## _cr13106 - 23. Staffs note that limits to the administrative implementation capacity may be more

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### Overview of PDES (Plan for Economic and Social Development)
- Approved by the Council of Ministers on August 1, 2012; covers the period 2012-2015 and seeks to operationalize the Niger Renaissance Program.
- Overarching growth objective: around 8 percent average annual economic growth over 2012-2015.
- PDES structure: 11 strategic results and 86 programs organized in five programmatic areas:
  - (i) strengthening the credibility and efficiency of public institutions;
  - (ii) creating the conditions for inclusive, sustainable and balanced development;
  - (iii) food security and sustainable agricultural development;
  - (iv) competitive and diversified economy for accelerated, inclusive growth;
  - (v) promotion of social development.

### Institutional arrangements and implementation lessons
- Responsibility transferred to the Ministry for Planning, Regional and Community Development; Ministry developing a long term strategy for inclusive growth for 2012-2035.
- Inclusive PDES preparation involving interministerial, sectoral, regional committees and civil society.
- Mid-term SDRP lessons informing PDES:
  - Maintain participative elaboration.
  - Multisectoral committees often failed due to lack of human, logistical, and financial resources.
  - Sectors must align strategies with PDES.
  - Establish effective risk management mechanisms.
  - Of required external financing for the SDRP, after three years only 17.3 percent of the targeted amount could be mobilized.
  - Strengthen capacity for resource mobilization and absorption; use appropriate public-private partnership mechanisms for major investments.
  - Improvements noted in governance dimensions.
  - Establish a new framework for engagement with development partners to strengthen policy dialogue and mutual accountability.

### Poverty, gender, and social targets
- Historical poverty: declined from about 63 percent in 1990 to 59.5 percent in 2008.
- 2011 Living Standards Measurement Study Survey carried out; new poverty estimates being prepared; follow-up survey planned for 2014.
- PDES poverty objective: enlarge the Nigerien middle class (population above the national poverty line but not in the top 10 percent).
  - Target: increase middle class from about 30 percent of the population in 2012 to about 50 percent by 2015 — implying a decline in the headcount poverty index by about 20 percentage points.
  - Staffs’ consistency condition: targeted progress consistent with a targeted average annual per capita income growth of at least four percent, an income elasticity of at least minus two, and unchanged inequality.
  - Staffs note: past six years poverty fell by only six percentage points and absolute number of poor increased due to high population growth.
  - PDES shortfall versus MDG (would require poverty about 30 percent).
- Targeting and program design recommendations:
  - Explicitly target the poorest and most vulnerable to avoid capture of benefits.
  - Irrigation development should include a clear approach to allocation of irrigated land.
- Gender:
  - PDES treats gender as cross-cutting and includes specific programs for gender equality.
  - Suggested strengthening: provide a clear road map with specific actions and resources for gender-sensitive outcomes; include more gender-disaggregated indicators in the PDES monitoring matrix.
  - Highlighted program: universal free and mandatory basic education up to age 16 (expected benefits: close gender gap in basic education, raise average age of marriage, reduce child and maternal mortality) — staff request a more detailed implementation plan and note significant human and financial resources will be required.
  - Other recommendations: programs on population growth management, reproductive health services, improved access to water, and actions to enhance women’s economic opportunities (access to credit, agricultural inputs, land); sensitization to improve women’s status and rights.

