## 1nerea2023003

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### Executive summary — context, recent developments, and program rationale
- Context and vulnerabilities:
  - Rapid population growth and high climate vulnerability (ND-Gain index low institutional/readiness scores).
  - Reliance on rain-fed agriculture makes climate change a major driver of chronic food insecurity and conflict.
  - Fragility and deteriorating security conditions undermine adaptation and development prospects.
- Recent macroeconomic developments:
  - Real GDP growth: 2022 estimated at 11.9 percent (agriculture ~40 percent of economy; cereal production rebounded 70 percent after 2021 drought).
  - Near-term growth projection: 7 percent in 2023 and 13 percent in 2024.
  - Inflation: y-o-y inflation reached 1.0 percent at end-April 2023.
  - Current account deficit: 15.6 percent of GDP in 2022.
  - Food insecurity: World Food Program estimates 2.9 million people (11 percent of the population) will experience acute food insecurity this lean season (24 percent higher than historical levels).
  - Conflict and displacement: refugees and asylum-seekers 304,085; internally displaced persons 361,593 as of April 2023 (UNHCR); conflict incidents more than doubled relative to 2021.
- Fiscal and financial outcomes 2022:
  - Fiscal deficit: 6.8 percent of GDP.
  - Revenue collection stood at 90 percent of the second review target; revenue 10 percent below the 2022 target.
  - BCEAO tightened policy: key rates +75 basis points in 2022 and +25 basis points in March 2023; 12-month bill yields rose from ~3.5 percent (2021 average) to 7.5 in May 2023.
  - Credit to the economy increased 12.6 percent in 2022; banking NPLs declined from 21.2 percent (end-2021) to 18.2 percent (end-2022); microfinance NPLs 28.5 percent in 2022 (from 40.1 percent in 2021 after ASUSU reclassification).
- Program rationale:
  - Staff supports extension, rephasing, and modification of ECF and concludes third review resulting in SDR 19.74 million disbursement.
  - Authorities request a 23-month RSF arrangement of SDR 98.7 million (75 percent of quota) to support climate investments and reforms.

### Oil pipeline, production timeline, and macroeconomic impact
- Project status and production:
  - Agadem oil field initial expansion to 90,000 barrels per day projected by late 2023.
  - Pipeline construction completed; crude oil exports should begin in November 2023.
  - State participation: government set at 15 percent via credit convention with WAPCO (January 2023).
- Current account and growth impact:
  - Current account deficit projected to narrow to 12.2 percent of GDP in 2023 and to 5.2 percent of GDP in 2024 with onset of crude oil exports.
  - Drivers: crude oil exports, lower capital goods imports linked to pipeline construction, scaling-up of domestic agricultural production.
  - Growth stabilizes around potential of 6 percent long-run; inflation converges to 2 percent (WAEMU midpoint).
- Key medium-term projections (selected from Text Table 2):
  - GDP (percent change): 2021 1.4; 2022 11.9; 2023 7.0; 2024 13.0; 2025 7.0; 2026 6.2; 2027 6.0; 2028 6.0.
  - Consumer price index, average (percent change): 2021 3.8; 2022 4.2; 2023 2.7; 2024 2.5; 2025–2028 2.0 each year.
  - Total revenue (percent of GDP): 2021 10.8; 2022 10.1; 2023 11.2; 2024 13.5; 2025 14.1; 2026 14.6; 2027 14.7; 2028 14.8.
  - Overall fiscal balance (commitment basis, incl. grants) (percent of GDP): 2021 -5.9; 2022 -6.8; 2023 -5.3; 2024 -4.1; 2025–2028 -3.0 each year.
  - External current account (incl. grants) (percent of GDP): 2021 -14.1; 2022 -15.6; 2023 -12.2; 2024 -5.2; 2025 -6.7; 2026 -6.9; 2027 -7.6; 2028 -6.7.
  - Total public and publicly-guaranteed debt (percent of GDP): 2021 51.3; 2022 50.3; 2023 51.3; 2024 48.3; 2025 47.0; 2026 46.2; 2027 45.7; 2028 45.4.

### RSF request, reform agenda, and expected catalytic effects
- RSF request and objectives:
  - Authorities requested RSF SDR 98.7 million (75 percent of quota) to address climate risks and leverage additional financing, including private sector mobilization.
  - RSF to support four reform areas and 11 Reform Measures (RM1–RM11) spanning climate budget tagging, climate-sensitive PIM, disaster-informed fiscal planning, and renewable energy promotion.
- Reform Areas and selected Reform Measures:
  - Area 1 (Climate PFM): RM1 validate climate-budget tagging methodology; RM2 apply CBT to selected ministries in 2024; RM3 amend budget circular for 2025 budget.
  - Area 2 (Climate PIM): RM4 develop/publish guidelines for climate vulnerability assessments; RM5 amend PIM decree; RM6 publish feasibility and vulnerability studies for ≥ CFAF 5 billion projects.
  - Area 3 (DRM/Climate PFM): RM7 publish guide for natural disaster fiscal risks; RM8 publish fiscal risks statement including natural disasters; RM9 operationalize DRM focal points; RM10 publish flood/drought risk assessments on www.risques-niger.ne.
  - Area 4 (Green Energy): RM11 create new FONAP window to provide technical/financial assistance for renewable energy SME projects.
- Catalytic expectations and risks:
  - RSF expected to leverage private climate finance for large-scale renewable energy, energy-efficiency, climate-smart agriculture, and water management.
  - Risks to catalysis: persistence of insecurity and fragile country conditions; low private sector capacity; below-cost electricity tariffs may deter investment.

### Fiscal policy stance, revenue mobilization, and oil revenue management
- Fiscal consolidation commitments:
  - Authorities committed to reach WAEMU convergence criterion of 3 percent of GDP by 2025.
  - Deficit targets: 5.3 percent of GDP in 2023; 4.1 percent of GDP in 2024; converge to 3 percent by 2025.
- Revenue performance and measures:
  - Cash tax revenues grew 7.6 percent y-o-y nominal in Q1 2023 but 10 percent below programmed floor.
  - Tax revenue projections for 2023 revised down by CFAF 104 billion relative to second ECF review.
  - Measures: accelerate digitalization and interconnection of DGI and DGD, simplify customs clearance, leverage GUCE/DVT/SISIC data (expected revenue increase 0.1 percent of GDP), revise specific tax on petroleum products (from 15 to 5 percent), boost gold export tax collection, collect tax on cigarettes.
  - Tax exemptions estimated at 5.6 percent of GDP in 2022; staff recommends collecting arrears, reducing exemptions, fighting tax fraud, and accelerating property/land registration.
- Oil revenue management framework:
  - Oil revenue management strategy to be adopted before crude oil exports (SB#2 and Annex II).
  - Plans to establish a stabilization fund, a technical committee to assess projected revenue streams and fiscal risks (proposed SB #7), and a decree for the reference price formula and expert committee (proposed SB #10).

### Debt policy, reprofiling, and debt-sustainability assessment
- Debt reprofiling and liability management:
  - Authorities plan a debt reprofiling operation to mitigate rollover risks amid tighter regional financing conditions; envisaged commercial loan of CFAF 300 billion to clear maturing T-bills/bonds (July–November 2023 window).
  - Operation design to seek longer maturity commercial external debt, potentially ATI-guaranteed; staff to assess implications for debt sustainability and debt-distress rating.
- Debt metrics and financing composition (selected 2022 figures):
  - Total debt (2022): 7,812 (US$ million), 100.0 percent total debt, 50.3 percent of GDP.
  - External debt (2022): 5,071 (64.9 percent of total debt; 32.7 percent of GDP).
  - Domestic debt (2022): 2,741 (35.1 percent of total debt; 17.7 percent of GDP).
  - Multilateral creditors (2022): 4,218 (54.0 percent of total debt; 27.2 percent of GDP); IMF (2022): 478 (6.1 percent of total debt; 3.1 percent of GDP); World Bank (2022): 2,284 (29.2 percent of total debt; 14.7 percent of GDP).
- DSA assessment and risks:
  - Baseline: risk of external and overall public debt distress assessed as "moderate".
  - PV of PPG external debt-to-GDP projected to remain below thresholds; one-year breach of external debt service-to-revenue ratio noted.
  - Climate-adjusted (World Bank G5-Sahel CCDR pessimistic dry medium-growth) scenario: cumulative GDP loss relative to baseline could reach 8.9 percent by 2045; PV of debt-to-GDP could approach thresholds in early 2030s; additional balance of payments needs could reach 3.2 percent of GDP in 2045; poverty could increase by 8.6 percentage points by 2050 vs no-impact baseline.
- Capacity to repay Fund:
  - Niger’s capacity to repay remains adequate; repayment obligations to the Fund peak at 1.5 percent of exports and 2.2 percent of fiscal revenues in 2029 under staff projections.

### Climate vulnerability, costs, and national strategy
- Climate exposure and impacts:
  - Rainfed agriculture accounts for 40 percent of GDP; ~73 percent of active population in agriculture; irrigated land <1 percent of agri land.
  - Temperature increase: 1 degree Celsius (1951–2020); projected >2 degrees Celsius by 2050 under SSP5-8.5.
  - Water availability per capita: 2,300 m3/year (2004) → 1,360 m3/year (2021) per World Bank estimate.
  - Recent shocks: 2020 flooding affected >632,000 people; 2021 drought collapsed agricultural production ~40 percent and put 4.4 million people in acute food insecurity, prompting government response amounting to 2.9 percent of GDP.
- NDC and financing:
  - Niger’s 2021 NDC estimates investment needs by 2030 at about US$ 9.9 billion (68 percent adaptation; 32 percent mitigation); government contribution 26.4 percent of total cost.
  - External resources for climate projects averaged US$ 250 million annually.
- National strategies and DRM:
  - NDC revised 2021; NAP 2022–2026; PDES 2022–2026 Program #16 dedicated to climate change; DRM Law No 2022-61 (2022) with application decrees prepared.
  - DRM institutionalization, fiscal risk assessment for disasters, and CBT institutional arrangements remain priorities with IMF/GIZ/World Bank technical support.

### Financial sector, microfinance vulnerabilities, and governance
- Financial sector status:
  - Banking sector remains well-capitalized, profitable, and liquid; regulatory capital to risk-weighted assets 14.4 (Dec. 2022).
  - Gross NPLs to total loans 18.2 (Dec. 2022); provisioning rate 36.4 (Dec. 2022); liquid assets to total assets 26.5 (Dec. 2022).
  - Credit to private sector: various series (e.g., percent change: 2021 16.4; 2022 9.1; see tables for further breakdowns).
- Microfinance and governance issues:
  - Microfinance NPLs 28.5 percent in 2022 (regional average 7.9 percent).
  - BAGRI embezzlement uncovered: >4 billion CFA francs (CENTIF audit, January 2023); BAGRI accounted for 7.7 percent of total banking assets.
  - Recommendations: strengthen banks’ internal controls, treasury management, AML/CFT; accelerate resolution of procurement payment delays; improve fiscal/debt transparency to reduce SFAs (SFAs added ~1 percent of GDP per year avg over 2013–2021).
- Governance and anti-corruption:
  - Auditor General reports: partial/full implementation of recommendations across procurement and extractive audits; HALCIA determined CFAF 11 billion owed in tax evasion cases (3 billion recovered).
  - Asset declaration: 570 declarations received, 358 audited; compliance remains low (~3,000 officials subject).
  - AML/CFT reforms underway after GIABA report; action plan adopted.

### Social protection, public expenditure quality, and digitalization
- Social safety nets:
  - Unified Social Registry (USR) covers 417,000 vulnerable households; planned expansion to 800,000 households by 2024 to cover 43 percent of the poor.
- Education and gender measures:
  - National Gender Policy: construction of boarding schools for girls, financial incentives to reduce dropouts, expansion of school feeding programs.
- PFM digitalization and expenditure control:
  - Decentralization of payment orders expanded; AE/CP double accounting expanded to 11 ministries.
  - Deployment of prepaid debit cards for scholarship and pension payments; digitalization of expenditure orders and authorizations (SB #3 and #4) committed.
  - Census of commercial bank accounts (including local governments) started May 2023.

### Program monitoring, review schedule, and capacity development priorities
- Monitoring and disbursement schedules:
  - Staff supports completion of the third ECF review and disbursement SDR 19.74 million.
  - Rephased ECF disbursement schedule totals SDR 197.4 (150 percent) across tranches (examples: SDR 39.48 on Dec 8, 2021; SDR 19.74 on Apr 28, 2023; subsequent dates and amounts specified).
  - RSF proposed six disbursements of SDR 8.554 million each tied to RM implementation; reviews aligned with ECF reviews.
- Capacity development priorities (Annex III highlights):
  - FAD: digitalization/interconnection of tax and customs, broaden tax base, Climate Budget Tagging, strengthen fiscal risks framework, TSA and cash management.
  - MCM: strengthen debt management and prepare public debt plan.
  - STA: government finance statistics (GFSM 2014), national accounts rebasing (make 2022 base year), balance of payments improvements, quarterly national accounts.
  - LEG: Governance Diagnostic report addressing natural resource vulnerabilities.
- Reporting requirements and TMU:
  - Extensive monthly and quarterly reporting obligations defined (e.g., monthly within six weeks: detailed domestic financing, TOFE; CPI series within two weeks; monetary survey within eight weeks; treasury balances within six weeks).

### Risks, scenarios, and recommended policy responses
- Main downside risks:
  - Delays in pipeline operationalization; security deterioration; extreme weather events; commodity price volatility; tighter global financial conditions; reduced donor support.
  - Likelihood-Impact samples from RAM: intensification of regional conflicts — Relative likelihood: High; Impact: Medium; recommended response: domestic revenue mobilization and advance structural reforms.
  - Rising and volatile food and energy prices — Relative likelihood: Medium; Impact: High; recommended response: prioritize well-targeted social spending and support plan for vulnerable populations.
- Scenario outcomes:
  - Climate-change adjusted DSA: cumulative GDP loss up to 8.9 percent by 2045; additional BOP needs up to 3.2 percent of GDP in 2045; poverty rate could increase by 8.6 percentage points by 2050 relative to no-impact baseline.
  - Export shock calibration: 20.7 percent consecutive declines in nominal export values in 2024–2025 can breach export-related debt indicators.
- Policy recommendations (selected):
  - Accelerate domestic revenue mobilization (digitalization, limit exemptions, tax code revision).
  - Prioritize concessional loans and grants; carefully design debt reprofiling to preserve "moderate" debt distress rating.
  - Strengthen oil revenue management (stabilization fund, non-oil primary balance rule, transparency and oversight).
  - Strengthen climate-informed PFM, DRM operationalization, CBT, and green public investment management; scale RSF-supported capacity development.
  - Protect priority social spending while achieving growth-friendly fiscal consolidation 2023–2025.

*Source: EXECUTIVE SUMMARY and excerpts from 1nerea2023003 (IMF staff report and supporting annexes).*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Context
- Niger faces substantial development needs exacerbated by rapid population growth and high climate vulnerability (ND-Gain index shows low institutional and readiness scores).
- Reliance on rain-fed agriculture makes climate change a significant driver of chronic food insecurity and conflict by intensifying competition for scarce resources.
- Fragility and deteriorating security conditions further undermine adaptation capacity and development prospects.

### Recent developments and macroeconomic performance
- Real GDP growth is estimated to have accelerated to 11.9 percent in 2022, driven by a 70 percent rebound in cereal production after a severe drought in 2021 and agriculture’s ~40 percent share of the economy.
- Growth is projected to average 7.5 percent over the next five years with large-scale projects and reforms (including the new oil pipeline) and continued donor support.
- Near-term growth profile: 7 percent in 2023 and 13 percent in 2024 (peak driven by ramp-up of crude oil production and spillovers to transportation).
- Inflation: y-o-y inflation reached 1.0 percent at end-April 2023.
- Current account: deficit weakened to 15.6 percent of GDP in 2022, reflecting lower oil exports (refinery maintenance and export restrictions) and higher imports of petroleum products and investment-related goods.
- Food insecurity: World Food Program estimates 2.9 million people (11 percent of the population) will experience acute food insecurity this lean season (24 percent higher than historical levels).
- Conflict and displacement: conflict incidents more than doubled relative to 2021; refugees and asylum-seekers number 304,085 and internally displaced persons number 361,593 as of April 2023 (UNHCR).
- Fiscal outcome 2022: fiscal deficit reached 6.8 percent of GDP; programmed deficit target was met through spending restraint despite revenue collection below expectations.
  - Revenue collection stood at 90 percent of the second review target.
  - Revenue was 10 percent below the 2022 target (program noted revenues 10 percent below target elsewhere in the Summary).
- Regional financial conditions: BCEAO raised key rates by 75 basis points in 2022 and an additional 25 basis points in March 2023; reinstated pre-pandemic auction mechanism led to liquidity rationing.
  - Government financing cost: yield for 12-month bills rose from around 3.5 percent on average in 2021 to 7.5 in May 2023.
- Banking and financial sector:
  - Credit to the economy increased by 12.6 percent in 2022 but decelerated in Q1 2023.
  - Banking NPLs declined from 21.2 percent at end-2021 to 18.2 percent at end-2022.
  - Microfinance NPLs decreased to 28.5 percent in 2022 from 40.1 percent in 2021 (after ASUSU reclassification).
  - Banking sector remains well-capitalized, profitable, and liquid.

### ECF program implementation, performance, and extension rationale
- Program performance has been broadly satisfactory:
  - All quantitative performance criteria (QPCs) were met.
  - All structural benchmarks and almost all indicative targets for end-December 2022 and end-March 2023 were met, except the end-December and end-March indicative targets on cash revenues.
  - Basic budget balances (including and excluding budget grants) and social spending were above program floors; ratio of exceptional expenditures on authorized spending was zero.
- Reasons for missed cash revenue floors: security issues, trade disruptions at the Nigeria border, and lower-than-expected yields from new tax policy and revenue administration reforms.
- Authorities plan a debt reprofiling operation later in the year to mitigate rollover risks amid tightened regional financing conditions.
- An extension of the ECF program is warranted to:
  - ensure time to complete key reforms, notably implementation of the action plan for the new oil revenue management strategy and other domestic revenue mobilization initiatives;
  - support fiscal consolidation efforts to reach the WAEMU convergence criterion of 3 percent of GDP by 2025;
  - support implementation of the ambitious public financial management (PFM) agenda.
- Program extension is also supported by protracted balance of payments needs.
- Staff supports extension, rephasing and modification of performance criteria and indicative targets under the ECF arrangement.

### RSF program request and reform agenda
- Authorities requested a program under the Resilience and Sustainability Facility (RSF) to address climate change risks and help leverage additional financing.
- Proposed RSF arrangement: SDR 98.7 million, 75 percent of quota.
- The RSF would support implementation of the authorities’ climate-related investments and reforms and help leverage additional financing.
- Authorities committed to reform measures in four areas:
  - strengthening the planning and budgeting of climate-related spending;
  - improving the sensitivity of public investment management to climate-related issues;
  - enhancing disaster informed fiscal planning and management;
  - promoting renewable energy.
- World Bank G5-Sahel CCDR estimate: Niger’s GDP losses linked to climate change could reach 11.9 percent by 2050 under no further adaptation measures.

### Program financing and disbursements
- Staff supports conclusion of the third review under the ECF, which will result in the disbursement of SDR 19.74 million.
- Staff supports the authorities’ request for a new RSF program.

### Structural reform implementation status and near-term priorities
- Progress made on structural benchmarks: administrative order adopted to continue interconnection process between DGI and DGD (SB#1); all continuous structural benchmarks met.
- Remaining reform agenda largely on track but subject to delays in at least one key area:
  - First draft of oil revenue management strategy prepared; internal consensus-building underway.
  - Revision of the tax code is advancing more slowly than planned and will require a revision to the original implementation schedule.
  - Progress toward digitalization of expenditure orders and authorizations and interconnection of tax and customs IT systems (SBs #6, #8, #9).

### Risks and outlook considerations
- Near-term growth remains strong but subject to risks from security deterioration, climate shocks, and implementation delays of reforms.
- Financing risks elevated due to shorter-term issuances and higher yields in regional markets.
- Food crisis and conflict-driven displacement create lingering humanitarian and economic pressures.

