The Nigerien authorities and the IMF team have reached staff-level agreement for the completion of the first review of the Extended Credit Facility supported program, subject to approval by IMF Management and the Executive Board, Niger could be entitled to a disbursement of SDR 14.1 million (about CFAF 10.97 billion). Executive Board consideration is currently scheduled for January 2018.
- Staff-level agreement has been reached on economic and financial policies that could support completion of the first program review by the IMF’s Executive Board.
- Economic activity is expanding, with growth of 5.2 percent expected for both 2017 and 2018.
- Performance in implementing the government’s program supported by the IMF under the Extended Credit Facility (ECF) has been satisfactory.
Niger’s program was approved by the IMF Board on January 23, 2017.
During the International Monetary Fund (IMF) staff team visit led by Christoph A. Klingen in Niamey from October 23 to November 6, 2017 to conduct discussions on the first review of the program supported by the Extended Credit Facility (ECF) arrangement, Klingen said Niger’s overall macroeconomic performance remains satisfactory, despite security challenges and unfavorable commodity prices, especially for uranium.
He said Niger is benefitting from a good crop year and a rebound in oil production and that real GDP grew by 5 percent in 2016 and inflation remained contained at 0.2 percent.
“The current account deficit improved substantially to below 16 percent of GDP, as several import-intensive investment projects wound down. Real GDP is expected to grow at 5.2 percent in 2017, driven mainly by the hydrocarbon and service sectors, and supported by strengthening credit growth. Inflation should remain well contained and the current account deficit will likely improve further in 2017. Growth is expected to remain at 5.2 percent in 2018, but over the medium run, government reform efforts should be rewarded by a pickup in growth. Inflation should remain below WAEMU’s convergence criterion of 3 percent and the international reserve position is projected to strengthen starting from 2017.
“All quantitative performance criteria for the June 2017 test date have been met. Fiscal deficit targets and the programmed reduction of domestic payment arrears have been achieved. But revenues continue to fall short of expectations, reflecting depressed trade with Nigeria, and delays in the implementation of some high-yield reforms, notably at customs. Considering the government’s strong commitment to prudent fiscal policy, the basic and overall fiscal deficits should decline this year to 4 percent of GDP and 5.4 percent of GDP, respectively. Progress was made in implementing structural reforms, although some structural benchmarks were not met in full on time due to capacity constraints.
“For 2018, the government has put forward a strong fiscal program underpinned by concrete measures to increase revenues, steps to contain domestically-financed spending, and plans to raise the quality of public spending. Programmed targets for the overall and basic fiscal balance keep public finances on a path to reach the WAEMU convergence criterion for the overall fiscal deficit of 3 percent of GDP by 2020, while expeditiously eliminating remaining domestic arrears. The 2018 draft budget also aims for fuller absorption of rising donor funds, providing a near-term boost to the economy and substantially improving long-term prospects. A fiscal reform agenda for 2018 has been agreed, centered on revenue mobilization and improvements in public financial management.
“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. The agenda includes policies to grow the financial sector, improve the business environment further, and steps to diversify the economy inside and outside the mining sector.
“The team met with the President of the Republic, H.E. Mr. Issoufou Mahamadou, and held sessions with the Minister of Finance, Mr. Massoudou Hassoumi, Ministers in charge of Planning and Mines, 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.”