### Macroeconomic framework and sectoral risks
- PDES three macroeconomic scenarios for 2012-2015:
  - Base case: average annual economic growth of 8 percent.
  - High growth: economic growth of 9.7 percent.
  - Low growth: economic growth of 6.2 percent.
  - All scenarios depend on an ambitious public investment agenda.
- Identified risks: (i) climatic shocks and natural disasters; (ii) deterioration of the global environment, including regional security; (iii) financing risks for PDES.
- Growth projections and oil:
  - PDES assumes start of petroleum exports in 2012 leading to GDP annual growth: 11.6 percent (2012), 6.8 percent (2013), 7 percent (2014), 6.6 percent (2015).
  - Growth projections under the Fund-supported program are about 0.5 percentage points lower in each year.
  - Staffs caution extractive sector risks: vulnerability to international demand for uranium and petrol, Dutch disease, weakened governance, rent capture, increased conflict.
  - First year of oil production (2012): production significantly below refinery capacity causing financial losses of the refinery close to one percent of GDP.
  - Continued application of EITI standards and transparency in mining revenue use are important.
- Business climate and diversification:
  - High growth scenario unlikely without far-reaching reforms to improve business climate and foster non-extractive sector growth and job creation.
  - Recommended reforms: strengthen judiciary and fight corruption, simplify business regulations and trade procedures, improve tax and customs administration efficiency.
- Price shocks sensitivity:
  - PDES low growth scenario omits decline in oil export price impact; assuming a 30 percent decline in the export price of petroleum products, staffs’ projections imply a 20 percent decrease in government oil revenue.

### Fiscal framework, budgeting, and public expenditures
- Budget coordination issues:
  - PDES preparation and the 2013 budget were prepared in parallel with little alignment.
  - Split of the former Ministry of Economy and Finance into a Ministry of Finance (budget) and a Ministry of Planning has caused coordination problems.
  - Priority: strengthen coordination to translate PDES into Medium-Term Expenditure Frameworks and annual budgets.
- Fiscal clarity and consistency:
  - Fiscal framework needs clarification and stronger linkage between PDES costing and macro-fiscal scenarios.
  - Annual PDES expenditures in the prioritized action plan are close to or exceed projected total government expenditures under different macro scenarios.
  - PDES points to a budget deficit of 15.9 percent in 2013, rising to 19.1 percent in 2015.
  - Fund-supported program implies deficits of 12 percent in 2013 and 11.1 percent in 2015.
  - Footnote: the Fund program amounts exclude the projected new project loan of 12 percent of GDP to refinance the loan for the construction of the refinery Soraz.
  - PDES does not provide a focused discussion or analysis of debt sustainability.
- Recurrent vs. investment spending pressures:
  - Current/recurrent expenditures about 12.4 percent of GDP and investment expenditure about 13.3 percent of GDP; operation and maintenance expenditures often underfunded.
  - Rapid increases in investment expenditures require careful consideration of recurrent expenditure implications.

### Financing, absorptive capacity, and prioritization
- PDES financing envelope and external funding needs:
  - Prioritized action plan foresees PDES-related expenditure increase from about US$1.2 billion in 2012 to US$3.8 billion in 2015, totaling US$10.8 billion over 2012-2015.
  - Of the US$10.8 billion, about 77 percent or US$8.3 billion is to be externally funded.
  - PDES Round Table in Paris, November 13-14, 2012: indications of donor support for 2012-2015 amounted to about US$4.8 billion, leaving an external resource gap of about US$3.6 billion.
  - Historical annual external financing for Niger over the previous five years: between US$300 million and US$400 million annually.
  - Reaching PDES external funding envisaged would require a massive increase in external support and absorptive capacity.
- Staff advice on operational strategy:
  - Further prioritize PDES to a volume of expenditures that represents a more organic evolution from historic expenditure levels while strengthening absorptive capacity.
  - Prioritization and sequencing guided by explicit linkages between programs across pillars and focus on those essential for key overall results; establish a clearer hierarchy of results.
  - Use prioritization to harness synergies across sectors (e.g., link economic growth, employment, and skills development).
- Skills and employment linkages:
  - Treat skills development as central to the growth agenda; identify specific skills needs tied to PDES growth drivers.
  - Evidence points to job growth in extractive industries constrained by lack of semi-skilled and skilled workers.
  - Recommendation: increase support to the TVET sector and develop a demand-driven skills development system.
  - Social development measures contribute to food security, competitiveness, productivity, employability, and inclusive growth.