*Source: EXECUTIVE SUMMARY (1nerea2023003)*

### 13. The new oil pipeline should become operational in the last quarter of 2023. The

### 13. The new oil pipeline should become operational in the last quarter of 2023.

### Oil project status and near-term production
- Development of the Agadem oil field: initial expansion of production capacity to 90,000 barrels per day projected by late 2023.
- Pipeline construction: completed; crude oil exports should begin in November 2023.
- Nigerien State participation: government signed a credit convention with the West African Oil Petroleum Company (WAPCO) in January 2023 to set conditions of state participation at 15 percent.

### Impact on current account and external flows
- Current account projections with onset of crude oil exports:
  - Current account deficit projected to narrow to 12.2 percent of GDP this year.
  - Current account deficit projected to narrow to 5.2 percent of GDP in 2024.
- Drivers of improvement:
  - Onset of crude oil exports.
  - Decrease in capital goods imports associated with pipeline construction.
  - Expected scaling-up of domestic agricultural production supported by recovery from past harvests and improved productivity from irrigation projects (substituting food imports).
- Financial account: foreign direct investment (FDI) expected to be lower than previously projected due to front-loading of investments related to the pipeline.

### Macroeconomic medium-term outlook
- Growth and inflation:
  - Growth projected to stabilize around its potential of 6 percent.
  - Inflation should converge to 2 percent, the mid-point of the WAEMU convergence criteria.
- External and fiscal positions:
  - Current account deficit would hover around 7 percent of GDP, financed mainly by foreign direct investment, grants, and concessional loans.
  - Fiscal balance projected to gradually converge to the WAEMU norm of 3 percent of GDP.
  - Public and publicly guaranteed debt should stabilize at close to 45 percent of GDP.
- Debt distress assessment: risk of external and overall public debt distress is assessed as moderate.

### Key numeric projections and indicators (selected from Text Table 2)
- GDP at constant prices (percent change): 2021 1.4; 2022 11.9; 2023 7.0; 2024 13.0; 2025 7.0; 2026 6.2; 2027 6.0; 2028 6.0.
- Consumer price index, average (percent change): 2021 3.8; 2022 4.2; 2023 2.7; 2024 2.5; 2025 2.0; 2026 2.0; 2027 2.0; 2028 2.0.
- Consumer price index, end of period (percent change): 2021 4.9; 2022 3.1; 2023 2.9; 2024 2.5; 2025 2.0; 2026 2.0; 2027 2.0; 2028 2.0.
- Credit to the private sector (percent change): 2021 16.4; 2022 9.1; 2023 8.1; 2024 10.0; 2025 14.3; 2026 14.3; 2027 10.8; 2028 10.9.
- Total revenue (percent of GDP): 2021 10.8; 2022 10.1; 2023 11.2; 2024 13.5; 2025 14.1; 2026 14.6; 2027 14.7; 2028 14.8.
- Total expenditure and net lending (percent of GDP): 2021 24.3; 2022 21.6; 2023 21.9; 2024 22.6; 2025 22.3; 2026 22.8; 2027 22.9; 2028 23.0.
- Overall fiscal balance (commitment basis, incl. grants) (percent of GDP): 2021 -5.9; 2022 -6.8; 2023 -5.3; 2024 -4.1; 2025 -3.0; 2026 -3.0; 2027 -3.0; 2028 -3.0.
- External current account balance (excl. grants) (percent of GDP): 2021 -16.4; 2022 -16.9; 2023 -14.2; 2024 -6.7; 2025 -8.2; 2026 -8.3; 2027 -9.0; 2028 -8.1.
- External current account balance (incl. grants) (percent of GDP): 2021 -14.1; 2022 -15.6; 2023 -12.2; 2024 -5.2; 2025 -6.7; 2026 -6.9; 2027 -7.6; 2028 -6.7.
- Total public and publicly-guaranteed debt (percent of GDP): 2021 51.3; 2022 50.3; 2023 51.3; 2024 48.3; 2025 47.0; 2026 46.2; 2027 45.7; 2028 45.4.
- Public and publicly-guaranteed external debt (percent of GDP): 2021 33.5; 2022 32.7; 2023 32.6; 2024 30.9; 2025 30.2; 2026 29.8; 2027 29.6; 2028 29.4.
- Public domestic debt (percent of GDP): 2021 17.8; 2022 17.7; 2023 18.7; 2024 17.4; 2025 16.8; 2026 16.4; 2027 16.1; 2028 16.0.

### Risks and scenarios
- Downside risks highlighted:
  - Any delays in operationalization of the pipeline would weaken growth prospects and fiscal and external positions.
  - Rising hydrocarbon production and exports could challenge the transition to a low-carbon economy.
  - Deterioration in security and social unrest could disrupt growth and cause fiscal slippages.
  - Extreme weather events could negatively affect growth, current account, and widen fiscal deficits.
  - Intensification of regional conflicts, commodity price volatility, and tighter global financial conditions could jeopardize prospects.
- Upside possibilities:
  - Earlier materialization of a large uranium mining investment project and agro-industrial clusters could boost medium-term growth.
- Climate-change adjusted scenario (DSA):
  - Based on World Bank’s G5-Sahel CCDR pessimistic dry medium-growth scenario.
  - Cumulative GDP loss relative to the baseline could reach 8.9 percent by 2045.
  - External and public debt indicators would deteriorate but remain below thresholds; debt risk rating remains “moderate”.
  - PV of debt to GDP ratio could increase close to thresholds in the early 2030s before decreasing.
  - Additional balance of payments needs relative to baseline could reach 3.2 percent of GDP in 2045 due to increased food imports and decline in cash crop exports.
  - Social impacts: poverty rate could increase by 8.6 percentage points by 2050 relative to no-impact baseline.

### Fiscal policy stance and revenue measures
- Fiscal consolidation commitments:
  - Authorities committed to meeting the regional fiscal deficit criterion by 2025.
  - Deficit target: 5.3 percent of GDP in 2023; projected narrowing to 4.1 percent of GDP in 2024; converge to 3 percent of GDP by 2025.
- Revenue performance and revisions:
  - Cash tax revenues grew 7.6 percent y-o-y in nominal terms in Q1 2023 but stood below programmed target by 10 percent.
  - Tax revenue projections for 2023 revised downwards by CFAF 104 billion relative to second ECF review.
- Expenditure management:
  - Authorities committed to postponing some lower priority domestically financed capital expenditure to maintain deficit trajectory.
  - Treasury committee to regularly monitor revenue collection and authorize spending.
- Oil revenue management:
  - Oil revenue management strategy to be adopted before start of crude oil exports (SB#2 and Annex II).
  - Plans to establish a stabilization fund and create a technical committee to report on projected revenue streams and assess fiscal risks (new proposed SB #7).
  - Adopt a decree for the formula calculating the reference price for the oil stabilization fund and create a committee of experts to implement it (new proposed SB #10).

### Measures to improve domestic revenue mobilization
- Customs and trade measures:
  - Customs administration (DGD) to accelerate clearance via simplified declaration, reinforce pre- and post-clearance controls, and accelerate digitalization (Assamaka and Dirkou).
  - Leverage GUCE platform DVT information and SISIC data; expected revenue increase of 0.1 percent of GDP from measures.
  - Revision of the specific tax on petroleum products from 15 to 5 percent; lifted refined oil export ban; steps to boost gold export revenue and collect tax on cigarettes.
- Tax administration:
  - DGI strategic plan 2022-24 to strengthen compliance risk management and digital systems; reinforced legal powers for tax enforcement unit.
  - Creation of a division dedicated to extractive industries within the large taxpayer office.
  - Tax exemptions estimated at 5.6 percent of GDP in 2022; staff recommended collecting arrears, reducing exemptions, fighting tax fraud, and accelerating property and land registration.
- Tax code revision:
  - National Advisory Council of the Ad-hoc Committee of Tax Policy created in May 2023.
  - Technical/legal assessment started in May 2023; timeline for adoption extended by six months with benchmark now expected by June 2024.

### Enhancing public spending quality and social programs
- Social safety nets and targeting:
  - Unified social registry (USR) includes 417,000 vulnerable households; planned expansion up to 800,000 households by 2024 covering 43 percent of the poor.
  - Integrate USR with other databases to strengthen program effectiveness.
- Gender and education:
  - National Gender Policy implementation: construction of dozens of boarding schools for girls, financial incentives to reduce dropout rates, expansion of school feeding programs.
- Public expenditure and digitalization reforms:
  - Decentralization of payment orders expanded to three new ministries; evaluation planned in 2023.
  - AE/CP double accounting system expanded to six new ministries (now covering eleven ministries).
  - Deployment of prepaid debit cards for scholarship and pension payments; authorities committed to digitalizing expenditure orders and authorizations (SB #3 and #4).
  - Census of commercial bank accounts including local governments started in May 2023 to close inactive accounts.

*Sources: Nigerien authorities; and IMF staff estimates and projections.*

### 32. The government intends to identify and disclose fiscal risks (MEFP ¶32). The 2025

### 1nerea2023003 - 32. The government intends to identify and disclose fiscal risks (MEFP ¶32). The 2025

### Fiscal risks disclosure and contingency planning
- The 2025 budget will include a detailed fiscal risks statement covering selected macroeconomic risks, risks stemming from SOEs, and fiscal risks linked to climate change.
- An IMF technical assistance mission is planned for July 2023 to support authorities in:
  - identifying key risks,
  - quantifying potential fiscal impacts,
  - elaborating a budget contingency plan to mitigate fiscal risks associated with various shocks.

### Debt policy and liability management
- A prudent debt policy remains essential; a debt reprofiling operation may be desirable given conditions in the regional market.
- Niger should prioritize external financing in the form of concessional loans and grants.
- Authorities plan to conduct a liability management operation with terms more favorable than prevailing domestic debt to mitigate rollover risks via issuance of longer-dated commercial external debt.
- Historical precedent: external loan contracted with Deutsche Bank for a total amount of euro 225 million with a maturity of 10 years and interest rate of 5.25 percent to repay domestic debt (January 2020).
- Staff will assess implications of any debt management operation on debt sustainability so that the reprofiling does not undermine the external debt distress rating under prospective conditions.

### Stock-flow adjustments (SFAs) and fiscal/debt transparency
- IMF analysis shows SFAs (fiscal and quasi-fiscal transactions, extra-budgetary and below-the-line operations) are estimated to have added about one percent of GDP per year on average over 2013-2021 to Niger’s debt accumulation.
- In Niger, discrepancies could arise from external borrowing requirements of SOEs and other off-budget fiscal operations: SOEs do not borrow directly abroad but rely on on-lending from the central government, so related borrowing requirements are not fully captured in the fiscal deficit.
- Recommendation: authorities should strive to improve transparency of fiscal and debt recording to help reduce SFAs.

### Stepping up the structural reform agenda — private sector development
- New public-private dialogue framework established in 2022; an action plan to address private sector concerns is planned for 2023, covering taxation, business registration, access to financing, public procurement by SMEs, cross-border trade, land tenure, commercial justice, and investor protection.
- Revision and simplification of the investment code planned during 2023.
- Authorities plan to adopt by decree (MEFP ¶34), before the end of the year, the charter for SMEs to improve regulation, access to financing, and public procurement.
- Agro-industrial clusters envisaged in all regions under PDES 2022-2026; authorities plan stakeholder engagement, elaboration of an operational and strategic plan over 2023-27, and a pilot cluster after feasibility studies.

### Promoting financial stability and inclusion
- Implementation of the National Financial Inclusion Strategy (SNFI 2019-2023) is broadly on track; authorities conducting a diagnostic study and intend to develop a national financial education program.
- Digitalization efforts: promotion of mobile money and digital services; working group led by National Agency for the Information Society (ANSI) established; "Smart Villages" project to promote Fintech and digital inclusion in rural areas is on track with World Bank support.
- WAEMU project on interoperability of financial systems should support these actions.
- Feasibility studies for index-based insurance for agricultural and livestock sectors prepared with World Bank support.
- Recommendation: address other obstacles to financial inclusion notably by improving access to electricity and internet connections.

Key figures and actions:
- FONAP financed 109 SMEs for a total amount of 10 billion CFA francs in 2022.
- Authorities developing a strategy to mobilize CFAF 102 billion in additional resources for FONAP from development partners over the medium term.
- Donors committed CFAF 80 billion in financial support to the Financial Development and Inclusion Fund (FDIF).

### Microfinance sector vulnerabilities and banking supervision
- Progress on microfinance sector restructuring plan developed in 2017; three institutions under interim administration should resume activities this year.
- Local banks signed refinancing agreements with ASUSU; banks entered the institution's capital. Recovery plans for TANADI and UCMM are being developed with development partner support.
- Need to strengthen banks’ internal controls, treasury management, and AML/CFT procedures.
- In January 2023, a routine audit by CENTIF uncovered embezzlement of more than 4 billion CFA francs at BAGRI (majority state-owned agricultural bank).
  - BAGRI accounted for 7.7 percent of total banking assets (and a similar share of deposits) according to the latest available information.
  - Impacts: massive temporary withdrawal of deposits; decrease in interbank loans.
  - BAGRI’s governance being strengthened via recruitment of additional internal audit staff and measures to enhance oversight.
- High NPLs partly caused by portfolio concentration in a small number of clients and payment delays in public procurement contracts.
  - Staff supports information sharing between Ministry of Finance and banks to address procurement payment delays and urges authorities to accelerate resolution of delayed payments.

### Advancing the governance agenda
- Auditor General published two audit reports covering sectors vulnerable to corruption (public procurement during COVID-19 and the extractive sector) and followed up on recommendations:
  - On public procurement report: 4 recommendations fully implemented and 4 partially implemented (out of 12).
  - On extractive sector report: 2 recommendations out of 4 fully implemented by the Ministry of Petroleum; other ministries yet to implement recommendations.
- HALCIA (anti-corruption agency) increased number of cases transmitted to Public Prosecutor but does not receive follow-up prosecution/conviction information; HALCIA determined CFAF 11 billion owed in tax evasion cases, of which 3 billion have been recovered.
  - Recommendation: ensure HALCIA has necessary financial independence and human resources.
- Authorities started publishing beneficial ownership information of companies awarded non-competitive contracts; plan to strengthen legal instrument (currently a circular) to collect and publish this information (MEFP ¶39) with IMF technical assistance.
- Following GIABA report identifying serious AML/CFT deficiencies, authorities adopted a new AML/CFT strategy and action plan and conducted thematic/sectoral risk assessments; recommendation to ensure sustained action on AML/CFT supervision, monitoring of non-profit organizations, increased investigations/prosecutions, and implementation of targeted financial sanctions.
- Asset declaration framework: Auditor General received 570 asset declarations, of which 358 were audited; amount of declared assets, name and position of the official published in the 2022 annual audit report.
  - Compliance remains low given around 3, 000 officials are subject to the requirement, but this is an improvement from last year when only Ministers submitted declarations.
  - Authorities working on a draft decree prescribing content of financial disclosures for online publication and envisage moving to sanctions after sensitization and awareness.

### Climate change challenges and fiscal implications
- Niger projected, under the SSP5-8.5 scenario, to face a more than 2 degrees Celsius increase in temperature by 2050.
- Average economic cost of a drought is estimated at more than US$ 70 million.
- Recent events:
  - 2020 severe flooding affected more than 632,000 people.
  - 2021 drought caused a collapse of agricultural production by around 40 percent and put 4.4 million people in acute food insecurity, prompting a government response amounting to 2.9 percent of GDP.
- External resources to finance projects with a climate component have amounted, on average, to US$ 250 million annually.
- Niger’s 2021 NDC estimates investment needs to meet mitigation and adaptation targets by 2030 at about US$ 9.9 billion.
- Despite progress in climate-informed planning and regulatory framework for disaster risk management, constraints include limited institutional capacities in integrating climate change in PFM functions, managing fiscal risks, and promoting renewable energy.

### RSF-supported reform measures (four reform areas and concrete reform measures RM1–RM11)
- Objective: incorporate climate-related considerations into macroeconomic policy framework, build resilience, and create fiscal space via cost-effective financing under the RSF arrangement.

Reform Area 1 — Strengthening planning and budgeting of climate-related spending
- RM1: validate a methodology for tracking climate-related expenditures.
- RM2: apply the CBT (climate budget tagging) framework in selected pilot Ministries in their 2024 budget preparations.
- RM3: amend the existing budget circular to include instructions on identifying climate-related allocations in the 2025 budget preparation.

Reform Area 2 — Improving PIM sensitivity to climate issues
- RM4: develop and publish guidelines for climate vulnerability assessments of public investment projects and programs.
- RM5: amend the PIM decree integrating climate change aspects in various phases of PIM and publish it on the Ministry of Planning website.
- RM6: publish feasibility studies, including a climate vulnerability assessment, for at least three public investment projects of more than CFAF 5 billion.

Reform Area 3 — Enhancing disaster-informed fiscal planning and management
- RM7: develop a guide, with IMF technical assistance, to assess and report disaster-related fiscal risks.
- RM8: publish a fiscal risks statement, including natural disasters-related risks assessment, concomitantly with the multi-year economic and fiscal programming document (DPBEP).
- RM9: operationalize DRM coordination mechanisms by adopting a regulation establishing DRM focal points of relevant directorates within key ministries.
- RM10: publish risk assessments for flood and drought in key exposed areas on the National DRM Data Platform.

Reform Area 4 — Promoting renewable energy sources
- Context: low electricity access rate of 19.3 percent in 2020.
- RSF will support a reform (RM11) to reinforce services offered by FONAP through creation of an additional window to promote development of renewable energy sector.
  - The window will aim to provide both technical and financial assistance for generation of green energy projects and ensure their implementation.
- Note: existing regulatory framework allows for IPPs, but private sector capacity and access to credit are limited; below-cost electricity tariffs could deter investment — World Bank assessing tariffs and subsidies; if tariffs are inadequate and/or subsidies inefficient, prompt action should be taken.

*Source: 1nerea2023003 - 32. The government intends to identify and disclose fiscal risks (MEFP ¶32). The 2025*

### 47. Moreover, the proposed RSF arrangement is expected to leverage additional climate

### 1nerea2023003 - 47. Moreover, the proposed RSF arrangement is expected to leverage additional climate

### Climate finance and private-sector mobilization
- The proposed RSF arrangement is expected to leverage additional climate finance from the private sector.
- Investment opportunities in Niger identified in the text:
  - Large-scale renewable energy (solar and wind power) projects.
  - Energy-efficient technologies in buildings.
  - Climate smart agriculture, including agroforestry and development of better water management systems.
- Program support aims to:
  - Improve the regulatory environment―including green accountability and transparency.
  - Encourage financing of climate actions by the private sector.
  - Support the bankability of projects in renewable energy to create a supportive environment for private sector investment.
- Risks to expected catalyzing effect:
  - Persistence of insecurity.
  - Country’s fragile condition.

### RSF Reform Areas and Reform Measures (2023-25)
- Reform Area 1: Strengthening the planning and budgeting of climate-related spending
  - RM1 (Climate PFM). Government to validate a methodology for tagging climate-related expenditures (CBT).
  - RM2 (Climate PFM). Government to apply the CBT framework for at least 4 sectoral ministries in their 2024 budget and share the results with IMF staff.
  - RM3 (Climate PFM). Government to amend the budget circular for the preparation of the 2025 budget to include instructions on identifying climate-related allocations in the 2025 budget preparation.
- Reform Area 2: Improving the sensitivity of public investment management to climate-related issues
  - RM4 (Climate PIM). Government to develop and publish (on the website of the Ministry of Planning) a guide defining the methodology for climate vulnerability assessments of public investment projects and programs.
  - RM5 (Climate PIM). Government to amend the decree no. 0041 dated November 03, 2021―on the process of analysis and selection of projects and investment programs―to require the integration of climate change aspects in the various stages of public investment management (evaluation and selection) and to publish it on the website of the Ministry of Planning.
  - RM6 (Climate PIM). Government to publish feasibility studies, including climate vulnerability assessments, for at least three public investment projects of more than 5 billion CFAF.
- Reform Area 3: Enhancing disaster informed fiscal planning and management
  - RM7 (Climate PFM). Government to publish on the website of the Ministry of Finance a guide for the analysis of budgetary risks related to natural disasters.
  - RM9 (DRM). Government to adopt an order to establish focal points consisting of at least two persons (one titular and one alternate) in the relevant directorates of three selected ministries to carry out the responsibilities defined in the new DRM law.
- Reform Area 4: Promoting renewable energy sources
  - RM10 (DRM). Government to publish flood and drought risk assessments in key exposed areas on the National DRM Data Platform: www.risques-niger.ne
  - RM8 (Climate PFM). Government to publish a fiscal risks statement, including an assesment of natural disasters related risks, on the Ministry of Finance website.
  - RM11 (Green Energy). Government to create a new window (“Guichet”) within the FONAP that provides technical and financial assistance for improving the bankability of small and medium enterprises projects as well as their implementation in the field of renewable energy.
- Review timing mentioned alongside measures:
  - 4th ECF Review (End December 2023)
  - 5th ECF Review (End June 2024)
  - 6th ECF Review (End December 2024)
  - 7th ECF Review (End June 2025)

### Coordination with development partners and capacity development
- Development partner engagement:
  - World Bank: large portfolio; technical assistance; policy dialogue in disaster risk management, renewable energy, adaptive social protection, water and integrated landscape management, and climate resilient agriculture and infrastructure.
  - GIZ: supporting the Ministry of Planning on enhancing public investment management functions; to work closely on climate budgeting (RM2) and integrating climate aspects in public investment management (RM4, RM5, and RM6).
  - AfDB, European Union, French Development Agency, UK’s FCDO: focus on institutional capacity to facilitate access to climate funds, strengthen small farmers’ resilience, groundwater management, renewable energy, and land restoration.
- Capacity development needs:
  - New priorities include: (i) Climate budget tagging, and (ii) Green public investment management.
  - Niger’s low implementation capacity constitutes a program risk; staff recommended closer engagement of the statistics office with IMF technical assistance to improve national accounts and support envisaged rebasing of GDP.
  - Capacity development support will be provided by the IMF and other partners to mitigate implementation risks.

