Washington, DC:
An International Monetary Fund (IMF) staff team led by Mr. Antonio David
held meetings from May 4 to May 13, 2022, on the first review of the
three-year arrangement with Niger supported by the Extended Credit Facility
(ECF).
At the end of the mission, Mr. David issued the following statement:
“The Nigerien authorities and the IMF team reached a staff-level agreement
on the first review of Niger’s economic program under the Extended Credit
Facility. The staff-level agreement is subject to IMF Management and
Executive Board approval. The Board meeting is expected to take place in
June. The review’s completion would allow the disbursement of SDR39.48
million (about US$ 53 million, or 30 percent of Niger’s quota) to Niger to
cover external financing needs.
“After a substantial deceleration to 1.3 percent in 2021 following the
adverse effects of climate-related shocks and insecurity on the
agricultural sector, growth is projected to rebound to 6.9 percent in 2022
on the back of the recovery in agricultural production and the acceleration
of the implementation of large investment projects related to the oil
pipeline to Benin. However, inflation would remain elevated due to
continued food price pressures at both the global and domestic levels.
“Despite the projected positive outlook this year, Niger is facing an acute
food crisis. Around 4.4 million people are expected to face food insecurity
during the lean season. The authorities are taking action and recently
approved a new support plan for 2022 targeting vulnerable populations.
Moreover, the security situation in the Sahel and political instability in
neighboring countries, as well as uncertain climate conditions continue to
pose risks to Niger’s economic prospects. The war in Ukraine is
exacerbating these challenges by adding to global and local food price
pressures.
“As a response to these shocks, authorities are implementing several
emergency measures, including the acquisition of cereals for food
distribution to vulnerable populations; the implementation of the emergency
plan to support livestock feed; the implementation of a support plan for
the acquisition of fertilizer and pesticides and a program to address
dilapidated school infrastructure. As a result of these measures, the
overall fiscal deficit is projected to temporarily widen in 2022 to 6.6
percent of GDP. Still, public debt would remain at moderate risk of debt
distress.
“The authorities also committed to implementing corrective measures on the
revenue side, including measures to reduce tax evasion and improve revenue
administration, to ensure that program targets are met and that the deficit
reverts to the program’s trajectory over the medium-term.
“The three-year arrangement under the ECF is supporting Niger’s recovery
from the pandemic, while reinforcing macroeconomic stability and laying the
foundations for resilient, inclusive and private sector-led growth.
“Program performance until end-March 2022 was broadly satisfactory and most
quantitative macroeconomic objectives were met. Structural reforms are
gradually advancing, as measures are being taken to rationalize tax
exemptions, improve public procurement and public investment management,
enhance tax administration by promoting digitalization, and boost
transparency through the publication of beneficial ownership information of
companies awarded single tender or sole source contracts.
“Further efforts to bolster domestic revenue mobilization are crucial to
increase fiscal space for priority spending and support fiscal adjustment
over the medium-term. In that context, Nigerien authorities plan to assess
and simplify their current tax system and accelerate the digitalization of
revenue administration.
“Reforms to enhance the quality of public spending to improve the delivery
of public goods are also ongoing. Authorities are committed to scaling up
public spending on education and social safety nets to foster human capital
and improve the protection of vulnerable populations. Strengthening public
financial management systems is essential to achieve these objectives.
“The IMF will continue to support the authorities’ efforts to strengthen
governance and transparency and welcomes the recent publication of the
audit report of COVID-19 related expenditures as well as the audit report
on tax exemptions to the extractive sector, which were structural
benchmarks under the program. Looking ahead, the mission welcomes the
authorities’ intention to take steps towards implementing the reports’
recommendations.
“The mission met his Excellency President Mohamed Bazoum and his Excellency
Prime Minister Ouhoumoudou Mahamadou. The mission also held working
sessions with the Minister of Finance, Dr. Ahmat Jidoud, Minister of
Petroleum, Mr. Mahamane Sani Issoufou, the National Director of the BCEAO,
Mr. Maman Laouane Karim, as well as other senior government officials.
“The team would like to thank the authorities for their cooperation, and
for the constructive and productive discussions.