### Administrative implementation capacity: key findings and institutional priorities
- Key findings:
  - Limits to administrative implementation capacity may be more constraining than expected.
  - Even at current levels of investment spending, project implementation capacity is weak and often results in slowly and poorly executed investment projects.
  - Expansion of program and project implementation capacity and scaling up of budgetary spending need to go hand in hand to avoid slow or poorly implemented projects that claim resources but do not generate expected outcomes.
  - Building capable institutions requires a long-term horizon and benefits from incremental achievements and quick wins.
  - Wholesale approaches ("being everywhere at the same time") have not proved effective; recommendation to prioritize and start with programs that have the most catalytic effects.
  - Particular importance: strengthening Niger’s public investment management system, in line with the Second Public Expenditure Management and Accountability Report.
- Institutional and policy reform priorities:
  - PDES investment program should be accompanied by a monitorable priority plan for institutional and policy reforms.
  - Examples:
    - Kandadji development program: reforms of key institutions in energy and irrigation (ONAHA, NIGELEC), and tariff reforms.
    - Road sector: reforms of road maintenance funding and management to accompany investments.
  - Staffs welcome preparation of an aid strategy to guide donor coordination, choice of aid instruments, role of budget support, use of country systems, and measures to strengthen aid effectiveness.
  - Observations on aid:
    - Overall aid levels to Niger reported in OECD aid statistics are low.
    - A large share of aid is currently delivered outside government (NGOs or direct donor execution).
    - Staffs encourage strengthening public financial management systems to enhance donor confidence.

### Sectoral observations: agriculture, trade, business environment, and social sectors
- Agriculture, trade, and rural development:
  - Crop yields in Niger are half of the West African average (except for rice) (World Bank 2011 Poverty Assessment).
  - Low producer prices and high levels of risk deter investment for higher yields.
  - Reducing rent extracted by transport cartels by freeing-up competition would allow producer prices to rise without increasing consumer prices.
  - National quotas for freight and the queuing system increase prices for food staples for consumers.
  - World Bank 2012 Agriculture Sector Risks Assessment priorities and mitigation-transfer-coping framework; filtering mechanism may help select high return interventions for the 3N initiative.
  - PDES includes livestock productivity as a key element of rural development.
  - Facilitate domestic and international trade in food and agricultural products; reduce trade barriers and enhance regional integration.
  - PDES could put greater emphasis on removing obstacles to competition and strengthening tax administration and public procurement to create level playing fields.
  - Targeted judicial improvements would strengthen trade.
- Business environment and financial sector:
  - Authorities should finalize and adopt the action plan for business environment improvement and prioritize reforms given weak administrative capacity.
  - Priority reforms: facilitate domestic and international trade and establish a level playing field for market participants.
  - Financial sector development is a priority; roadmap exists in the financial sector development strategy and action plan.
  - Key area: increased access to financial services and credit for SMEs and the agriculture sector.
  - PDES is silent on micro-finance; access to micro-finance in Niger is significantly less than in neighboring countries, representing an opportunity.
- Education, health, and demographic challenges:
  - Staffs view free and mandatory education until age 16 as a main PDES focus.
  - PDES results framework targets increase in primary education enrolment from about 76.1 percent in 2011 to 96 percent by 2015, but does not provide targets for enrolment until age 16.
  - Recommendation: focus on increasing primary enrollment as a step toward universal education to age 16; requires increased financial and human resources and better management.
  - Encourage innovative service delivery, strengthen community role, and improve accountability.
  - Emphasize private sector partnerships for technical training and higher education; align TVET with economy needs; emphasize certification and evaluation of skills.
  - Free health services for vulnerable groups (small children and pregnant women) important, but delays in reimbursement jeopardize viability and should be addressed urgently.
  - Projected population growth poses substantial difficulties; control of demographic growth depends on strong reproductive health programs; sustain progress in family planning during PDES.