### Program modalities, financing, and timeline changes
- Fund resources: to be made available entirely in the form of budget support.
- Requests and modifications:
  - A 6-month extension of the ECF-supported program to June 2025, rephasing of disbursements (Table 8a), and modification of performance criteria and indicative targets are requested.
  - An additional review with test date end-December 2024 to retain semi-annual spacing.
  - Modification requests include: ceiling on net domestic financing, two indicative targets on the basic budget balance (including budget grants and excluding grants), and indicative targets for the cash revenue floor starting from end-June 2023 to account for lower projected nominal tax revenue levels and faster-than-expected execution of investment spending in the first semester of 2023.
  - Adjustment to continuous performance criterion on new public and publicly guaranteed external debt and the ceiling on net domestic financing to include an adjustor for the debt reprofiling operation.
  - New QPCs and ITs proposed at end-June and end-March 2024, respectively.
- RSF-specific request and terms:
  - A 23-month RSF-supported program is requested.
  - Reform implementation will be monitored by four semiannual reviews concurrent with remaining ECF reviews.
  - Authorities request an access level of 75 percent quota or SDR 98.7 million; the interest rate on RSF disbursements will be capped at 2.25 percent.
  - The facility is intended to substitute for more costly domestic financing and create buffers to absorb future shocks.

### Financing needs and selected figures (as presented)
- Text Table 4 excerpt (as presented in source):
  - Total Financing Requirement1,7321,7221,2891,422
  - Current account deficit (excl. budget support grants)1,5701,4407771,050
  - Government amortization98173150141
  - Changes in FA excl. RSF disbursements (+: increase) 1/64109362231
  - Total Financing Source1,3571,3791,0181,181
  - Foreign direct investment593594212192
  - Project-related financing584658774861
  - Other flows18112732127
  - Financing Need375343271241
  - Budget support 2/305310250230
  - ECF66332211
  - CCRT4000
  - Residual Financing Gap0000
  - RSF disbursement0422811
  - Total changes in FA incl. RSF disbursements 1/64151390242
  - 2/ The estimated amounts include the World Bank's budget support for 2023-2025 , which will be finalized once officially confirmed after the internal approval procedure.
  - 1/ The amounts net out the transactions that affect liabilities other than Fund lending disbursements.

### Staff appraisal, macro-fiscal outlook, and policy recommendations
- Program implementation and performance:
  - Implementation of the ECF-supported program remains broadly satisfactory.
  - All quantitative performance criteria, and almost all indicative targets at end-December 2022 and end-March 2023 have been met, except the cash revenue floor ITs for end-December 2022 and end-March 2023.
  - All structural benchmarks assessed in this review have been implemented.
- Growth and outlook:
  - Economic growth remains strong and the outlook is favorable, but subject to downside risks.
  - Agriculture sector recovered from severe drought in 2022; large-scale investment projects support activity.
  - Oil pipeline expected to be operationalized by the end of the year and would spur growth and fiscal revenues; any delay, deterioration in security, or climate shocks could jeopardize prospects.
- Fiscal trajectory and reforms:
  - Agreed fiscal trajectory for 2023-2025 aims to meet WAEMU convergence criterion of 3 percent of GDP by 2025 via revenue-enhancing measures and expenditure containment.
  - Emphasis on accelerating implementation of measures to achieve revenue targets to avoid cuts in priority spending.
- Revenue mobilization:
  - Domestic revenue mobilization efforts ongoing, yields slower due to security challenges, trade disruptions at border with Nigeria, and lower-than-expected yields from new tax measures.
  - Authorities committed to corrective actions including digitalization and reinforcement of controls.
  - Staff recommends more decisive policy to rationalize tax exemptions.
- Debt policy and spending quality:
  - Authorities planning a debt reprofiling operation to mitigate rollover risks and lengthen debt maturity.
  - Recommendation to prioritize concessional loans and grants.
  - Digitalization of expenditure orders and authorizations and expansion of the unified social registry are underway to improve spending quality.
- Governance and private sector development:
  - Progress on operationalization of asset declaration regime is welcome; staff recommends steps for online publication of asset declarations and fostering financial and administrative independence of HALCIA consistent with Article 6 of the UN Convention against corruption.
  - Continued digitalization in government agencies recommended to spur transparency, efficiency, and tax revenue collection.
  - Authorities urged to make steadfast progress on cross-cutting initiatives to facilitate private sector development and access to finance.
- RSF program role on climate:
  - RSF program will support authorities’ agenda to fight climate change, accelerate reforms, and improve investment quality in climate-friendly projects.
  - RSF resources seen as cost-effective financing to create and sustain fiscal space to address future shocks.
  - Staff supports access level of 75 percent of quota requested by authorities.
  - Risks include implementation capacity constraints and rising oil production/export challenges to low-carbon transition; mitigation via capacity development support and sequential reform approach.
- Capacity to repay Fund:
  - Niger’s capacity to repay remains adequate.
  - Repayment obligations to the Fund peak at 1.5 percent of exports and 2.2 percent of fiscal revenues in 2029.
  - Potential risks to capacity to repay include fiscal slippages, delays in oil pipeline operationalization and oil exports, and climate-related shocks.
  - Swift reform implementation and contingency measures mitigate such risks.

*Source: Excerpts from the supplied IMF chapter/section content for 1nerea2023003*

### 62. Based on performance and commitments under the program, staff supports the

### 1nerea2023003 - 62. Based on performance and commitments under the program, staff supports the

### Program decisions and financing
- Staff supports:
  - Completion of the third review under the ECF arrangement.
  - The request for the extension, rephasing, and modification of performance criteria and indicative targets.
  - Disbursement of the fourth tranche of SDR 19.74 million.
  - The authorities’ request of a new program under the RSF.
- Rephased ECF disbursement schedule (Table 8a):
  - SDR 39.48 (30 percent) — Executive Board Approval of the ECF Arrangement — December 8, 2021.
  - SDR 39.48 (30 percent) — Observance of December 31, 2021 performance criteria, and completion of the first review — April 29, 2022.
  - SDR 39.48 (30 percent) — Observance of June 30, 2022 performance criteria, and completion of the second review — October 31, 2022.
  - SDR 19.74 (15 percent) — Observance of December 31, 2022 performance criteria, and completion of the third review — April 28, 2023.
  - SDR 19.74 (15 percent) — Observance of June 30, 2023 performance criteria, and completion of the fourth review — October 31, 2023.
  - SDR 13.16 (10 percent) — Observance of December 31, 2023 performance criteria, and completion of the fifth review — April 30, 2024.
  - SDR 13.16 (10 percent) — Observance of June 30, 2024 performance criteria, and completion of the sixth review — October 31, 2024.
  - SDR 13.16 (10 percent) — Observance of December 31, 2024 performance criteria, and completion of the seventh review — April 30, 2025.
  - Total SDR 197.4 (150 percent).

- Proposed RSF disbursement schedule (Table 8b, partial):
  - Six disbursements of SDR 8.554 million each (6.5 percent of quota each) tied to implementation reviews of specified Reform Measures (RM). One scheduled date listed: ECF 4th Review — October 31, 2023 (ECF review total 39 percent). Total RSF amounts and full schedule presented in Table 8b.

### Recent economic developments (figures summary)
- Turnover in commerce and financial services: recovered in the second half of 2022 (Figure 2).
- Inflationary pressures: have moderated (Figure 2).
- Credit growth: Growth in credit to the private sector remains insufficient to foster financial deepening (Figure 2).
- Revenue performance: Revenue increased in 2022 compared to 2021, mostly driven by income tax and VAT (Figure 2).
- Sector composition (Figure 3):
  - As of 2022, the share of the agriculture sector has increased, partly reflecting recovery from the drought in 2021.
  - The primary sector dominates economic activity.
- Output volatility (Figure 3):
  - GDP growth is highly volatile and is driven by the impact of climate shocks on agriculture.
  - Per capita GDP growth is volatile and relatively modest, due to high population growth.

### Medium-term outlook and key macro projections (selected)
- Growth and inflation (Figure 4 and Table 1):
  - Following the rebound in 2022, growth should remain strong in the near-term driven by private consumption and net exports.
  - Inflation should converge to the upper-limit of the WAEMU target band by end-2023 and decline to the mid-point over the medium term.
- External sector:
  - Current account deficit is projected to narrow over the near term with higher oil exports.
- Fiscal stance:
  - After three years of fiscal expansion, the onus is on growth-friendly fiscal consolidation over 2023-25.
- Public debt and debt service:
  - Public debt will remain contained while debt service gradually declines (Figure 4).

### Fiscal and public finance indicators (selected exact values from Tables 1–3)
- Overall balance (commitment basis, incl. grants) projections (percent of GDP, Table 1 / Table 3):
  - 2021: -5.9
  - 2022: -6.6
  - 2023: -6.8
  - 2024: -4.7
  - 2025: -5.3
  - 2026: -5.3
  - 2027: -4.1
  - 2028: -3.0 (and repeated as -3.0 for subsequent projection rows through 2028)
- Total revenue (percent of GDP, Table 3):
  - 2021: 10.8
  - 2022: 11.8
  - 2023: 11.7
  - 2024: 10.1
  - 2025: 13.0
  - 2026: 12.8
  - 2027: 11.2
  - 2028: 13.5
- Total expenditure and net lending (percent of GDP, Table 3):
  - 2021: 24.3
  - 2022: 24.3
  - 2023: 24.8
  - 2024: 21.6
  - 2025: 23.2
  - 2026: 23.1
  - 2027: 21.9
  - 2028: 22.6
- Capital expenditure (percent of GDP, Table 3):
  - 2021: 13.1
  - 2022: 13.2
  - 2023: 13.2
  - 2024: 10.8
  - 2025: 11.6
  - 2026: 11.6
  - 2027: 11.0
  - 2028: 12.6
- Public and publicly-guaranteed debt (percent of GDP, Table 1):
  - 2021: 51.3
  - 2022: 54.1
  - 2023: 56.6
  - 2024: 50.3
  - 2025: 53.8
  - 2026: 57.6
  - 2027: 51.3
  - 2028: 48.3

### External sector and balance of payments (selected exact values)
- Current account balance (percent of GDP, Table 6):
  - 2021: -14.1
  - 2022: -15.4
  - 2023: -14.4
  - 2024: -15.6
  - 2025: -13.2
  - 2026: -13.4
  - 2027: -12.2
  - 2028: -5.2
- Exports, f.o.b (percent of GDP, Table 6):
  - 2021: 8.1
  - 2022: 9.2
  - 2023: 8.3
  - 2024: 6.7
  - 2025: 11.2
  - 2026: 9.9
  - 2027: 9.1
  - 2028: 16.4
- Imports, f.o.b (percent of GDP, Table 6):
  - 2021: 18.9
  - 2022: 19.9
  - 2023: 19.1
  - 2024: 18.7
  - 2025: 19.8
  - 2026: 19.1
  - 2027: 18.1
  - 2028: 16.6
- Current account balance, excluding grants (percent of GDP, Table 6 / Table 5 memorandum):
  - 2021: -16.4
  - 2022: -16.7
  - 2023: -16.2
  - 2024: -16.9
  - 2025: -14.8
  - 2026: -14.9
  - 2027: -14.2
  - 2028: -6.7

### Monetary and financial sector (selected exact values)
- Broad money annual change (Table 4):
  - 2021: 9.7
  - 2022: 19.3
  - 2023: 10.3
  - 2024: 11.9
  - 2025: 12.5
  - 2026: 12.1
  - 2027: 15.2
  - 2028: 16.4
- Credit to the private sector (percent of GDP, Table 4):
  - 2021: 13.0
  - 2022: 13.4
  - 2023: 12.5
  - 2024: 12.2
  - 2025: 14.0
  - 2026: 12.6
  - 2027: 12.1
  - 2028: 11.5
- Financial soundness indicators (selected from Table 7):
  - Regulatory capital to risk-weighted assets: 14.4 (2022, Dec.)
  - Gross NPLs to total loans: 18.2 (2022, Dec.)
  - Provisioning rate: 36.4 (2022, Dec.)
  - Liquid assets to total assets: 26.5 (2022, Dec.)

### Key policy implications and operational points (derived from presented analysis and tables)
- Program implementation:
  - Continued observance of performance criteria and completion of program reviews is tied to ECF tranche disbursements (exact SDR amounts and review dates specified).
  - RSF disbursements are tied to implementation reviews of specified Reform Measures.
- Fiscal policy:
  - Need for growth-friendly fiscal consolidation over 2023-25 after fiscal expansion during the prior three years.
  - Maintain focus on revenue mobilization (income tax and VAT contributed to 2022 revenue increase) while managing support measures (e.g., tariff reductions in 2022) that affect revenue.
- External and reserves management:
  - Expectation of narrower current account deficit in the near term with higher oil exports; monitor reserve implications given projected flows.
- Financial sector:
  - Address insufficient growth in credit to the private sector to foster financial deepening.
  - Continue monitoring asset quality given elevated Gross NPLs to total loans (18.2 in 2022, Dec.) and provisioning dynamics.

*Source: Nigerien authorities; and IMF staff estimates, projections, and figures contained in the provided content.*

### 19.5 percent

### 1nerea2023003 - 19.5 percent

### Public debt and debt service (2022–25)
- Total debt (2022): 7,812 (US$ million), 100.0 percent total debt, 50.3 percent of GDP.
- Debt stock (end of period) projections (US$ million and percent GDP):
  - 2023: 1,106 (7.1 percent of GDP)
  - 2024: 1,457 (7.5 percent of GDP)
  - 2025: 1,969 (9.3 percent of GDP)
- External debt (2022): 5,071 (64.9 percent of total debt; 32.7 percent of GDP).
- Multilateral creditors (2022): 4,218 (54.0 percent of total debt; 27.2 percent of GDP).
  - IMF (2022): 478 (6.1 percent of total debt; 3.1 percent of GDP).
  - World Bank (2022): 2,284 (29.2 percent of total debt; 14.7 percent of GDP).
  - AfDB (2022): 431 (5.5 percent of total debt; 2.8 percent of GDP).
  - Other Multilaterals (2022): 1,024 (13.1 percent of total debt; 6.6 percent of GDP).
    - BOAD (2022): 478 (6.1 percent of total debt; 3.1 percent of GDP).
    - Islamic Development Bank (2022): 242 (3.1 percent of total debt; 1.6 percent of GDP).
- Bilateral creditors (2022): 650 (8.3 percent of total debt; 4.2 percent of GDP).
  - Paris Club (2022): 211 (2.7 percent of total debt; 1.4 percent of GDP).
    - France (2022): 192 (2.5 percent of total debt; 1.2 percent of GDP).
    - Belgium (2022): 190 (0.2 percent of total debt; 0.1 percent of GDP).
  - Non-Paris Club (2022): 439 (5.6 percent of total debt; 2.8 percent of GDP).
    - China (2022): 183 (2.3 percent of total debt; 1.2 percent of GDP).
    - India (2022): 80 (1.0 percent of total debt; 0.5 percent of GDP).
- Commercial creditors (2022): 203 (2.6 percent of total debt; 1.3 percent of GDP).
  - Deutsche Bank (2022): 159 (2.0 percent of total debt; 1.0 percent of GDP).
  - CNPC (2022): 44 (0.6 percent of total debt; 0.3 percent of GDP).
- Domestic debt (2022): 2,741 (35.1 percent of total debt; 17.7 percent of GDP).
  - T-Bills (2022): 368 (4.7 percent of total debt; 2.4 percent of GDP).
  - Bonds (2022): 2,056 (26.3 percent of total debt; 13.2 percent of GDP).
  - Loans (2022): 220 (2.8 percent of total debt; 1.4 percent of GDP).
  - Others (2022): 97 (1.2 percent of total debt; 0.6 percent of GDP).
- Nominal GDP (2022): 15,521 (US$ million).

### Summary of projected external borrowing program (Table 10)
- Volume and composition of new borrowing (USD million; percent):
  - Total (program year): 1,670.1 (100 percent)
  - Concessional debt: 1,326.9 (79.4 percent)
    - Multilateral debt: 1,298.9 (77.8 percent)
    - Bilateral debt: 28.0 (2.0 percent)
  - Non-concessional debt: 343.2 (20.6 percent)
    - Semi-concessional: 255.9 (15.3 percent)
    - Commercial terms: 87.3 (5.2 percent)
- By creditor type (USD million; percent):
  - Multilateral: 1,641.1 (98.3 percent)
  - Bilateral - Non-Paris Club: 28.0 (1.7 percent)
  - Other: 1.0 (0.1 percent)
- Uses of debt financing (USD million; percent):
  - Infrastructure: 239.0 (14.3 percent)
  - Social Spending: 934.1 (55.9 percent)
  - Budget Financing: 350.0 (21.0 percent)
  - Other: 147.1 (8.8 percent)
- PV of new debt in 2023 (program purposes): figures reported in the table for PPG external debt and program volumes.

### Indicators of capacity to repay the Fund (2023–45) (Table 11)
- Fund obligations based on existing credit (SDR millions, principal):
  - 2023: 19.2
  - 2024: 26.1
  - 2025: 38.1
  - 2026: 42.9
  - 2027: 50.9
  - 2028: 53.1
  - 2029 onward: declining to 0.0 in later years as shown in table.
- Fund obligations based on existing and prospective credit (SDR millions, total obligations):
  - 2023: 19.2
  - 2024: 27.5
  - 2025: 40.2
  - 2026: 45.1
  - 2027: 53.1
  - 2028: 57.3
  - 2029: 64.3
  - ... through 2045 as detailed in the table.
- Charges and interest (SDR millions) under existing and prospective credit:
  - 2023: 0.0
  - 2024: 1.5
  - 2025: 2.1
  - 2026: 2.2
  - 2027: 2.2
  - ... declining to 0.0 by 2045 as shown.
- Total obligations (SDR millions) and equivalents in CFAF billions reported year-by-year in the table (e.g., SDR millions 2023: 19.2; CFAF billions 2023: 15.8).
- Ratios and indicators (selected):
  - Percent of exports of goods and services (2023): 1.0 percent.
  - Percent of debt service (2023): 3.6 percent.
  - Percent of GDP (2023): 0.10 percent.
  - Percent of tax revenue (2023): 1.5 percent.
  - Percent of quota (2023): 14.6 percent.
- Outstanding IMF credit based on existing and prospective drawings (SDR millions):
  - 2023: 430.4
  - 2024: 464.9
  - 2025: 453.1
  - 2026: 410.2
  - 2027: 359.4
  - ... and projections through 2045 as listed.
- Net use of IMF credit (SDR millions), annual series (selected):
  - 2023: 65.6
  - 2024: 35.9
  - 2025: -9.7
  - 2026: -40.7
  - 2027: -48.6
  - ... through 2045 as given (e.g., 2044: -0.7).
- Memorandum items (selected series in CFAF billions):
  - Exports of goods and services (2023): 1,659; (2024): 2,750; (2025): 2,889; continuing annually through 2045.
  - External debt service (CFAF billions) series provided (e.g., 2023: 437; 2024: 366; 2025: 370; continuing).
  - Nominal GDP (CFAF billions) series provided (e.g., 2023: 10,535; 2024: 12,143; 2025: 13,255; continuing).
  - Tax revenue (CFAF billions) series provided (e.g., 2023: 1,084; 2024: 1,528; 2025: 1,717; continuing).
  - Quota (SDR millions): 131.6 for all years shown.

