Niger: Staff Report for the 2004 Article IV Consultation, Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and Request for Waiver of a Performance Criterion
Author:
International Monetary Fund
Search for other papers by International Monetary Fund in
Current site
Google Scholar Close
Publication Date:
25 Aug 2004
eISBN:
9781451828658
Language:
English
Keywords:
ISCR; CR; EU program; EU counterpart; state; EU grant; CFA franc; debt relief; reform program; financing requirement; private sector; Debt relief; Arrears; West Africa
Download PDF (753.9 KB)

This paper focuses on Niger’s 2004 Article IV Consultation, Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and Request for Waiver of Performance Criterion. Niger’s macroeconomic performance has been satisfactory in 2002 and 2003, notwithstanding the adverse impact of the crisis in Côte d’Ivoire and large fluctuations in agricultural output owing to uneven rainfalls. Real GDP growth is estimated to have increased to 5.3 percent in 2003, from 3.0 percent in 2002, owing to a bumper crop made possible by favorable weather conditions.

Abstract

This paper focuses on Niger’s 2004 Article IV Consultation, Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and Request for Waiver of Performance Criterion. Niger’s macroeconomic performance has been satisfactory in 2002 and 2003, notwithstanding the adverse impact of the crisis in Côte d’Ivoire and large fluctuations in agricultural output owing to uneven rainfalls. Real GDP growth is estimated to have increased to 5.3 percent in 2003, from 3.0 percent in 2002, owing to a bumper crop made possible by favorable weather conditions.

I. Introduction

1. Niger is on the 24-month consultation cycle for program countries, and the last Article IV consultation was completed on February 8, 2002. On that occasion, Directors welcomed a rebound in economic growth following two years of declining output and encouraged the authorities to pursue structural reforms, particularly the privatization program, and to restructure the financial sector. In concluding the fifth review under the PRGF arrangement on November 24, 2003, Directors welcomed the authorities’ continued efforts to keep the economic program on track and carry out their poverty reduction strategy. They stressed the need to implement the procurement code, establish a multisector regulatory agency, move ahead with privatization, and develop a technical assistance program to strengthen the country’s institutional capacity.

2. On April 12, 2004, the Executive Board approved Niger’s enhanced HIPC Initiative completion point and request for topping up. Including topping-up, Niger will receive debt relief amounting to US$663 million in net present value (NPV) terms, of which US$42 million is from the Fund. This will bring the ratio of NPV of debt to exports down from 209 percent to 150 percent at end-2002. On May 12, 2004, Paris Club creditors cancelled all of Niger’s debt (US$185 million in NPV terms) (Box 1).

Niger: External Debt and Enhanced HIPC Initiative Assistance

Debt estimates

Niger’s total outstanding external public debt at end-2002 was estimated at US$1,758 million (about 81 percent of GDP). Approximately 84½ percent of the debt is owed to multilateral creditors, 15 percent to official creditors, and the remainder to commercial creditors.

Paris Club

Following Niger reaching the completion point in the context of the Enhanced HIPC Initiative in April 2004, Paris Club creditors agreed on May 12, 2004 to cancel the country’s entire debt, in line with assistance expected under the Enhanced HIPC Initiative, topping up relief, and additional bilateral debt cancellation. Participant creditors included the governments of France, Japan, Spain, the United Kingdom, and the United States.

The key terms of the agreement are as follows:

  • Paris Club creditors agreed to cancel US$104 million in NPV terms, which represents their share of the Completion Point debt relief to Niger under the Enhanced HIPC initiative, including topping up, as agreed by the Boards of the Fund and the World Bank.

  • All maturities were cancelled, except for a small share of maturities falling due under the 1996 and 2001 Paris Club rescheduling agreements.

  • Going beyond their HIPC commitments, participating Paris Club creditors pledged to cancel all of the remaining maturities, or an additional US$48 million in NPV terms, on a bilateral basis.

  • As a result, and taking into account the assistance already provided during the interim period (US$33 million in NPV terms), the entire debt of Niger with Paris Club creditors will be cancelled. The bilateral agreements are to be concluded no later than October 31, 2004.

Non-Paris club creditors are expected to provide debt relief to Niger on at least comparable terms to those provided multilaterally by the Paris Club creditors.

3. The political situation remains calm, as Niger settles into a long electoral period. Local elections will take place in the third quarter of 2004; parliamentary and presidential elections are scheduled for November 2004. The continuing crisis in Côte d’Ivoire and possible budgetary slippages during the long election period are a risk to strong program implementation in 2004.

4. Relations with the Fund are presented in Table 1 and Appendix II; while those with the World Bank Group are described in Table 1 and Appendix III. Statistical issues are reviewed in Appendix IV.

Table 1.

Niger: Fund Position, 2000-08 1/

article image
Source: IMF, Finance Department.

End of period.

II. Recent developments and Performance Under the PRGF-Supported Program

A. Economic Developments and Structural Reforms

5. Niger has continued to make progress toward restoring macroeconomic stability and putting the economy on a stronger growth path. Real GDP growth rose to 5.3 percent in 2003 (3 percent in 2002), owing to a bumper crop made possible by favorable rainfall, and to buoyant activity in the construction and trade sectors (Table 2). Cereal production increased by an estimated 8.6 percent in 2003, allowing for a large build-up of the strategic reserves stock. Under these conditions, and against the backdrop of the appreciating CFA franc vis-à-vis the U.S. dollar, price pressures remained subdued, with consumer prices declining by 1.6 percent during the year.1

Table 2.

Niger: Selected Economic and Financial Indicators, 2001-07

article image
Sources: Nigerien authorities; and staff estimates and projections.

Commitment basis as per payment orders issued.

In percent of beginning-of-period money stock.

Total revenue, excluding grants, minus expenditure, excluding interest payments.

Total revenue, excluding grants, minus total expenditure, excluding foreign-financed investment projects.

Before debt relief. For projections, including the financing gap.

6. Economic activity has remained buoyant in early 2004, with the agriculture and construction sectors benefiting from continued favorable weather conditions and the implementation of HIPC-funded investment projects in the social sectors and rural areas. Consumer prices declined in the 12 months ended in April 2004, as food prices continued to fall.

7. Niger made further progress toward fiscal consolidation in 2003. The basic fiscal deficit2 was contained at 2 percent of GDP, as programmed, and the overall fiscal deficit (before grants), at 7.5 percent of GDP, was lower than targeted. As revenue was weaker than envisaged, the fiscal outcome was achieved by keeping spending under strict control. Total revenue was lower than programmed, owing to smaller transfers from the West African Economic and Monetary Union (WAEMU), a decline in customs receipts because of the repeated closing of the border with Nigeria, and weaknesses in VAT collection. With the exception of the wage bill (3.6 percent of GDP), all other spending items were kept below the program’s projections. Total spending on health and education was equivalent to 5.2 percent of GDP in 2003, compared with 6.1 percent envisaged in the program, reflecting mainly shortfalls in external assistance for projects in these sectors, owing to administrative delays on the part of both the authorities and donors. Taking into account the reduction in domestic arrears, the government’s net financing requirement was more than covered with external resources, including from the World Bank and the European Union. As a result, the government was able to reduce slightly its domestic debt (Table 3).

Table 3.

Niger: Financial Operations of the Central Government, 2001-07

article image
article image
Sources: Nigerien authorities; and staff estimates and projections. 1/ Based on interim assistance under the HIPC Initiative in 2003.

Revenue from the settlement of reciprocal liabilities between the government and enterprises, such as settlement of tax arrears.

In 2001, includes payment of end-1999 external payments arrears vis-à-vis the African Development Bank (AfDB) and the OPEC Fund, as agreed in the rescheduling agreements. In 2002, includes payment of end-1999 external payments arrears vis-à-vis the OPEC Fund, Libya, the Saudi Fund for Development, and a commercial bank. In 2003, includes payment of external arrears vis-à-vis the European Investment Bank.

Includes in the 2002 program assistance from IDA and the AfDB that are now classified as grants; for 2003-05, includes assistance provided through a rescheduling of current maturities by Paris Club creditors (up to the completion point), China, and a portion of the relief from the Islamic Development Bank (IsDB), and the OPEC Fund.

The revised program for 2003 is on the premise that the World Bank and the AfDB intended to disburse CFAF 33.4 billion of loans for budgetary assistance, and the European Union was expected to disburse CFAF 19.6 billion of grants for budgetary assisance; the remaining gap (CFAF 9.1 billion) was expected to be financed by grants from bilateral donors.

Total revenue, excluding grants, minus total expenditure, and excluding foreign-financed investment projects.

In 2003, includes CFAF 3.2 billion of HIPC assistance granted on a stock of debt operation.

Table 3b.

Niger: Quarterly Cumulative Financial Operations of the Central Government, 2003

(In billions of CFA francs)

article image
Sources: Nigerien authorities; and staff estimates and projections.

West African Economic and Monetary Union.

Niger: Fiscal Performance, 2002-03

(in percent of GDP)

article image

Before grants (- deficit)

After grants

8. While no indicative targets were established for end-March 2004 and beyond, government revenue mobilization remained weak in the first quarter of 2004, with revenue collection declining slightly relative to the same period of 2003. At the same time, expenditures rose by an estimated 0.4 percent of GDP compared to the first quarter of 2003, with current outlays accounting for most of the increase. As no external budgetary support was disbursed, the authorities drew heavily on their deposits at the Central Bank for West African States (BCEAO) to meet the government’s financing requirement (Box 2).

