Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

NIGER

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Niger is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at a fixed rate of CFAF 655.957 per €1, which is the official buying and selling rate. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris foreign exchange market and the fixed rate between the euro and the CFA franc.
Exchange taxAD banks charge an exchange commission of 2% on exchanges involving euros and a commission on purchases and sales of other currencies, the rate of which is freely determined. In addition, they levy a bank commission of 0.25% on transfers to all countries outside the WAEMU, which must be surrendered in its entirety to the treasury.
Exchange subsidyNo.
Forward exchange marketResidents are authorized to contract forward exchange cover to settle payments related to imports and exports of goods and services, and maturities may not take place after the payment due date for the imports or exports in question.
Arrangements for Payments and Receipts
Prescription of currency requirementsNiger is linked to the French Treasury through an Operations Account; therefore, settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC members and the Comoros) are made in euros or the currency of any other Operations Account country or any other currency stipulated in commercial contracts.
Controls on the use of domestic currencyForeign currency accounts (FCAs) may be debited with domestic currency for the following transactions: cash purchases of foreign exchange, credit to another FCA, and payments to a resident. All other transactions through FCAs in domestic currency require prior BCEAO approval.
For current transactions and paymentsYes.
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Use of foreign exchange among residentsForeign exchange may be used among residents only in transactions between ADs and their clients.
Payments arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Clearing agreementsA multilateral clearing agreement exists between the WAEMU members and Cape Verde, The Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone.
Administration of controlExchange control is administered jointly by the MOF and the BCEAO. Most of the authority to supervise foreign exchange transactions has been delegated to authorized banks, which are required to report those operations to the MOF. The only operations that continue to require prior authorization of the MOF or the BCEAO involve residents’ investments abroad, domestic accounts in foreign exchange, foreign exchange accounts held in currencies other than euros, and residents’ accounts abroad. No supporting documents are required for transfers of up to CFAF 300,000.
International security restrictions
In accordance with UN sanctionsMeasures have been taken to freeze the funds of persons and entities associated with terrorism.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports and exports of gold require prior authorization from the MOF. Exempt from this requirement are (1) imports and exports by or on behalf of the treasury or the BCEAO; (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles); and (3) articles of gold up to a combined weight of 500 grams when carried by a traveler.
Controls on exports and imports of banknotes
On exports
Domestic currencyTravelers are allowed to export CFA franc banknotes within the WAEMU. However, repurchases by the BCEAO of banknotes exported outside its zone of issue continue to be suspended. In addition, the shipment of BCEAO banknotes between authorized intermediaries and their correspondent banks located outside of the WAEMU zone is strictly prohibited.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers is authorized up to the equivalent of CFAF 500,000; amounts exceeding this limit require documentation demonstrating either the importation of the foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits in local banks. In addition, residents traveling outside the WAEMU member states are authorized to take out foreign currency up to the equivalent of CFAF 2 million per person; amounts exceeding this limit may be exported in the form of traveler’s checks or other means of payment.
On imports
Foreign currencyNonresidents bringing in foreign banknotes, foreign currency traveler’s checks, and other means of payment exceeding the equivalent of CFAF 1 million must declare the amounts to customs upon entry. Resident travelers bringing in foreign currency banknotes or other means of payment exceeding the equivalent of CFAF 300,000, must surrender the amount to an authorized intermediary, within eight days of their return.
Resident Accounts
Foreign exchange accounts permittedResidents are allowed to open foreign exchange accounts with local banks or banks abroad with authorization from the MOF, subsequent to the approval of the BCEAO.
Held domesticallyThese accounts are valid for one year and renewal requires an application to the MOF at least one month prior to expiration of the validity period. If no application is presented by the beneficiary, the account must be closed at the end of the validity period.
Held abroadIndividuals traveling abroad may open bank accounts abroad to deposit foreign currencies legally exported during travel and income earned during a stay abroad. Residents are required to repatriate assets held in these accounts within 30 days of their return. Foreign accounts of national diplomatic representatives are not subject to any restrictions.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are allowed to open these accounts, but BCEAO authorization is required. These accounts are valid for two years. For renewal of these accounts, account holders are required to submit an application with proof of their position and actual residence, and with the reasons for the request, within one month prior to expiration of the validity period.
Domestic currency accountsThe BCEAO has suspended the repurchase of banknotes circulating outside the WAEMU countries; therefore, these accounts may not be credited with banknotes of the BCEAO, euro notes, or any other banknote issued by a central bank maintaining an Operations Account with the French Treasury. These accounts may not be overdrawn without prior authorization from the MOF, subsequent to BCEAO approval. Transfers may be made freely between nonresident accounts.
