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International Monetary Fund. African Dept.

Mali’s territorial integrity is threatened, questioning its internal capacity to face challenges and especially to ensure the physical safety of goods and individuals. The government is committed to implement all measures to overcome this situation. More specifically, it will increase political and diplomatic actions for a quick and successful crisis outcome, maintain peace and security, revive economic activity, maintain social gains and target the poorest populations, fight against corruption and financial crime, and improve revenue mobilization to reduce dependence on aid.

Mr. Ernesto Hernández-Catá and C. A. François

Abstract

In January 1994, seven sub-Saharan African countries—Benin, Burkina Faso, Côte dď lvoire, Mali. Niger, Senegal, and Togo—signed a treaty establishing the West African Economic and Monetary Union (WAEMU). These countries, with the addition of Guinea-Bissau in 1997, form part of the CFA franc zone along with a second group of six African countries that participate in a similar monetary arrangement, the Central African Economic and Monetary Community (CAEMC). The CAEMC countries are Cameroon, the Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon. Within eaeh subzone, monetary arrangements are managed by a separate central bank: the Central Bank of West African States (BCEAO) for the WAEMU and the Bank of Central African States (BEAC) for the CAEMC. The two subzones share a common currency, the CFA franc, which stands for the Communauté financiere africaine in the BCEAO area and for the Coopération financiere en Afrique in the BEAC area.

Mr. Ernesto Hernández-Catá and C. A. François

Abstract

During the second half of the 1980s and in the early 1990s, a prolonged deterioration of the terms of trade, a steep increase in labor costs, and the nominal appreciation of the French franc against the U.S. dollar resulted in a considerable real effective appreciation of the CFA franc (Figure 1 and Figure 2 and Appendix II).3 These developments led to a serious decline in the competitive position of the CFA franc zone and a substantial weakening of the economic situation in the region. For the WAEMU as a whole during 1990–93, real GDP growth per capita was negative, and savings and investment ratios were very low (see Table 1 and Appendix IV, Tables 4–13). The deterioration in the terms of trade, together with the slow growth of export volume, resulted in a widening of the external current account deficit to an average of 11 percent of GDP in 1990–93. The shrinking of the tax base caused by the decline in real income as well as the financial difficulties of most corporate taxpayers were reflected in a drop in the ratio of government revenue to GDP, a deterioration in the overall fiscal balance, and severe constraints on government investment. Consequently, there was a significant accumulation of both domestic and external payments arrears, a large increase in the public debt, and a decline in the net foreign assets of the BCEAO.

Mr. Ernesto Hernández-Catá and C. A. François

Abstract

The BCEAO conducts monetary policy in the WAEMU at the regional level. Its basic near-term objectives are (1) to maintain the fixed exchange rate relationship between the CFA franc and the French franc—which means that the trend rate of inflation in the area is fundamentally determined by French inflation (Box 2); and (2) to achieve a target level of foreign assets for the BCEAO. The fixed exchange rate system implies that the independence of regional monetary policy is constrained: money growth within the region is endogenously determined, and an appropriate differential must be maintained between market interest rates in the WAEMU and in France (Figure 3). Moreover, there is no scope for national monetary policies in the member countries of the WAEMU. For this reason, IMF-supported programs in these countries currently do not include targets for either base money or the central banksď net domestic assets because these variables cannot be meaningfully defined at the national level. Even if they could be defined, they would be beyond the control of the national authorities. Of course, fiscal policy—including public debt management—remains within the purview of individual countries in the WAEMU, and IMF-supported programs typically include targets for the fiscal deficit, external borrowing by the government, and net domestic bank credit to the government. Cumulative borrowing by national governments from the BCEAO is itself constrained to no more than 20 percent of their fiscal revenue in the previous year.

International Monetary Fund

Niger has experienced a significant program interruption. Executive Directors supported the efforts to resume the economic and structural reform program interrupted, and restore budgetary transparency, improve governance, and accelerate structural reforms. They welcomed the efforts to resume financial relations with development partners, maintain social and political stability, and stressed the need for fiscal consolidation and monitoring of banks' compliance with prudential regulations. They urged the authorities to continue efforts to improve quality and timeliness, inclusive of social data.

International Monetary Fund

Niger’s sociopolitical environment remains fragile, with a continuation in early 2003 of the social tensions that surfaced in 2002. In the wake of a satisfactory macroeconomic performance in 2002, activity has continued to be buoyant in all sectors of the economy, particularly in the construction and trade sectors, and together with the onset of a favorable rainy season, has supported the economic environment underlying the program for 2003. The broadly satisfactory track record of Niger in policy implementation has continued in 2003.

International Monetary Fund

This paper discusses key findings of the Fifth Review Under the Poverty Reduction and Growth Facility (PRGF) for Niger. Growth prospects for 2007 are favorable, particularly because of strong agricultural production and buoyant investments. Inflation remains low. Growth prospects for the medium term have been improved by the rising price of uranium, which supports continued exploration and development of existing mines, although insecurity in the northern mining areas, if not checked, could slow the expansion. The IMF staff recommends completion of the review.

International Monetary Fund

The staff report for Niger’s 2008 Article IV Consultation, first review under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and request for Waivers and Modification of Performance Criteria is discussed. The authorities initially suspended taxes on critical foodstuffs but also relied on targeted interventions for vulnerable groups, which made it possible to end the tax suspensions in September. They also froze the retail price of petroleum products, in effect suspending part of the tax on fuel.