9. The external current account deficit (including official transfers) narrowed slightly to 6.2 percent of GDP in 2003, as an increase in the trade deficit was offset by lower interest payments and higher official transfers for budgetary assistance (Table 4). The terms of trade deteriorated in 2003, reflecting increases in prices of food imports. Export volume rose by 4.0 percent owing to increased shipments of uranium, cowpeas, and onions, while import volume grew in line with real GDP. The current account deficit was mostly financed by official foreign assistance. Preliminary balance of payments data show a decline in Niger’s contribution to the reserves of the regional central bank (BCEAO), as explained in paragraph 11 below relating to monetary developments.3

Table 4.

Niger Balance of Payments, 2001 - 07

(In billions of CFA francs, unless otherwise indicated)

article image
article image
Sources: Nigerien authorities; and staff estimates and projections.

Includes purchases of goods in ports and airports by carriers, in line with the 5th manual.

In 2002, a grant of CFAF 8.9 billion was provided by the European Commission (EC) for the settlement of external payments arrears to the European Investment Bank and the EC.

In 2002, two loans of CFAF 9.4 billion and CFAF 13.7 billion were disbursed by the OPEC Fund for (i) the settlement of Niger’s external payments arrears at end 1999 vis-à-vis the OPEC Fund; and (ii) the OPEC Fund’s contribution to the HIPC Initiative.

In 2001, includes settlement of end-1999 external payments arrears vis-à-vis the African Development Bank (AfDB) and the OPEC Fund, as agreed in the rescheduling agreements. In 2002, includes payment of end-1999 external payments arrears, whose setltlements were agreed with the OPEC Fund, Libya, the Saudi Fund for Development and a commercial bank.

Includes in the 2002 program assistance from IDA and the AfDB that are now classified as grants; for 2003-05, includes assistance provided through a rescheduling of current maturities by Paris Club creditors, the Islamic Development Bank (IsDB), the Opec Fund, the Kuwait Fund for Arab Economic Development.

Includes debt under discussion for CFAF 16.6 billion in 2001, CFAF 14.7 billion in 2002, and CFAF 8.1 billion in 2003.

Includes assistance from the IsDB, the Opec Fund, the West African Economic and Monetary Union (WAEMU), the Arab Bank for Development in Africa (BADEA) and the Kuwait Fund for Arab Economic Development (KFAED).

Table 5.

Niger: Monetary Survey, 2001–04

article image
Sources: BCEAO; and staff estimates and projections.

In 2002, bank financing includes the impact of the OPEC Fund financing for the settlement of external payment arrears and delivery of HIPC Initiative assistance.

Niger: Budgetary Outturn for the First Quarter of 2004

(in billions of CFA francs)
article image

10. The real effective exchange rate appreciated by 5 percent from end-2001 to end-2003 (Figure 1), 4 consistent with the strong appreciation of the euro (to which the CFA franc is pegged) against the U.S. dollar. A favorable inflation differential dampened the impact of a strengthening of the nominal effective exchange rate over the past two years.

Figure 1.
Figure 1.

Niger: Real Effective Exchange Rates

Citation: IMF Staff Country Reports 2004, 275; 10.5089/9781451828658.002.A001

Figure 1.
Figure 1.

Niger: Exchange Rate Indices, January 1993-March 2004

Citation: IMF Staff Country Reports 2004, 275; 10.5089/9781451828658.002.A001

Sources: IMF, Information Notice System.

11. Based on very preliminary information, broad money is reported to have declined by 13½ percent in 2003, owing to a large contraction of currency in circulation.5 While net foreign assets (NFA) of the banking system are estimated to have fallen by 15 of beginning-of-period broad money (M2), net domestic assets rose by 2 percent. Credit to the private sector and to the government rose by 5 percent and 3 percent of beginning of period M2, respectively, with most of the credit to the private sector being allocated to the telecommunications and trade sectors (Table 8). Since July 2003, the BCEAO reduced the discount rate by 150 basis points to 5 percent, in light of the decline in inflation and the high level of international reserves in the monetary union. The health of Niger’s banking system is broadly satisfactory, with the majority of the local banks effectively complying with most of the Regional Banking Commission’s prudential regulations (Box 3).

Table 6.

Niger: Quantitative Performance Criteria and Indicative Targets for the Period December 31, 2002-December 31, 2003

(In billions of CFA francs)

article image
Note: The term “debt” has the meaning set forth in point number 9 of the Guidelines on Performance Criteria with Regard to Foreign Debt, adopted on August 24, 2000, and also applies to commitments contracted or guaranteed for which value has not been received.

Performance criteria for program indicators under A and B; indicative targets otherwise. The performance criterion on net bank credit to government is replaced by a performance criterion on domestic financing for December 2003 (N/A = not applicable).

√ and X reflect the observance or the nonobservance, respectively, of a performance criterion or indicative target.

The ceiling on net bank credit to government or domestic financing of the budget will be adjusted if the amount of disbursements of external budgetary assistance, as defined in footnote 6, exceeds or falls short of program forecasts. If disbursements are less than the programmed amounts, the ceiling will be raised pro tanto in line with the observed shortfalls up to a maximum of CFAF 7.5 billion at end-March 2003, CFAF 7.5 billion at end-June 2003, CFAF 15.0 billion at end-September 2003, and CFAF 7.0 billion at end-December 2003. If disbursements of assistance exceed programmed amounts by more than CFAF 3.0 billion, the ceilings will be lowered pro tanto by any additional amount beyond this CFAF 3.0 billion unless the excess assistance is used for a reduction of domestic payments arrears in excess of the programmed reduction.

Maximum. If external budgetary assistance defined in footnote 6 exceeds the amounts programmed by up to CFAF 3.0 billion, the basic budget balance will be decreased pro tanto by that amount.

Total revenue, excluding grants and revenue from settlement of reciprocal debts, minus total expenditure excluding foreign-financed investment outlays.

Minimum.

External budgetary assistance (including traditional debt relief, but excluding IMF financing and HIPC Initiative interim assistance) net of external debt service (excluding IMF repayment) and payments of external arrears.

Except for ordinary credit for imports or debt relief.

Excluding debt relief obtained in the form of rescheduling or refinancing.

Excluding (i) revenue from the settlement of reciprocal debts between the government and Nigerien enterprises; and (ii) revenue from the privatization of public enterprises that is included in financing.

The scope of the wage bill is defined in the technical memorandum of understanding.

Table 7.

Niger: Structural Performance Criterion and Structural Benchmarks Under the Poverty Reduction and Growth Facility-Supported Program for the Period January 1, 2003–December 31, 2003

article image
Table 8.

Niger: Public Expenditure for Health and Education, 2001-04

article image
Sources: Nigerien authorities; and staff estimates.

Execution rates may not strictly reflect budget execution because off-budget expenditures are also included in the calculation of the execution rates.

Includes HIPC Initiative assistance.

All off-budget expenditures are assumed to be financed from abroad as most of these are related to projects directly managed by foreign donors which are not known to the authorities at the time when the investment budget is elaborated.

Table 9.

Niger: External Debt Indicators, 2002-22 (continue)

(In percent, unless otherwise indicated)

article image
Sources: Nigerien authorities; and staff estimates and projections.

Assumes a stock-of-debt operation on Naples terms at end-1999, and at least comparable treatment by non-Paris Club creditors.

Based on a three-year backward-looking moving average of exports of goods and services.

Revenue is defined as central government revenue, excluding grants.

Current-year exports, as defined in IMF, Balance of Payments Manual, 5th ed., 1993, and excluding transit trade.

Reflects debt relief provided by some bilateral creditors, on a voluntary basis, in addition to the assistance provided under the HIPC Initiative.

Table 9.

Niger: External Debt Indicators, 2002-22 (concluded)

(In percent, unless otherwise indicated)

article image
Sources: Nigerien authorities; and staff estimates and projections.

Assumes a stock-of-debt operation on Naples terms at end-1999, and at least comparable treatment by non-Paris Club creditors.

Based on a three-year backward-looking moving average of exports of goods and services.

Revenue is defined as central government revenue, excluding grants.

Current-year exports, as defined in IMF, Balance of Payments Manual, 5th ed., 1993, and excluding transit trade.

Reflects debt relief provided by some bilateral creditors, on a voluntary basis, in addition to the assistance provided under the HIPC Initiative.

Niger: Compliance with Prudential Norms, End-December 2003

article image
Source: BCEAO

Number of complying banks out of the total number of banks.

Measured as the ratio of medium- and long-term resources over fixed assets and medium- and long-term loans.

Ratio of liquid assets to short-term liabilities.

12. In 2003, the authorities continued with their efforts to improve public expenditure management. The operations of the external debt unit were strengthened through training and the installation of new software, and two regional treasury offices were computerized for the implementation of the new charter of public accounts. In November 2003, the authorities successfully finalized the budget for 2004 using the new budget nomenclature and charter of public accounts, following extensive training programs.6 The authorities also completed an actuarial audit of the National Retirement Pension Fund (NRPF) and a financial audit of the wage bill.7 However, the implementation of the new public procurement code was postponed owing to delays in the provision of technical assistance.

13. During 2003 the authorities set up successfully a multisector regulatory agency (MRA), but the privatization of the State’s electricity and petroleum enterprises (NIGELEC and SONIDEP) was further delayed. Unable to attract investors to take over SONIDEP in late 2003, the authorities launched a new tender offer in 2004. The privatization of NIGELEC has proven difficult owing to the need to mobilize US$60-100 million in funding for its rehabilitation and expansion, as well as the company’s dependence on the Nigerian Electrical Power Authority (NEPA), which faces its own financial difficulties. Discussions are under way with Nigerian and French companies to set up a consortium that would take a 51 percent stake in NIGELEC (Box 4).