Convertible into foreign currencyThese accounts may be freely debited for the purchase of foreign currencies on the official market.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance payments for imports require authorization, and importers may not acquire foreign exchange until the scheduled date of the payment.
Documentation requirements for release of foreign exchange for importsExchange authorization and invoices are required.
Domiciliation requirementsAll imports exceeding CFAF 5 million must be domiciled with an AD.
Preshipment inspectionGoods exceeding CFAF 3 million f.o.b. require an inspection for quality and price.
Import licenses and other nontariff measures
Negative listImports of narcotics and firearms are prohibited.
Other nontariff measuresQuantitative restrictions may be applied on products for public health and security reasons.
Import taxes and/or tariffsThe CET of the WAEMU consists of four rates (zero, 5%, 10%, and 20%). In addition, imports are subject to a 1% statistical fee and a community solidarity levy of 1%. All imports from outside the ECOWAS are subject to a community solidarity levy of 0.5%.
Taxes collected through the exchange systemYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsThe due date of payment for exports must be within 120 days after the goods have been shipped. Proceeds from exports, regardless of the purchasing country, must be repatriated in their entirety through the BCEAO no later than 30 days from the date of receipt. The repatriation of proceeds from exports to WAEMU countries is not required.
Surrender requirementsResidents are required to surrender to an AD all proceeds in foreign currency within one month of the date of receipt.
Financing requirementsNo.
Documentation requirementsA customs declaration is required.
DomiciliationAll exports of more than CFAF 5 million, except those to WAEMU countries, must be domiciled with an AD.
Export licensesAuthorization is required for exports of gold.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisible transactions to France, Monaco, and the Operations Account countries are permitted freely. Payments to other countries may be made freely by ADs with presentation of supporting documents.
Trade-related payments
Indicative limits/bona fide testPayments for imports with countries outside the franc zone exceeding the equivalent of CFAF 5 million limit must be domiciled with an AD, which is required to verify the validity of the request and open a file to include all supporting documents required by exchange regulations.
Investment-related payments
Prior approvalPrior approval from the MOF is required for these payments abroad.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsResidents traveling as tourists or on business to franc zone countries that are not members of the WAEMU are allowed to take out up to the equivalent of CFAF 2 million in cash in foreign currency. Any sum above this amount may be taken out in the form of traveler’s checks, certified checks, or other payment instruments. Foreign currency is issued upon presentation to an AD of a ticket and a valid passport or identity card. Resident travelers must declare to customs and surrender to an AD within eight days of their return any foreign means of payment in excess of the equivalent of CFAF 300,000 that they bring in.
Personal payments
Prior approvalPrior approval is required for payment of family maintenance.
Foreign workers’ wages
Indicative limits/bona fide testTotal net wages may be transferred upon the presentation of pay slips.
Credit card use abroadCredit cards issued by resident financial intermediaries or foreign financial institutions may be used abroad.
Other paymentsYes.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions with countries that are not WAEMU members must be repatriated.
Surrender requirementsProceeds, except those from WAEMU members, must be surrendered within one month of the due date or date of receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsAll investments abroad by residents require prior MOF authorization, and at least 75% of the financing of such investments should be effected by borrowing from abroad. Capital inflows to WAEMU countries are unrestricted. Capital transfers to all other countries require MOF approval, but receipts are freely permitted.
There are no controls on foreign investments in WAEMU countries or on capital outflows for repayment of loans, disinvestment abroad, and option contract purchases. These operations must be reported to the MOF for statistical purposes.
Controls on capital and money market instrumentsPrior authorization of the RCPSFM is required for the issuing and marketing of securities and real assets of foreign entities, canvassing, or advertising investments abroad.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThese are subject to declaration to the MOF for statistical purposes.
Sale or issue locally by nonresidentsResidents may purchase securities sold or issued by nonresidents only after obtaining the authorization of the RCPSFM.
Purchase abroad by residentsThe prior authorization of the MOF is required for these operations.
Sale or issue abroad by residentsResidents may sell securities freely to nonresidents for disinvestment purposes, but the settlement by transfer abroad or by a credit to a nonresident’s account requires an exchange license issued by the MOF.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
On money market instrumentsThe regulations governing shares or other securities of a participating nature apply.
On collective investment securitiesThe regulations governing shares or other securities of a participating nature apply.