### Cost, implementation arrangements, monitoring and evaluation
- Overall cost of all PDES programs: about US$12.6 billion.
- Prioritized action plan for 2012-2015: PDES programs amounting to US$10.8 billion.
- PDES provides limited detail on program elements and costs, making aggregate cost assessment difficult.
- Recommendation: further prioritize PDES to align with absorptive capacity and maintain focus if resources fall short.
- Implementation arrangements: multi-layered system including PDES Orientation Council (chaired by the Prime Minister), Inter-ministerial Commission for Strategic Planning, National Committee (government/donors—DAC/OECD), National Technical Committee, sector committees, and regional/district/municipal monitoring committees.
- Past issues: PRSP implementation structure did not function well; only four of eight regional committees were functioning; government–donor meetings irregular and without clear terms of reference; political instability affected implementation.
- Ministry of Planning’s responsibility for PDES holds potential but needs effective coordination mechanisms across ministries.
- Recommendation: implementation and monitoring mechanism must be appropriately resourced; recognize Ministry of Finance explicitly (e.g., co-chair the Inter-ministerial Commission).
- PDES monitoring and evaluation system focuses on:
  - quarterly program execution reports by implementing ministries and agencies;
  - monitoring results on identified indicators and targets;
  - monitoring public expenditures through an annual public expenditure review;
  - a mid-term and final evaluation;
  - evaluation of impacts of public policies focusing on five to ten policies or measures every year.
- Staffs note many results indicators lack baseline and target values and call for better indicators capturing efficiency, quality and equity.
- The 2011 living standards measurement survey can provide important baselines; government commitment to a planned follow-up survey in 2014 is important.

### Conclusions, risks, and sequencing
- PDES offers a comprehensive analysis and plan for accelerated sustainable growth; linkage of good governance, security and development is welcome.
- Staffs welcome strategic focus on sustainable and inclusive growth to achieve poverty reduction, but stress interventions must provide new opportunities for the poor and address gender inequalities.
- PDES is ambitious and poses significant challenges in resource mobilization and utilization; requires further prioritization and focus on enhancing absorptive capacity.
- Institutional and policy reforms must be clearly spelled out and receive implementation priority to ensure efficient use of resources and expected results.
- Strengthening mechanisms to translate PDES into medium-term expenditure and annual budgets is essential.
- Identified risks:
  - External risks: natural disasters (droughts, inundations), cricket infestations, animal diseases; adverse external economic environment; disruptive socio-political developments; security threats.
  - Implementation risks: weak stakeholder engagement, inadequate funding, poor donor coordination and alignment, weaknesses in program implementation.
- Staffs concur on importance of mitigating measures, especially strengthening public sector capacities and financial management systems.
- Recommendation: appropriately sequence reforms to ensure implementation capacity exists when programs are launched.

*Source: _cr13106*

### 1. Niger’s new Poverty Reduction Strategy—the Plan for Economic and Social

### 1. Niger’s new Poverty Reduction Strategy—the Plan for Economic and Social Development (PDES)

### Overview
- Approved by the Council of Ministers on August 1, 2012; covers the period 2012-2015 and seeks to operationalize the Niger Renaissance Program.
- Overarching growth objective: around 8 percent average annual economic growth over 2012-2015 as the means to significantly improve living conditions.
- PDES clusters: 11 strategic results and 86 programs organized in five programmatic areas:
  - (i) strengthening the credibility and efficiency of public institutions;
  - (ii) creating the conditions for inclusive, sustainable and balanced development;
  - (iii) food security and sustainable agricultural development;
  - (iv) competitive and diversified economy for accelerated, inclusive growth;
  - (v) promotion of social development.

### Institutional arrangements and implementation lessons
- Responsibility moved to the Ministry for Planning, Regional and Community Development (previously in the prime minister’s office) to reinforce strategic planning, coordination, and economic management; Ministry is developing a long term strategy for inclusive growth for 2012-2035.
- PDES preparation process was inclusive: Interministerial Commission for Strategic Planning, government-development partner committee, technical national committee, twelve sectoral and thematic working groups, eight regional committees; civil society and development partners participated.
- Mid-term review lessons from the SDRP that informed PDES:
  - Maintain the participative elaboration process.
  - Implementation arrangements were well designed but did not work well; multisectoral committees often failed due to lack of human, logistical, and financial resources — a rationalized implementation framework is important.
  - Sectoral policies were often not aligned with the SDRP; sectors must develop or align strategies for consistency with PDES.
  - Risks identified in the SDRP materialized; establish effective risk management mechanisms.
  - Of the required external financing for the SDRP, after three years only 17.3 percent of the targeted amount could be mobilized.
  - Strengthening capacity for resource mobilization and absorption is critical; for major investments establish appropriate mechanisms for public-private partnerships.
  - Improvements noted in all dimensions of governance.
  - Establish a new framework for engagement with development partners to strengthen policy dialogue and mutual accountability.