B. Program Implementation in 2003

14. The implementation of the 2003 PRGF-supported program was broadly satisfactory. All of the quantitative and structural performance criteria for December 2003 were observed, with the exception of the performance criterion on the reduction of domestic arrears, owing to the shortfall in revenue and delays in receiving external financial assistance (Tables 6 and 7).8 Staff reached understandings with the authorities on a revised schedule for clearing a portion of the unsettled arrears during the 18-month period to end-June 2005. In addition, as indicated above (paragraph 9), the indicative target on total government revenue was missed. Regarding structural reforms, the benchmarks on the actuarial audit of the NRPF and the wage bill audit were observed in November 2003, instead of by end-September 2003; and the benchmark on the preparation of a Medium-Term Expenditure Framework (MTEF) for the education and health sectors was met in May 2004, instead of December 2003. The authorities have requested a waiver for the nonobservance of the performance criterion on the reduction of domestic arrears (Appendix 1).

Niger: Structural Conditionality Under the PRGF Arrangement

Coverage of structural conditionality in the current program

The structural areas covered by conditionality in the 2003 program included the following: (i) continuous implementation of the petroleum product pricing system; (ii) introduction and use of a new debt-management and recording software; (iii) completion of an actuarial study of the National Retirement Pension Fund; (iv) completion of a financial audit of the wage bill; (v) computerization of the regional treasury offices for the implementation of the new government charter of public accounts; and (vi) preparation of a medium-term expenditure framework for two key social sectors. The continuous implementation of the petroleum product pricing system contributes to securing a steady supply of petroleum imports. The strengthening of the External Debt-Service Unit will allow for improved debt management. The computerization of the regional treasury offices for the implementation of the new government charter of public accounts allows the government to record and monitor budgetary operations more efficiently, while the medium-term expenditure framework will make it possible to improve budget preparation.

Relevant structural measures not included in the current program

Reforms related to the strengthening of the financial sector and the privatization of public enterprises are the main responsibility of the World Bank and are not included as structural conditions under the current program.

Status of structural conditionality included in earlier programs

Niger’s past track record of structural reform implementation was not very satisfactory as a result of weaknesses in implementation capacity and several interruptions related to the two coups d’état that took place since 1995. The main areas of reform in the last program, supported by the Enhanced Structural Adjustment Facility(ESAF) arrangement (1996-98), included civil service reform to control the wage bill, the privatization of public enterprises, the restructuring of the banking sector, and governance measures to strengthen the transparency of budgetary operations and clear domestic payments arrears. During the current Poverty Reduction and Growth Facility (PRGF) arrangement, structural conditionality focused on strengthening the budgetary execution and reporting processes, as well as improving governance. The track record of reform implementation has improved.

Structural areas covered by HIPC Initiative completion point conditionality

Key conditions for reaching a floating completion point under the enhanced HIPC Initiative included the following measures: (i) ensuring full budgeting of poverty reduction programs financed by HIPC Initiative assistance, and publishing semiannual reports on the execution of these programs; and (ii) submitting budget review laws (loi de règlement) to the National Assembly and the corresponding treasury accounts to the Supreme Court’s Chamber of Accounts and Budgetary Discipline for fiscal years 1998-2000. The authorities fulfilled these conditions.

Structural areas covered by World Bank lending and conditionality

A two-tranche Public Expenditure Adjustment Credit (PEAC I) was approved by the World Bank Board in November 2001 to support the fiscal management and structural reform programs in the period 2001-02. The PEAC I was fully disbursed in amounts of US$30 million in December 2001 and US$40 million in August 2002. The PEAC I focused on the following policy areas: (i) public sector reform, particularly public expenditure and budget management reforms, procurement reform, and domestic arrears reduction; (ii) social sector reforms, including key reforms in education and health; (iii) financial sector reform; and (iv) privatization and regulatory reforms. A follow-up operation, the PEAC II, was approved by the World Bank Board on October 23, 2003 in an amount of US$65 million, of which US$40 million was disbursed in December 2003, and the outstanding balance is due to be disbursed before end-June 2004. The financial sector reform program, which targets the restructuring and consolidation of the commercial banking sector, as well as of the insurance, pension, and microfinance sectors, will be supported by a forthcoming World Bank financial sector technical assistance project.

III. Policy Discussions

15. Niger’s main challenges are to preserve macroeconomic stability and bring the economy to a higher and sustainable growth path, with a view to further reducing poverty. This will require improving competitiveness, raising savings and investment, and diversifying the economy to reduce its vulnerability to exogenous shocks. Against this background, discussions focused on the implementation of the PRGF-supported program and the medium-term policies to consolidate the gains made in the macroeconomic and structural areas.

16. In this context, the Article IV consultation discussions revolved around the following themes: (i) the policies to be pursued during the remainder of 2004 and an assessment of macroeconomic prospects for the medium term; (ii) the structural reform agenda, including policy initiatives to promote private sector savings and investment and improve the competitiveness of the economy; and (iii) the authorities’ capacity to deal with potential shocks. In addition, the staff discussed with the authorities the preliminary Ex Post Assessment of Niger’s Performance under Fund-supported Programs, and the recent progress made in implementing the country’s poverty reduction strategy (PRS). Encouraged by the positive results over the last three years, the authorities expressed a keen interest in a successor PRGF arrangement to help implement their unfinished reform agenda.

A. Discussions on Medium-Term Macroeconomic Prospects and Challenges

17. The authorities target average real GDP growth of slightly over 4 percent a year during 2004-06, based on substantial increases in investment and a strengthening of nonmining activities, mostly in the agriculture and services sectors, including tourism. The medium-term macroeconomic framework also aims to contain inflation below the WAEMU target of less than 3 percent; narrow the external current account deficit; and increase the investment-to-GDP ratio to 16½ percent by 2006.

18. The achievement of Niger’s medium-term macroeconomic objectives is predicated on the continuation of prudent financial policies, especially fiscal consolidation, and the acceleration of the structural reform program. The authorities recognized the need to further strengthen revenue, pursue a prudent public wage policy, and carry on with the reform of the public enterprise and financial sectors. Government revenue is projected to rise to 11.5 percent of GDP by 2006, and expenditure will be contained below 19 percent of GDP. As a result, the basic fiscal balance will be brought to near balance and the current budget deficit will shift to surplus, rising to 1.5 percent of GDP by the latter year (Table 3).

19. The staff expects Niger’s balance of payments to remain sustainable over the medium term, with continued support from the donor community. With the coming on stream of gold production in 20059 and assuming continuation of strong export performance for agricultural products, overall export growth is projected to average 7 percent a year during 2004-06. The growth of imports would be relatively moderate, sustained by demand for capital and intermediate goods in the public and private sectors. With the terms of trade remaining broadly stable, the external current account deficit would narrow to below 6 percent of GDP in 2006. The overall balance of payments position would strengthen steadily during the period, reflecting in part substantial external assistance and private investment inflows, including in gold mining. As a result, Niger’s contribution to the international reserves of the BCEAO will improve over the medium term.

20. The crisis in Côte d’Ivoire has resulted in increased transport costs for some of Niger’s supply lines and export activities. Coupled with the appreciation of the real effective exchange rate over the last two years, these developments have eroded Niger’s competitiveness. The country’s investment performance is further frustrated by difficulties in attracting foreign direct investment because of high energy and transportation costs, a lowskill labor force and a narrow resource base, as well as a small domestic market. Moreover, Niger’s attempts to break the heavy dependence of its economic performance on weather conditions have been hindered by its low savings rate. Over the past five years, gross domestic savings averaged a mere 4 percent of GDP, with private savings accounting for about half of the total. Private domestic investment is also constrained by a lack of long-term funding, as the financial market is undeveloped and commercial banks have a conservative attitude toward lending.

21. The authorities agreed that continued strict adherence to ongoing macroeconomic and structural reforms was essential to addressing Niger’s weak savings and investment performance (Box 5). In view of the country’s low income and consumption levels, they stressed the regional dimension of their economic policy within the WAEMU. They noted that with its more than 60 million inhabitants and open intra-zone trade regulations, the Union offered significant prospects for investment opportunities in agriculture and manufacturing. The staff encouraged the authorities to examine the extent to which the investment potential could also be developed in the context of the U.S.-sponsored African Growth and Opportunity Act (AGOA).

Niger: Efforts at Enhancing Competitiveness

Since the devaluation of the CFA franc in 1994, economic activity and export growth have been led, to a large extent, by agriculture and livestocks, reflecting prevailing rainfall conditions, a rapid growth of the labor force in rural areas, and successful price and trade liberalization.

The increase in agricultural exports (mainly cowpeas and onions) has contributed to export diversification. Nevertheless, Niger’s trade remains heavily concentrated in a few commodities, with uranium and cattle accounting for about 60 percent of total exports (excluding reexports) in 2002. Given the secular decline in uranium prices and the moderate growth of cattle production that is expected in the coming years, the authorities are seeking to capture new market shares and increase those traditional exports in which Niger has a comparative advantage (cowpeas, onions, and groundnuts). At the same time, they strive to promote nontraditional exports (including industrial products, meats, and tourism) in order to sustain growth and reduce Niger’s vulnerability to exogenous shocks. In particular, the government aims at (i) doubling exports of cowpeas; and (ii) tripling the number of international tourists by 2005-06. With the starting of gold operations in 2005, the share of uranium and cattle exports is expected to fall to less than 27 percent over 2006-07.

The government’s goals are ambitious, given the challenges to attract private investment, including poor institutional, human and physical resources; inadequate property rights and a weak judicial system; and the high costs of energy, communications and transportation. In addition, the level of financial deepening remains very low; bank lending is mostly limited to short-term trade finance; and the spread between lending and deposit rates remains wide, owing to insufficient competition, a high level of nonperforming loans, difficulties in recovering overdue loans, and high operating costs. In addition, water management is a major constraint.

