IMF Staff Completes Mission to Niger
An International Monetary Fund (IMF) staff mission led by Cheikh Anta Gueye visited Niamey from October 24 to November 7, 2016 to conduct the 2017 Article IV consultation and discuss a successor Extended Credit Facility (ECF) arrangement that could support Niger’s medium-term economic and financial program.
At the end of the mission, Mr. Gueye issued the following statement:
“The Nigerien authorities and the IMF team reached a staff-level agreement on a medium-term program (2017-2020) that could be supported by a successor ECF. The new program builds on lessons of the current ECF arrangement. While the 2012-2016 ECF-supported program helped maintain macroeconomic stability despite a series of substantial adverse exogenous shocks and implementation slippages, allocations for health and education were crowded out by priority security expenses, which constrained the achievement of broader development objectives.
“The new program aims at preserving macroeconomic stability and at achieving the development objectives of the Economic Development Document. In view of the elevated security spending needs and the persisting shocks to government revenue, policies under the new program focus on domestic revenue mobilization, by broadening the tax base, and on strengthened budget management, to provide the needed fiscal space and ensure debt sustainability. The program also includes a strong agenda for structural reforms to strengthen public financial management, support the diversification of the economy and enhance resilience, while reflecting limited capacity.
“Niger’s overall macroeconomic performance has remained satisfactory in 2016, despite the security and humanitarian shocks, the unfavorable commodity prices, and the reduction of trade flows to neighboring countries. Growth is projected to increase to 4.5 percent in 2016 from 3.5 percent in 2015, helped by a strong 2016/17 crop year and despite continued weakness in the oil and mining sectors. Inflation would be contained at 1.6 percent in 2016.
“Budget execution has been impacted by lower-than-targeted revenue collection partly due to unfavorable developments in commodity sectors and continued economic problems in neighboring countries. At end-June 2016, most fiscal targets other than for government revenue were however met. Progress was made in implementing structural reforms, albeit with delays.
“In response to a larger shortfall of revenue collection in the second half of 2016, the authorities curtailed commitments on nonpriority expenditures for the last quarter of 2016. This measure enacted by the inter-ministerial budget regulation committee will help avoid the accumulation of payments arrears and the resort to domestic financing.
“The economic outlook for the medium-term is favorable, but remains subject to substantial external and domestic risks. Real GDP growth is projected to increase to 5.2 percent in 2017, driven by agriculture and an expected pick-up in oil production. Inflation is expected to remain contained below 2 percent. Real GDP growth is expected to average 6.0 percent during 2018- 2021, mainly as a result of the expansion of the extractive industries sector and an increase in public and private investments. Inflation is expected to remain below the 3 percent WAEMU convergence criterion. Key risks include negative externalities of regional conflicts, vulnerability to natural disasters, and the economic turmoil in the sub-region.
“The Article IV discussions focused on preventing and managing natural disasters, harnessing the demographic dividend, and dealing with the gender issue in Niger.
“The mission met with President Issoufou Mahamadou and Prime Minister Brigi Rafini. The mission held also working sessions with the Minister of Finance, Mr. Massoudou Hassoumi, other Ministers in charge of Planning, Petroleum, Mines, the Minister Delegate for Budget, the National Director of the BCEAO, as well as other senior government officials. The staff also met with representatives of civil society, the private sector, and the donor community.
“The IMF mission would like to thank the authorities for their warm hospitality and for the constructive and productive discussions.”
 The Extended Credit Facility (ECF) is the IMF’s main tool for medium-term financial support to low-income countries. Financing under the ECF carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years.