### Poverty and gender
- Historical poverty: declined marginally from about 63 percent in 1990 to 59.5 percent in 2008.
- A Living Standards Measurement Study Survey was carried out in 2011; new poverty estimates are being prepared and a follow-up Living Measurement Study Survey is planned for 2014.
- PDES poverty framing and target:
  - Objective: enlarge the Nigerien middle class (population above the national poverty line but not in the top 10 percent).
  - Target: increase middle class from about 30 percent of the population in 2012 to about 50 percent by 2015 — implying a decline in the headcount poverty index by about 20 percentage points.
  - Staffs’ consistency condition: targeted progress is consistent with a targeted average annual per capita income growth of at least four percent, an income elasticity of at least minus two, and unchanged inequality.
  - Staffs note past six years: poverty fell by only six percentage points and absolute number of poor increased due to high population growth.
  - PDES acknowledges remaining shortfall versus MDG (which would require poverty about 30 percent).
- Targeting and program design recommendations:
  - Interventions should explicitly target the poorest and most vulnerable to avoid capture of benefits (e.g., subsidized inputs, irrigated land, food security interventions).
  - Irrigation development should include a clear approach to allocation of irrigated land.
- Gender: PDES treats gender as cross-cutting and includes specific programs for gender equality.
  - Suggested PDES strengthening: provide a clear road map with specific actions and resources for gender-sensitive outcomes; include more gender-disaggregated indicators in the PDES monitoring matrix.
  - Highlighted programs: universal free and mandatory basic education up to age 16 (expected benefits: close gender gap in basic education, raise average age of marriage, reduce child and maternal mortality) — staff note significant human and financial resources will be required and request a more detailed implementation plan.
  - Other recommendations: programs on population growth management, reproductive health services, improved access to water, and identifying entry points in economic development (access to credit, agricultural inputs, land) to enhance women’s economic opportunities; sensitization efforts to improve women’s status and rights.

### Macroeconomic framework and sectoral risks
- PDES presents three macroeconomic scenarios for 2012-2015:
  - Base case: average annual economic growth of 8 percent.
  - High growth: economic growth of 9.7 percent.
  - Low growth: economic growth of 6.2 percent.
  - All scenarios depend on an ambitious public investment agenda.
  - Identified risks: (i) climatic shocks and natural disasters; (ii) deterioration of the global environment, including regional security; (iii) financing risks for PDES.
  - Baseline growth mainly driven by expansion of the natural resource sector.
  - Low growth scenario assumes downside risks materialize (more frequent droughts, weaker external demand, lower investment).
  - High growth assumes good climatic conditions and favorable global environment with higher investment.
- Growth projections and oil:
  - PDES assumes start of petroleum exports in 2012 leading to GDP annual growth: 11.6 percent (2012), 6.8 percent (2013), 7 percent (2014), 6.6 percent (2015).
  - Growth projections under the Fund-supported program are about 0.5 percentage points lower in each year.
  - Staffs caution extractive sector risks: vulnerability to international demand for uranium and petrol, Dutch disease (real exchange rate appreciation and loss of competitiveness), weakened governance, rent capture, increased conflict — these can stymie competitiveness and inclusive growth if not managed.
  - First year of oil production (2012): production significantly below refinery capacity causing financial losses of the refinery close to one percent of GDP; staff welcome preparation and implementation of an action plan for sector coordination.
  - Continued application of EITI standards and transparency in use of mining revenues are important for national cohesion.
- Business climate and diversification:
  - Staffs view high growth scenario as unlikely without far-reaching reforms to improve the business climate to foster non-extractive sector growth and job creation.
  - Recommended reforms: strengthen judiciary and fight corruption, simplify business regulations and trade procedures, improve tax and customs administration efficiency.
- Price shocks sensitivity:
  - Staffs note PDES low growth scenario omits decline in oil export price impact; assuming a 30 percent decline in the export price of petroleum products, staffs’ projections imply a 20 percent decrease in government oil revenue.

