IMF Executive Board Completes Third Review Under the Extended Credit Facility Arrangement for Niger and Approves US$5 Million DisbursementPress Release No. 10/36
February 12, 2010
The Executive Board of the International Monetary Fund (IMF) today completed its third review of Niger’s economic performance under a program supported by the Extended Credit Facility (ECF)1. Completion of the third review allows the disbursement of an amount equivalent to SDR 3.29 million (about US$5.0 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 13.16 million (about US$20.2 million).
The Executive Board approved a three-year arrangement for Niger in May 2008 in the sum of an amount equivalent to SDR 23.03 million (about US$35.3 million), equivalent to 35 percent of the country’s quota in the IMF (see Press Release No. 08/127).
Following the Executive Board’s discussion on Niger, Mr. Murilo Portugal, Deputy Managing Director and Acting Chair, made the following statement:
“Niger has weathered the external environment relatively well because of the buoyant non-agricultural growth, declining inflation and high foreign direct investment related to the expansion of the oil and uranium sectors. Macroeconomic prospects for 2010 appear broadly favorable. The medium term outlook is also positive, with oil and mining projects coming into their production phase after 2012.
“The authorities have maintained a prudent fiscal position in the face of severe shortfalls in budget support. Combined with the strong revenue performance, the authorities’ efforts to align the pace of budget execution with available resources have kept the ECF-supported program on track. They have also prepared contingency measures for 2010 in the event of further delays in external support. The authorities are strongly encouraged to take all necessary steps to mobilize the external financing included in the program.
“Progress in the implementation of the structural reform agenda has been broadly satisfactory. Measures to simplify and increase the transparency of the tax system are welcome. Deeper public financial management reform is needed to further improve budgetary formulation, execution and reporting. The authorities have also taken significant steps to ensure the transparent accounting of all mining and oil revenues. Sound management of natural resources will be critical to ensure higher overall growth and faster poverty reduction, and the authorities are encouraged to start formulating a comprehensive strategy for the macroeconomic management of these resources. Stepping up efforts to complete the restructuring of the financial sector will also be necessary to ensure that the financial system can fully support growth.”
1 The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.