### Risk Assessment Matrix (RAM) — main risks, likelihood, impact, and recommended responses
- Spillover risks:
  - Intensification of regional conflicts, with an escalation of Russia’s war on Ukraine or other regional conflicts.
    - Relative likelihood: High
    - Impact if realized: Medium
    - Recommended policy response: Implement domestic revenue mobilization to create fiscal space. Advance structural reforms, including public debt management measures, to enhance resilience to external shocks.
  - Even higher commodity prices, tighter financial conditions, lower aid flows, and other adverse spillovers.
    - (Implicitly grouped with spillover risks)
  - Social discontent.
    - Relative likelihood: High
    - Impact if realized: Medium
    - Recommended policy response: Advance structural reforms to reduce informality and achieve more inclusive growth. Prioritize well-targeted spending to protect the most vulnerable from the rise in the cost of living.
  - Rising and volatile food and energy prices.
    - Relative likelihood: Medium
    - Impact if realized: High
    - Recommended policy response: Prioritize well-targeted spending to protect the most vulnerable and accelerate implementation of the support plan for populations vulnerable to food, nutritional and pastoral insecurity.
  - Monetary policy miscalibration, leading to de-anchoring of inflation expectations.
    - Relative likelihood: Medium
    - Impact if realized: Medium
    - Recommended policy response: Intensify efforts to mobilize donor funds and access to concessional financing to contain debt vulnerabilities. Accelerate implementation of reforms to foster domestic revenue mobilization.
  - Reduced donor support.
    - Relative likelihood: Low
    - Impact if realized: High
    - Recommended policy response: Enhance engagement with traditional and new donors. Enhance implementation capacity to ensure high return from donor-financed projects.
  - Deterioration of security situation in the Sahel and neighboring countries.
    - Relative likelihood: Medium
    - Impact if realized: High
    - Recommended policy response: Allow for a more backloaded fiscal consolidation path as needed to accommodate high priority security spending. Increase engagement with neighboring countries and the international community on security issues.
- Structural risks:
  - Delays in the realization of extractive industry projects.
    - Relative likelihood: Medium
    - Impact if realized: High
    - Recommended policy response: Accelerate efforts to enhance oversight and transparency of the sector.
  - Extreme climate events.
    - Relative likelihood: Medium
    - Impact if realized: High
    - Recommended policy response: Increase well-targeted spending, including transfers to vulnerable populations, while restraining other current expenditure.

### Climate change risks, impacts, and national strategy (Annex I)
- Climate vulnerability and exposure:
  - Rainfed agriculture accounts for 40 percent of GDP.
  - Around 73 percent of the total active population is engaged in the agricultural sector.
  - Loss of forest cover estimated at more than 10,000 hectares every year.
  - Irrigated land represents less than one percent of total agriculture land.
  - Rapid population growth with an annual growth rate of 3.7 percent exacerbates vulnerability.
  - World Bank estimate: water availability per capita decreased from 2,300 m3/year in 2004 to 1,360 m3/year in 2021.
- Observed and projected climate changes:
  - Between 1951 and 2020, annual average temperature increase: 1 degree Celsius (change toward warmer days).
  - Under the SSP5-8.5 scenario, Niger is projected to face a more than 2 degrees Celsius increase by 2050.
- GHG emissions and energy:
  - Niger’s GHG emissions: 0.09 metric tons per capita; world average: 4.12 metric tons per capita; Sub-Saharan Africa average: 0.89 metric tons per capita.
  - Sectoral contribution to GHGs: agriculture 88 percent; energy 9 percent.
  - Niger imports 70 percent of its energy supply from Nigeria.
  - Solar energy potential: estimated at 6 to 7 kWh/m2/day.
  - Solar power accounted for about 11 percent of Niger's energy production in 2021.
  - Niger had approximately 81 percent of the population lacking access to electricity as of 2020.
  - Less than 3 percent of the population has access to clean energy for cooking.
- Macroeconomic and social costs and projections:
  - Past weather shocks have led to food shortages, soaring food prices, lower GDP growth, higher current account deficits, and increased displacement.
  - By 2050, GDP losses from climate change estimated to range between 2.2 percent and 11.9 percent (optimistic and pessimistic World Bank G5-Sahel CCDR scenarios).
  - An additional 5 million people expected to fall into poverty by 2050, mainly in rural areas.
- National climate strategy and commitments:
  - Revised National Determined Contribution (NDC) in 2021 raised ambitions vs. 2015 NDC.
  - National Adaptation Plan (NAP) to be implemented over 2022-2026; integrates adaptation into five priority sectors (agriculture, transport, forestry, health, humid areas) with water as cross-cutting.
  - National Economic and Social Development Plan (2022-2026) includes program #16 dedicated to climate change.
  - Disaster risk management law: Law N o 2022-61 (2022) with application decrees being prepared.
- Adaptation priorities:
  - Long-term objectives: ensure food security; combat poverty; promote rational management of natural resources; enhance resilience of population and ecosystems.
  - NAP supports mainstreaming of adaptation across priority sectors with a comprehensive implementation plan.
- Mitigation and low-carbon transition:
  - NDC mitigation commitment: reduce GHG emissions by between 23.2 percent (unconditional) and up to 67.8 percent (conditional on international support) by 2030.
  - NDC mitigation priorities emphasize co-benefit measures in agriculture and energy, including climate smart agriculture under the Investment Fund for Food and Nutrition Security (FISAN).
  - Government committed to renewable energy infrastructure with estimated production capacity of 718 MW by 2030:
    - 526 MW in solar power
    - 130 MW in hydroelectricity
    - 50 MW in wind power
    - 12 MW in power derived from bagasse

*Source: International Monetary Fund.*

### 6. While various national strategy documents underpin the implementation of

### 6. While various national strategy documents underpin the implementation of

### Implementation challenges and financing needs
- Key obstacles to effective execution of adaptation and mitigation efforts outlined in the NDC:
  - Lack of an enabling legal and institutional framework.
  - Insufficient technical know-how to identify and develop climate actions.
  - Financing and capacity constraints.
- Estimated cost of Niger’s NDC over the decade 2021-2030: US$ 9.9 billion.
  - Adaptation: 68 percent of the total cost.
  - Mitigation: 32 percent of the total cost.
  - Government contribution: 26.4 percent of the total cost.
  - Development partners expected to finance the remainder.
- Government plans (with World Bank support) to develop a climate investment plan, including funding sources for NDC actions.
- Niger’s first updated biennial report on climate change (published in 2022) highlights the obstacles above.

### Progress in reforms, highlighted gaps, and priority reform areas
- Reforms to date have focused on improving planning and strengthening regulations, but:
  - Weak institutional capacities and limited financing have undermined NDC implementation.
- World Bank G5 Sahel CCDR and Climate PEFA identified reform areas:
  - Improving climate sensitivity in public financial and disaster risk management.
  - Strengthening coordination across government entities involved in climate action.
  - Removing barriers to access climate finance and developing risk transfer instruments at government, firm, and household levels.
  - Promoting renewable energy resources (solar, wind and hydroelectric) to support a low carbon development path.
  - Investing in Climate Smart Agriculture (CSA) practices.
  - Expanding climate-resilient cities and implementing disaster risk management systems.

### Identified policy priorities and institutional/operational gaps
- Climate mapping and reporting:
  - 2018 climate mapping established a database for the National Environment Council for Sustainable Development (CNEDD).
  - Identification and reporting on adaptation and mitigation projects are not institutionalized.
  - Recent Climate Public Expenditure and Institutional Review (CPEIR) conducted with UNDP support; unclear use of findings for strategic budget allocations.
  - No institutional arrangement clarifying roles/responsibilities or quality control for climate budget tagging (CBT); tools for CBT design and implementation through existing systems and reporting mechanisms are lacking.
- Environmental impact assessments and resilient infrastructure:
  - Law N o 2018-28 requires EIAs for all projects, but EIAs have been carried out primarily for major externally-funded projects.
  - Need to adapt existing climate vulnerability assessment guideline of the BNEE to the country context.
- Fiscal risk statements and disaster risk:
  - Niger prepares a multi-year economic and fiscal document (Document de programmation budgétaire et économique pluriannuel DPBEP) with a brief qualitative assessment of fiscal risks, but:
    - Fiscal risk assessment is at an initial stage; authorities requested IMF support to strengthen the framework by identifying key risks and quantifying potential fiscal impacts.
    - No qualitative or quantitative assessment of the fiscal impact of natural disasters currently.
  - Technical assistance mission scheduled for July 2023.
- Disaster risk management (DRM) institutional strengthening:
  - Niger subscribed to risk-sharing services from African Risk Capacity Group since 2014.
  - In 2022, government received a payment of US$ 4.2 million under the insurance contract due to rainfall deficit in certain agricultural production zones.
  - DRM Law (Law N o 2022-61) adopted by the Council of Ministers on October 20, 2022, aims to respond to coordination problems and strengthen DRM governance.
  - Government establishing Superior Orientation Council on DRM and its Permanent Secretariat to oversee declaration of state of disaster and response actions.
  - Government capacity to respond promptly and effectively to crises remains weak, partly due to absence of a formal DRM coordination mechanism.
- Renewable energy and private sector capacity:
  - Regulatory framework allows for independent power producers (IPPs), supportive of green energy opportunities, but private sector capacity is limited.
  - National action plan for promotion of renewable energies adopted in 2015; private sector involvement critical given investment needs.
  - National Support Fund for Small and Medium Enterprises and Medium Industries (FONAP) created in 2021 with current allocations of CFAF 15.1 billion; expected additional resources from development partners.
  - FONAP does not currently have a window to support elaboration of business projects in renewable energy.

### Institutional capacity needs and planned technical assistance under the RSF
- Reform measures under the RSF will be supported by capacity development activities (CD); authorities have requested IMF CD for:
  - Disaster informed fiscal risk assessments.
  - Design and implementation of climate budget tagging.
  - Introduction of climate-sensitive public investment management practices.
- Other development partner support:
  - GIZ: placing technical assistance advisors at the Ministry of Planning and reviewing/revising climate vulnerability assessment guidance.
  - World Bank: technical support on DRM and other areas through an investment project and advisory services; support for flood and drought risk assessments in urban areas via PIDUREM.
- Expected capacity development focus areas:
  - Strengthening planning and budgeting of climate-related spending (Reform area 1):
    - Establish a working task force to develop institutional framework for CBT, prepare CBT guidelines, and update planning tools (e.g., budget circular).
    - Implement CBT framework with pilot sector ministries to identify climate-related spending.
    - Support provided by IMF and GIZ (technical resident advisors and short-term assistance).
  - Improving public investment management sensitivity to climate change (Reform area 2):
    - GIZ to review/revise guidance note for climate vulnerability assessment to adapt to Niger’s circumstances.
    - Support for amending public investment management legislation to integrate climate aspects in evaluation and selection stages.
    - IMF short-term assistance to provide good practices and potentially facilitate peer learning.
  - Enhancing disaster informed fiscal planning and management (Reform area 3):
    - Need for technical capacity building on methods/tools for quantitative fiscal risk assessment incorporating natural disaster risk in the medium term.
    - IMF TA mission planned for July 2023 to support development of a guidance note (including methodology) and an action plan to integrate natural disasters-related risks into fiscal risk assessment.
    - Additional needs: operationalization of the DRM law (coordination and implementation responsibilities) and preparation of flood and drought risk assessments in urban areas.
    - World Bank support through Integrated Urban Development and Multisectoral Resilience Project (PIDUREM).

### Strategic documents summarised (selected highlights)
- National Determined Contribution 2021 (NDC):
  - Objectives: implement adaptation measures and GHG mitigation; encourage climate-smart agriculture techniques; expand use and access to modern and clean energy services for all by 2030.
  - 2021 revision defined governance, including creation of institutions to oversee implementation.
- National Adaptation Plan 2022-2026 (NAP):
  - Integrates climate change adaptation into socio-economic sectors.
  - Objectives: (i) reduce vulnerability by strengthening adaptive capacity and resilience; (ii) facilitate integration of adaptation into policies, programs, and development planning processes.
- Economic and Social Development Plan 2022-2026 (PDES):
  - Poverty Reduction and Growth Strategy structured around three strategic axes and sixteen programs; Program #16 dedicated to climate change.
- Agriculture Strategy for Adaptation to Climate Change 2020-2035 (SPN2A):
  - Aims for sustainable and climate-smart agricultural development; objectives include sustainable exploitation of agro-ecosystems, improved agronomic/economic/environmental performance, increased resilience to shocks.
- 3N “Nigeriens Feed Nigeriens” Initiative (Action plan for 2021-2025):
  - National strategy for food/nutritional safety and sustainable agricultural development, implemented via five-year action plans.
- National Access to Electricity Strategy 2018-2035:
  - Goals: universal access to reliable, affordable, environmentally friendly electricity; increase access rate from 20 percent in 2020 to at least 80 percent in 2035, with an intermediate target of 34 percent in 2025.
- National Action Plan for Integrated Water Resources Management (PANIGRE, 2017-2030):
  - Four pillars: knowledge of water resources; mobilization/valorization of natural resources; environment preservation and resilience to climate change; improvement of water governance and capacity building.
  - Total cost: CFAF 74.36 billion (or $122.4 million).

### IMF advice on oil revenue management (Annex II summary)
- Authorities committed to adopting an oil revenue management strategy by end-September 2023 before start of crude oil exports through the new pipeline (SB#2); oil pipeline completion and start of exports expected in the second half of 2023.
- Risks from oil revenues include exposure to oil price volatility, pro-cyclical policies, potential “resource curse” effects, crowding-out of other sectors, security and rent-seeking risks.
- Four pillars of IMF advice:
  - Enhance macroeconomic framework:
    - Prepare detailed oil revenue projections covering period of oil production and exports.
    - Assess quality of past revenue forecasts and include analysis of forecast errors in multi-year budget and economic programming document.
  - Strengthen budget preparation and execution:
    - Identify priority spending to be financed with oil receipts.
    - Tag oil-related revenue and expenditure operations in the budget.
    - Increase feasibility studies before project inclusion in budget.
    - Expand double accounting system (AE/CP) to ministries with large investment portfolios.
    - Clarify mechanism for transferring 15 percent of oil revenues to local governments.
    - Decentralize payment orders (especially at regional level).
    - Reinforce infra-annual expenditure programming tools and expand TSA to local governments.
  - Establish and implement a stabilization fund and non-oil revenue primary fiscal balance target:
    - Define reference price for projections, maximum level and time frame for the fund, and rules for deposits and withdrawals.
    - Set a flexible non-oil primary balance target compatible with WAEMU 3 percent of GDP fiscal deficit ceiling; include target in budget law.
  - Ensure fiscal transparency and accountability:
    - Strengthen disclosure on the oil sector (publish oil contracts, procedures for granting oil licenses, oil licenses registry).
    - Assess, monitor, and publish fiscal risks in the oil sector and financial statements of SOEs operating in the oil sector in the multi-year budget and economic programming document.
    - Strengthen oversight of oil revenue management by independent entities (e.g., Cour des Comptes, Finance Committee of the National Assembly).

*Source: IMF staff summary of Niger climate and fiscal policy content as presented in the provided PDF chapter.*

### Annex III. Capacity Development Priorities by Department for

### Annex III. Capacity Development Priorities by Department for FY24/25

### FAD Priorities — Revenue administration and Tax policy
- Revenue administration objectives:
  - Improve the management of the taxpayer registration system.
  - Complete the digitalization and interconnection of tax and custom administrations.
  - Strengthen capacity for natural resource revenue management.
  - Establish robust tax and customs revenue forecasting models.
- Tax policy objectives:
  - Broaden the tax base and remove tax exemptions through a simplification of the general tax code.
  - Shift the tax burden from corporate and labor income to consumption.
  - Develop a Domestic Revenue Mobilization Strategy aiming to broaden and sustain the country’s fiscal space.

### FAD Priorities — Public financial management
- Objectives:
  - Implement a Climate Budget Tagging Framework to incorporate climate change considerations into the budget cycle.
  - Monitor the implementation of PIMA recommendations, including a Climate-PIMA section.
  - Enhance the fiscal risks assessment framework (macro risks related to PPP, SOEs, ...) covering climate risks.
  - Support further progress in implementing the single treasury account and enhance cash management.
  - Increase efficiency and transparency in the expenditure chain and strengthen budget preparation and execution in the context of program budgeting.

### MCM Priorities — Debt management
- Objectives:
  - Strengthen the country’s capacity to manage public debt.
  - Prepare a public debt plan consistent with the broader investment strategy and fiscal planning.

### STA Priorities — Macroeconomic and financial statistics
- Objectives and planned support:
  - Strengthen government finance statistics according to GFSM 2014 standards.
  - Improve balance of payment statistics and national accounts.
  - Provide technical assistance to develop quarterly national and rapid accounts.
  - Make 2022 the new base year for the national accounts (requiring increased engagement from the INS).
  - In cooperation with WAEMU and AFRISTAT, assist with updating and improving the harmonized consumer price index compiled by the WAEMU member countries, including Niger.
  - Conduct the e-GDDS mission in July 2023 at the request of the authorities.

### LEG Priorities — Governance
- Objectives:
  - Develop a Governance Diagnostic report to address governance vulnerabilities, including those linked to natural resources.

### Recent macroeconomic developments and program context (from Letter of Intent / MEFP)
- 2022 macroeconomic outcomes:
  - Real GDP growth: 11.9 percent in 2022 (rebound from prior year).
  - Agricultural production growth: up 37.9 percent in 2022.
  - Tertiary sector growth: 4.7 percent.
  - Secondary sector growth: 2.4 percent.
  - Average annual inflation: 4.2 percent in 2022 (compared to 3.8 percent in 2021).
  - Current account deficit: 15.6 percent of GDP in 2022.
  - Exports: 6.7 percent of GDP in 2022 (compared to 8.1 percent in 2021).
  - Overall fiscal deficit: 6.8 percent of GDP in 2022.
  - Money supply: CFAF 1862 billion in 2022, or 19.7 percent of GDP, up 11.9 percent on 2021.
  - Net domestic claims increase: 20.7 percent.
  - Claims on the economy growth: 12.6 percent.
- Financial sector indicators (end-2022 / end-June 2022 where specified):
  - Banking sector capital adequacy ratio: 14.5 percent at end-June 2022 (regional average 12.6 percent).
  - Liquid assets: 26.5 percent of total assets and 42.4 percent of deposits.
  - After-tax return on equity (banks): 12.2 percent (regional average 17.4 percent).
  - Nonperforming loans (sector): 18.2 percent at end-December 2022 (regional average 8.4 percent).
  - Combined NPLs for eight banks: 31.7 percent (compared to sector gross NPLs ratio of 18.2 percent at end-2022).
  - NPLs by borrower category among eight banks: other corporations 51.7 percent; individual businesses 41.5 percent.
  - NPLs by maturity for banks concerned: short-term loans 43.5 percent; long-term loans 27.1 percent.
  - Sectoral concentration ratio of bank loans: 210.9 percent at end-June 2022.
  - Credit to agriculture sector: 0.97 percent.
  - Microfinance institutions NPLs: 28.5 percent in 2022 (regional average 7.9 percent); 50.25 percent in 2021 (following ASUSU S.A reclassification).
- Policy actions and program requests:
  - Construction of the Niger-Benin oil pipeline completed; extraction begun at Agadem oil field; crude oil export operations to begin in November 2023.
  - Request access to the Resilience and Sustainability Facility (RSF) in the amount of SDR 98.7 million (or 75 percent of our quota) to be disbursed as budget support.
  - Request disbursement of the fourth tranche under the ECF arrangement, of SDR 19.74 million (or 15 percent of our quota).
  - Request a six-month extension, to June 2025, and rephasing of the ECF arrangement.
  - Government commitments:
    - Adhere to the agreed fiscal consolidation path to preserve sustainability of public finances and debt.
    - Step up efforts to mobilize domestic revenue to create more space for priority and development spending.
    - Improve the quality and efficiency of public expenditure.
    - Pursue structural reforms to create a more favorable environment for private sector development and economic transformation.
- Program implementation status (as reported):
  - All performance criteria at end-December 2022 were met.
  - All indicative targets for end-March 2023 were met except those relating to cash revenues.
  - At end-March 2023, all structural benchmarks – including the continuous benchmarks – were met.
  - Overall fiscal deficit: CFAF 149.3 billion in the first quarter of 2023 (below the program target of CFAF 182.7 billion).
  - Total revenue was below the program target of CFAF 45 billion for Q1 2023.