To achieve economic diversification and promote growth, the authorities are endeavoring to improve infrastructure and reduce public utility and transportation costs, notably in the context of the privatization program (paragraph 31). They are determined to promote private sector investment by simplifying the regulatory framework, strengthening the judicial system and governance, and deepening financial intermediation. At the same time, the government is seeking to expand the tax base rather than increase marginal rates of taxation, and to streamline tax exemptions and subsidies with a view to curtailing existing distortions and preventing further expansion of the informal sector. The authorities consider that these reforms are crucial to furthering fiscal consolidation and increasing the level of resources available for poverty reduction.

22. The authorities have rightly identified the rural sector as the main source of growth, given its dominant role in the economy. In close collaboration with the World Bank, they are developing a strategy for the sector, which seeks to raise the growth of agricultural output from an average of 2 percent a year to 6 percent. To achieve this objective, the authorities intend to reduce the dependency of agricultural output on rainfall by promoting small scale irrigated agriculture and other nonfarm income generating activities. To dampen the effects of droughts, the government has also created an early warning agency set up within the Prime Minister’s Office—The Service d’Alerte Precoce (SAP)—which monitors closely climatic and food conditions and deploys contingency plans for managing food crises. In addition, the authorities indicated that they will continue to pursue mineral and oil explorations; so far, results in these areas have been modest (Box 6).

Niger: Contribution of Gold to the Economy

In 2003, the Société des Mines du Liptako (SML) was given the rights to exploit Niger’s gold deposits for export under the Samira project. The SML is jointly owned by a parastatal company (ONAREM), with a 20 percent minority share, and Canada’s African Geomining Development Corporation (AGDC) with an 80 percent equity participation. Under the project, which is expected to last five years, production would amount to 23.5 tons out of the estimated 93.4 tons of Niger’s gold reserves.

The contribution of gold to the economy will be modest, accounting for about 0.6 percent of GDP during 2005-09 and 9.2 percent of total exports in 2005. Gold export receipts would decline to about 6 percent of total exports earnings per annum thereafter. Because of the exemptions granted under the mining code, revenue accruing to the government would total US$19.1 million in the form of royalties and dividends, accounting for less than 1 percent of projected total government revenue during 2005-09

B. Policies for 2004

Macroeconomic policies

23. Within the macroeconomic framework spelled out above, real GDP is expected to grow by 4.1 percent in 2004, assuming good rainfall and continuing growth in agricultural production. Non-agricultural real GDP growth would rise to 4.3 percent, driven by manufacturing and construction of additional schools, health centers and other basic infrastructure in the rural areas, in line with the PRSP. Other construction activities will also be undertaken to revamp sports infrastructure for the 2005 Francophonie games, mostly with donor financing. Consumer prices are projected to increase moderately in 2004, with inflation remaining well below the 3 percent WAEMU convergence target.

Fiscal policy

24. The authorities’ fiscal program for 2004 is consistent with the medium-term objectives of the PRSP and seeks to continue the process of fiscal consolidation. The fiscal target is to narrow the basic deficit (on a commitment basis and before grants) from 2 percent of GDP in 2003 to 1.4 percent in 2004. This is to be realized by increasing total government revenue from 9.9 percent of GDP in 2003 to 10.3 percent in 2004 and limiting expenditure—other than externally financed investment outlays—to below 12 percent of GDP (Box 7 and Table 3). In order to increase revenue, the authorities have introduced the following measures: (i) suspension of tax-free imports of rice for reexport, which had encouraged tax evasion; (ii) introduction of the value added tax on cooking oil, in addition to the existing excise tax; and (iii) imposition of a 12 percent excise tax on tea. Consideration is also been given to increasing the domestic tax on premium gasoline by 5 percent. At the same time, to strengthen tax administration, the government has appointed a new Deputy Finance Minister in charge of informal sector taxation issues.

Niger: Revenue Measures Proposed by FAD for FY 2004

An FAD mission that visited Niamey in early October 13, 2003 proposed a series of measures to broaden the tax base, with a total revenue impact estimated at CFAF 5.8 billion(0.35 percent of GDP). These included: (i) the extension of the VAT on all processed food products; (ii) elimination of VAT exemptions on water and electricity consumption; and (iii) imposition of an excise tax on soft drinks and tea. In November 2003, an AFR team urged the authorities to speedily implement the measures in early 2004, and to initiate the collection of the license fee that had been instituted earlier in the year on the reexport of tobacco and cigarettes, with a potential revenue impact of CFAF 0.5-1 billion (0.1 percent of GDP). The team also reviewed prospects with regard to the return of WAEMU transfers to levels prevailing before the crisis in Côte d’Ivoire, which would bring CFAF 3-4 billion in additional revenue (0.2 percent of GDP) in 2004. Finally, the team urged the authorities to begin taxing imports on the basis of actual values, with technical assistance from the pre-shipment inspection agency (COTECNA).

Citing the politically sensitive nature of the main revenue measures noted above, the authorities decided to undertake alternative revenue-enhancing actions, as spelled out in paragraph 24. The authorities indicated readiness to consider other measures, if needed, to ensure the realization of the revenue objective for the year.

25. On the expenditure side, current outlays are programmed to increase by0.2 percent of GDP in 2004, mainly because of (i) a budgetary allocation for the local, parliamentary and presidential elections (0.5 percent of GDP); and (ii) a 3.5 percent increase in the wage bill.10 Over half of the increase in the wage bill is to be allocated to merit pay raises, against the backdrop of an effective freeze on civil service employment. External interest payments would decline relative to the 2003 level, following Niger’s reaching the completion point under the enhanced HIPC Initiative. After stagnating in 2003, capital expenditure is expected to increase by more than 20 percent in 2004, largely financed by foreign resources. The authorities expect to reduce domestic payment arrears by an additional1.1 percentage point of GDP in 2004, including a portion of unsettled claims from FY 2003 (see paragraph 14).11

26. The authorities indicated that the 2004 budget allocations for the social sectors were consistent with the PRSP objectives in these areas. Spending in education and health sectors is expected to rise to 5.6 percent of GDP in 2004, from 5.2 percent in 2003, owing to increased HIPC resources and higher project financing for these sectors (Table 8). This would contribute to increasing the number of classrooms and teachers as part of the special volunteer teachers program, the staffing of rural health centers, and national immunization rates for infants aged 12-14 months.

27. The financing gap amounting to CFAF 58 billion (3.4 percent of GDP) is expected to be fully covered in 2004. The authorities have already received financing assurances from the European Union (CFAF 19.1 billion), the World Bank (CFAF 13.2 billion), the African Development Bank (CFAF 3 billion) and other donors (CFAF 16.4 billion), including France and Belgium. A residual financing gap estimated at CFAF 6.4 billion (0.4 percent of GDP) is expected to be mostly covered with additional bilateral assistance in the second half of the year.

Monetary policy

28. Monetary policy in 2004 continues to be conducted at the regional level, and is aimed at maintaining price stability and strengthening the external position. Net bank credit to the government is projected to increase moderately, permitting the allocation of adequate financial resources to the private sector. The authorities will begin complying with the general guidelines of the monetary authorities requiring the settlement of outstanding statutory advances to the central bank. They also intend to issue government bonds on the regional financial market. In consultation with the World Bank, the authorities are implementing the reform of the financial sector and intensifying consultations with the BCEAO on the supervision of microfinance institutions. Consistent with the low levels of foreign interest rates, in January 2004 the rediscount rate was eased by a further 50 basis points, to 4 percent.

Regional integration

29. The authorities noted that despite the improvement in Niger’s overall economic performance, the country will not meet all the convergence criteria set in the WAEMU’s regional Convergence, Stability, Growth and Solidarity Pact for 2004.12

uA01fig01

Real GDP Growth, 1994-2003

Citation: IMF Staff Country Reports 2004, 275; 10.5089/9781451828658.002.A001

uA01fig02

Inflation, 1994-2003

Citation: IMF Staff Country Reports 2004, 275; 10.5089/9781451828658.002.A001

The authorities reiterated, however, their commitment to the continued implementation of the policies required to meet these objectives. In particular, they recognized the need to continue broadening the tax base to progressively move toward meeting the regional revenue-to-GDP threshold of 17 percent. Realization of the latter remains, nevertheless, a long-term challenge, and the authorities noted that improvements in revenue mobilization are bound to be gradual.13 They also underscored their intention to adhere to prudent demand management policies and to rely on grant financing in order to reach and maintain the targeted debt-to-GDP ratio (Box 8).

Niger and WAEMU Convergence Criteria

article image

Structural reforms

30. Niger’s structural reform program for 2004 focuses on further improving budget management, continuing the privatization process in coordination with the World Bank, and finalizing the restructuring of the financial sector. The government has made major strides over the past several years in budget management reform, with efforts focusing on modernizing the chain of expenditure, both in terms of management procedures and the information system. Improvements in budget management will also be consolidated in 2004 with: (i) an audit of the HIPC-funded poverty reduction program; and (ii) the implementation of the recommendations of a Public Expenditure and Financial Accountability Review (PEMFAR) recently completed with technical assistance from the World Bank.

31. The authorities reiterated their commitment to pursuing their privatization and financial sector reform programs, with technical assistance from the World Bank and other donors. However, they expressed concern over the difficult privatization process in some sub-Saharan African countries and called for steps to avoid similar experiences in Niger.14 With the recent sale of SONITEL (the telecommunications company), the focus is on SONIDEP and NIGELEC, as well as on the privatization of the CDN and the restructuring of the National Post and Savings Institution (ONPE). In early 2004, the World Bank approved a new credit for US$5.5 million in support of the reform of the latter two institutions.

