IMF Staff Reaches Staff-Level Agreement on the Second Review of the Extended Credit Facility for Niger and Conducts the 2022 Article IV Consultation

IMF News, November 2, 2022

Source details

Canonical URL: IMF Staff Reaches Staff-Level Agreement on the Second Review of the Extended Credit Facility for Niger and Conducts the 2022 Article IV Consultation

IMF staff and Nigerien authorities reached a staff-level agreement on the second review of Niger’s economic program under the Extended Credit Facility (ECF). The staff-level agreement is subject to IMF Management and Executive Board approval; the Board meeting is expected to take place in December.
Completion of the review would allow the disbursement of SDR 39.48 million (about US$ 50.7 million, or 30 percent of Niger’s quota) to Niger to cover external financing needs.
The mission was led by Mr. Antonio David and held meetings from October 5 to November 2, 2022. The mission also conducted the 2022 Article IV consultation and met His Excellency President Mohamed Bazoum, the Minister of Finance Dr. Ahmat Jidoud, the Minister of Planning Dr. Rabiou Abdou, the National Director of the BCEAO Mr. Maman Laouane Karim, and other senior government officials.

GDP growth projections and recent performance:
- Growth is expected to boost to 7.1 percent in 2022 driven by the ongoing recovery in agriculture and private investment.
- Growth is projected to reach 7.0 percent in 2023, driven by higher oil production (expected start of exploitation of the Agadem oilfield) and the recovery in the agricultural sector.
- Growth is expected to reach double-digits in 2024 as oil production picks up and structural reforms materialize.
Inflation and price developments:
- Year-on-year inflation of 3.2 percent at end-September 2022, with inflationary pressures from food prices having eased.
- The impact of the war in Ukraine was mostly felt through higher global food, petroleum, and fertilizer prices.
Fiscal and external positions:
- The fiscal stance is accommodative in 2022 with the fiscal deficit projected to widen to 6.8 percent of GDP as authorities address urgent spending needs related to the food crisis and a deterioration of the security situation.
Program status:
- Program performance until end-June 2022 was broadly satisfactory: all quantitative performance criteria (QPCs) were met, and all five indicative targets (ITs) were observed.
- Most structural benchmarks (SBs) were met, including the adoption of a roadmap for the review and simplification of the tax system.

Identified downside risks:
- Delays in the construction of the pipeline would significantly impact growth and worsen the fiscal and external positions.
- Deterioration of the security situation in the Sahel.
- Volatility in commodity prices, including higher food import prices impacting inflation and the external accounts.
- Unfavorable climatic conditions affecting performance in the agricultural sector.
Supply-chain and production assumptions:
- Inflationary pressures should continue to gradually ease with the expected recovery in agricultural production and the normalization of supply chains.

Fiscal and revenue measures:
- Continue to prioritize reforms to enhance domestic revenue mobilization and improve the efficiency of public spending.
- Revise the tax code to increase efficiency by shifting the burden of taxation away from production factors.
- Promote digitization of tax administrations and the expenditure chain.
- Improve the efficiency of social spending and public investment management.
Structural and human capital reforms:
- Enhance Niger’s education system (access to education, teaching quality, and infrastructure) as part of the Economic and Social Development Plan.
- Implement broader measures to reduce gender disparities, notably by promoting girls’ education and fostering women’s access to the financial system.
Climate resilience and food security:
- Implement reforms and investments to build resilience to climate change, including investments in irrigation systems, strengthening of social safety nets, and developing a robust framework for climate-smart agriculture.
Governance and transparency:
- Continue efforts to strengthen governance and transparency; mission welcomes the adoption of the new AML/CFT strategy and its action plan.

The three-year arrangement under the ECF is supporting Niger’s recovery, reinforcing macroeconomic stability, and laying foundations for resilient, inclusive, and private sector-led growth.
The IMF will continue to support the authorities’ efforts to strengthen governance, transparency, and implementation of the reform agenda.

Source: Press Release No. 22/365, IMF Communications Department, November 2, 2022.