Controls on derivatives and other instrumentsThese instruments are virtually unknown in Niger. However, instruments of this type are governed by the rules and regulations normally applicable to securities and direct investments. Residents are authorized to purchase abroad call and put options in commodities and securities.
Controls on credit operations
Commercial credits
By residents to nonresidentsCredits to nonresidents may be granted freely for merchandise exports if the due date of payment is within 120 days following shipment of the goods; for export services; or if no time limit has been officially fixed for such payment.
To residents from nonresidentsThere are no controls on the granting of loans of this type. Their repayment is, in general, authorized, subject to the submission of documents.
Financial credits
By residents to nonresidentsThe granting of financial credit is subject to prior authorization of the MOF. For the transfer abroad of funds in this context, a foreign exchange authorization must be submitted for clearance from the MOF, together with the necessary supporting documents.
To residents from nonresidentsThere are no controls, but funds required to service these facilities must be transferred through an AD.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe regulations governing financial credits apply.
To residents from nonresidentsThere are no controls, but the necessary funds must be transferred from abroad through an AD. If, however, these transactions take place between a direct investment company resident in Niger and its parent company located abroad, the transactions are considered direct investments and require a prior declaration to the MOF.
Controls on direct investment
Outward direct investmentParticipation in a company is considered direct investment if it exceeds 20%. Authorization from the MOF is no longer required for investments consisting of the acquisition by residents of securities, for which the issue or marketing by nonresidents has been authorized in advance by the RCPSFM. At least 75% of such investments must be financed with borrowing from abroad.
Inward direct investmentInward investment is subject to prior reporting to the MOF for statistical purposes.
Controls on liquidation of direct investmentThe liquidation of a resident’s investments abroad must be reported to the MOF. Reinvestment of the proceeds of such liquidations is subject to prior MOF authorization. If reinvestment is not authorized, the proceeds must be repatriated within one month through an AD.
There are no controls on the sale of foreign investment in Niger, but such operations must be reported to the MOF for statistical purposes.
Controls on real estate transactions
Purchase abroad by residentsPrior authorization of the MOF is required.
Purchase locally by nonresidentsPurchases for purposes other than direct investment in a business, branch, or company are allowed with prior declaration to the MOF.
Sale locally by nonresidentsOperations may be settled only after approval of the MOF. Following settlement, the liquidation or sale must be reported to the MOF and the BCEAO within 20 days.
Controls on personal capital transactions
Loans
By residents to nonresidentsPrior authorization of the MOF is required.
To residents from nonresidentsA declaration for statistical purposes and submission of a report to the MOF are required.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsGifts and endowments are subject to prior authorization of the MOF. Inheritances and dowries are generally authorized.
To residents from nonresidentsThese transactions are subject to declaration to the MOF.
Settlement of debts abroad by immigrantsImmigrants who have acquired resident status must first obtain authorization from the MOF to settle debts contracted abroad while they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsThese transactions are subject to prior authorization of the MOF.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAll borrowing abroad must be reported to the Directorate of External Finance for statistical purposes.
Maintenance of accounts abroadBanks and financial institutions may open accounts with correspondent banks but are not authorized to hold liquid assets, except to meet the needs of their current operations.
Lending to nonresidents (financial or commercial credits)Prior MOF authorization is required.
Lending locally in foreign exchangeLending in foreign exchange by resident banks to resident individuals who are authorized to hold accounts in foreign exchange is subject to prior MOF authorization, after the consent of the BCEAO has been obtained.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Credit controlsLoans and other assistance granted to nonresidents are subject to prior MOF authorization, after the consent of the BCEAO has been obtained.
Differential treatment of deposit accounts held by nonresidents
Credit controlsYes.
Investment regulationsThe regulations governing direct investment apply.
Abroad by banksInvestments abroad by banks are subject to authorization from the MOF.
Provisions specific to institutional investorsControls are imposed by the Insurance Code of the Inter-African Conference of Insurance Markets (CIMA Code).
Limits (max.) on securities issued by nonresidentsSecurities and mutual funds issued outside the WAEMU by a private or public entity that is not a resident of a member country may not be listed on a regional securities exchange.
Limits (max.) on investment portfolio held abroadThe CIMA Code does not allow insurance companies to invest abroad.
Limits (min.) on investment portfolio held locallyThe CIMA Code includes specific rules for the use of insurance companies’ technical reserves.
Currency-matching regulations on assets/liabilities compositionThe CIMA Code specifies that liabilities in a given currency must be covered by assets denominated in the same currency.
Other controls imposed by securities lawsNo.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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