IMF Executive Board Completes the Second Review Under the Extended Credit Facility (ECF), Approves US$ 52.6 Million Disbursement, and Concludes the 2022 Article IV Consultation with Niger
IMF News, December 21, 2022
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- Published: December 21, 2022
Program status, disbursement, and financing
- The Executive Board completed the Second Review of the Extended Credit Facility (ECF) arrangement for Niger and approved the disbursement of SDR 39.48 million (about US$ 52.6 million).
- Total disbursements under the arrangement now amount to SDR 118.44 million (about US$ 157.8 million).
- Niger’s three-year ECF arrangement was for SDR 197.4 million (about US$ 275.8 million at the time of program approval or 150 percent of quota) and was approved on December 8, 2021.
- The arrangement is expected to catalyze additional bilateral and multilateral financial support.
Macroeconomic outlook and recent performance
- Near and medium-term outlook described as "broadly favorable" with growth expected to rebound in the year of the statement and accelerate thereafter, driven by private investment and oil exports through the new pipeline.
- Program performance: "broadly satisfactory" in a challenging context.
- All quantitative performance criteria were met at end-June and end-September 2022.
- Five out of six indicative targets were observed at end-September 2022.
- The present value of new PPG external debt exceeded its ceiling in November 2022.
- Authorities have made progress on key policy recommendations since the last Article IV consultation in 2019 and advanced their reform agenda, but the country continues to face daunting development challenges exacerbated by a decade of conflict in the Sahel and exposure to climate shocks.
Key priorities and policy recommendations from the IMF (Ms. Sayeh, Deputy Managing Director and Acting Chair)
- Fiscal policy and public debt:
- A gradual fiscal consolidation path is warranted to address urgent spending needs related to the food crisis and the deteriorating security situation in the Sahel, and to accommodate priority spending in education, infrastructure, and social safety nets.
- Authorities should avoid entrenched large fiscal deficits to preserve fiscal and public debt sustainability and revert to the WAEMU fiscal deficit norm by 2025.
- Revenue mobilization:
- Accelerate reforms to reduce tax exemptions and evasion.
- Revise the tax code to simplify the tax system and increase its efficiency.
- Enhance revenue administration through digitalization.
- Natural resource management:
- Establish a transparent oil resource management framework before the start of oil exports.
- Public spending and SOEs:
- Enhance efficiency and quality of spending and improve performance of state-owned enterprises to create fiscal space for priority social and investment spending.
- Financial sector:
- Step up efforts to preserve financial sector stability and soundness.
- Restructuring the microfinance sector remains critical for financial inclusion and resilience of the most vulnerable.
- Governance and fragility:
- Progress on the governance agenda is key to address sources of fragility and improve the business environment.
- Efforts to address remaining inadequacies of the AML/CFT framework and steps to publish asset declarations of high-ranking officials are welcome.
- Climate and diversification:
- Build resilience to climate shocks in the agricultural sector and foster export diversification to support long-term inclusive growth.
Executive Board Assessment and recommendations
- Directors agreed with the thrust of the staff appraisal and welcomed authorities’ commitment and progress under the ECF-supported program.
- While the medium-term outlook is favorable, risks remain significant: climate shocks, security threats, and protraction of Russia’s war against Ukraine.
- Recommended actions:
- Continue policies to promote macroeconomic stability and build resilience to shocks.
- Implement reforms targeted at developing the private sector and improving governance.
- Maintain donor involvement and leverage IMF capacity development support.
- Adhere to envisaged fiscal consolidation to meet the WAEMU fiscal deficit norm by 2025 and pursue a prudent debt policy prioritizing concessional loans.
- Strengthen capacity in compiling debt and fiscal statistics.
- Advance revenue mobilization, including tax code revision and reducing exemptions and evasion.
- Develop a transparent framework for oil revenue management before exports begin.
- Accelerate efficiency and quality improvements in spending and SOE performance; strengthen social safety nets; foster girls’ education and gender equality.
- Closely monitor rising vulnerabilities in the banking and microfinance sectors; address deterioration in asset quality.
- Advance structural reforms to promote private sector development, climate resilience in agriculture, export diversification, financial inclusion, governance, anti-corruption measures, and digitalization.
Selected economic and financial indicators, 2019–23 (annual percentage change, percent of GDP, and CFA francs as reported)
- National income and prices (annual percentage change)
- GDP at constant prices: 6.1; 3.5; 1.4; 7.1; 7.0
- Export volume: -3.3; -0.6; -8.3; -6.7; 22.8
- Import volume: 9.5; 2.7; 1.1; -5.2; 10.6
- CPI, annual average: -2.5; 2.9; 3.8; 4.5; 3.0
- CPI, End-of-period: -2.3; 3.1; 4.9; 4.8
- Government finances (percent of GDP)
- Total revenue: 11.2; 10.8; 11.7; 12.8; 21.6
- Total expenditure and net lending: 22.4; 24.3; 24.8; 23.1
- Current expenditure: 9.6; 10.7; 11.0; 10.2; 12.0
- Capital expenditure: 13.1; 13.2; 11.6
- Overall balance (incl. grants): -3.6; -4.8; -5.9; -6.8; -5.3
- Gross fixed capital formation: 29.9; 31.1; 31.7; 34.2; 33.5
- Non-government investment: 19.3; 20.5; 20.6; 22.9; 23.7
- Government investment: 10.5; 11.1
- External current account balance
- Excluding official grants: -15.1; -15.7; -16.4; -16.2; -14.9
- Incl. grants: -12.3; -13.2; -14.1; -14.4; -13.4
- Public debt (percent of GDP)
- Total public and publicly-guaranteed debt: 39.8; 45.0; 51.3; 56.6; 57.6
- Public and publicly-guaranteed external debt: 26.5; 31.6; 37.2; 36.7
- PV of external debt: 24.5; 22.7; 20.7; 22.2
- Public domestic debt: 13.3; 17.8; 19.4; 20.9
- Domestic credit and monetary aggregates
- Domestic credit: -12.2; 25.0; 9.2; 17.5; 15.0
- Credit to the government (net): -89.5; 565.5; -24.6; 103.6; 37.7
- Credit to the economy: 13.0; 8.6; 15.4; 9.8
- Broad money: 17.0; 9.7; 10.3; 12.1
- GDP at current market prices (Billions of CFA francs): 7,568; 7,911; 8,271; 9,222; 10,065
Source: IMF Communications Department, December 21, 2022.