32. The government has been implementing a comprehensive financial sector reform program since 1999 aimed at rehabilitating and restructuring ailing banking institutions, restoring confidence in the banking system, and deepening financial intermediation.15 The authorities have successfully conducted an audit of the national pension fund and are taking steps toward improving the environment for the operation and expansion of the financial sector, including the development of microfinance entities.16 The financial sector reform project is to be financed by a credit from the World Bank.

33. The restructuring of the banking system has focused on the rehabilitation and/or liquidation of four banking institutions: the CDN; the Caisse de Prêts aux Collectivités Territoriales (CPCT); the Banque Commerciale du Niger (BCN); and the Banque Islamique du Niger pour le Commerce et l’Investissement (BINCI). The CPCT ceased operations in 1999, and a restructuring plan has been prepared for CDN’s privatization. The BCN and the BINCI are no longer under the administrative oversight of the monetary authorities, and have resumed normal operations while continuing implementation of their restructuring plans.

34. Niger maintains a relatively liberal exchange and trade system. Niger is an Article VIII country and its exchange system, which is common to all members of WAEMU, has remained free of restrictions on the making of payments or transfers for current international transactions. In addition, Niger does not engage in multiple currency practices. The trade regime is rated as 2 on the ten-point Fund scale of trade restrictiveness. The country shares a common trade regime with other members of the WAEMU. As a result of the gradual introduction of the common external tariff (CET) between 1998 and January 2000, the maximum customs duty rate was set at 20 percent and the number of rates was reduced to four (0, 5, 10, and 20 percent). Imports to Niger are not subject to quantitative restrictions.

35. Niger is a signatory of the Cotonou Convention,17 and as such its exports to the European Union generally enjoy nonreciprocal preferential treatment in the form of exemption from import duties. Likewise, Nigerien goods enjoy nonreciprocal preferential access to the markets of developed countries, other than the European Union member states, under the Generalized System of Preferences. The country is also eligible for the benefits of the United States’ AGOA.18

C. Ex Post Assessment and Possible Successor PRGF Arrangement

36. Niger is still at a relatively early stage of its reform agenda. With the notable exception of the current PRGF Arrangement, performance under Fund-supported programs has lacked in perseverance and continuity, due to repeated bouts of political and social instability, as well as to limited institutional and human capital capacity. Because of the ensuing stop-go pattern of policy implementation, the extent of effective adjustment has been moderate, and real GDP growth has remained highly dependent on weather conditions (Box 9).

37. The authorities emphasized their commitment to breaking the heavy dependence of Niger’s economy on rainfall. In their view, setting Niger’s economy on a long-term sustainable growth path would require a modernization of the informal sector and important investments in infrastructure to ensure a better management of water. This, they stressed, was critical to significantly enhancing the performance of the agricultural and rural sectors, in which 80 percent of the population make a living effectively working only four months per year.19

38. An area of continuing concern for the authorities is the technical and institutional weaknesses that hinder program implementation. While the government has taken steps to improve institutional capacity, much remains to be done, particularly in the areas of tax and customs administration, debt management, and statistical data management. Fund technical assistance has focused largely on the fiscal area, especially on strengthening the tax and treasury administration, as well as the expenditure management process. Assistance in tax and customs administration remains critical to ensuring that Niger’s revenue bounces back from the weak performance experienced in 2003. The authorities called for the posting of new tax and customs resident experts in the country (possibly with support from France) to replace those that were reassigned last year, notably to AFRITAC West. The staff indicated that the Fund will continue to assist Niger in developing its institutional capacity.

39. Looking forward, the authorities underscored that Niger will remain dependent on concessional external financing. Indeed, prospects for domestic financing of the poverty reduction program remain limited, despite the recent progress in improving the public finances. The authorities concurred that financing needs should be mostly covered with grants, and only if necessary with highly concessional loans.20 They requested continued Fund assistance in implementing their reform agenda and securing adequate resources in the context of a new PRGF arrangement. The staff stressed that Niger’s debt sustainability analysis should guide the authorities’ borrowing policy in the medium term, and more importantly, that the level of assistance would continue to depend on the implementation of sound macroeconomic policies and good governance.

Niger: Overview of the Ex Post Assessment of Niger’s Performance Under Fund-Supported Programs

Overall performance under Fund-supported programs

  • Performance under Niger’s adjustment programs was weak in the early 1990s, became mixed during the latter part of the decade, and clearly improved during the period 2000-03. With the notable exception of the three years to 2003, program implementation in the last decade lacked in perseverance and continuity, owing to political and social instability, as well as limited institutional and human resource capacity.

  • Niger’s stop-go pattern of policy implementation has limited the extent of effective adjustment and reform. Real GDP growth has remained weak and dependent on weather conditions, and the revenue-to-GDP ratio is the lowest in the WAEMU, making it difficult to considerably reduce the country’s dependence on external aid.

  • Steady trade liberalization under Fund-supported programs has resulted in increased openness of the economy. Program approach to export promotion progressively shifted away from reforming of specific sectors toward improving the investment climate, along with attaining macroeconomic stability. While uranium remains the single most important export, there has been some progress in export diversification.

  • The volatility of foreign aid flows presented significant challenges to successive programs. It resulted in the interruption of projects and programs, and reduced the effectiveness of macroeconomic policies.

  • Program projections were sometimes overly optimistic and staff did not always fully take into account in program design Niger’s weaknesses in capacity implementation, despite extensive provision of technical assistance over the program period.

The way forward: Niger’s medium-term challenges, objectives, and policies

  • The overriding task of the authorities is to place the economy on the path to stronger and sustained growth, for effective poverty reduction. This will require continued fiscal consolidation and expenditure reorientation toward increased investment, as well as a further strengthening of Niger’s structural reform agenda, both of which are essential to ensuring that the economy becomes progressively less dependent on weather conditions.

  • The implementation of the reform agenda will continue to impose a heavy burden on Niger’s administrative resources, requiring extensive technical assistance. The Government needs to develop a well targeted program for strengthening capacities in many areas of the public administration.

Role of the Fund and collaboration with other donors

  • The authorities have indicated their determination to work with the Fund to ensure that the needed external financing requirements are met, recognizing that the financing needs will have to be covered with grants, and only if necessary with highly concessional loans. Given the reform challenges that lie ahead, especially in the fiscal area, the staff is of the view that Niger is not ready to move to a relationship with the Fund based only on surveillance and technical assistance, and that Fund involvement should continue in the form of a new PRGF arrangement, possibly with a low level of access. The Fund is also expected to play a catalytic role in securing financial and technical support from other development partners, with future conditionality designed to take into account progress in addressing capacity constraints.

D. Poverty Reduction Strategy

40. Poverty is widespread in Niger. Based on a 1993 household survey, two thirds of the population lives below the poverty line and one-third is considered extremely poor. The country’s social indicators are among the weakest in the world. Niger’s first progress report on the implementation of the PRSP was presented to the Fund’s Board in November 2003. The report stressed the overall success of the poverty projects financed through HIPC Initiative assistance, as well as some of the shortcomings in program implementation. The best results have been achieved in the health and education sectors. In particular, primary school enrollment rates have increased substantially and medical coverage has expanded in the rural areas (see IMF Country Report No. 04/161). The authorities have recently initiated an audit of HIPC-funded programs to improve their effectiveness.

uA01fig03

Niger: Selected Social Indicators, 1995-2001

Citation: IMF Staff Country Reports 2004, 275; 10.5089/9781451828658.002.A001

41. Looking ahead, the achievement of the Millennium Development Goals (MDGs) by 2015 remains a major challenge (Table 13). Under the growth scenario outlined above (paragraph 16), poverty is expected to be reduced further by 5 percent by 2015. Hence, Niger would fall short of the MDG goal of halving poverty by 2015 (relative to poverty rate in 1995).21 Measuring progress toward other social objectives has been complicated by the lack of reliable indicators. Substantive work needs to be done to assess the required financing and technical assistance, as well as structural and institutional reforms and capacity building to attain the MDGs.

42. The authorities expressed their continued commitment to fighting poverty by using HIPC resources. In reporting on the key issues raised in the Joint Staff Assessment (EBD/03/94), they indicated that the update of the poverty analysis through a household survey was delayed owing to lack of funds (an estimated US$3 million). The authorities have begun a study on the incidence of public spending in the health sector and completed an analysis of the sources of growth.22 In addition, they are furthering preparations for a comprehensive population policy. The second annual PRSP progress report is due to be completed by end-June 2004; work is under way for updating the first PRSP by June 2005.

43. The staff discussed the authorities’ priorities for conducting Poverty and Social Impact Analysis (PSIA). The authorities concurred that the recent privatization of the water company is a key reform warranting a PSIA; however, no funds are presently available for such an analysis.

IV. Staff Appraisal

44. Niger has been implementing satisfactorily the PRGF-supported program. Especially noteworthy has been the progress accomplished in restoring macroeconomic stability and putting the economy on a path to stronger growth. Against the backdrop of a weak overall revenue performance, fiscal consolidation has required expenditure restraint, especially in 2003. Nonetheless, significant advances have been made in implementing the government’s poverty reduction strategy, which has resulted in increased school enrollment rates and improved medical coverage in the rural areas. In recognition of these efforts, in early April Niger reached the completion point under the enhanced HIPC Initiative.

45. Looking to the medium term, Niger’s main challenge is to sustain and broaden economic growth in a low inflation environment, in order to achieve a substantial reduction in poverty. Beyond the pursuit of prudent macroeconomic policies, a vigorous implementation of the structural reform agenda, especially in the public enterprise and financial sectors, and the development of a much needed dialogue with the private sector on economic policy making, constitute important elements for the success of the government’s growth strategy.