### Fiscal framework, budgeting, and public expenditures
- Budget coordination issues:
  - PDES preparation and the 2013 budget were prepared in parallel with little alignment.
  - Split of the former Ministry of Economy and Finance into a Ministry of Finance (budget) and a Ministry of Planning (PDES and investment budget) has caused repeated coordination problems.
  - Priority: strengthen coordination between the Ministry of Planning, Regional, and Community Development and the Ministry of Finance to translate PDES into Medium-Term Expenditure Frameworks and annual budgets.
- Fiscal clarity and consistency:
  - Fiscal framework in PDES needs clarification and stronger linkage between PDES costing and macro-fiscal scenarios.
  - Annual PDES expenditures in the prioritized action plan are close to or exceed projected total government expenditures under different macro scenarios.
  - PDES points to a budget deficit of 15.9 percent in 2013, rising to 19.1 percent in 2015.
  - Fund-supported program implies deficits of 12 percent in 2013 and 11.1 percent in 2015.
  - Footnote: the Fund program amounts exclude the projected new project loan of 12 percent of GDP to refinance the loan for the construction of the refinery Soraz.
  - PDES does not provide a focused discussion or analysis of debt sustainability.
- Recurrent vs. investment spending pressures:
  - Current/recurrent expenditures about 12.4 percent of GDP and investment expenditure about 13.3 percent of GDP; operation and maintenance expenditures are often underfunded.
  - With rapid increases in investment expenditures, carefully consider recurrent expenditure implications.

### Cross-cutting issues: financing, absorptive capacity, and prioritization
- PDES financing envelope and external funding needs:
  - Prioritized action plan foresees PDES-related expenditure increase from about US$1.2 billion in 2012 to US$3.8 billion in 2015, totaling US$10.8 billion over 2012-2015.
  - Of the US$10.8 billion, about 77 percent or US$8.3 billion is to be externally funded.
  - PDES Round Table in Paris, November 13-14, 2012: indications of donor support for 2012-2015 amounted to about US$4.8 billion, leaving an external resource gap of about US$3.6 billion.
  - Historical annual external financing for Niger over the previous five years: between US$300 million and US$400 million annually.
  - Reaching PDES external funding envisaged would require a massive increase in external support and absorptive capacity.
- Staff advice on operational strategy:
  - Further prioritize PDES to a volume of expenditures that represents a more organic evolution from historic expenditure levels while implementing measures to strengthen absorptive capacity.
  - Prioritization and sequencing guided by explicit linkages between programs across pillars and focusing on those essential for key overall results; establish a clearer hierarchy of results in the results framework.
  - Use prioritization to harness synergies across sectors (e.g., link economic growth, employment, and skills development).
- Skills and employment linkages:
  - Skills development currently discussed under social development pillar; recommendation to treat skills development as central to the growth agenda and identify specific skills needs tied to PDES growth drivers.
  - Evidence points to job growth in extractive industries constrained by lack of semi-skilled and skilled workers for construction and operational phases.
  - Recommendation: increase support to the TVET sector and develop a demand-driven skills development system.
  - Social development measures (social protection, skills development) contribute to food security, competitiveness, productivity, employability, and inclusive growth.

*Source: IMF staff summary of Niger’s PDES as presented in the IMF country report.*

### 23. Staffs note that limits to the administrative implementation capacity may be more

### _cr13106 - 23. Staffs note that limits to the administrative implementation capacity may be more

### Administrative implementation capacity: key findings
- Limits to administrative implementation capacity may be more constraining than expected.
- Even at current levels of investment spending, project implementation capacity is weak and often results in slowly and poorly executed investment projects.
- Strengthening of government administrative capacity is key to implementation of the PDES.
- Expansion of government program and project implementation capacity and scaling up of budgetary spending need to go hand in hand to avoid slow or poorly implemented projects that claim resources but do not generate expected outcomes.
- Building capable institutions requires a long-term horizon and generally feeds on incremental achievements and quick wins in targeted areas.
- The wholesale approach of being everywhere at the same time has not proved effective for Niger; the Government pursued this approach in PFM, justice, civil service, and decentralization with very little success.
- Recommendation: prioritize and start with programs that have the most catalytic effects.
- Particular importance: strengthening Niger’s public investment management system, in line with the diagnostic and recommendations provided in the Second Public Expenditure Management and Accountability Report.

