International Monetary Fund (IMF) and Niger Reach Staff-Level Agreement on the Third Review of the Extended Credit Facility and a New Program under the Resilience and Sustainability Facility
The Nigerien authorities and the IMF team reached a staff-level agreement on the third review of Niger’s economic program under the Extended Credit Facility and a new program under the Resilience and Sustainability Facility
Real GDP growth is estimated to have accelerated to 11.9 percent in 2022, mainly due to a strong recovery in agricultural production and progress in major investment projects
IMF Staff and Nigerien Authorities have reached an agreement at the staff level on the third review of Niger's economic program under the Extended Credit Facility (ECF) and a new program under the Resilience and Sustainability Facility (RSF); The economic outlook is favorable over the near and medium term, with growth projected at 7 percent this year. But this positive outlook is subject to downside risks, in particular those linked to vulnerabilities to climate shocks, as well as the security situation; RSF financing will support the authorities’ efforts to advance structural reforms and investments on adaptation and mitigation to address rising risks and challenges associated with climate change. According to the RSF agreement--which is subject to approval by the IMF Executive Board-- Niger will have access to SDR 98.7 million (about US$ 133.4 million).
An International Monetary Fund (IMF) staff team led by Mr. Antonio David held meetings from April 25 to May 9, 2023, on the third review of the three-year arrangement with Niger supported by the Extended Credit Facility (ECF) and a new program supported by the Resilience and Sustainability Facility (RSF).
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 third review of Niger’s economic program under the Extended Credit Facility and a new program under the Resilience and Sustainability Facility. The staff-level agreement is subject to IMF Management and Executive Board approval. The Board meeting is expected to take place in July. The ECF review’s completion would allow the disbursement of SDR 19.74 million (about US$ 26.7 million, or 15 percent of Niger’s quota) to cover external financing needs.
“Real GDP growth is estimated to have accelerated to 11.9 percent in 2022, mainly due to a strong recovery in agricultural production and progress in major investment projects. Inflationary pressures have eased. The economic outlook is favorable over the near and medium term, with growth projected at 7 percent this year, driven by the completion of the pipeline which will lead to an increase in oil production and the continued recovery in agriculture. Nevertheless, this positive outlook is subject to downside risks, in particular those linked to vulnerabilities to climate shocks, as well as the security situation.
“The fiscal stance was accommodative last year with the fiscal deficit estimated to have reached 6.8 percent of GDP, due to urgent spending needs to mitigate the effects of the food crisis and the security situation. Going forward, the deficit trajectory is calibrated to adhere to the authorities’ commitment to reach the WAEMU regional convergence criteria of 3 percent GDP by 2025, which remains an imperative especially in light of the tightening of financing conditions.
“The arrangement under the Extended Credit Facility aims to reinforce macroeconomic stability and lay the foundations for resilient, inclusive, and private sector-led growth. Program performance was broadly satisfactory. Most quantitative objectives and structural benchmarks (SBs) were met.
“Measures to bolster domestic revenue mobilization remain crucial to increase fiscal space for priority social spending and support fiscal adjustment over the medium-term. The authorities’ ongoing efforts to simplify the tax system, promote the digitalization of revenue administration, and adopt an oil revenue management strategy are key reforms in this area. Moreover, boosting the quality and efficiency of spending is needed to improve the delivery of public services.
“In addition, initiatives to lift the most binding constraints to private sector development should be accelerated. These include the implementation of recent cross-cutting initiatives, such as the digitalization of business registration procedures, the land registry, and the one-stop shop for foreign trade as well as measures to improve access to finance. The authorities are also committed to achieving tangible results in the fight against corruption, including implementing the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) strategy and its action plan.
“RSF financing, in turn, will support efforts to advance structural reforms and investments to address rising risks and challenges associated with climate change, thereby building resilience and safeguarding livelihoods. The RSF-supported reforms will incorporate climate-related considerations into Niger's macroeconomic policy framework by: 1) strengthening the planning and budgeting of climate-related spending; 2) improving the sensitivity of public investment management to climate-related issues; 3) enhancing disaster informed fiscal planning and management; and 4) promoting renewable energy sources.
“The mission met his Excellency Prime Minister Ouhoumoudou Mahamadou and his Excellency the President of the National Assembly Seini Oumarou. The mission also held working sessions with the Minister of Finance, Dr. Ahmat Jidoud, the Minister of Planning Dr. Rabiou Abdou, the Minister of Humanitarian Action and Disaster Management Mr. Laouan Magagi, the Minister for the Environment and Fight against Desertification, Mrs. Garama Saratou Rabiou Inoussa, the National Director of the BCEAO, Mr. Maman Laouane Karim, as well as other senior government officials, private sector representatives, and development partners.
“The team would like to thank the authorities for their cooperation, and for the constructive and productive discussions.”
Distributed by APO Group on behalf of International Monetary Fund (IMF).