46. Niger has entered into a long electoral period, with presidential elections expected to be held in the latter part of 2004. These elections represent a potential risk to effective budget management. Under these circumstances, strict adherence to the key fiscal objectives for 2004 would be critical to preserving macroeconomic stability. In particular, there is a need to ensure that the revenue target is met and that spending is maintained under strict control, especially the wage bill and election-related outlays.

47. Niger continues to experience delays in implementing its structural reform agenda. The authorities are encouraged to move ahead decisively with their privatization and financial sector reform programs to strengthen competitiveness and improve the quality of services. In particular, there is a need to complete promptly the privatization of SONIDEP and NIGELEC, as well as the restructuring of the CDN and the ONPE, with technical assistance from the World Bank.

48. The staff welcomes the broadly satisfactory implementation of the PRSP since the issuance of the first annual progress report in June 2003. Although progress has been made in addressing some of the issues raised in the JSA, difficulties have also emerged. Specifically, while preparations for developing a population policy have started, work on the household survey has been put on hold, owing to lack of resources. Looking ahead, it is important that the survey be carried out, and that the HIPC Initiative savings be used effectively to further advance the poverty reduction program. The authorities should be commended for their efforts to complete the second annual progress report and update the PRSP.

49. The authorities agreed with the thrust of the ex post assessment of past Fund-supported programs. They stressed that substantial investments in water management infrastructure and irrigation systems are essential to reduce the continued dependence of growth performance on weather conditions. They also concurred with the staff on the importance of limiting external financing to grants and highly concessional loans to prevent a deterioration of debt sustainability.

50. Niger provides adequate data to the Fund, although timeliness, quality, and coverage need to be improved. In particular, data sources and the methodology employed in deriving the national accounts and balance of payments data are in need of substantial improvement. In addition, there are serious weaknesses in the monetary data owing to large swings in currency in circulation in several WAEMU countries that need to be addressed at the regional level. Staff will continue to assist the authorities in securing the necessary technical assistance to help in the overall improvement of the statistics used for policy formulation and program monitoring.

51. Finally, the staff encourages the authorities to closely monitor the key potential risks to effective implementation of their reform agenda. These pertain to Niger’s weak revenue performance, its dependence on donor support, and the country’s weak institutional capacity. Addressing these risks requires continued strengthening of revenue mobilization, securing the timely disbursement of adequate external assistance, and developing and implementing a well-targeted technical assistance program.

52. The staff recommends the completion of the sixth and final review under the PRGF arrangement. Considering the government’s stated commitment to pursuing the ongoing reform efforts, and in view of the steps taken to preserve Niger’s medium term objectives with regard to the reduction of domestic payments arrears, the staff supports the authorities’ request for a waiver for the nonobservance of the missed performance criterion for end-December 2003.

53. It is proposed that the next Article IV consultation with Niger be held in accordance with the provisions of the Executive Board Decision No. 12854-(02/96), 9/12/02.

Figure 2.
Figure 2.

Niger: Selected Economic Indicators, 1997-2004

Citation: IMF Staff Country Reports 2004, 275; 10.5089/9781451828658.002.A001

Sources: Nigerien authorities; and staff estimates and projections.Dashed line corresponds to original projections under the PRGF arrangement approved in December 2000 (IMF Country Report No. 01/15). Solid line corresponds to actual data until 2002, estimates for 2003 and current projections for 2004.
Figure 3.
Figure 3.

Niger: Selected Fiscal Indicators, 1997-2004

(In percent of GDP)

Citation: IMF Staff Country Reports 2004, 275; 10.5089/9781451828658.002.A001

Sources: Nigerien authorities; and staff estimates and projections.1/ Dashed line corresponds to original projections under the PRGF arrangement approved in December 2000 (IMF Country Report No. 01/15). Solid line corresponds to actual data until 2002, estimates for 2003 and current projections for 2004.2/ Overal budget balance, excluding foreign-financed capital expenditure.
Table 10.

Niger: Tracking Delivery of HIPC Initiative Assistance

(As of December 31, 2003)

article image
Sources: Nigerien authorities; and staff estimates.
Table 11.

Niger: Selected Social and Demographic Indicators

article image
Source: World Bank; World Development Indicators 2003.
Table 12.

Niger: Millennium Development Goals

article image
Source: World Development Indicators database, April 2004.

APPENDIX I

Niamey, June 15, 2004

Mr. Rodrigo Rato

Managing Director

International Monetary Fund

Washington, DC 20431

Dear Mr. Rato:

1. The government of Niger has successfully implemented the PRGF-supported program covering the period 2000-03. During the discussions with the staff on the sixth and last review of the program held in April 2004, it was concluded that all but one of the quantitative and structural performance criteria for the end-December 2003 were met, and that one quantitative indicative target and one structural benchmark were not observed. The missed quantitative performance criterion pertained to the reduction of domestic payments arrears, with only CFAF 12.2 billion being cleared, instead of the programmed CFAF 18 billion for the period. The quantitative indicative target on government revenue mobilization was missed by CFAF 11 billion (0.7 percent of GDP); and the medium-term expenditure framework (MTEF) for the health and education sectors was finalized in June 2004, instead of end-December 2003.

2. The government has reached satisfactory understandings with Fund staff on a revised schedule for the clearance of domestic payments arrears that preserves Niger’s medium-term objectives in this area, and would like to ask for a waiver for the nonobservance of the relating performance criterion. Having fulfilled the conditions agreed upon under the PRGF arrangement, the government requests, thus, completion of the sixth review and release of the final disbursement.

3. Niger achieved strong growth in 2003 driven by the agricultural sector and the government maintained prudent macroeconomic policies. Early indications are that economic growth in 2004 is likely to remain relatively strong, mainly due to the continued expansion of the agricultural sector and strong activity in the construction sector.

4. The government remains determined to foster growth and reduce poverty, and wishes to continue to benefit from financial and technical support from the Fund under a new PRGF arrangement.

5. The government authorizes the Fund to publish the staff report.

Sincerely yours,

/s/

Ali Lamine Zeine

Minster of Economy and Finance

APPENDIX II Niger: Relations with the Fund

(As of April 30, 2004)

I. Membership Status: Joined: 04/24/1963; Article VIII

II. General Resources Account:

article image

III. SDR Department:

article image

IV. Outstanding Purchases and Loans:

article image

V. Financial Arrangements:

article image

VI. Projected Payments to Fund, without HIPC Assistance (SDR Million; based on existing use of resources and present holdings of SDRs.):

article image

VII. Projected Obligations to Fund, with Board-approved HIPC Assistance (SDR Million; based on existing use of resources and present holdings of SDRs.):

article image

VIII. Implementation of HIPC Initiative

article image

IX. Safeguards Assessments:

The Central Bank of the West African States (BCEAO) is the common central bank of the West African states, which includes Niger. An on-site safeguards assessment of the BCEAO proposed specific remedies to alleviate vulnerabilities that were identified by staff. Although Fund staff and BCEAO authorities disagreed on the initial modalities of the recommendations, the following specific understandings were subsequently reached regarding the key remedies:

  • Financial reporting framework. The Fund staff recommended that the BCEAO formally adopt International Accounting Standards (IAS) and publish a complete set of financial statements, including detailed explanatory notes. It was agreed between the BCEAO and Fund staff that the BCEAO will strive to improve its financial and accounting reporting by aligning its practices with those recommended by the IAS, as adopted internationally by other central banks.

  • Internal controls system. The staff noted that the absence of oversight of the bank’s governance, financial reporting, and internal control practices by an entity external to the management of the BCEAO represented a significant risk. It was agreed between the BCEAO and Fund staff that, after seeking the opinion of the external auditor (commissaire contrôleur), the BCEAO staff will propose to the BCEAO Board of Directors that it adopt a resolution whereby the external auditor will be required to apprise the Board of Directors, during its annual review and approval of the financial statements, of the state and quality of internal controls within the bank.

Based on the 2002 financial statements, the staff noted that the BCEAO has improved the explanatory notes to the financial statements and further changes are scheduled for the next fiscal year, with a view toward a graduate alignment with IAS accounting to the extent applicable to central banks by 2005. The external auditor has apprised the Board of Directors of the BCEAO of the quality of internal controls in June 2003, and the financial statements for the year 2001 were published on the bank’s website. The staff will continue its follow up on the progress of the BCEAO in implementing the proposed recommendations as part of the ongoing safeguard-monitoring process.

X. Exchange Arrangements:

Niger is a member of the West African Economic and Monetary Union (WAEMU). The exchange system, common to all members of the WAEMU, is free of restrictions on the making of payments and transfers for current international transactions. The union’s common currency, the CFA franc, is pegged to the French franc. On January 12, 1994, the CFA franc was devalued by 50 percent in foreign currency terms, and the exchange rate was adjusted from CFAF 50 = F 1 to CFAF 100 = F 1. Effective December 31, 1998, the parity was switched to the euro at a rate of CFAF 655.96 = EUR 1. On December 31, 2003, the rate of the CFA franc in SDR terms was SDR 1 = CFAF 771.76.

XI. Article IV Consultation:

Niger is on the standard 24-month consultation cycle, and the last Article IV consultation discussions were held in Niamey in April 2004. The staff report will be discussed by the Executive Board in June 2004.

XII. Technical Assistance:

article image
article image

XIII. Resident Representative:

The position was filled in January 2004.