### Institutional and policy reform priorities
- The PDES investment program should be accompanied by a monitorable priority plan for institutional and policy reforms.
- Examples of necessary reforms:
  - Kandadji development program: reforms of key institutions in the energy and irrigation sector, such as the Nigerien Office for Irrigation (ONAHA) and the power sector utility (NIGELEC), as well as tariff reforms.
  - Road sector: reforms of road maintenance funding and management arrangements to accompany investments.
- Staffs welcome preparation of an aid strategy to complement the PDES to guide donor coordination, choice of aid instruments and the role of budget support, use of country systems, and measures to strengthen aid effectiveness.
- Aids noted:
  - Overall aid levels to Niger as reported in OECD aid statistics are low.
  - A large share of aid is currently delivered outside government, either through NGOs or direct execution by donor agencies.
  - Staffs encourage government to continue strengthening public financial management systems to enhance donor confidence.

### Agriculture, trade, and rural development observations
- Crop yields in Niger are half of the West African average (except for rice) (World Bank 2011 Poverty Assessment).
- Low producer prices and high levels of risk deter investment needed for higher yields.
- Reducing rent extracted by transport cartels by freeing-up competition would allow producer prices to rise without increasing consumer prices.
- National quotas for freight and the queuing system for freight allocation increase prices for food staples for consumers, exacerbating food insecurity (Bank report "Africa Can Help Feed Africa").
- World Bank 2012 Agriculture Sector Risks Assessment:
  - Analyzes agricultural risks and impact over 1980-2012.
  - Prioritizes most important agricultural risks and provides a mitigation-transfer-coping framework.
  - Highlights limitations of financial risk transfer (insurance) and social safety nets; emphasizes a broader holistic agricultural risk management approach.
  - The filtering mechanism proposed may help select high return interventions for agricultural risk management in the action plan for the 3N initiative.
- PDES includes livestock productivity as a key element of rural development; balanced attention to agriculture and livestock helps foster national cohesion.
- Facilitating domestic and international trade in food and agricultural products is equally important; reducing trade barriers and enhancing regional integration are essential.
- PDES could put greater emphasis on removing obstacles to domestic and international competition to enhance efficiency and reduce costs and prices.
- Reforms to strengthen tax administration and public procurement should aim to create a level playing field and incentives for full tax compliance.
- Targeted improvements in the judicial system would strengthen domestic and international trade.

### Business environment and financial sector
- Authorities should finalize and adopt the action plan for improvement of the business environment and ensure proper prioritization given weak administrative capacity.
- Priority reforms: facilitate domestic and international trade and establish a level playing field for all market participants.
- Financial sector development is a priority; the financial sector development strategy and action plan provide a roadmap.
- Key area: increased access to financial services and credit for SMEs and the agriculture sector.
- Note: With World Bank support a study on rural finance has already been carried out.
- The PDES is silent on the role of micro-finance; access to micro-finance in Niger is significantly less than in neighboring countries, representing an opportunity to scale up and benefit poor households.

