IMF and Niger Reach Staff-Level Agreement on First Review of Extended Credit Facility Arrangement
May 17, 2022
End-of-mission press releases include statements from IMF staff conveying preliminary findings after a visit to a country. The views expressed in this statement are those of IMF staff and do not necessarily represent the views of the IMF Executive Board. Based on the preliminary findings of this mission, staff will prepare a report which, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.
- Staff and the authorities of Niger have reached a staff-level agreement on the first review of Niger’s economic program under the Extended Credit Facility (ECF).
- The economic outlook is favorable in the short to medium term, with growth expected to rebound to 6.9% this year. But this positive outlook is subject to downside risks related to the volatility of commodity prices (including food prices), vulnerabilities to climatic shocks, as well as the security situation, among others.
- The continued implementation of reforms aimed at improving domestic revenue mobilization, the quality of public spending, transparency and the fight against corruption is more than ever a priority to promote resilient and inclusive economic growth.
A team of International Monetary Fund (IMF) staff led by Mr. Antonio David held meetings from May 4 to May 13, 2022, on the first review of the three-year arrangement with Niger supported by the Extended Credit Facility (ECF). ).
At the end of the mission, Mr. David made the following statement:
“The Nigerien authorities and the IMF team have reached a staff-level agreement on the first review of Niger’s economic program under the Extended Credit Facility. The staff agreement is subject to approval by IMF management and the Executive Board. The board meeting is expected to take place in June. Completion of the review would allow the disbursement of SDR 39.48 million (about US$53 million, or 30 percent of Niger’s quota) to Niger to cover external financing needs.
“After a substantial deceleration to 1.3% in 2021 following the adverse effects of climate-related shocks and insecurity on the agricultural sector, growth is expected to rebound to 6.9% in 2022 thanks to the recovery of agricultural production. and accelerating the implementation of major pipeline-related investment projects to Benin.However, inflation would remain high due to continued food price pressures globally and domestically.
“Despite the positive outlook projected this year, Niger is facing an acute food crisis. About 4.4 million people are expected to face food insecurity during the lean season. The authorities are taking action and have recently approved a new support plan for 2022 targeting vulnerable populations. Furthermore, the security situation in the Sahel and political instability in neighboring countries, as well as uncertain weather conditions continue to pose risks to Niger’s economic prospects. The war in Ukraine exacerbates these challenges by adding to global and local pressures on food prices.
“In response to these shocks, the authorities are implementing several emergency measures, including the acquisition of cereals for the distribution of food to vulnerable populations; implementation of the emergency livestock feed support plan; the implementation of a support plan for the acquisition of fertilizers and pesticides and a program to deal with the dilapidated state of school infrastructure. As a result of these measures, the overall fiscal deficit is expected to widen temporarily in 2022 to 6.6% of GDP. Nevertheless, public debt would remain exposed to a moderate risk of over-indebtedness.
“The authorities are also committed to implementing corrective measures on the revenue side, including measures to reduce tax evasion and improve revenue administration, to ensure that program objectives are met and that the deficit returns to the medium-term program path.
“The three-year arrangement under the ECF supports Niger’s recovery from the pandemic, while strengthening macroeconomic stability and laying the foundations for resilient, inclusive and private sector-led growth.
“Program performance through end-March 2022 has been broadly satisfactory and most quantitative macroeconomic targets have been met. Structural reforms are progressing gradually, as steps are taken to streamline tax exemptions, improve public procurement and public investment management, strengthen tax administration by promoting digitalization, and enhance transparency through disclosure on the beneficial owners of companies that have been awarded single-tender or single-source contracts. .
“Further efforts to strengthen domestic revenue mobilization are essential to increase fiscal space for priority spending and support medium-term fiscal adjustment. In this context, the Nigerien authorities plan to assess and simplify their current tax system and accelerate the digitization of tax administration.
“Reforms to improve the quality of public spending to improve the delivery of public goods are also underway. The authorities have pledged to increase public spending on education and social safety nets to foster human capital and improve protection for vulnerable populations. Strengthening public financial management systems is key to achieving these goals.
“The IMF will continue to support the authorities’ efforts to strengthen governance and transparency and welcomes the recent publication of the audit report on COVID-19-related expenditures as well as the audit report on tax exemptions to the extractive sector. , which were structural benchmarks under the program. Looking ahead, the mission welcomes the intention of the authorities to take steps to implement the recommendations of the reports.
“The mission met with His Excellency President Mohamed Bazoum and His Excellency Prime Minister Ouhoumoudou Mahamadou. The mission also held working sessions with the Minister of Finance, Dr. Ahmat Jidoud, the Minister of Petroleum, Mr. Mahamane Sani Issoufou, the National Director of the BCEAO, Mr. Maman Laouane Karim, as well as other senior officials. governmental.
“The team would like to thank the authorities for their cooperation and for the constructive and productive discussions.
IMF Communications Department
PRESS OFFICER: Nico Mombrial
Call: +1 202 623-7100E-mail: [email protected]