APPENDIX III Niger: Relations with the World Bank Group

(As of December 31, 2003)

Partnership in Niger’s development strategy

1. Niger’s poverty reduction strategy paper (PRSP), which was adopted in January 2002, presents a thorough poverty diagnosis and identifies key development challenges. The government reconfirmed the main thrust of the PRSP through a progress report that was validated via a national workshop in July 2003 and will be discussed at the Bank and Fund Boards in late 2003. The PRSP outlines a sound strategy for poverty reduction centered around four strategic pillars: (i) a macroeconomic framework ensuring economic and financial stability while promoting sustained and sustainable economic growth; (ii) the development of productive sectors, especially in rural areas; (iii) the development of basic social services; and (iv) the promotion of good governance and the strengthening of human and institutional capacities. The government has begun using the PRSP to improve coordination of development efforts in the country, including donor-supported activities. To that end, a donors’ forum was held in Niamey on June 7–8, 2003. At this forum, donors reaffirmed their endorsement of the PRSP as a strategic anchor for their assistance, and agreed on a progressive shift from project to program financing, and the need for further coordination and harmonization of policies and procedures. In this regard, the signing of a protocol relating to coordination among all donors supporting the education sector is a positive outcome and a great step forward.

2. The IMF is in the lead in helping Niger maintain macroeconomic stability through a three year Poverty Reduction Growth Facility (PRGF) arrangement approved in December 2000. The PRGF arrangement addresses fiscal imbalances and issues relevant to macroeconomic stability and economic growth. The PRGF arrangement’s structural conditionality has addressed areas related to budgetary and debt management, petroleum pricing, utilization of Initiative for Heavily Indebted Poor Countries (HIPC Initiative) resources, pension reforms, and transparency in public finances (preparation of budget review laws).

3. The Bank leads the policy dialogue on structural reforms relevant to economic growth and poverty reduction, including privatization and regulatory reforms, education, health and rural development. The Bank and Fund share joint responsibility in supporting financial sector and public expenditure reforms. The Bank and the Fund have also jointly assisted the government in the preparation of the PRSP and the first progress report assessing its implementation. They have also been providing assistance to Niger for reaching the completion point under the enhanced HIPC Initiative.

IMF-World Bank collaboration in specific areas

54. Common objectives and joint support for Niger’s PRSP and HIPC Initiative processes have increased collaboration between Fund and Bank in recent years. The Bank and Fund teams are closely coordinating their policy advice to the authorities and work closely together in the determination of structural conditionality. In general, the Bank leads the policy dialogue on key structural aspects of Niger’s reform program while the Fund is in the lead on policy dialogue on macroeconomic, particularly fiscal elements of the reform (see Table 1).

Table 1.

Bank-Fund Collaboration on Niger

(Ongoing or Planned)

article image

Areas in which the Bank leads

4. Privatization and regulatory reform. Privatization and regulatory reforms in Niger, supported by a Bank credit, have experienced delays in recent months, after having gained important momentum in 2000 and 2001. Currently, the Bank is assisting the authorities in the privatization of SONIDEP (petroleum) and NIGELEC (electricity) and strengthening the Multi-Sector Regulatory Agency (ARM). The Bank’s policy dialogue with the government on structural reforms is also being conducted in the context of adjustment operations (Public Expenditure Adjustment Credit I, PEAC I, and the Second Public Expenditure Adjustment Credit, PEAC II, approved by the Board in October 2003). The Fund is also a key partner in this policy dialogue and has included elements of the public enterprise reform agenda, such as the continuous implementation of a petroleum pricing system, as structural benchmarks for the PRGF arrangement.

5. Rural development. The Bank is providing support for developing and implementing a comprehensive rural development strategy, which aims at mitigating vulnerability and stimulating income generation, especially in rural areas. A draft rural development strategy has been recently completed. Bank assistance in this sector is provided through two ongoing (Private Irrigation and Agro-Pastoral Export Promotion) and one new (Community Action Program) investment projects. Decreasing the dependence of the vast majority of Niger’s population on rain-fed subsistence agriculture is a key objective of this strategy. Bank support in this area emphasizes the promotion of small-scale irrigated agriculture, livestock, farm and nonfarm income-generating activities and cereal bank construction. In addition, a prior action for PEAC II ensured an adequate allocation of budgetary resources to the rural development sector in Niger’s fiscal-year (FY) 04 budget. The disbursement of the second tranche of this credit is also conditional to the preparation of a multi-year budget program covering 2005, 2006, and 2007 in the rural development sector and complying with the MTEF for said fiscal years.

6. Social sector reforms. Improvement of access for the poor to social services is one of the strategic pillars in the PRSP. The Bank supports this objective through ongoing and new lending operations, which combine project assistance with program support, as well as analytical work, notably on population, gender, and poverty. There has also been close collaboration between the Bank and the government in the design and implementation of reforms in the education and health sectors, such as the introduction of decentralized recruitment of teachers (“volunteer teachers”) and health workers on a contractual basis. This contractual recruitment program has helped address issues of human resource shortages and supply-side constraints while keeping payroll costs sustainable. PEAC II supports the continuation of the contractual recruitment program. The Bank has also assisted the government in the preparation of a ten-year development plan in the education sector that is based on the PRSP and includes a medium-term expenditure framework for the basic education sector. It has also provided assistance and played a key role in Niger’s eligibility for participation in the Education for All—Fast-Track Initiative. In the health sector, the Bank has worked with the government on the preparation of the Strategic Orientations for Health Sector Development for 2001–11. The PEAC II has a specific measure related to the allocation of adequate budgetary resources to the education and health sectors in Niger’s FY 04 budget. In addition, the release of the second tranche of PEAC II is conditional to the preparation of multi-year budget programs for the Education and Health sectors covering FY2005-2007 and complying with the MTEF for said fiscal years.

7. Poverty monitoring. The Bank worked closely with the government in preparing a poverty profile that served as the basis for the PRSP poverty diagnosis. While this diagnosis has been judged as thorough and comprehensive by the joint staff assessment (JSA), it is based on household survey data from 1993. Updating the existing database is therefore an important concern of the government. A nationwide census has been completed recently, and preparations for a new household survey are under way. The Bank, together with other donors, is also advising the authorities on strengthening institutional arrangements for the monitoring and the evaluation of poverty in the context of the PRSP. In addition, the Bank is preparing a poverty assessment, as a contribution to the government’s efforts to update and strengthen the knowledge base on poverty and social development.

Areas where Bank and Fund share the lead

8. Poverty reduction strategy. Together with other external development partners, the Bank and Fund have jointly provided assistance to the government in the preparation of the PRSP. Since its completion, both institutions have jointly advised the authorities on the refinement and implementation of the strategy. The first progress report on the implementation of the PRSP has been prepared with the assistance of the Bank and the Fund. A second progress report is being prepared by the authorities with the assistance of both institutions.

9. Debt sustainability. The Bank and Fund have supported the government’s efforts to reach the HIPC completion point in April 2004. The need to build technical and institutional capacity for managing Niger’s external debt has been stressed by the Fund and the Bank. Measures to strengthen the external debt unit have figured as a structural benchmark under the PRGF.

10. Budgetary and public expenditure reforms. Strengthening public finances is a prerequisite for success of Niger’s broader reform agenda. The Bank and Fund share the lead in this area. Both institutions have played key roles in helping the government reduce domestic and external arrears. While the Fund is leading the dialogue on revenue-enhancing measures, the Bank is concentrating its efforts on budgetary reforms, in particular in the area of public expenditure. The Fund is also making key contributions to improving budgetary processes: a number of important measures, such as preparation of budget review laws and computerization of budgetary expenditure, have been included as structural benchmarks in the PRGF arrangement. The Bank has supported budgetary reforms through PEAC I. Consolidation and deepening of these reforms are currently supported by PEAC II. Several measures, such as the issuance of a circular on budget preparation, the establishment of a cash allocation plan, the closing of budgetary accounts, the preparation of bidding documents for the privatization of SONIDEP, and the issuance of circulars on the implementation of the procurement code are up-front actions undertaken by the government in the context of the ongoing PEAC II. In addition, the Bank intends to help strengthen Niger’s fiduciary framework through analytical work on public finance issues, in particular a Public Expenditure Management and Country Financial Accountability Assessment (PER/CFAA) and a Country Procurement Assessment Report (CPAR), both to be completed in FY 04.

11. Financial sector reform. Key elements of the reform agenda in Niger’s financial sector are as follows: (i) restructuring of the banks that remain under government control (the CDN and the CPCT); (ii) restructuring of the Islamic Trade and Investment Bank (BINCI), (iii) restructuring of the National Postal and Savings Office (ONPE), which involves the reorganization of the postal branch and the creation of a financial services affiliate of the Post Office and a National Savings Fund (CNE); (iv) an actuarial audit of the social security fund(CNSS); (v) reform of the insurance sector; and (vi) promotion and supervision of the microfinance sector and reforming of the social security system. The Bank has been playing a lead role in these reforms through its forthcoming financial sector technical assistance credit. This project, and in particular the studies on CDN and CPCT, have been prepared in close consultation with the Fund.

12. Civil service reform and decentralization. The reform and modernization of the civil service is an important element of Niger’s PRSP, yet there has been little progress in this area so far. The authorities are currently making an effort to put in place an integrated civil service database. By allowing a more transparent and effective management of the civil service, this database should improve control over the wage bill. Controlling the wage bill is important for maintaining fiscal balance, as recognized by the PRGF arrangement, which has set quantitative benchmarks for the wage bill. Planning for the implementation of the legal framework for political decentralization of 1996 has recently gained momentum, and local elections are scheduled for late 2003. However, important concerns regarding this reform remain, such as the lack of capacity at the local level and the fiscal implications of decentralization. To help the government address some of these concerns, the Community Action Program will help build capacities in rural communities in planning, implementing, and monitoring micro-development projects.