*Source: Annex III. Capacity Development Priorities by Department for FY24/25; Appendix I. Letter of Intent; Attachment I. Memorandum of Economic and Financial Policies (excerpts).*

### 13.      The government met all the program quantitative performance criteria at end-

### 13.      The government met all the program quantitative performance criteria at end-

### Program performance and fiscal/financial targets
- Net domestic financing of the government – adjusted by the amount of budgetary support planned but not disbursed and the amount of the float from the 2022 budget year – remained below the ceiling:
  - Ceiling for December 2022: CFAF 403 billion; actual: CFAF 223.4 billion.
  - Ceiling for March 2023: CFAF 129.8 billion; actual: CFAF 89.9 billion.
- No external payment arrears were accumulated during the period.
- Present value of new external public and publicly guaranteed debt contracted:
  - End-December 2022: CFAF 493 billion (ceiling CFAF 575 billion).
  - End-April 2023: CFAF 43.6 billion (ceiling CFAF 550 billion).
- Indicative targets mostly met at end-December 2022 and end-March 2023:
  - Basic budget balances (including and excluding grants), exceptional expenditures, and social spending targets: met at end-December 2022 and end-March 2023.
  - Cash revenues: CFAF 939.8 billion at end-December 2022 and CFAF 238.5 billion at end-March 2023 — below the program floor.
- Structural benchmarks:
  - All structural benchmarks at end-December 2022 and end-March 2023 were met.
  - Publication of the compliance audit report of the Auditor General (Cour des Comptes) on tax expenditures relating to extractive industries: met in May 2022.
  - Interconnection of all DGD and DGI IT systems progressed with adoption of an administrative order on registration of taxpayers and joint management of the taxpayer database, including sanctions for noncompliance.

### Continuous structural benchmarks and transparency measures
- All program continuous structural benchmarks met by target dates:
  - Government provided IMF staff with a list of all tax exemptions, newly adopted or extended, including details and expiration dates (end-March 2023).
  - Public procurement plans, related tender notices, and final results of public contract awards regularly published on the government procurement portal.
  - Information on beneficial owners of firms awarded non-competitive contracts published, except for defense and security contracts.
  - Feasibility studies for public investment projects of more than CFAF 5 billion published on the Ministry of Planning website.

### Macroeconomic framework and outlook
- Growth and inflation projections:
  - Real GDP growth in 2023 projected at 7.0 percent (drivers: recovery of agricultural production, start of crude oil production for export from the Agadem field, renewed momentum in tertiary sector, recovery in manufacturing).
  - Real GDP growth in 2024 projected at 13.0 percent (reason: crude oil production increases to nearly full capacity and transported through the new pipeline; continued buoyancy of agriculture).
  - Growth in subsequent years expected to remain around 6 percent.
  - Inflationary pressures expected to gradually decline and return within the regional convergence band as agricultural production recovers, international supply chain disruptions attenuate, and imported food prices continue to fall.
- Current account:
  - Current account deficit expected to narrow with start of crude oil exports via the new Niger-Benin pipeline:
    - 2022: 15.6 percent of GDP.
    - 2023: 12.2 percent of GDP.
    - 2024: 5.2 percent of GDP.
  - Additional improvements expected from stabilization of imported food prices, new uranium sector investment projects in the medium term, and improved agricultural production.

### Debt policy and public debt outlook
- Fiscal consolidation and deficit targets:
  - Overall fiscal deficit expected to narrow from 6.8 percent of GDP in 2022 to 5.3 percent of GDP in 2023.
  - Oil revenue contribution modest in 2023; becomes more substantial in 2024 and should support compliance in 2025 with the WAEMU convergence criterion of 3 percent of GDP for the overall fiscal deficit including grants.
- Borrowing policy:
  - Government will pursue a prudent borrowing policy to maintain the risk of debt distress at a moderate level; prioritize concessional resources and grants.
  - Public debt sustainability indicators expected to remain below their critical thresholds and improve in the medium term with crude oil exports.
- Planned debt reprofiling operation:
  - Contracting of a commercial loan of CFAF 300 billion (roughly 2.8 percent of GDP) to clear Treasury bills and bonds maturing between July and November 2023.
  - Objective: reduce refinancing and liquidity risks by extending average maturity of total public debt and reducing interest payment burden.
  - Operation intended not to result in a downgrade of the risk rating for external or overall debt distress.

### Fiscal policies and revenue mobilization (2023)
- Financing and expenditure restraint:
  - Fiscal framework for 2023 fully financed.
  - Interministerial Budget Regulation Committee to ensure expenditure restraint and release appropriations considering revenue and grant mobilization pace to contain deficit within 5.3 percent of GDP.
- Domestic revenue emphasis:
  - Government to intensify efforts to raise domestic revenue to finance priority social and development spending.
  - 2023 budget law includes new tax policy and tax administration measures to expand the tax base, limit evasion, and consolidate previous reforms.
  - Cash tax revenues increased by 7.6 percent in Q1 2023 but remained below the programmed target established during the second review.
- Customs and specific revenue measures:
  - Measures to offset customs revenue losses: accelerate merchandise clearance using simplified declaration system, strengthen pre- and post-clearance inspections, monitor customs operations, exploit GUCE data, accelerate digitization and interconnection of revenue-collection agencies.
  - Efforts to increase revenues related to gold exports and production by verifying certificates of origin and implementing new specific taxes on gold and cigarettes.
- Tax administration reforms (2022–2024 strategic plan):
  - Strengthened legal powers of the tax fraud repression unit with mandate to recover fines and penalties.
  - New tax audit tools developed; monthly reports planned on tax audit program implementation and performance contracts for all auditors.
  - Continued digitization and implementation of tax ring fencing (enclos fiscal).
- Key tax policy reform actions and benchmarks:
  - Revision and simplification of the General Tax Code (CGI):
    - Ad hoc national advisory board on tax policy created.
    - Government committed to adopting the new CGI before June 2024 (structural benchmark for end-June 2024).
  - Integration of DGI and DGD digital platforms:
    - Order on tax registration and joint management of taxpayer database issued by the minister of finance (structural benchmark for end-March 2023).
    - Study mission to Côte d'Ivoire planned; interfacing manual to be revised; commitment to fully interconnect information systems (SB#6, SB#8, SB#9).
  - Certified invoice reform:
    - Free online issuance of certified electronic invoices (e-SECEF) operational and extended to all taxpayers, including those not subject to VAT.
    - Ongoing training for public procurement controllers and stakeholders to verify certified invoices and strengthen controls.
- Rationalization of exemptions:
  - Beneficiaries of exemptions under the investment code must pay full customs duties and taxes, reimbursed once investment is made (since 2022).
  - Extractive industries division created within the DGI Directorate of Large Business Taxpayers (DGE) to support conventions with the Ministry of Petroleum and Ministry of Mines and improve control of exemptions.
  - Two-year exemption on property tax for income-producing properties was repealed.
- Oil revenue management strategy:
  - Priority to adopt the strategy prior to start of crude oil exports planned for November 2023 (structural benchmark for end-September 2023).
  - Commitments:
    - Create a technical committee of ministries to prepare a detailed report on projected revenue from crude oil production and export and evaluate tax risks (structural benchmark for end-March 2024).
    - Adopt a regulatory text establishing formula for calculating the reference price for the oil stabilization fund and create a committee of experts to implement the calculation (structural benchmark for end-September 2024).
- Petroleum product molecular marking:
  - Molecular marking of petroleum products remains suspended; negotiations with the contractor ongoing, notably on marking costs.
  - Given price differentials with neighboring countries, little incentive to divert petroleum products intended for export to the domestic market or to engage in smuggling into Niger.

### Public expenditure management, digitalization, and social protection
- Treasury single account (TSA) and local authorities:
  - Since January 2023, Treasury accountants serve as accountants for local authorities to integrate local government accounts into the TSA.
  - Inventory of accounts begun to prepare a report of all public accounts at commercial banks, including local authorities’ accounts, to enable closure and integration into the TSA.
- Decentralization of payment authorization:
  - Pilot phase extended to three additional ministries, bringing total ministries covered to five; payment officers identified and training continued.
- AE/CP budgeting of appropriations:
  - Reform covers 11 ministries; plan to specify and establish a nomenclature for capital expenditures to be integrated in AE/CP budgeting procedures.
- Deployment of new digital solutions for the expenditure chain and payroll:
  - New order issued in May to simplify and expedite digitization of the expenditure chain.
  - Secure digitization phase completed (archiving documents used in the expenditure chain; integration of DGB and DGTCP databases; automation of commitment, validation, payment authorization, and financial control).
  - Next phases: securing and authenticating documents used in expenditure execution; development of a Qualified Electronic Signature.
  - Planned integration of DGB PAIE database and Ministry of Civil Service database to ensure changes in civil servants database automatically impact the budget.
  - e-bulletin (e-pay slip) system to facilitate access to and printing of payroll statements via mobile application.
  - Career and payroll management process to be developed for civil service and contract employees.
  - DGTCP to interconnect regional and headquarters treasuries and deploy digital International ACH Transactions (IAT) platform to improve cash flow management.
  - Scholarship and pension payments to be distributed via prepaid cards in the near future.
- Unified Social Registry (USR) expansion:
  - USR to cover 800,000 households and 43 percent of the poor populations in 2024 to improve efficiency of social protection and support to vulnerable populations.
- Public enterprises governance and capacity building:
  - Implementation of an information and data entry system to collect budgets and financial statements for public enterprises; financial statements for fiscal year 2021 entered for 18 of the 33 public enterprises.
  - First National Forum of Public Enterprises and Establishments held in October 2022 to discuss irregularities and formulate recommendations.
  - Budgets of all public enterprises and establishments require prior validation by the minister of finance after adoption by their decision-making bodies.
  - Emphasis on implementation of performance contracts among public enterprises; plans for merger and elimination of some administrative public establishments and related divisional units.
- Fiscal risk disclosure:
  - Government will start including a statement of fiscal risks in the 2025 budget law, identifying and quantifying macroeconomic and climate change risks; IMF to provide technical assistance.

### Public investment project selection and monitoring
- Requirement for feasibility studies:
  - Projects amounting to CFAF 5 billion or more require feasibility studies before inclusion in the government investment program.
- Feasibility studies and resource mobilization:
  - Feasibility studies for 11 projects were presented in Paris on December 5 and 6, 2023.
  - Following the roundtable, feasibility studies planned for another 20 projects.
  - Government requested support from German Cooperation through the PAMO project for operationalization of the integrated monitoring and evaluation system.
  - Training arranged for management staff from sectoral ministries and the Ministry of Planning as part of deployment of the CEGIP-PIP software.

### Structural reforms and private sector development
- Public-private dialogue and SME support:
  - New framework for public-private dialogue created in April 2022 with institutional framework at central and regional levels.
  - Technical committees created to develop an action plan responding to private sector concerns; action plan to be adopted by the national committee before the end of the year.
  - Government plans to adopt a decree instituting a charter for small and medium-sized enterprises (SMEs) before the end of the year to improve competitiveness and facilitate access to financing.

*Source: IMF staff report excerpt.*

### 35.      The development of agricultural value chains is one of the major pillars of the

### 1nerea2023003 - 35.      The development of agricultural value chains is one of the major pillars of the

### Agricultural value chains and agro-industrial clusters
- The "agro-industrial clusters" program is a key program of PDES Pillar 3, "Structural Transformation of the Economy" intended to create added value and generate jobs and income in the country's eight regions.
- Principal segments with strong development potential: meat, leather and animal skins, onion, pepper, tomato, cowpea, groundnut, rice, buckwheat, and dry cereals.
- Niger's endowments relevant to the sector: abundance of agricultural land, surface and underground water resources, and immense potential for solar and wind energy.
- Construction and management of each cluster will be handled by private or joint public-private firms investing their own resources in the context of a public-private partnership.
- Key enabling actions: construction of key infrastructures and adoption of reforms.
- Program governance: a program development and coordination unit was created as part of the Office of the President of the Republic, under the supervision of a steering committee, to manage the program.

### Financial inclusion policy and digitalization
- The government remains committed to implementing its National Financial Inclusion Strategy (SNFI); most actions provided under SNFI have been implemented.
- A task force was established to define the pillars of the national financial education program, targeting primarily rural populations, women, and youths.
- A consumer protection observatory was instituted for digital financial services; hiring of staff is almost completed.
- A study is being conducted to identify the needs of potential customers to ensure alignment of supply with demand (the study will draw on a similar analysis by the BCEAO while considering the specific Nigerien context).
- To strengthen agricultural resilience to climate change, authorities plan to foster index-based, inclusive insurance for agriculture and livestock with support from the World Bank.
- Implementation of the decree adopted in 2018 instituting warehouse-receipt financing is a priority to better include the agriculture sector in the financial system.
- Digitalization of the financial system continues in cooperation with the National Agency for the Information Society (ANSI).
- At the regional level, the project to interconnect all existing WAEMU financial systems is broadly on track.

### Development funds and support for SMEs
- SNFI implementation is supported by:
  - (i) the National Fund to support small and medium-sized enterprises and small and medium-sized industries (FONAP)
  - (ii) the Financial Development and Inclusion Fund (FDIF).
- FONAP’s first annual work plan, validated in 2022, enabled its four windows to become operational.
- First FONAP project: "100 champion SMEs" launched in 2022 with CFAF 10 billion financed by FONAP, will support 109 SMEs with capacity development and financial guarantees.
- FONAP raised CFAF 21.1 billion from development partners (DPs), of which CFAF 10 billion in 2022 and CFAF 11.1 billion in first quarter 2023.
- FONAP executive secretariat plans to strengthen its financial strategy to raise about CFAF 102 billion from among DPs over the medium term (2023-2029).
- The four windows of the FDIF were put in place; operationalization will depend on availability of financing promised by DPs.

### Microfinance sector restructuring and supervision
- Recent progress on the microfinance sector restructuring plan adopted in 2017 is expected to help restructure and consolidate the sector.
- Number of accredited mutual or cooperative savings and loans institutions (systèmes financiers décentralisés, SFDs) increased from 37 in 2021 to 40 in 2022, including 30 mutual institutions and 10 limited liability corporations.
- Number of points of service increased by 9.5 percent between 2021 and 2022.
- Number of beneficiaries increased by 8.1 percent between 2021 and 2022.
- A strategy to strengthen the microfinance network is being developed to stimulate the sector through affiliation of SFDs in difficulty.
- An agreement was signed by local banks to implement the ASUSU restructuring plan envisaging banks' participation in ASUSU's capital and resumption of activities by end-2023.
- TANADI: financial statements approved; a shareholders meeting must be held to propose a restructuring plan.
- Union des Caisses Mutuelles du Niger (UCMN): a plan for financial support and strengthened governance prepared for 2023-2025 with support from LuxDev.
- Digitalization and capacity-building measures at the Microfinance Sector Regulatory Agency (ARSM): redesign of the website, implementation of a management information system, a data transmission platform, and personnel training.
- Note of constraint: security situation has resulted in decline of deposits and closing of branches in affected areas.
- Institutional status change: In December 2022, the President issued a decree changing the status of the ARSM to that of an administrative public entity.

### Governance, anti-corruption, and asset declaration reforms
- Government commitment: strengthen governance and anti-corruption framework; improve transparency in public financial management and reduce vulnerabilities to corruption, in particular through digitization.
- Transparency in awarding public contracts: information on beneficial owners of firms awarded non-competitive contracts are published on the public procurement authority (ARCOP) website (continuous structural benchmark starting from January 2023).
- Plan to adopt a new regulatory text with technical assistance from the IMF’s Legal Department to strengthen the legal framework for collection of information on beneficial owners.
- Plan to continue automation of public contracting procedures.
- Adoption of a new anti-money laundering and terrorism financing strategy and detailed action plan to remedy deficiencies identified by GIABA.
- Money laundering and terrorism financing risk assessments were conducted; relevant legal texts are currently being revised.
- Cour des Comptes’s 2023 annual report: complete or partial implementation of eight of the 11 recommendations of the audit report on COVID-19 expenditures in 2020.
- The Ministry of Petroleum: complete implementation of recommendations of the compliance audit report on tax expenditures in the extractive industries.
- The Ministry of Mines: partial implementation of those recommendations.
- Assets declaration framework: government plans to adopt, by the end of this year, a decree specifying the nature of information in assets declarations of senior public officials that can be published online by the Cour des Comptes, in accordance with HAPDP recommendations.
- At the conclusion of the outreach phase (planned for end-May 2023), the Cour des Comptes will begin imposing sanctions provided by law on public officials who fail to disclose their assets.

### Policies and measures to combat climate change; RSF-supported reforms
- Recognition of urgency: expected impact of climate change in Niger likely to accentuate challenges in agriculture, forestry, road, water distribution, and school infrastructures.
- World Bank’s G5-Sahel Climate Change Development Report (CCDR): reduction of Niger’s GDP caused by climate change could range between 2.2 percent to 11.9 percent by 2050 in the absence of adaptation measures.
- National climate frameworks: Nationally Determined Contribution (NDC) adopted in 2016 and revised in 2021; 2022-2026 PDES; 2020-2035 National Strategy and Plan for Agricultural Adaptation to Climate Change (SPN2A); National Adaptation Plan (PNA) adopted in 2022.
- New law on disaster risks management (DRM) adopted in December 2022.
- Decree in 2022 creating a policy steering committee for NDC implementation; committee already operational.
- PNA adaptation measures target five sectors (agriculture and livestock, transportation, forests, health, and wetlands) with 22 priority programs including development of pastoral areas, sustainable land management, and reinforcement of flood control barriers along roads.
- Niger’s mitigation commitments: development of renewable energies, climate-smart agriculture, and sustainable development of forest areas for carbon sequestration.
- Estimated cost of the NDC: CFAF 9.9 billion over the 2021-2030 period.
- Plan to develop a climate investment plan with support from the World Bank, financed with domestic and external resources.
- Remaining challenges: strengthening institutional capacities, mobilization of climate financing, and mitigation efforts.
- Government requested financing under the IMF Resilience and Sustainability Facility (RSF) to accelerate climate agenda implementation. Priority reform areas under RSF:
  - (i) strengthening the planning and budgeting of climate-related spending,
  - (ii) improving the sensitivity of public investment management to climate-related issues,
  - (iii) improving the management of natural disaster risks and associated fiscal risks,
  - (iv) promoting renewable energies.

### RSF reform measures and timelines for climate integration and resilience
- Climate budget tagging (CBT):
  - Develop a CBT methodology to be validated by end-October 2023 (RSF reform measure 1).
  - Apply tagging to pilot sectoral ministries in the 2024 budget and share results with IMF staff by end-April 2024 (RSF reform measure 2).
  - Amend the budget circular to provide for application of CBT in the 2025 budget by end-May 2024 (RSF reform measure 3).
  - Pilot sectoral ministries: Ministry of Agriculture and Livestock, Ministry of the Environment, Ministry of Water Resources, Ministry of Transport, and Ministry of Energy.
- Climate-resilient public investment:
  - Develop and publish a guide defining methodology for analyzing vulnerability of public investment projects and programs to climate change by end-October 2023 (RSF reform measure 4).
  - Amend order no. 0041 of November 3, 2021 on analysis and selection of investment projects and programs to require assessments to consider climate-related issues; publish amended decision on the Ministry of Planning website by end-October 2023 (RSF reform measure 5).
  - Prepare feasibility studies, including climate-vulnerability analyses, and publish these studies for at least three projects of more than 5 billion CFAF by end-April 2025 (RSF reform measure 6).
- Natural disaster risk management and fiscal risks:
  - Publish a guide for analysis of natural disaster-related fiscal risks by end-October 2023 (RSF reform measure 7).
  - Publish a statement on fiscal risks, including assessment of risks associated with natural disasters, by end-October 2024 (RSF reform measure 8).
  - Adopt an order to establish focal points in selected ministries by end-October 2023 (RSF reform measure 9).
  - Conduct drought and flood risk assessments in main exposed areas and publish on the national DRM data platform by end-April 2024 (RSF reform measure 10).
  - Selected ministries for focal points: The Ministry of Finance, Ministry of Urban Development, and Ministry of Water Resources.
- Renewable energy and green financing:
  - Create a new FONAP window to support technical and financial assistance for SMEs investing in renewable energy or adopting clean energies by end-October 2023 (RSF reform measure 11).
    - Actions: (i) modify order no. 000084/MF/SG/SE-FONAP dated February, 24 2022 to add the window; (ii) elaborate an operational manual for the window.
  - Objective: speed mobilization of green funds to finance adaptation and mitigation policy.

