IMF and Niger Reach Staff-Level Agreement on a New Economic Program

IMF News, November 2, 2021

Source details

Canonical URL: IMF and Niger Reach Staff-Level Agreement on a New Economic Program

IMF staff team led by Mr. Ari Aisen held virtual meetings from October 25 to November 1, 2021.
Nigerien authorities and the IMF reached a staff-level agreement on a new arrangement under the Extended Credit Facility (ECF) for 2021-2024.
The staff-level agreement envisages a new three-year arrangement under the Extended Credit Facility (ECF) with access to SDR 197.4 million (equivalent to about US$ 278.5 million or 150 percent of quota).
The staff-level agreement is subject to IMF Management and Executive Board approval. The Board meeting is expected in December.
Press Release No. 21/319; publication date: November 2, 2021. Press officer: Andrew Kanyegirire.

Real GDP growth is expected to rebound to 5.6 in 2021 as the economy recovers from the COVID-19 pandemic.
Growth is projected to accelerate in 2022 and reach double-digit levels in 2023, boosted by the operationalization of the new oil pipeline to Benin.
Oil exports are expected to start in 2023.
The external current account is expected to deteriorate in the short term due to large-scale projects with high content of imported capital and intermediate goods, before improving significantly with oil exports starting in 2023.
Inflationary pressures are expected to persist in 2021—mainly driven by food price hikes due to COVID-19 related supply chain disruptions—before easing in the outer years.
The fiscal position is projected to further deteriorate in 2021 in the face of significant security and development-related needs, with consolidation efforts and the advent of oil revenues expected to bring the deficit to the regional target of 3 percent of GDP over the medium term.

Aim: buttress macroeconomic stability, enhance governance and transparency, and lay foundations for stronger and more inclusive growth.
Revenue-side measures:
- Broaden the non-oil revenue base.
- Reduce informality by improving tax policy and the business environment.
- Advance tax administration reforms.
- Improve management of tax arrears to facilitate cash planning.
- Rationalize and manage exemptions to make the best use of limited fiscal resources.
- Support transparent and efficient management of oil revenues to ensure prospective increase in oil exports results in a commensurate increase in tax revenues.
Spending-side measures:
- Enhance public financial management to improve efficiency and transparency of spending.
- Support more rigorous medium-term budgeting.
- Implement enhanced transparency-related reforms.
- Improve planning and selection of investment projects.
- Strengthen liquidity and debt management with the establishment of a Single Treasury Account.
Governance and social measures:
- Step up efforts to enhance human capital and governance.
- Fight corruption and promote transparency and accountability to improve public finance management, provision of public goods, and the business environment.

Success of the program hinges on steadfast implementation of reforms helping catalyze additional donor financial support.
Key challenges highlighted:
- Economic consequences of COVID-19 in terms of foregone growth.
- Effects of climate change affecting agriculture, the country’s main production sector.
- Deterioration of the security situation in the Sahel region.
The health impact of the pandemic has so far been relatively contained, attributed in part to rapid measures taken to control the spread.

The mission held working sessions with:
- Minister of Finance, Mr. Ahmat Jidoud.
- Minister of Planning, Mr. Rabiou Abdou.
- National Director of the BCEAO, Mr. Maman Laouane Karim.
- Other senior government officials.
The staff also met with representatives from the private sector, civil society, Banks’ Association, and development partners.
The IMF team thanked the authorities for their cooperation and for the constructive and productive discussions.

IMF Press Release No. 21/319 — November 2, 2021.