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Niger: Staff Report for the 2014 Article IV Consultation and Fourth and Fifth Reviews Under the Extended Credit Facility Arrangement and Request for Waiver of Nonobservance of Performance Criteria and Modification of Performance Criteria—Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
March 2015
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Relations with the Fund

(As of October 31, 2014)

Membership Status Joined: April 24, 1963

Accepted Obligations of Article VIII, Sections 2, 3, and 4: June 1, 1996

General Resources Account

SDR Million%Quota
Quota65.80100.00
Fund holdings of currency57.1786.89
Reserve Tranche Position8.6413.13

SDR Department

SDR Million%Allocation
Net cumulative allocation62.94100.00
Holdings54.2586.20

Outstanding Purchases and Loans

SDR Million%Quota
ECF Arrangements67.89103.18

Latest Financial Arrangements

TypeDate of

Arrangement
Expiration

Date
Amount Approved

(SDR Million)
Amount Drawn

(SDR Million)
ECFMar 16, 2012Dec 31, 201578.9645.12
ECF1Jun 02, 2008Jun 01, 201123.0313.16
ECF1Jan 31, 2005Mar 31, 200826.3226.32

Projected Payments to Fund2

(SDR Million; based on existing use of resources and present holdings of SDRs)

Forthcoming
20142015201620172018
Principal2.947.474.964.825.78
Charges/Interest0.000.160.140.130.12
Total2.947.635.104.955.90

Implementation of HIPC Initiative

I. Commitment of HIPC assistanceEnhanced

Framework
Decision point dateDecember 2000
Assistance committed
by all creditors (US$ million)1663.10
Of which: IMF assistance (US$ million)42.01
(SDR equivalent in millions)31.22
Completion point dateApril 2004
II. Disbursement of IMF assistance (SDR million)
Assistance disbursed to the member31.22
Interim assistance6.68
Completion point balance24.55
Additional disbursement of interest income22.74
Total disbursements33.96

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence, these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence, these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Implementation of Multilateral Debt Relief Initiative (MDRI)

I. MDRI-eligible debt (SDR million)177.55
Financed by: MDRI Trust59.82
Remaining HIPC resources17.73
II. Debt Relief by Facility (SDR million)
Eligible Debt
Delivery DateGRAPRGTTotal
January 2006N/A77.5577.55

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

Decision point - point at which the IMF and the World Bank determine whether a country qualifies for assistance under the HIPC Initiative and decide on the amount of assistance to be committed.

Interim assistance - amount disbursed to a country during the period between decision and completion points, up to 20 percent annually and 60 percent in total of the assistance committed at the decision point (or 25 percent and 75 percent, respectively, in exceptional circumstances).

Completion point - point at which a country receives the remaining balance of its assistance committed at the decision point, together with an additional disbursement of interest income as defined in footnote 2 above. The timing of the completion point is linked to the implementation of pre-agreed key structural reforms (i.e., floating completion point).

Implementation of Post-Catastrophe-Debt-Relief (PCDR)

Not Applicable

Safeguards Assessments

The Central Bank of West African States (BCEAO) is a common central bank of the countries of the West African Economic and Monetary Union (WAMU). In accordance with safeguards policy requirements for regional central banks, a quadrennial safeguards assessment of the Central Bank of West African States (BCEAO) was completed in December 2013. The assessment found that the bank continued to have a strong control environment and has, with the implementation of the 2010 Institutional Reform, enhanced its governance framework. Specifically, an audit committee was established to oversee the audit and financial reporting processes, transparency has increased with more timely publication of the audited financial statements, and the BCEAO is committed to International Financial Reporting Standards (IFRS) implementation by end-2014. The assessment also identified some limitations in the external audit process and recommended that steps be taken to ensure its adequacy.

Exchange Arrangement

Niger is a member of the WAEMU and has no separate legal tender. The union’s common currency, the CFA franc, is pegged to the Euro at a rate of CFAF 655.957 = EUR 1, consistent with the official conversions rate of the French franc to the Euro and the previous fixed rate of the CFA franc to the French franc of CFAF 100= F 1. Effective January 1, 2007, the exchange arrangement of the WAEMU countries has been reclassified to the category of conventional pegged arrangement from the category of exchange arrangement with no separate legal tender. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender. The new classification thus only reflects a definitional change, and is not based on a judgment that there has been a substantive change in the exchange regime or other policies of the currency union or its members. The exchange system common to all member countries of the WAEMU is free of restrictions on payments and transfers for current international transactions subject to Fund jurisdiction.

Article IV Consultations

The last completed Article IV consultation discussions were held in Niamey in October 2011. The staff report (Country Report No. 11/357) was discussed by the Executive Board, and the 2011 Article IV consultation concluded, on December 2, 2011.

Technical Assistance over the period July 2013-October 2014

DepartmentPurposeTime of Delivery
FADMacro-fiscal function TTF [1/3]2013-08-08
FADChain of expenditures2013-08-12
FADIFMIS, MTFF, MTEF, medium-term fiscal rule and its legal framework2013-08-13
FAD/AFRITAC WCustoms administration2013-10-14
FAD/AFRITAC WPublic financial management (PFM)2013-10-28
FAD/AFRITAC WTax administration2014-02-24
FADMacro-fiscal function TTF [2/3]2014-03-24
FADTax administration: TA to tax auditors2014-04-14
FADMacro-fiscal function TTF [3/3]2014-06-18
STA/AFRITAC WReal sector statistics2014-06-30
FADFiscal reporting (2/2)2014-07-01
FADPFM: follow-up on macro-fiscal framework2014-08-18
FADTax and customs administration: STX visit2014-09-01
FADBudget classification2014-09-01
FAD/AFRITAC WTax administration2014-09-15
MCM/AFRITAC WPublic debt management2014-09-22
STA/AFRITAC WGovernment finance statistics2014-10-13

Resident Representative

Mr. Zorome assumed his position in Niamey as Resident Representative in April 2012.