### Implementation, technical support, and program monitoring
- Government commitment: implement all reforms and request technical support from development partners to implement the RSF-supported program.
- Program monitoring will be based on performance criteria and structural benchmarks; indicators and reporting requirements are defined in the attached Technical Memorandum of Understanding (TMU).
- Authorities will submit data and statistics to the IMF as set out in the TMU, and any other information requested by the IMF for monitoring purposes.

*Source: IMF country report text (excerpts provided in the content unit).*

### 50.      The ECF- and RSF-supported programs will be monitored in form of joint semiannual

### Program Monitoring and Performance Criteria (ECF- and RSF-supported programs)

### Monitoring framework
- The ECF- and RSF-supported programs will be monitored in form of joint semiannual reviews by the IMF Executive Board.
- Semiannual reviews under the ECF:
  - Based on performance criteria at end-June and end-December.
  - Based on indicative benchmarks at end-March and end-September.
  - New quantitative performance criteria and indicative targets are being proposed at end-June and end-March 2024.
- RSF reviews:
  - Based on the evaluation of implementation of the reform measures set out in Table 4.

### Quantitative performance criteria and indicative targets (selected figures)
- Ceilings on net domestic financing of the government, without IMF net financing (sample values reported in tables):
  - 410.1; 297.5; 109.7; 199.7; 286.7
  - 373.3; 456.1; 273.7; 289.3; 125.0; 159.8
- Adjusted ceilings on net domestic financing (sample values reported as “Adjusted ceiling on net domestic financing of the government, without IMF net financing”):
  - 515.7; 313.8 Met; 403.0; 223.4 Met; 129.8; 89.9 Met; 199.7; 286.7
  - 373.3; 456.1; 273.7; 289.3; 125.0; 159.8
- Memorandum items (external support):
  - External budget support (sample values): 38.1; 0.0; 348.7; 305.0; 15.0; 27.9; 30.3; 32.6
  - External budget grants (sample values): 632.4; 0.0; 131.6; 73.8; 12.6; 27.9; 22.4; 24.6

### Continuous quantitative performance criteria (selected figures)
- Accumulation of new external payments arrears: 0.0; 0.0; 0.0; 0.0; 0.0; 0.0 (zero arrears across reporting points).
- Present Value (PV) of new public and publicly-guaranteed (PPG) external debt contracted from the beginning of the relevant calendar year (ceiling and reported outcomes):
  - 402.0; 338.1 Met; 575.0; 493.0 Met; 550.0; 43.6 Met; 550.0; 550.0
  - For the September 2023–June 2024 window: 550.0; 550.0; 550.0; 550.0; 541.0; 541.0

### Indicative targets (selected figures and status)
- Basic budget balance (commitment basis, excl. grants), floor (sample values and status):
  - -388.2; -216.7 Met; -553.3; -520.2 Met; -92.3; -63.8 Met; -163.6; -256.0
  - For later periods: -308.4; -389.7; -425.7; -467.8; -95.3; -113.2
- Basic budget balance (commitment basis, incl. budget grants), floor:
  - -355.8; -421.6; -79.6; -141.3; -231.4
  - Later periods: -269.2; -344.4; -303.9; -317.6; -87.6; -97.5
- Cash revenue, floor (reported outcomes and status):
  - 719.6; 710.9 Unmet; 986.5; 939.8 Unmet; 265.9; 238.5 Unmet; 574.7; 520.0
  - Later sample values: 858.1; 785.2; 177.9; 114.0; 342.2; 738.4
- Floor on social spending:
  - 76.5; 78.5 Met; 100.0; 113.9 Met; 20.3; 73.8 Met; 50.6; 50.6
  - Later periods: 100.0; 100.0; 120.0; 120.0; 120.0; 120.0
- Ratio of exceptional expenditures on authorized spending (percent), ceiling:
  - 95.0; 0.0 Met; 5.0; 0.0 Met; 5.0; 0.0 Met; 5.0; 5.0
  - Later periods: 95.0; 5.0; 5.0; 5.0; 5.0; 5.0

### Adjustments and special provisions (as specified)
- Adjustment for shortfall in external budget support:
  - The quarterly ceiling will be raised pro tanto, up to a maximum of CFAF 30 billion, if disbursements fall short of forecasts.
- Adjustment for payments of domestic obligations (arrears and float):
  - The ceiling on domestic financing will be increased by the reduction in the float from 2021 of CFAF 115 billion; starting in 2023, this adjustment will be capped at a maximum of CFAF 75 billion.
- Adjustment for debt reprofiling and ATI-guaranteed borrowing:
  - The ceiling on the PV of new PPG external debt will be raised by the amount of borrowing under guarantee of ATI up to an amount of CFAF 300 billion for the period July 6, 2023 until December 31, 2023 (where applicable).
- Exceptional expenditures:
  - Defined as payments made by the treasury without prior authorization, excluding debt service payments and expenditures linked to exemptions.

### Structural benchmarks (Tables 2 and 3) — completed and scheduled measures (selected)
- Completed/Met (examples):
  - Provide Fund staff semi-annually with a tally of newly granted or renewed tax exemptions and expiration dates — Met for March 2023.
  - Publish procurement plans, tender notices and final contract award results on the Public Procurement Portal — Met for March 2023.
  - Produce feasibility study for any investment project of more than CFAF 5 billion and publish summary — Met in May 2023.
  - Publish beneficial owners information for companies awarded non-competitive contracts (with exceptions) — Met in May 2023.
  - Continue interconnecting DGD and DGI IT systems via an administrative order on taxpayer registration and management — End-March 2023 Met.
- Scheduled / pending structural benchmarks and proposed new benchmarks (sample items and timetables):
  - Adopt an oil revenue management strategy with IMF technical assistance — End-September 2023.
  - Digitize all expenditure orders and expenditure authorizations (AD) in budget execution — End-September 2023 and End-December 2023.
  - Adoption of the revised, simplified General Tax Code (CGI) by the Council of Ministers — End-June 2024 (Deadline has been postponed).
  - Further automation and full interconnection of DGD and DGI IT systems across multiple units — End-March 2024, End-June 2024, End-September 2024.
  - Adopt decree for formula calculating the reference price for the oil stabilization fund and create expert committee — End-September 2024 (New proposed SB).

### RSF proposed reform areas and reform measures (Table 4, 2023–25) — selected RM items and timing
- Reform Area 1. Strengthening planning and budgeting of climate-related spending:
  - RM1: Validate methodology for tagging climate-related expenditures (CBT) — 4th ECF Review (End October 2023). Technical assistance: IMF.
  - RM2: Apply CBT framework for at least 4 sectoral ministries in their 2024 budget and share results with IMF staff — 5th ECF Review (End April 2024). Technical assistance: IMF and GIZ.
  - RM3: Amend budget circular for 2025 budget to include instructions on identifying climate-related allocations — 5th ECF Review (End May 2024).
- Reform Area 2. Improving sensitivity of public investment management to climate issues:
  - RM4: Develop and publish guide defining methodology for climate vulnerability assessments of public investment projects — 4th ECF Review (End October 2023). Technical assistance: IMF and GIZ.
  - RM5: Amend decree no. 0041 (November 03, 2021) to require integration of climate change aspects into public investment management and publish it — 4th ECF Review (End October 2023). Technical assistance: IMF and GIZ.
  - RM6: Publish feasibility studies, including climate vulnerability assessments, for at least three public investment projects of more than 5 billion CFAF — 7th ECF Review (End April 2025). Technical assistance: MF and GIZ.
- Reform Area 3. Enhancing disaster-informed fiscal planning and management:
  - RM7: Publish guide for analysis of budgetary risks related to natural disasters on Ministry of Finance website — 4th ECF Review (End October 2023). Technical assistance: IMF.
  - RM8: Publish a fiscal risks statement, including natural disaster-related risks, on the Ministry of Finance website — 6th ECF Review (End October 2024).
  - RM9: Adopt order to establish focal points (titular and alternate) in relevant directorates of three selected ministries to carry out DRM responsibilities — 4th ECF Review (End October 2023). Technical assistance: World Bank.
  - RM10: Publish flood and drought risk assessments in key exposed areas on the National DRM Data Platform: www.risques-niger.ne — 5th ECF Review (End April 2024). Technical assistance: World Bank (PIDUREM project).
- Reform Area 4. Promoting renewable energy sources:
  - RM11: Create a new window (“Guichet”) within the FONAP to provide technical and financial assistance for bankability and implementation of SME renewable energy projects — 4th ECF Review (End October 2023).

### Technical Memorandum of Understanding — key definitions and scope
- The Technical Memorandum defines performance criteria and indicative targets for Niger’s ECF arrangement for Q1-2023 to Q2-2024; performance criteria and indicative targets for June 2023 through June 2024 are set out in Table 1 of the MEFP attached to the Letter of Intent of June 19, 2023. Structural benchmarks are in Tables 2 and 3.
- Definitions (selected):
  - Government: central government of the Republic of Niger; excludes political subdivisions, public entities, or central bank with separate legal personality.
  - Debt: current (not contingent) liability under a contractual arrangement created through provision of value (assets or services) that requires payments of assets or services according to a specific schedule; includes loans, suppliers’ credits, and leases (PV at inception for leases), and includes arrears, penalties, and judicially awarded damages arising from failure to make payments under contractual obligations that constitute debt.
  - PV of new PPG external debt contracted: discounts at a five percent annual rate the future payment stream, except loans with negative grant element (PV set equal to loan value). Calculation based on loan amount contracted in a given year, independent of disbursement timing.
  - Domestic payment arrears: domestic payments owed by the government but not paid, including committed and authorized fiscal year expenditures not paid within 90 days.
  - External payment arrears: external payments due but not paid.
  - Government obligation: any financial obligation of the government accepted as such by the government (including any government debt).

*Source: Niger MEFP, Tables 1–4, Attachment II: Technical Memorandum of Understanding (as provided in the supplied content).*

### 3.      Net domestic financing of the government is defined as the sum of (i) net bank credit

### Net domestic financing of the government is defined as the sum of (i) net bank credit to the government; (ii) net nonbank domestic financing of the government, including government securities issued in CFAF on the WAEMU regional financial market and not held by resident commercial banks, proceeds from the sale of government assets, and privatization receipts.

### Definitions and scope
- Net domestic financing of the government = (i) net bank credit to the government; (ii) net nonbank domestic financing of the government (including government securities issued in CFAF on the WAEMU regional financial market and not held by resident commercial banks, proceeds from the 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 claims include:
  - cash holdings of the Nigerien Treasury;
  - secured obligations;
  - deposits with the central bank;
  - deposits of the Treasury (including regional offices) with commercial banks.
- Government deposits with commercial banks are excluded from government claims insofar as they are used solely to finance externally financed capital expenditure.
- Government debt to the banking system includes:
  - assistance from the central bank (excluding net IMF financing);
  - the CFAF counterpart of the 2009 General SDR Allocation and the 2021 General SDR Allocation;
  - assistance from commercial banks (including government securities held by the central bank and commercial banks);
  - deposits with the CCP (postal checking system).
- The BCEAO’s scope for net bank credit includes all government administrations. Net bank credit and the amount of Treasury bills and bonds issued in CFAF on the WAEMU regional financial market are calculated by the BCEAO.
- Net nonbank domestic financing includes:
  - the 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;
  - the change in the balance of Treasury correspondents’ deposit accounts;
  - the change in the balance of various deposit accounts at the Treasury;
  - the change in the stock of claims on the government forgiven by the private sector;
  - payments resulting from PPP contracts;
  - net income from privatizations.
- Net nonbank financing of the government is calculated by the Nigerien Treasury.

### Timing of targets
- The 2023 and 2024 quarterly targets concern the cumulative amounts since the beginning of 2023 and 2024 respectively until the date selected for the performance criterion or indicative target.

### Adjustments to the ceiling on net domestic financing
- The ceiling on net domestic financing will be 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.
- The ceiling on net domestic financing will also be adjusted for payments of the float related to previous year's expenditure; this adjustment will be capped at a maximum of CFAF 75 billion.
- The ceiling on net domestic financing of the government will be lowered by the amount of borrowing guaranteed by the African Trade Insurance Agency (ATI) to refinance domestic debt service for end-September 2023 and end-December 2023.
- The ceiling on the PV of new PPG external debt will be raised by the amount of borrowing guaranteed by the African Trade Insurance Agency (ATI) to refinance domestic debt service from July 6, 2023, until December 31, 2023, up to an amount of CFAF 300 billion.

### Reporting requirements (domestic financing and arrears)
- Detailed data on domestic financing of the government: monthly, within six weeks after the end of each month.
- New external payment arrears on government debt:
  - Definition: government debt is outstanding debt contracted or guaranteed by the government. External arrears are obligations not paid on due dates, taking into account contractual grace periods. The 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 arrears arising from debt being renegotiated with external creditors, including Paris Club and other bilateral official creditors.
  - Reporting: data on the stock, accumulation, and repayment of external payment arrears will be provided monthly, within six weeks after the end of each month.

### Present Value (PV) of new public and publicly-guaranteed external debt (performance criterion)
- Contracting and guarantee timing:
  - Debt is deemed contracted or guaranteed when signed by the government, adopted by parliament by law and ratified by the President of the Republic. For program monitoring, external debt is deemed contracted or guaranteed on the date of ratification.
  - Guarantee arises from any explicit legal obligation of the government to service a debt in the event of nonpayment by the debtor.
- External debt definition: debt contracted or serviced in a currency other than the franc of the Financial Community of Africa (CFAF), except borrowing from the West African Development Bank (BOAD), which is considered external debt despite being local-currency-denominated.
- The performance criterion (PC) is a ceiling on the present value of all new external debt (concessional or non-concessional) contracted or guaranteed by the government, including commitments contracted or guaranteed for which no value has been received. Excluded from the PC:
  - (a) Short-term supplier or trade-related credit with a maturity of up to three months.
  - (b) rescheduling agreements.
  - (c) IMF disbursements.
- Currency denomination for valuation:
  - For program purposes, the value in CFAF of new external debt of 2023 and of 2024 is respectively calculated using the exchange rates for end April 2022 and end March 2023 in the IMF’s International Financial Statistics (IFS) database.
- PV calculation:
  - PV of new external debt is calculated by discounting all projected disbursements and debt service payments (principal and interest) using a program discount rate of 5 percent and taking account of all loan conditions, including projected disbursements, the maturity, grace period, payment schedule, front-end fees and management fees.
  - The PV is calculated using the IMF “DSA template,” based on the loan amount and the above parameters.
  - For loans for which the grant element is zero or less than zero, the PV is set equal to the nominal value.
- Reference rate and spreads for variable-rate debt:
  - Program reference rate for six-month USD Secured Overnight Financing Rate (SOFR) is 0.04 percent and will remain fixed for the duration of the program.
  - Spreads (over six-month USD SOFR) fixed for the program:
    1. Spread of six-month Euro LIBOR over six-month USD SOFR: -56.4 basis points.
    2. Spread of six-month JPY LIBOR over six-month USD SOFR: -9.0 basis points.
    3. Spread of six month GBP Sterling Overnight Interbank Average (SONIA) over six-month USD SOFR: 2.5 basis point.
    4. For interest rates on currencies other than Euro, JPY, and GBP, the spread over six-month USD SOFR is 15 basis points.
    5. Where the variable rate is linked to a benchmark other than six-month USD SOFR, a spread reflecting the difference between the benchmark rate and the six-month USD SOFR (rounded to the nearest 50 basis points) will be added.
- Exchange rates (exact values provided):
  - Exchange Rates (end April 2022)
    - CFAF/SDR 836.6272
    - U.S. Dollar/SDR 1.3443
    - Euro/SDR 1.27543
    - Japanese Yen/SDR 174.625
    - U.K. Pound Sterling/SDR 1.0695
    - U.A.E. Dirham/SDR 4.93696
  - Exchange Rates (end March 2023)
    - CFAF/SDR 811.4146
    - U.S. Dollar/SDR 1.3452
    - Euro/SDR 1.2370
    - Japanese Yen/SDR 179.5614
    - U.K. Pound Sterling/SDR 1.0870
    - U.A.E. Dirham/SDR 4.9404
- Reporting requirement:
  - Authorities will inform IMF staff of any planned external borrowing and the conditions on such borrowing before loans are contracted or guaranteed and will consult with staff on potential debt management operations.

### Indicative targets and related provisions
- Cash revenue (indicative target) includes tax, nontax, and special accounts revenue, but excludes proceeds from settlement of reciprocal debts between the government and enterprises and non-cash revenue.
- Basic budget balance = total revenue (cash revenue plus non-cash revenue) minus total fiscal expenditure excluding externally financed investment expenditure but including HIPC-financed expenditure.
  - Two indicative targets on basic budget balance are set: one including budget grants and the other excluding budget grants.
- If disbursements of external budgetary grants are lower than projected at the end of each quarter (as quantified in the performance criteria table), the corresponding quarterly floor of the basic budgetary balance, including budgetary grants, will be reduced on a pro rata basis, up to a maximum of CFAF 30 billion.
- The floor on social spending is an indicative target. Social spending is defined as expenditures from the Government's own resources allocated to social sectors and those directly benefiting poor and vulnerable groups. These expenditures will be coded in the budget per UNICEF recommendations to facilitate tracking.
- A limit is set on expenditures paid through exceptional procedures (without prior commitment) excluding debt service payments and expenditures linked to tax exemptions: limit = 5 percent of total authorized expenditures during the quarter for which the target is assessed.
- Reporting:
  - Basic budget revenues and expenditures: monthly, within six weeks after the end of each month.
  - Social expenditures: quarterly, within six weeks after the end of each quarter.
  - Exceptional expenditure: quarterly, within six weeks after the end of the quarter.

### Additional information for program monitoring (selected requirements)
- Government finance (to be forwarded 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.
  - 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 (monthly, within six weeks after end of month).
  - Comprehensive monthly data on net nonbank domestic financing components (monthly, within six weeks).
  - Quarterly data on social expenditure (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 specified line ministries.
  - Monthly data on Treasury balances outstanding by reference fiscal year, with breakdowns of maturities more than and less than 90 days.
  - Monthly data on effective debt service (principal and interest) compared with 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 terms and conditions.
- Monetary sector (monthly, within eight weeks after end of month):
  - Consolidated balance sheet of monetary institutions and, where applicable, consolidated balance sheets of individual banks.
  - Monetary survey (provisional).
  - Borrowing and lending interest rates.
  - Customary banking supervision indicators for banks and nonbank financial institutions (and where applicable, for individual institutions).
- Balance of payments:
  - Any revision of balance of payments data whenever they occur.
  - Preliminary annual balance of payments data within six months after the end of the reference year.
- Real sector:
  - Disaggregated monthly consumer price indexes, within two weeks following the end of each month.
  - National accounts, within six months after the end of the year; and any revision of the national accounts.
- Structural reforms and other data:
  - 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 publication or 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.

### Selected data-reporting deadlines and frequencies (exact schedule highlights)
- Disaggregated consumer price indexes: Monthly — End-month + 2 weeks.
- Net government position vis-à-vis the banking system: Monthly — End-month + 6 weeks.
- Complete monthly data on net nonbank domestic financing: Monthly — End-month + 6 weeks.
- Provisional TOFE including revenue and expenditure breakdowns and change in Treasury balances outstanding: Monthly — End-month + 6 weeks.
- Data on Treasury balances outstanding (RAP), by reference fiscal year: Monthly — End-month + 6 weeks.
- Monthly statement of Treasury correspondents’ deposit accounts: Monthly — End-month + 6 weeks.
- Execution of the investment budget: Quarterly — End-quarter + 6 weeks.
- Consolidated balance sheet of monetary institutions and borrowing and lending interest rates: Monthly — End-month + 8 weeks.
- Banking supervision prudential indicators: Quarterly — End-quarter + 8 weeks.
- Stock and repayment of external arrears: Monthly — End-month + 6 weeks.
- Table on the monthly effective service of external debt (principal and interests) compared with programmed maturities: Monthly — End-month + 4 weeks.

