On behalf of my Nigerien authorities, I would like to express my deep appreciation to management and staff for their invaluable policy advice and assistance which have contributed to strengthening macroeconomic stability, after the profound economic disruption in the wake of the 2005 food crisis. I also wish to convey to Executive Directors my authorities’ appreciation of their support to Fund’s continued involvement in Niger. A testimony of my authorities’ gratitude has been well reflected in the staff report, as my authorities expressed their satisfaction about the effectiveness of Fund’s surveillance and technical assistance.
My Nigerien authorities have shown a strong commitment to sound policies and reforms in recent years which helped strengthen macroeconomic stability and growth, and support initiatives taken to reduce poverty. In this regard, several measures have been implemented, including those aimed at better formulating and executing the budget, increasing revenue collection, improving social indicators, and accelerating private sector development. As regards public expenditure management, my authorities have completed the medium-term framework for the rural sector for 2007-09 and finalized an action plan to strengthen financial control function. As a result, the basic fiscal deficit and the net domestic financing have been much lower than initially projected. Furthermore, the domestic financing target has been revised to take into account these developments. My authorities have also envisaged finalizing by end-December 2006 the revised PRSP, whose key-components include the expansion of irrigation, the use of modern inputs in agriculture, the investment on roads and transport, and the enhancement of human capital training. However, my authorities’ efforts have been hampered by adverse effects of exogenous shocks, including the 2004 drought with its subsequent food crisis which hit the Nigerien economy. With the favorable developments on agricultural production in 2005 and 2006 as well as the substantial donor support, the food security was improved in 2006 while the economy resumed its recovery from the drought effects. All performance criteria and benchmarks through end-September were met, except two, for which my authorities have already taken the needed correctives measures.
My authorities are fully aware of the challenges ahead, in particular the need for strengthening the execution of priority programs, improving the business environment, and enhancing domestic revenue. The achievement of such objectives requires further progress in fostering higher and broad–based growth, through the development of an agriculture production system less vulnerable to weather vagaries, with an emphasis on important irrigation projects. The rural sector accounts, on average, for 40 percent of the total value added of the Nigerien economy and it employs about 80 percent of active population. My authorities welcome the findings of the interesting Selected Issues Paper on Sources of Economic Growth in Niger which identifies investments on irrigation among others (foreign aid, financial sector development etc.) as one of the most relevant variables having high correlation with growth in Niger. Despite the capacity constraints facing the economy, my authorities remain determined to address the challenges ahead, in close collaboration with development partners. They are grateful to the international community for its support in helping mitigate the adverse effects of food shortage in 2005. In view of the investment programs and other necessary reforms to address the challenges described above, the financial needs are daunting and require substantial and timely external assistance. Given their strong commitment, the corrective measures taken, and the set of reforms underway, my authorities are requesting waivers for nonobservance of missed criteria, the completion of the third review under the PRGF Arrangement and that of the 2006 Article IV consultation.