Areas in which the Fund leads

13. Macroeconomic management. The main objectives of Niger’s macroeconomic program, as stated in the PRSP, are to ensure economic and financial stability while promoting sustainable and robust growth. The Fund is supporting this program through its PRGF framework by providing financial and technical assistance, as well as through dialogue on macroeconomic policy reforms. The program has made satisfactory progress since approval of the PRGF arrangement in 2000 by achieving most of its benchmarks and overall positive fiscal performance. In the context of the macroeconomic framework underlying the PRSP, the Bank has provided technical assistance in building capacity in the Ministry of Finance and Economy to monitor economic performance and macroeconomic modeling.

14. Fiscal policy. Fiscal consolidation is a key objective of the PRGF and is supported by a number of performance criteria and benchmarks. Increasing budgetary revenue in order to progressively lower the government’s reliance on external assistance is particularly important, given Niger’s low level of revenues, compared with regional partners in WAEMU. In terms of expenditures, the Fund is mainly concerned with overall budget envelopes, while the Bank focuses on inter- and intrasectoral allocations, in particular in the key sectors of education, health, and rural development.

15. Monetary policy. The Fund leads the policy dialogue on monetary policy, which is set by the regional monetary authorities (BCEAO). The PRGF arrangement includes quantitative benchmarks for net bank credit to the government.

World Bank Group strategy

16. The Bank’s new Country Assistance Strategy (CAS) for the period 2003 to 2005 was approved by the Bank Board in January 2003. Its main objective is to support the implementation and further refinement of the PRSP. The strategic focus of the CAS is based on the four pillars of Niger’s poverty reduction strategy. The CAS outlines a lending and nonlending program that, in line with the Bank’s comparative advantage, will selectively provide assistance in areas relevant to these PRSP priorities.

17. As of September 30, 2003, the World Bank lending portfolio in Niger consisted of eight IDA operations, with a total commitment of US$245 million, out of which US$187 million was undisbursed. The CAS includes a base-case IDA lending program of US$238 million for FY 03 to FY 05. The Bank’s nonlending program for the CAS period is designed with a view to further assisting Niger in refining its Poverty Reduction Strategy and building capacity for a gradual transition toward programmatic lending.

Table 2.

Niger: Status of World Bank Portfolio (all IDA)

(In millions of U.S. dollars, as of September 30, 2003)

article image

18. The CAS outlines the Bank’s Analytical and Advisory Activities (AAA) for the coming years. The AAA program will help the government refine the PRSP by designing policy responses to issues raised in the joint staff assessments of the PRSP and PRSP progress report, such as poverty analysis, gender, population growth, and sources of growth. The AAA program also aims at reinforcing public sector capacity in pursuit of the PRSP’s objectives and in preparing Niger for the transition to consolidated programmatic lending. In support of these objectives, sector work on population and rural development is being completed. Others are ongoing, including a Public Expenditure Review/CFAA, a Poverty Analysis (FY 04), and a CPAR (FY 04) or planned, Development Policy Review (FY 05).

19. The Bank is committed to enhancing external partnerships in the framework of the government’s current efforts to mobilize and coordinate donor support for PRSP implementation. Besides the strong partnership with the Fund, the Bank is collaborating with a number of donors in different areas, including the European Union, the African Development Bank (AfDB), the United Nations Development Program (UNDP), and key bilateral donors involved in development issues in Niger.

Prepared by World Bank staff. Questions may be addressed to Mr. Pedro Alba, Country Director for Niger, at 458 2246; or Emmanuel Pinto Moreira, Country Economist for Niger, at 458-1834.

APPENDIX IV Niger: Core Statistical Indicators

(As of June 9, 2004)

article image

EIS = Economic Information System (IMF); FIN = Finance Department (IMF).

BCEAO = Central Bank of West African States.

Preliminary data for staff use only; actual data unrestricted.

APPENDIX V Niger: Scheduled Work Program Under the PRGF Arrangement, 2004

article image
1

Excluding food prices, the consumer price index rose by 0.5 percent.

2

Total revenue, before grants, minus total expenditure excluding foreign-financed investment projects.

3

At end-2003, Niger’s imputed gross international reserves were equivalent to 2 months of imports.

4

Niger trades predominantly with the European Union. The INS computation of Niger’s effective exchange rate, which does not include Nigeria, Côte d’Ivoire, and China as trading partners, shows no significant change in the real exchange rate over this period. When these three countries are included (with trade shares of 15 percent, 10 percent, and 8 percent, respectively), the real effective exchange rate shows an appreciation of 5 percent since end-2001.

5

Currency in circulation is reported to have contracted by two thirds during 2003. Against the backdrop of unexplained erratic swings in currency in circulation in several other WAEMU countries, this indicates that the BCEAO continues to experience difficulties in measuring that aggregate for individual countries of the monetary union. The authorities have noted that steps are being taken to address this problem. The staff has been following up on this issue in the context of the regional Article IV consultations with the WAEMU.

6

At end-2002, the Organic Law was amended by decree to take into account the new budget nomenclature and charter of public accounts, while ratifying the merger of the capital budget with the recurrent budget.

7

The actuarial audit of the National Pension Fund was conducted in an effort to determine the Fund’s financial viability and the effectiveness of its management. The audit revealed several weaknesses in management practices, including incomplete information on the documents used for determining payments of benefits and difficulties in determining eligible pension beneficiaries. The audit of wages and salaries did not uncover evidence of ghost workers but recommended a physical count of the civil servants.

8

The net reduction in domestic arrears amounted to CFAF 12.2 billion, instead of the programmed CFAF 18 billion.

9

Gold production is expected to last for about five years, with a total extraction of the metal estimated at 23.5 tons over the five-year period.

10

Wage payments would be limited to CFAF 59 billion in 2004, or 36.3 percent of tax receipts, broadly in line with the relevant WAEMU convergence criterion.

11

Under the current PRGF arrangement, domestic arrears were to be reduced from an initial stock of CFAF 132.2 billion (10.3 percent of GDP) in 2000 to CFAF 63.8 billion (4 percent of GDP) at end-2003. It was anticipated that the remaining balance would be cleared over several years beyond 2003. In the event, the actual stock of domestic arrears outstanding at end-2003 amounted to CFAF 69.6 billion, or 0.4 percent of GDP higher than programmed; these arrears are expected be cleared over the five-year period through end-2008 (see Table 5).

12

The WAEMU’s 1999 Growth and Solidarity Pact is based on the observance by member states of 8 convergence indicators pertaining to the public finances, the real sector, the balance of payments, and the common currency. Indicators viewed as essential are known as convergence criteria.

13

Under the baseline scenario underpinning Niger’s completion point DSA, the revenue-to-GDP ratio reaches the 17 percent threshold by 2022.

14

In some well publicized cases, privatization has been accompanied by substantial price increases, deterioration in the quality of services (including in the form of frequent power outages), and failure on the part of new private sector operators to commit the resources needed to modernize and expand capacity. The authorities stressed the need to avoid such post-privatization difficulties.

15

The financial system in Niger comprises nine institutions, three of which account for 79 percent of total deposits and 77 percent of outstanding credit.

16

Efforts have been made to harmonize the judicial system and the business laws according to the guidelines of the African Organization for the Harmonization of Business Laws (OHADA).

17

The convention, signed June 23, 2000 in Cotonou (Benin), regulates relations between the European Union and the African, Caribbean, and Pacific (ACP) countries in the areas of trade cooperation and development aid. The agreement replaces the Lomé Convention, which had been in effect since 1975 and whose fourth extension expired at the end of February 2000.

18

Niger is also a founding member of the Economic Community of West African States (ECOWAS), whose Treaty was revised in 1993 to include the objective of economic and monetary union.

19

Section VI of the ex post assessment report provides a detailed discussion of Niger’s policy options based on the lessons from the EPA.

20

Even under concessional terms of at least 50 percent, and notwithstanding the assumption of a smooth pattern of long term exports and GDP growth, the NPV of debt-to-export ratio is expected to remain above the 150 percent threshold in the long run, despite HIPC Initiative topping-up assistance. The ratios of the debt service to both exports and government revenue would, however, remain relatively low (below 7 percent).

21

These estimates assume an elasticity of poverty reduction with respect to growth of 0.5, as estimated in T. Besley and R. Burges (2003), Halving Global poverty (Journal of Economic Perspectives, Vol.17, and No.3.

22

The study underscores the predominant role of agriculture, animal breeding, and tourism in determining Niger’s growth prospects.

1

Decision was approved in principle by the Fund.

2

Net present value (NPV) terms at the decision point under the enhanced framework.

3

Excludes commitment of additional enhanced HIPC assistance of SDR 9.664 million subject to receipt of satisfactory financial assurances from other creditors.

Same Series

Other IMF Content

Other Publishers

  • Collapse
  • Expand
Cover IMF Staff Country Reports
Niger: Staff Report for the 2004 Article IV Consultation, Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and Request for Waiver of a Performance Criterion
Author:
International Monetary Fund
Volume/Issue:
Volume 2004: Issue 275
Publisher:
International Monetary Fund
ISBN:
9781451828658
ISSN:
1934-7685
Pages:
95
DOI:
https://doi.org/10.5089/9781451828658.002
Figure 1.

Niger: Real Effective Exchange Rates
Figure 1.

Niger: Exchange Rate Indices, January 1993-March 2004

Real GDP Growth, 1994-2003

Inflation, 1994-2003

Niger: Selected Social Indicators, 1995-2001
Figure 2.

Niger: Selected Economic Indicators, 1997-2004
Figure 3.

Niger: Selected Fiscal Indicators, 1997-2004

(In percent of GDP)