*NIGER — INTERNATIONAL MONETARY FUND (excerpt).*

### 1.      The coverage of the public sector in the DSA is in line with the fiscal accounts and the

### 1nerea2023003 - 1.      The coverage of the public sector in the DSA is in line with the fiscal accounts and the

### Coverage of the public sector and debt statistics
- The DSA covers the central government but excludes local governments and the social security fund.
- There are no extra budgetary funds.
- State guarantees extended to the private and public sectors for external borrowing are included.
- Publicly-guaranteed private debt is limited to the guarantee issued to the China National Petroleum Company (CNPC) for a loan to finance the refinery SORAZ to cover the government’s minority stake.
  - 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$43.7 million (0.3 percent of GDP) at end-2022 with repayments continuing until 2024 is included in the baseline stock of debt.
- SOEs do not directly borrow abroad; they benefit from on-lending by the central government, which is captured in debt statistics at the stage where the central government borrows the funds.
  - This on-lending includes electricity (NIGELEC), water (SPEN), telecom (Niger Telecom) companies, and the ABK (public administrative entity for Kandadji dam project).
- Given lack of reliable data, the DSA cannot explicitly account for domestic SOE debt.
- Authorities are working with the World Bank under the Sustainable Development Finance Policy (SDFP) to improve SOE financial information availability and quality.
- The authorities published certified financial statements for 2019 and 2020 of the ten largest SOEs on the Ministry of Finance website and, with World Bank support, will prepare from 2023 onwards an annual portfolio report covering the largest SOEs (financial and operational performance, procurement, investment implementation, debt, guarantees, human resources).
- Most external debt is defined on a currency basis, except for creditors whose residency can be tracked (example: West African Development Bank (BOAD) debt is classified as external debt).

### Design of contingent liability stress test and coverage shocks
- Text Table 1 default and country-specific settings (values preserved as presented):
  - Central government: X
  - Extra budgetary funds (EBFs): X
  - Guarantees (to other entities in the public and private sector, including to SOEs): X
  - Central bank (borrowed on behalf of the government): X
  - The country's coverage of public debt: The central government plus extra budgetary funds, central bank, government-guaranteed debt
  - Other elements of the general government not captured in 1.: 0.0percent of GDP
  - SoE's debt (guaranteed and not guaranteed by the government) 1/2percent of GDP2.0
  - PPP: 35percent of PPP stock0.0
  - Financial market (the default value of 5 percent of GDP is the minimum value)5percent of GDP5.0
  - Total (2+3+4+5) (in percent of GDP)7.0
- Contingent liability tailored stress test calibration:
  - Coverage shock for other elements of general government: 0 percent of GDP, justified because:
    - (i) strong financial position of the social security fund (CNSS) removes material fiscal risks;
    - (ii) authorities confirmed absence of extra-budgetary funds;
    - (iii) local governments solely contract short-term debt with the domestic banking sector, which is small in size.
  - Contingent liabilities shock from SOE debt: set at the default value of 2 percent of GDP to reflect risks associated with domestic borrowing.
  - PPP contingent liability stress test: not incorporated because PPPs signed under current PPP law do not involve government financing.
  - Financial market contingent liability risk: default value of 5 percent of GDP considered adequate given relatively low levels of credit to the economy.

### Background on debt levels and composition
- Public and publicly guaranteed (PPG) debt estimated at 50.3 percent of GDP at end-2022.
- PPG external debt made up 64.9 percent of Niger’s total debt stock in 2022.
  - Multilateral creditors represent around four fifths of external debt.
  - Niger borrows most from the World Bank (IDA) followed by BOAD and African Development Bank (AfDB).
  - Official bilateral debt represents around one fifth of external debt.
- External debt exposed to exchange rate risk: around one third of external debt.
- External debt concessionality and cost:
  - Average effective interest rate of external debt: 0.8 percent in 2022.
  - Remaining maturity of external debt: 19.6 years at end-2022.
- Domestic debt composition and parameters:
  - Consists mostly of short- and medium-term Treasury securities, predominantly held by banks domiciled in Niger or in the rest of WAEMU.
  - Average remaining maturity of domestic debt: 6.1 years.
  - Average weighted interest rate on domestic debt: 5.3 percent at end-2022.
- Pandemic-related relief and operations:
  - DSSI amounted to 0.4 percent of GDP in 2020-21.
  - CCRT to 0.3 percent of GDP through 2020-22.
  - 2021 SDR allocation (US$180 million, equivalent to 1.2 percent of GDP) on-lent in CFAF from BCEAO to WAEMU member countries, recorded as domestic debt for the DSA.
- Private external debt estimation is complicated by data limitations; BCEAO faces challenges compiling private external debt stock statistics. IMF Statistics Department providing technical support.

### Underlying macroeconomic assumptions (selected projections and parameters)
- Growth:
  - Growth in 2022 revised from 7.1 percent in the previous DSA to 11.9 percent due to stronger-than-expected agricultural recovery.
  - Growth expected at 7.0 percent in 2023 and peak at 13.0 percent in 2024 driven by ramp up of crude oil production; long-run growth projected at 6.0 percent.
- Natural resource revenue:
  - Natural resource revenue projected to rise from 1.9 percent of GDP in 2022 to 4.0 percent of GDP in 2025 due to government’s minority stake and onset of exports through new pipeline.
- Fiscal consolidation and revenue measures:
  - Aim to reach WAEMU deficit convergence criterion by 2025.
  - Revenue-enhancing measures based on:
    - i) enhancements in revenue administration (increased digitalization);
    - ii) limits to tax exemptions;
    - iii) revision of tax code to increase efficiency and broaden tax base.
  - Consolidation underpinned by efficiency improvements and unwinding emergency spending while protecting priority social and infrastructure spending.
- Financing strategy:
  - Authorities aim to maintain limited reliance on domestic financing.
  - Considering a debt reprofiling operation: obtain a long-term loan from international commercial banks to repay shorter-maturity domestic debt.
  - Concessional and semi-concessional external financing expected to remain main sources.
  - Concessional financing defined as grant element (GE) exceeding 35 percent of the face value.
- Assumed shifts in borrowing terms:
  - External borrowing gradually toward less concessional financing and commercial loans in the longer run.
  - Domestic borrowing instruments assumed to shift from T-bills to medium- and long-term bonds.
  - Average interest rate on government bonds in 2023 assumed at 7.2, 7.4, and 7.7 percent for bonds maturing in 1 to 3, 4 to 7 years and over 7 years, respectively.
  - Interest rate on T-bills set to 7.0 percent.
- Resilience and Sustainability Facility (RSF) request:
  - Request for a 23-month RSF with access level of 75 percent of quota.
  - Niger benefits from the interest rate cap of 2.25 percent as a Group A country.

### DSA toolkit checks and drivers of debt dynamics
- Debt dynamics drivers:
  - Evolution of total public debt dominated by developments in the primary fiscal deficit and real GDP growth.
  - Contribution of growth projections now dominates the unfavorable contribution of the primary deficit; public debt ratio projected at 44.3 percent of GDP in 2043.
  - External public debt peaked at 33.5 percent of GDP in 2021 and projected to decline to 23.5 percent in 2043.
  - Unexpected changes in primary deficits were chiefly responsible for past forecast errors for total public debt; current account, FDI, and residuals drove errors in external debt.
- Realism of planned fiscal adjustment:
  - Projected three-year fiscal adjustment in primary balance of 3.8 percentage points of GDP lies in the top quartile of past adjustments for a sample of LICs.
  - Adjustment justified by recovery from shocks, improvements in non-oil revenue mobilization, revenue boost from crude-oil exports, and unwinding of emergency support measures.
- Consistency checks:
  - Projected growth path for 2023–2024 driven by large projects including onset of oil exports; fiscal consolidation impact on growth likely muted in 2023.
  - Public and private investment share in GDP similar between previous and current DSAs; ratio in 2022 lower than previous DSA due to stronger-than-expected GDP from agricultural production.

### Country classification, composite indicator (CI), and stress test scenarios
- Debt-carrying capacity rating: “medium”.
- Composite indicator (CI) value: 2.90 based on October 2022 WEO vintage.
  - CI components and contributions (as presented in Text Table 3):
    - CPIA: coefficient 0.385, 10-year average 3.39, CI component 1.30, Contribution 45%
    - Real growth rate (percent): coefficient 2.71, 10-year average 6.38, CI component 0.17, Contribution 6%
    - Import coverage of reserves (percent): coefficient 4.05, 10-year average 44.27, CI component 1.79, Contribution 62%
    - Import coverage of reserves^2 (percent): coefficient -3.99, 10-year average 19.60, CI component -0.78, Contribution -27%
    - Remittances (percent): coefficient 2.02, 10-year average 0.90, CI component 0.02, Contribution 1%
    - World economic growth (percent): coefficient 13.52, 10-year average 2.90, CI component 0.39, Contribution 14%
  - CI Score: 2.90; CI rating: Medium; Debt Carrying Capacity: Medium.
- Tailored stress tests applied in addition to six standardized tests:
  - Tailored stress test 1: combined contingent liabilities of a one-time debt shock equivalent to 7 percent of GDP (2 percent from SOEs + 5 percent for bank recapitalization).
  - Tailored stress test 2: commodity price shock capturing a sudden one standard deviation decline in prices of commodities the country exports (commodities accounted for 75.0 percent of Niger exports of goods and services over 2018-20).

### External debt sustainability outlook
- Under the baseline:
  - PPG external debt-to-GDP ratio expected to remain almost flat at 32.6 percent in 2023.
  - PPG external debt projected to follow a downward trajectory to 23.5 percent at end-2043.
  - Total external debt projected to decline to 30.6 percent of GDP in 2043.
- Key driver: non-interest current account deficit; goods and services deficit expected to be reduced by oil exports through the new pipeline, improving the current account when projects come on stream.
- Remaining drivers of external debt dynamics (after accounting for current account, net FDI, endogenous debt): other capital account components, reserve accumulation, valuation adjustments, price and exchange rate changes, and residuals.

*Source: IMF staff calculations.*

### 16.      While the PPG external debt indicators remain below their thresholds and follow declining

### 16.      While the PPG external debt indicators remain below their thresholds and follow declining

### Baseline assessment of external debt sustainability
- PPG external debt indicators remain below thresholds and follow declining trajectories throughout the projection period under the baseline scenario, except for a single-year breach of the external debt service-to-revenue ratio; overall risk of external debt distress is assessed as "moderate".
- Present value (PV) of debt-to-GDP is projected to follow a gradual downward trend over the projection period.
- PV-to-exports and debt service-to-exports ratios are projected to decline as exports strengthen due to prospective oil exports via a new pipeline.
- Debt service-to-revenue ratio:
  - Exceeds thresholds in 2023, reflecting security challenges, trade disruptions at the Nigerian border, and lower-than-expected revenue yields of new tax policies and revenue administration reforms.
  - Is discounted from the analysis for the rating but is expected to decline steadily in the medium- and long-run as oil revenue from the new pipeline and domestic revenue mobilization efforts materialize.
- Liquidity risk is somewhat contained through:
  - Stable donor support in the form of grants and concessional loans.
  - Government spending control in case of revenue shortfall.
  - Access to the WAEMU pooled external reserves.

### Stress tests and export shock vulnerability
- Two export-related indicators (PV of PPG external debt-to-exports ratio and debt service-to-exports ratio) exceed thresholds under the export shock scenario.
- Export shock calibration:
  - Shock amounts to 20.7 percent declines in nominal export values consecutively in 2024 and 2025.
  - Calibrated as the historical average (4.2 percent) minus one standard deviation (24.9 percent).
  - In line with LIC-DSF guidance, the standard deviation is subtracted from the lower value in the historical average and baseline projection, thus the stress scenario excludes projected high growth in exports under the baseline (notably the 64.5 percent increase in 2024 tied to crude oil exports).

### Climate change alternative scenario and long-term impacts
- An alternative scenario assesses climate change and adaptation policies over the next two decades, informed by the World Bank’s G5 Sahel CCDR.
- Scenario features:
  - Based on pessimistic (higher temperature increases and larger precipitation changes) and dry (smallest (or decrease) precipitation changes) CCDR scenario.
  - Incorporates simulations of climate change effects on macroeconomic variables and partial adaptation policies.
  - CCDR modeling channels include: (1) rainfed crop yields, (2) heat stress and labor productivity, (3) heat-related human health shock, (4) livestock yields, (5) inland flooding, and (6) roads and bridges.
  - Adaptation modeled with partial adaptation to three channels (rainfed crop yields, livestock yields and roads and bridges).
- Projected impacts:
  - Cumulative GDP loss compared to baseline no-climate-change case amounts to 8.9 percent by 2045.
  - Under the climate alternative, external and domestic debt indicators are considerably higher than baseline but remain below respective thresholds.
  - Additional fiscal expenditure for adaptation causes the fiscal deficit to be larger than in the baseline scenario by 4.1 percent of GDP at the maximum.
  - PV of total public debt-to-GDP ratio approaches the threshold around 2033 when adaptation investment is expected to peak.

### Liability management operation planned by authorities
- Authorities plan a liability management operation to mitigate roll-over risk by issuing longer-dated commercial external debt to repay shorter-maturity domestic debt (T-bills and T-bonds) due in the second half of this year.
- Operation design (details to be finalized):
  - Obtain a long-term loan from international commercial banks with a guarantee from the African Trade Insurance Agency (ATI).
  - Expected to substantially lengthen maturities and reduce roll-over risk and potential higher interest costs from regional financial tightening.
- Trade-offs and calibration:
  - Substituting foreign debt for domestic debt (keeping nominal overall debt unchanged) increases the share of external debt in total debt, worsening external debt sustainability indicators.
  - Need to assess benefits, costs, risks, and viability to maintain "moderate" external debt distress rating.
  - Currently available plan information indicates a total refinanced amount of CFAF 300 billion equivalent in Euros at a 10-year maturity at an assumed 8 percent interest rate; in this alternative scenario external debt indicators would remain below respective thresholds.

### Granularity assessment and policy space
- Granularity assessment indicates limited space to absorb shocks in 2023, though situation may ease in medium- and long-run as exports and revenues strengthen.
- In 2023:
  - Debt-service to exports and debt service-to-revenue ratios indicate limited space, with particularly reduced space relative to thresholds for the latter.
- Policy implication:
  - Urgency in implementing policy measures to buttress debt sustainability.
  - Medium-term improvement depends on export pickup (new pipeline) and revenue mobilization reforms.

### Public debt projections (public sector)
- Public sector debt projected to decline gradually in medium- and long-run:
  - After a sizable increase compared to pre-pandemic levels, public debt projected to decline to and stabilize at around 44.3 percent of GDP in the long run.
- Drivers:
  - Resumption of economic growth and fiscal consolidation aided by higher oil revenues.
  - Improved domestic revenue mobilization, higher spending efficiency, and better expenditure control.
  - Gradual shifts toward lower concessionality and longer maturities could marginally increase interest costs while reducing roll-over risks.
- PV of public debt-to-GDP:
  - Remains below the benchmark of 55 percent of GDP in 2023 under the baseline.
  - A commodity price shock would set PV of debt and debt-service ratios on a diverging path absent compensating fiscal and other policy measures.

### Risk rating and vulnerabilities
- Overall assessment:
  - Niger’s risk of external and overall debt is rated "moderate"; debt is deemed sustainable.
- Rationale:
  - No PPG external or public debt indicator breaches thresholds under baseline except a one-year breach in external debt service-to-revenue ratio.
  - Debt indicators on steady downward trajectories and overall public debt sustainability solid.
  - Favorable medium- and long-term growth outlooks supported by recovery from multiple shocks and crude oil exports onset in the last quarter of 2023.
  - Liquidity risk remains low due to WAEMU pooled reserves access.
  - Continued significant financial assistance from donors expected.
- Program design:
  - In line with the Fund Debt Limits Policy (DLP), a debt limit on new PPG external borrowing is embedded in program conditionality and calibrated to build an adequate buffer.

### Key policy recommendations to buttress debt sustainability
- Domestic revenue mobilization:
  - Enhance revenue administration, reduce tax exemptions, and broaden the tax base.
  - Avoid fully spending additional oil revenues; use under appropriate legal and fiscal framework for oil revenue management.
- Fiscal risks and spending quality:
  - Strengthen project evaluation and governance for SOE-led large investments.
  - Increase efficiency of public spending.
- Economic diversification:
  - Implement horizontal policies to foster diversification, develop the local private sector, tackle informality, and accumulate human capital through education.
- External borrowing:
  - Prioritize concessional and semi-concessional loans and grants until export prospects are more certain.
  - Favor euro-denominated debt, given the CFAF peg, to reduce exchange rate risk.
- Domestic borrowing:
  - Improve market communication to increase average tenor of issuances.
  - Implement structural program of swaps of securities close to maturity with longer maturities.
- Financing plan:
  - Execute debt issuance volumes consistently with annual and quarterly borrowing plan and integrate with the cash flow plan to avoid liquidity shortfalls and minimize financing costs.

### Authorities’ views
- Authorities agreed with staff assessment of moderate overall and external debt distress risk and welcomed downward debt trajectories.
- They reiterated commitment to prudent fiscal policies and debt sustainability.
- Reported progress in debt management reforms: development of an IT system for debt data and preparation of a manual to standardize signing and ratifying external loans.
- Broad concurrence with the analysis in the climate alternative scenario and reiterated commitment to implement adaptation policies.

*Source: 1nerea2023003 - 16.*

### 27.      The authorities committed to carefully calibrate the debt reprofiling operation to ensure

### 1nerea2023003 - 27.      The authorities committed to carefully calibrate the debt reprofiling operation to ensure

### Debt reprofiling commitment
- The authorities committed to carefully calibrate the debt reprofiling operation to ensure that the moderate risk of debt distress rating is maintained.
- They noted that the parameters of reprofiling, including the interest rate, maturity, and currency denominated, should be carefully calibrated.
- They assured staff that they would tailor the operation so that Niger’s risk rating for external debt distress would remain at “moderate.”

### Indicators and scenarios (high-level)
- Figures and stress tests present indicators of Public and Publicly Guaranteed (PPG) external debt and public debt under:
  - Baseline, historical scenario, tailored tests (including commodity prices and combined contingent liabilities), climate change scenarios (2023–43), and a Debt Reprofiling Scenario (2023–34).
- Stress test methodology note:
  - "The most extreme stress test is the test that yields the highest ratio in or before 2033. Stress tests with one-off breaches are also presented (if any), while these one-off breaches are deemed away for mechanical signals."

