4.5 (2024); -3.2 (2025); -2.2 (2026); -2.1 (2027); -2.1 (2028); -2.0 (2029); -1.9 (2030); -1.9 (2031); -1.5 (2041). - Selected sustainability indicators: - PV of PPG external debt-to-GDP ratio (projections): 24.2; 23.4; 23.0; 21.2; 19.5; 18.3; 17.7; 17.2; 16.9; 16.5; 16.2; 15.9; 13.1 (selected years as presented). - PV of PPG external debt-to-exports ratio (projections): 145.8; 161.3; 155.4; 122.4; 100.2; 88.1; 90.4; 86.3; 85.9; 85.4; 83.7; 83.0; 74.7. - PPG debt service-to-exports ratio: 7.8 (2018); 7.5 (2019); 6.7 (2020); 9.8 (2021); 13.4 (2022); 11.4 (2023); 8.9 (2024); 7.7 (2025); 7.7 (2026); 7.3 (2027); 6.7 (2028); 6.8 (2029); 6.9 (2030); 6.5 (2031); 5.7 (2041). - PPG debt service-to-revenue ratio: 7.3 (2018); 7.2 (2019); 10.4 (2020); 13.0 (2021); 17.2 (2022); 15.5 (2023); 12.9 (2024); 11.6 (2025); 10.7 (2026); 10.3 (2027); 9.1 (2028); 9.0 (2029); 8.9 (2030); 8.3 (2031); 6.0 (2041). - Gross external financing need (Million of U.S. dollars): 1293.1 (2018); 1022.6 (2019); 1646.2 (2020); 1857.4 (2021); 2216.9 (2022); 1955.6 (2023); 1532.1 (2024); 1402.3 (2025); 1702.1 (2026); 1699.3 (2027); 1835.9 (2028); 1925.5 (2029); 2105.6 (2030); 1988.8 (2031); 4396.4 (2041). - Borrowing and grant parameters: - Grant element of new public sector borrowing (in percent) in projections sample: 40.3; 38.3; 38.4; 38.4; 39.1; 38.3; 36.4; 35.3; 34.6; 34.4; 34.2; 32.9 (selected years). - Grant-equivalent financing (in percent of GDP): 8.1; 7.4; 6.5; 6.2; 5.8; 5.7; 5.6; 5.5; 5.4; 5.4; 5.3; 5.0 (selected years); 6.1 (average projection). - Grant-equivalent financing (in percent of external financing): 77.2; 74.4; 76.1; 76.3; 78.6; 78.9; 78.8; 78.8; 78.8; 78.9; 79.0; 80.8; 77.8 (selected years). ### Public financial management, debt management and structural measures - PFM reforms underway: - Multiyear budgeting for public investments; digitalization of payments; implementation of a Treasury Single Account; establishment and testing of the banking function of the treasury for Niamey with later generalization. - Debt management priorities: - Maintain debt sustainability and transparency; meet the WAEMU convergence criterion of 70 percent of GDP for external debt. - Pursue prudent borrowing policy, modernize debt management framework, emphasize concessional loans and growth-enhancing projects. - Given concessional resource scarcity for PDES 2022-26, semi-concessional or non-concessional loans could be considered within the debt ceiling and monitored by CISPEE/NAB. - Natural resource management (oil): - Prepare oil revenue management strategy with IMF support; adapt legislation to local content; prioritize bringing oil revenue under exclusive control of the treasury; emphasize transparency and civil society involvement. ### Financial sector and inclusion measures - Measures and initiatives: - New financing mechanisms (credit-bail, warrantage), operationalization of the Investment Fund for Food Security and Nutrition, National Fund for the Support of SMEs and SMIs, BCEAO regional financing facility for SMEs/SMIs, and the “Maison des Entreprises.” - Implementation of the National Strategy for Inclusive Finance; operationalization of the Fund for the Development of Financial Inclusion; improvements in banking infrastructure and mobile payments; steps taken to acquire payment cards, ATMs and ACDs. ### Structural and social priorities - Structural reforms aimed at improving the business climate, governance and anti-corruption measures, and strengthening agropastoral development and green economy initiatives. - Social priorities include boosting social spending—especially education for girls—improving public investment quality (feasibility studies requirement), and supporting food security and nutrition via targeted funds. ### Program request and implementation note - Authorities request a three-year ECF arrangement (2021–2024) to maintain macroeconomic stability, advance the PDES 2022-2026 reforms, catalyze external assistance, and support transformative structural reforms. - Prior action implemented: regulation of November 3, 2021 requiring beneficial ownership information for companies bidding on Covid-19-related public procurement; mandates publication on Public Procurement Portal; provides exclusion and prosecution provisions for non-compliance; aligns definition of “beneficial ownership” with regional regulations. - Staff statement: confirmation that the prior action has been implemented (Statement by the Staff Representative on Niger, December 8, 2021). *Source: IMF staff report and associated DSA figures and tables contained in the provided content.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2021/english/1nerea2021001.pdf_