JMAP Bank-Fund Matrix

TitleProductsTiming of missionExpected delivery
A. Mutual information on relevant work programs
Bank work programBudget support series 2015-17: US$50 million annually for three yearsSeptember 2014April 2015
IMF work program in the next 12 months1. Fourth and Fifth ECF review and Article IV consultationOctober 2014December 2014
2 Sixth ECF reviewMarch 2015June 2015
B. Requests for work program inputs
Fund request to BankAssessment of economic impact of selected public investment projectsMay 2014June 2015
Bank request to FundMacroeconomic assessment that can be reported in the budget support program documentOctober 2014December 2014
C. Agreement on joint products and missions
Joint products in the next 12 monthsDebt Sustainability AnalysisOctober 2014December 2014

Statistical Issues

A. Assessment of Data Adequacy for Surveillance
General: Data provision has some shortcomings, but is broadly adequate for surveillance. Niger participates in the WAEMU’s harmonization of statistical methodologies through the multilateral surveillance process, seeking regional improvements in national accounts, with the support of the WAEMU Commission and AFRITAC West.
Real sector statistics: The economic accounts are compiled on an annual basis by the National Institute of Statistics (INS), in accordance with the System of National Accounts 1993 (SNA93). Although the national accounts compilation follows best methodological practice, the ROSC assessment found that national accounts data originate mainly from administrative sources and the household and informal sector surveys are not up-to-date. For several years, the INS has been engaged in a process of renovation of its national accounts, following the SNA93 methodology and using the ERETES software, with the assistance of AFRITAC West. This project is behind schedule as the new base year 2006 was finalized in 2009, and national accounts for 2010 have been finalized in 2013 only. Work has just started on the 2011 national accounts. Meanwhile, the INS is continuing to issue an up-to-date series of national accounts with a methodology adjusted to the SNA93. In concert with other WAEMU member countries, the INS has been compiling and publishing a harmonized consumer price index (CPI) for Niamey on a monthly basis since early 1998. The CPI was rebased in 2008, with a new basket of products and revised weights.
Government finance statistics: Monthly government finance statistics are compiled by the Ministry of Finance (MF) with a one- to four-month lag, based on information provided by the budget, customs, tax, and treasury directorates. The MF prepares a monthly reconciliation of spending commitments made by the budget directorate and payments made by the treasury, but the data are not disseminated to the general public. Data are limited to the operation of the budgetary central government that covers the general budget, special funds, and operations of the treasury special accounts, but not the social security administration. As part of the process of economic integration within the WAEMU, the country has made significant progress in bringing its fiscal data in line with the common framework that has been developed with technical assistance from the IMF (the harmonized table of government financial operations—TOFE). The authorities plan to adopt the Directive n°10/2009/CM/UEMOA on the TOFE, which will imply migrating from Government Finance Statistics Manual 1986 (GFSM 1986) to the GFSM 2001.
Monetary and financial statistics: Monetary statistics are generally based on the Guide to Money and Banking Statistics in IFS (1984 Guide). Preliminary monetary data are compiled by the national agency of the Central Bank of West African States (BCEAO) and released officially by BCEAO headquarters. The authorities report monetary data on a regular basis, with a lag of about three months.
Balance of payments: The balance of payments statistics are compiled in conformity with the Balance of Payments Manual, Sixth Edition (BPM6). The national agency of the BCEAO is responsible for compiling and disseminating the balance of payments statistics, and the BCEAO headquarters for delineating the methodology and calculating the international reserves managed on behalf of the participating countries. Since the statistics in this area are published with a significant lag, the quantitative analysis in this sector should be taken with caution.
Niger: Table of Common Indicators Required for Surveillance
Date of latest observationDate receivedFrequency of Data7Frequency of Reporting7Frequency of publication7
Exchange RatesCurrentCurrentDDM
International Reserve Assets and Reserve Liabilities of the Monetary Authorities109/1411/14MMM
Reserve/Base Money09/1411/14MMM
Broad Money09/1411/14MMM
Central Bank Balance Sheet09/1411/14MMM
Consolidated Balance Sheet of the Banking System09/1411/14MMM
Interest Rates209/1411/14MMM
Consumer Price Index10/1411/14MMM
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4NANANANANA
Revenue, Expenditure, Balance and Composition of Financing3– Central Government09/1411/14MMNA
Stocks of Central Government and Central Government-Guaranteed Debt506/1410/14SSNA
External Current Account Balance12/1311/14SSA
Exports and Imports of Goods and Services201311/14AQA
GDP/GNP201311/14AAA
Gross External Debt201310/14AIA
International Investment Position620109/10AAA

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability position vis-à-vis nonresidents.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Semiannually (S); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability position vis-à-vis nonresidents.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Semiannually (S); Irregular (I); Not Available (NA).

Formerly PRGF.

When a member has overdue financial obligations outstanding for more than three months the amount of such arrears will be shown in this section.

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