### Key sustainability projections and indicators (selected, exact values from Baseline Scenario tables)
- External debt (nominal), selected years (in percent of GDP): 52.3 56.7 56.6 54.8 50.6 48.9 47.7 46.7 45.9 44.3 42.8 41.5 40.3 39.1 30.6 47.6 45.7
- Of which: public and publicly guaranteed (PPG) (percent of GDP): 31.6 33.5 33.5 32.7 32.6 30.9 30.2 29.8 29.8 29.6 29.4 28.8 28.3 28.0 27.6 27.3 23.5 25.7 29.3
- Change in external debt (percent of GDP): 3.8 4.5 -0.1 -1.8 -4.2 -1.7 -1.2 -1.0 -0.8 -1.6 -1.5 -1.3 -1.3 -1.1 -0.7
- Identified net debt-creating flows (percent of GDP): 7.7 6.3 7.5 3.0 -2.8 2.0 2.7 3.6 2.9 2.5 3.0 2.9 3.3 3.7 4.1 6.5 2.4
- Non-interest current account deficit (percent of GDP): 12.8 13.7 15.3 11.8 4.8 6.4 6.6 7.3 6.5 6.0 6.5 6.2 6.6 6.9 6.8 12.8 6.9
- PV of PPG external debt-to-GDP ratio (selected projection path): 22.4 21.1 19.4 18.4 17.7 17.1 16.6 16.4 16.2 16.2 16.3 16.4 16.1
- PV of PPG external debt-to-exports ratio (selected numbers): 188.4 134.0 85.8 84.7 82.2 84.5 81.0 78.1 77.8 78.0 78.2 79.3 76.9
- PPG debt service-to-exports ratio (selected numbers): 6.8 8.6 14.1 14.2 7.8 7.6 6.9 6.8 6.6 6.4 6.2 5.4 5.2 4.8 5.1
- PPG debt service-to-revenue ratio (selected numbers): 10.4 12.3 16.5 20.0 13.0 11.7 10.1 9.4 9.2 8.8 8.5 7.3 7.0 6.4 6.2
- Gross external financing need (Million of U.S. dollars) (selected values): 1,621.9 1,721.5 1,695.9 1,472.9 949.1 1,401.0 1,532.5 1,822.7 1,754.7 1,756.7 2,030.2 2,045.8 3,321.8 2,590.9 5,647.8

### Macroeconomic assumptions (selected exact figures)
- Real GDP growth (percent): 3.5 1.4 11.9 7.0 13.0 7.0 6.2 6.0 6.0 6.0 6.0 6.0 6.0 6.0 5.7 6.8
- GDP deflator in US dollar terms (change in percent): 2.9 6.9 -7.5 3.3 1.2 1.7 1.6 1.5 0.9 2.0 2.0 2.0 2.0 2.0 -0.4 1.8
- Effective interest rate (percent): 0.8 0.7 0.5 0.9 0.8 0.8 0.7 0.6 0.6 0.5 0.6 0.6 0.6 0.7 1.0 0.8 0.7
- Growth of exports of G&S (US dollar terms, in percent): 65.2 1.2 -20.8 46.7 64.5 4.7 6.5 1.3 8.4 10.5 7.6 7.8 8.0 7.2 7.1 4.2 15.7
- Government revenues (excluding grants, in percent of GDP) (selected numbers): 10.8 10.8 10.1 11.2 13.5 14.1 14.6 14.7 14.8 15.2 15.2 15.4 15.4 15.5 17.1

### Public sector debt (selected baseline projections and indicators)
- Public sector debt (percent of GDP): 45.0 51.3 50.3 51.3 48.3 47.0 46.2 45.7 45.4 45.4 43.6 44.3 36.4 45.9
- PV of public debt-to-GDP ratio (selected numbers): 39.9 39.9 36.9 35.2 34.1 33.3 32.7 32.7 32.7 37.0
- Debt service-to-revenue and grants ratio (selected numbers): 45.9 37.8 48.5 44.2 44.4 50.4 49.1 49.5 51.5 43.0 37.5
- Gross financing need (selected numbers): 10.9 10.7 12.7 11.4 11.0 11.5 11.5 11.7 12.2 10.7 10.1

### External debt decomposition (Table 5, USD million; selected series)
- External (USD million), selected years: 5,071 5,525 5,988 6,367 6,758 7,176 7,592 8,062 8,588 9,172 9,803 10,497 11,243 12,070 12,935 13,833 14,749 15,685 16,655 17,658 18,695 19,766 20,885
- Multilateral creditors (USD million), selected years: 4,218 4,801 5,355 5,798 6,237 6,699 7,116 7,567 8,038 8,551 9,095 9,681 10,290 10,964 11,664 12,378 13,099 13,826 14,571 15,333 16,111 16,906 17,730
- IMF (USD million), selected years: 478 566 608 583 526 472 401 329 258 208 167 146 128 113 100 87 74 61 48 34 21 8 2 0
- World Bank (USD million), selected years: 2,284 2,849 3,346 3,859 4,377 4,915 5,475 5,797 6,071 6,303 6,530 6,734 6,917 7,123 7,304 7,463 7,599 7,712 7,814 7,908 7,993 8,068 8,143 8,215
- Commercial creditors (USD million), selected years: 203 158 113 90 71 55 44 38 58 83 113 147 186 229 276 328 385 448 516 591 672 762 859 964
- Multilateral creditors as percent of external debt (selected percents): 83.2% 86.9% 89.4% 91.1% 92.3% 93.4% 93.7% 93.9% 93.6% 93.2% 92.8% 92.2% 91.5% 90.8% 90.2% 89.5% 88.8% 88.1% 87.5% 86.8% 86.2% 85.5% 84.9% 84.3%
- IMF share (percent of external debt), selected values: 9.4% 10.2% 10.2% 9.2% 7.8% 6.6% 5.3% 4.1% 3.0% 2.3% 1.7% 1.4% 1.1% 0.9% 0.8% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% 0.0% 0.0%

### Sensitivity analysis (selected signals)
- Sensitivity tables present alternative scenarios, bound tests, and tailored tests for indicators including:
  - PV of debt-to-GDP ratio, PV of debt-to-exports ratio, debt service-to-exports ratio, debt service-to-revenue ratio, and PV of debt-to-revenue ratio for 2023–34.
- Table 3 and Table 4 present multiple scenario paths and identify threshold breaches (a bold value indicates a breach of the threshold).

### Policy implications and operational guidance (from source text)
- Reprofiling design must consider:
  - Interest rate on reprofiled debt.
  - Maturity profile (including grace period and avg. maturity).
  - Currency denomination of reprofiled obligations.
- The authorities plan to tailor reprofiling so that Niger’s external debt distress classification remains at “moderate.”
- Stress tests and tailored scenarios (including climate and commodity-price shocks) are used to evaluate the impact of reprofiling and other shocks on debt indicators up to 2043 in climate scenarios and up to 2034 in reprofiling scenarios.

*Source: Niger — IMF staff estimates and projections as presented in the cited chapter.*

### 1. Niger and the other countries in the Sahel are among the world’s most

### 1. Niger and the other countries in the Sahel are among the world’s most

### Vulnerability to climate change and recent impacts
- Niger is ranked 176th out of 182 countries in the University of Notre Dame Global Adaptation Initiative Index (countries are ranked from 1 (lower risk) to 182 (higher risk)); Niger is assessed as very high risk.
- Floods, droughts, and other natural disasters are increasing in intensity and frequency.
- In 2020, severe flooding affected over 632,000 people and caused losses of around 2 percent of GDP.
- In 2021, poor rainfall devastated cereal production in large parts of the country.

### Projected economic losses and poverty impacts from climate change
- IPCC: most climate scenarios show temperatures in the Sahel, including Niger, will rise by at least 2°C in the near term (2021 to 2040) while rainfall variability will increase.
- G5 Sahel CCDR estimates for Niger by 2050 if urgent adaptation investments are not taken:
  - Annual GDP reduced by 2.2 percent under the wet and optimistic climate scenarios by 2050.
  - Annual GDP reduced by 11.9 percent under the dry and pessimistic climate scenarios by 2050.
- Main negative impact channels: lower labor productivity due to heat stress; lower rainfed crop and livestock yields; damages to roads and bridges; damages from inland flooding.
- By 2050 projected poverty rates:
  - Baseline (no climate change): 30.4 percent.
  - Wet and optimistic scenarios: 32.1 percent.
  - Dry and climate pessimistic scenarios: 39 percent.
  - The increase under the pessimistic scenario translates to an additional 5.23 million people falling into poverty.
- Climate change will increase inequality and have heterogeneous spatial effects, with higher poverty impacts in rural areas and vulnerable border communities in Chad, Niger, and Mali.

### Priority areas for resilient growth (G5 Sahel CCDR)
- The CCDR identifies five priority areas for measures, policies, and investments:
  - (i) Institutions (including disaster risk management).
  - (ii) Climate Financing and Risk Mitigation.
  - (iii) Energy (opportunity for low-carbon pathway leveraging renewable potential).
  - (iv) Landscapes (integrated management of natural capital, agriculture, water and environment).
  - (v) Cities (resilient urban development).

### Government adaptation policies and institutional measures
- Niger’s Nationally Determined Contribution (NDC) is within the UNFCCC and Paris Agreement framework and aligned with national strategies including the Sustainable Development and Inclusive Growth Strategy (SDDCI): Niger vision 2035, PDES 2017-2021 and 2022-2026.
- The NDC covers both adaptation and mitigation ambitions.
- Adaptation priorities in the NDC include: agriculture and livestock; conservation of ecosystems, biodiversity and forests; water and sanitation; energy and infrastructure; gender and social protection; land use planning; health; education; fisheries and aquaculture.
- AFOLU adaptation measures focus on resilience of agriculture, livestock, forestry, water resources, fisheries, wildlife, and population health.
- A Measurement, Reporting, and Verification (MRV) mechanism for the NDC will be established to monitor and evaluate performance indicators; monitoring and evaluation will be overseen by a Permanent Secretariat housed in the Ministry of Environment and conducted in a participatory manner.
- Disaster risk management (DRM):
  - Niger has the National Disaster Risk Reduction Strategy (SN-RRC) 2019-2030, aligned with the Sendai Framework 2015-2030.
  - Humanitarian and Disaster Management Policy 2022-2026 and its Action Plan (2023): Plan d’Actions de la Politique Humanitaire et de Gestion des Catastrophes 2022-2026.
  - A new DRM law was approved by Parliament in December 2022 providing a mandate for integrating DRM and climate resilience into key sectors.
  - Two implementing decrees are being prepared to: (i) establish a DRM High Council chaired by the President and set procedures for the declaration of the state of emergency; and (ii) define the mission, organization, composition, and operating modalities of the DRM High Council.

### Mitigation commitments and energy targets
- Niger’s annual share of global greenhouse gas emissions is less than 0.1 percent; total emissions reported as 46 Mt CO2 eq (including land use).
- The five Sahel countries combined contribute less than 1 percent of global GHG emissions; all five have pledged net-zero emissions by 2050 and have low-carbon growth strategies emphasizing renewable energy.
- Niger target: 30 percent of renewable energy by 2030.
- NDC mitigation focus (2021-2030) sectors:
  - Agriculture, Forestry, and Other Land Use (AFOLU) — planned measures to scale up sustainable land management and water practices, reduce emissions from deforestation and degradation, and sequester carbon.
  - Energy — measures to facilitate access to cheap, sustainable, and clean energy (target 80 percent of the population in Niger by 2035) and promote modern energy services.
- Reported sectoral GHG contributions and reduction targets (source: G5 Sahel CCDR):
  - Agriculture and Energy sectors contribute 88 and 9 percent to the country’s GHGs, respectively.
  - Unconditional GHG reduction compared to BAU baseline: 13% for AFOLU, 11% for energy.
  - Conditional GHG reduction compared to BAU baseline: 23% for AFOLU, 45% for energy.
- Recent reforms in electricity sector:
  - Electricity Code enacted in May 2016 ended NIGELEC monopoly and liberalized sector for private participation.
  - Decree in 2020 mandated transparent and competitive selection process for new IPPs based on a least-cost power development plan (LCPDP).
  - Installed and operational renewable energy capacity in 2022: approximately 7% of total national grid capacity (in MW).
  - Renewable energy in 2022: about 2.5% of total national energy produced (in MWh).
  - Government preparing a decree to adopt the low carbon updated LCPDP; the code revision and decree adoption are critical.

### Financing needs, fiscal constraints, and institutional capacity priorities
- NDC investment to 2030: approximately USD 9.91 billion.
  - Of which USD 3.17 billion is for mitigation and USD 6.74 billion is for adaptation.
- Niger’s average annual NDC financing need is equivalent to 7.7 percent of 2021 GDP.
- Fiscal space for public financing is constrained; mobilization of international, private, non-governmental, and climate finance will be required.
- Recommended institutional capacity actions:
  - (i) Strengthen planning and monitoring of climate-related expenditures (adaptation and mitigation) in budgets.
  - (ii) Mainstream into the public investment management system appraisal of projects’ climate vulnerabilities and contributions to resilience and mitigation goals.
  - (iii) Move towards green public procurement.
  - (iv) Systematically assess fiscal risks from climate change.
  - (v) Strengthen capacity of sectoral ministries to plan and finance risk reduction interventions and prepare and respond to climate-related disasters to support implementation of the new DRM law.
- The proposed RSF measures support areas (i), (ii), (iv), and (v).

### World Bank engagement and complementary policy support
- Active World Bank operations with high climate co-benefits include:
  - Niger Integrated Water Safety Platform Project: USD 400 million (P174414) — strengthen integrated water resource management, increase access to water services, improve resilience to climate-induced water variability.
  - Niger Integrated Urban Development and Multi-sectorial Resilience Project: USD 250 million (P175857) — increase resilience to floods, improve urban management and access to basic services, include flood risk reduction infrastructure, DRM institutional strengthening, and Early Warning Systems.
  - Niger Gorou Banda Scaling Solar Project (P176887) — construct a 60 MW Solar Power Plant to increase renewable share.
  - Niger Integrated Landscapes Project: USD 150 million (P177043) — increase adoption of climate-smart landscape restoration practices and improve rural communities' access to income-generating opportunities.
  - USD 2m dedicated to enabling environment for NDC implementation and land degradation neutrality.
- Operations under preparation aligned with CCDR priority areas to strengthen resilience in agriculture, livestock, and infrastructure.
- Technical assistance and analysis:
  - Sahel CCDR provides knowledge base.
  - TA via project components and Climate Support Facility trust fund supports MRV development, DRM framework strengthening, LCPDP development and implementation, and operationalization of CCDR findings.
- World Bank Niger Resilient Growth and Capital Building Development Policy Financing (DPF) series:
  - Programmatic series of two single-tranche DPFs; first operation for $350 million (P178423) approved by the Board in December 2022; second operation under preparation.
  - DPF pillars: (1) Strengthening institutional framework for economic and social resilience to shocks; (2) Improving service delivery to build physical and human capital; (3) Enhancing governance over natural resources.
  - DPF supports DRM legal and institutional framework, expansion of social protection coverage using the Unified Social Registry, sustainable access to electricity and shift to renewables, groundwater management and protection, and expanded irrigation for climate-resilient agriculture.
- Complementarity between the DPF series and RSF for Niger, particularly in DRM and renewable energy; RSF contains measures to establish DRM focal points in key ministries and promote usage of the National DRM Data Platform, and to provide technical and financial assistance to SMEs for renewable energy projects.

*Buff Statement by Mr. Sylla on Niger Executive Board Meeting July 05, 2023*

### 1. The Nigerien authorities would like to express their appreciation for the Board and

### 1. The Nigerien authorities would like to express their appreciation for the Board and Management’s support to the country and for Staff’s active engagement

### Recent economic developments and outlook
- 2022 GDP growth reached 11.9 percent, driven by sustained public investments and higher agricultural production.
- Inflation is decelerating in line with domestic and external price developments.
- Public debt is projected to increase to 51.3 percent of GDP this year from 50.3 percent in 2022.
- The current account deficit rose from 14.1 percent in 2021 to 15.6 percent in 2022, reflecting adverse terms of trade.
- Regional central bank (BCEAO) tightened financial and monetary conditions in response to global price pressures, resulting in:
  - Higher government borrowing costs and increased short-term securities rollover risks.
  - Constrained credit expansion for the private sector.
  - Banking system remains stable, well-capitalized, liquid, and profitable; BCEAO assessments point to the need for actions to mitigate increased NPLs.
- Ministry of Finance is working with banks to accelerate resolution of loan repayment delays related to public procurement weaknesses.
- GDP growth projections:
  - 7.0 percent for 2023
  - 13 percent in 2024
  - From 2025 reverting towards 6.3 percent on average in the medium-term
- Fiscal projections and external position:
  - Fiscal deficit expected to narrow to 5.3 percent in 2023 and to gradually converge to the WAEMU target of 3 percent of GDP over the medium term.
  - Public debt would decline and the external position improve, supported by the start of oil exports and continued uranium sales.
- Main risks: security concerns, natural disasters, and potentially tighter global financial conditions.

### Implementation of the 2021-2024 ECF arrangement
- Implementation since December 2022 has been satisfactory; program performance has been constrained by heightened adverse security conditions in 2022 leading to lower tax collection and subdued economic activity and trade.
- Security conditions have hampered effectiveness and diligence of tax policy and revenue administration reforms, delaying expected results.
- Authorities request modifications to program targets to reflect reassessed prospects:
  - Performance criterion on the ceiling on net domestic financing.
  - Indicative targets on basic budget balance and cash revenue floor, starting from end-June 2023.
  - Continuous performance criterion on the ceiling on new public and publicly guaranteed external debt.

### Macroeconomic policies and reforms going forward
- Overall strategy:
  - Preserve macroeconomic stability via continued prudent macroeconomic and financial policies under the ECF program.
  - Key priorities: scale up revenue mobilization, improve quality of public expenditures, strengthen governance, and enhance debt management practices.
  - Authorities request flexibility in program evaluation given external shocks, while reiterating commitment to structural reforms.

- Fiscal policy:
  - Pursue fiscal consolidation to return to relevant WAEMU convergence criteria over the medium term.
  - Reduction of fiscal deficit intended to create space for increased infrastructure, social programs, and development spending.

- Revenue mobilization:
  - Focus on broadening the tax base and reducing tax evasion, with emphasis on streamlining tax exemptions in the extractive industries and investment code.
  - Priority given to the 2022-24 strategic plan for tax administration.
  - Prevent customs revenue losses by increasing digitalization.
  - Immediate goals: simplify tax procedures, increase transparency, enhance tax compliance, and improve tax regulations.
  - Plan to adopt a new General Tax Code in the next several months after a consultative process.
  - Integrate tax and customs administrations' IT platforms and streamline taxpayer compliance requirements.

- Public spending efficiency:
  - Reforms to speed decentralization of expenditures include:
    - Establishment of a unified social registry to improve targeting of assisted vulnerable populations.
    - Acceleration of actions to put in place a Treasury Single Account (TSA).
  - Implement digital solutions to increase transparency and traceability in expenditure and cash flow management.

- Public financial management (PFM) reforms:
  - Enhance fiscal risks analysis by integrating climate risks into budget preparation.
  - Improve performance of public enterprises and establishments.
  - Closely monitor the lifecycle of investment projects.
  - SOE budgets to be subject to prior validation by the minister of finance and operate under strict government-mandated performance contracts.
  - Reforms align with PDES 2022-26 and efforts to modernize public institutions, extend decentralization, reinforce capacity building, and raise spending transparency.

- Debt management:
  - Commit to prioritize grants and concessional loans to keep public debt sustainable.
  - Implement prudent fiscal policy, promote economic growth, and strengthen debt management institutions to maintain a downward trend in debt indicators.
  - Undertaken a debt reprofiling operation to be finalized by the end of July 2023 through a commercial loan of CFA 300 billion to address increased rollover risks.

- Oil resources management:
  - New oil project progressing: second oil pipeline completed and related oil exports expected to begin by the end of 2023.
  - Authorities finalizing an oil revenue management strategy to ensure oil revenue is used consistent with development goals.
  - Full deployment may take longer; steps include establishing a technical committee for oil revenue projections and tax risk evaluation and creating an expert committee for the oil stabilization fund's reference price calculation.

- Structural reforms:
  - Enhance governance and fight corruption via audits, digitalizing PFM and procurement procedures, and new asset declaration guidelines for senior public officials.
  - Strengthen legal frameworks for collecting beneficial ownership information and AML/CFT.
  - Promote economic diversification with business-friendly environment, favorable legal frameworks for investors, and value chains in agribusiness.
  - Foster financial inclusion under the National Financial Inclusion Strategy and promote digitalization and Fintech, including in remote areas.

### Request for an arrangement under the Resilience and Sustainability Facility (RSF)
- Rationale:
  - Niger faces major climate-related impediments that could prevent progress in poverty alleviation if not addressed.
  - RSF access would sustain implementation of the National Strategy for Climate Change and have a catalytic effect on climate financing, supporting adaptation, mitigation reforms, and green investments.
- Climate exposure and strategy:
  - Agriculture represents about 40 percent of GDP and faces challenges due to reliance on rain-fed agriculture.
  - Authorities have adopted:
    - a Nationally Determined Contribution (NDC);
    - the 2020-2035 National Strategy and Plan for Agricultural Adaptation to Climate Change;
    - the National Adaptation Plan.
- RSF-supported priorities:
  - Meet financing and capacity development needs for climate adaptation and mitigation strategies and programs, including the climate investment plan and the NDC framework for the 2023-2030 period.
  - Advance medium and long-term adaptation planning and budgeting (example: “Advancing Medium and Long-Term Adaptation Planning and Budgeting in Niger” project contributing to climate budget tagging).
  - Execute adaptation measures enabling construction of climate-resilient infrastructures and management of natural disaster risks.

### Concluding remarks and official requests
- Despite multiple security and climate-related challenges, authorities achieved commendable performance under the Fund-supported program and are determined to continue reforms.
- Official requests to the Executive Board:
  - Completion of the Third Review under the ECF.
  - Rephasing and extension of the program to June 2025.
  - Access to an arrangement under the RSF.
- These requests are presented as crucial to sustain implementation of Niger’s transformative socioeconomic agenda and the authorities request Executive Directors’ favorable consideration.

*Source: Niger authorities’ request and program update as presented to IMF staff.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1nerea2023003.pdf_