### Education, health, and demographic challenges
- Staffs view: free and mandatory education until the age of 16 should be one of the main focus areas of PDES.
- PDES results framework targets an increase in primary education enrolment from about 76.1 percent in 2011 to 96 percent by 2015, but does not provide targets for enrolment until the age of 16.
- Recommendation: focus on increasing enrollment for primary education as a step toward universal education to age 16; requires increased financial and human resources and better management.
- Encourage innovative service delivery approaches, strengthen role of communities, and improve accountability mechanisms.
- PDES underlines importance of efficient and effective institutional functioning of the education sector but does not cover financing.
- Emphasize partnerships with the private sector for technical training and higher education; technical and vocational training should match economy needs.
- Certification and evaluation of skills deserve more emphasis.
- Government policy of free health services for vulnerable groups (small children and pregnant women) is important, but delays in reimbursement of health centers jeopardize system viability and should be addressed urgently.
- Projected pace of population growth poses substantial difficulties for livelihoods, education, health services, and natural resources; progress toward universal mandatory basic education to age 16 is expected to impact population growth.
- Control of demographic growth depends importantly on strong reproductive health programs; some progress in family planning needs to be sustained during the PDES period.

### Cost, implementation arrangement, and monitoring and evaluation
- Overall cost of all PDES programs: about US$12.6 billion.
- Prioritized action plan for implementation over 2012-2015 contains PDES programs amounting to US$10.8 billion.
- PDES provides little detail on elements of proposed programs and their cost, making assessment of aggregate cost estimates difficult.
- Recommendation: further prioritization of the PDES to align with absorptive capacity and maintain focus if available resources are less than envisaged.
- Implementation arrangements: multi-layered system including PDES Orientation Council chaired by the Prime Minister, an Inter-ministerial Commission for Strategic Planning, a National Committee (government/donors—DAC/OECD), a National Technical Committee, sector committees, and regional, district, and municipal PDES monitoring committees.
- Past issues: the PRSP implementation structure did not function well; only four of eight regional committees were functioning; government–donor meetings were irregular and without clear terms of reference; political instability affected implementation.
- The establishment of a Ministry of Planning, Regional and Community Development responsible for PDES holds potential for undivided attention but needs effective coordination mechanisms across ministries.
- Recommendation: implementation and monitoring mechanism must be appropriately resourced; recognize importance of the Ministry of Finance more explicitly (for example by having the Ministry of Finance co-chair the Inter-ministerial Commission for Strategic Planning and other implementation organs).
- PDES monitoring and evaluation system focuses on:
  - quarterly program execution reports by implementing ministries and agencies;
  - monitoring of results on basis of identified results indicators and targets;
  - monitoring of public expenditures through an annual public expenditure review;
  - a mid-term and final evaluation;
  - an evaluation of the impacts of public policies focusing on five to ten policies or measures every year.
- Staffs note further work is needed on results indicators: a large number lack baseline and target values.
- Need to better capture efficiency, quality and equity of social sectors’ interventions using more comprehensive indicators.
- The living standards measurement survey carried out in 2011 can provide important baselines; government commitment to the planned follow up survey in 2014 is important to measure changes in many PDES target areas.

### Conclusions and risks
- PDES provides a comprehensive analysis of Niger’s development challenges and a plan to achieve accelerated sustainable growth; the linkage of good governance, security and development is welcome.
- Staffs welcome strategic choice to focus on sustainable and inclusive growth to achieve poverty reduction, but stress that interventions must provide new opportunities for the poor and address gender inequalities.
- PDES is ambitious and poses significant challenges in resource mobilization and utilization; requires further prioritization of and within PDES programs and a focus on enhancing absorptive capacity.
- Necessary institutional and policy reforms must be spelled out clearly and receive priority during PDES implementation to ensure efficient use of resources and expected results.
- Strengthening mechanisms to translate PDES into medium-term expenditure and annual budgets will be essential.
- Identified risks:
  - External risks: natural disasters (droughts, inundations), cricket infestations, animal diseases; adverse external economic environment; disruptive socio-political developments; security threats.
  - Implementation risks: weak stakeholder engagement, inadequate funding, poor donor coordination and alignment, weaknesses in program implementation.
- Staffs concur on importance of mitigating measures, especially strengthening public sector capacities and financial management systems.
- Note: these risks are rooted in deep seated problems of public sector performance; international experience points to significant effort and time needed to address them.
- Recommendation: appropriately sequence reforms to ensure implementation capacity exists when programs are launched.

*Source: _cr13106*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2013/_cr13106.pdf_