An International Monetary Fund (IMF) staff team led by Christoph A. Klingen
visited Niamey from March 28 to April 10, 2018 to conduct discussions on
the second review of the program supported by the Extended Credit Facility
(ECF) arrangement.
[1]
Niger’s program was approved by the IMF Board on January 23, 2017 (see Press Release no 17/18).
At the end of the visit, Mr. Klingen issued the following statement:
“The Nigerien authorities and the IMF team have reached a staff-level
agreement for the completion of the second review of the ECF-supported
program. IMF Executive Board consideration is tentatively scheduled for
June 2018.
“Niger’s overall macroeconomic performance remains strong and reforms,
together with support from technical and financial partners, open a window
of opportunity for the years ahead. Despite security challenges,
unfavorable uranium prices, and a less-favorable-than-expected crop year,
real GDP grew by 4.9 percent in 2017 , helped by a rebound in oil
production and strong activity in the construction and telecommunication
sectors. Real GDP is expected to grow by 5.2 percent in 2018, driven mainly
by energy and service sectors, and construction activity related to
preparations for the 2019 African Union Summit. It should rise further over
the medium run, as reform efforts and the absorption of foreign assistance
pay off. Inflation came to a moderate 2.4 percent in 2017, notwithstanding
an uptick in the last quarter. During 2018, it is expected to recede
rapidly from the current transitory levels to its well-contained historical
norm, in part thanks to the sale of cereals at moderate price under the
government support plan for vulnerable people.
“All quantitative performance criteria for end-December 2017 under the
government’s economic and financial program have been observed. The overall
fiscal deficit declined significantly, while spending on poverty reduction was
protected. Targets for net domestic financing and the reduction of domestic
payment arrears were met by a large margin. However, revenues fell well
short of expectations, reflecting in part the reduction in
telecommunications taxes, delayed sales of telecommunications licenses, and
adverse economic circumstances outside the control of government. The
strong revenue performance in the first quarter of 2018 signals a
turn-around though, with the envisaged revenue for the full year well
within reach.
“For the remainder of 2018, the basic fiscal balance is set to improve to 4
percent of GDP, firmly putting Niger on the path to reaching the WAEMU
convergence criterion for the overall fiscal deficit of 3 percent of GDP by
2021, while providing space to absorb the scaling up of external financial
support pledged for the PDES 2017-21. Achieving these objectives is
predicated on the continuation of the encouraging revenue performance in
early 2018, backed by a strong push to systematically strengthen tax and
customs administration, guided by performance plans, fighting petroleum
smuggling, and collecting tax arrears. Other fiscal structural reforms will
also be advanced, including the strengthening of debt management, fully
harnessing program budgeting, digitalizing fiscal payments, and
implementing the treasury single account.
“The authorities and the team also discussed policies to develop a strong
private sector and address fast population growth. They agreed that
progress on both fronts is essential for a sustained improvement of living
standards and poverty reduction. Commendable strides have been made to
improve the business environment and leaning against population growth.
Deepening the financial sector and improving access to finance are key
items for the reform agenda going forward.
“The team met with President Issoufou Mahamadou and Prime Minister Brigi
Rafini. It also met with Minister of Finance Massoudou Hassoumi, the
President of the Court of Accounts, Ministers in charge of Planning,
Agriculture and Petroleum, the Minister Delegate for the Budget, the
National Director of the BCEAO, as well as other senior government
officials. Staff also met with representatives of civil society, the
private sector, and the donor community.
“The team would like to thank the authorities for their hospitality and for
the constructive discussions.”
[1]
The Extended Credit Facility (ECF) is the IMF’s main tool for
medium-term financial support to low-income countries. Financing
under the ECF carries a zero interest rate, with a grace period of
5½ years, and a final maturity of 10 years.
