IMF Approves US$275.8 Million ECF Arrangement for Niger

  • The decline in economic activity caused by the COVID-19 pandemic, coupled with security challenges and climate-related shocks, heightened fiscal pressures and balance of payment needs.
  • The three-year arrangement under the Extended Credit Facility (ECF) will support the implementation of the authorities’ reform agenda to buttress macroeconomic stability while laying the foundations for stronger and more inclusive growth.
  • Reforms will focus on broadening fiscal space, improving spending quality to allow for much needed investment and social spending, advancing the anti-corruption and governance agenda, and addressing constraints to the business environment to foster private sector development.
  • Washington, DC: The Executive Board of the International Monetary Fund (IMF) approved today a three-year arrangement under the Extended Credit Facility equivalent toSDR197.4 million (about US$275.8 million or 150 percent of quota)for Niger.

    The Board’s decision allows an immediate disbursement of SDR 39.48 million (about US$55.2 million or 30 percent of quota). The arrangement is expected to catalyze additional bilateral and multilateral financial support.

    Following the Executive Board discussion, Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair, made the following statement:

    ”The Nigerien economy is expected to rebound in 2021 with economic activity gaining momentum in the medium term, with the start of oil exports through a new pipeline to the Benin coast. This broadly favorable outlook is, however, subject to significant downside risks related to heightened security challenges in the Sahel region and Niger’s increased exposure to the effects of climate change.

    ”The ECF arrangement supports the authorities’ reform agenda aimed at strengthening the macroeconomic framework while creating fiscal space for basic infrastructure and social spending to foster inclusive and resilient growth.

    To ensure medium-term debt sustainability and create space for social and developmental spending, the program will support reforms to improve domestic revenue mobilization (by broadening the tax base, reducing exemptions, and revising the tax code), bolster the quality of public spending (including by scaling up effective social programs and improving public investment management), and ensure transparent and efficient management of oil revenues. The program will also support efforts to meet the regional fiscal deficit convergence criterion and strengthen debt management.

    ”Promoting the development of a diversified private sector and implementing reforms to strengthen governance and anti-corruption frameworks will be pivotal to mitigate fiscal risks and strengthen the business environment. In this context, implementing transparency commitments related to pandemic emergency spending-including reporting and publication of beneficial ownership information of companies awarded pandemic-related contracts-is essential. The authorities also plan to extend the requirement to collect and publish beneficial ownership information to non-competitive procurement contracts and accelerate the implementation of the new asset declaration regime.

    ”Firm commitment to reforms and their steadfast implementation will be key to success and to catalyzing additional donor support.”

    Table 1: Niger: Selected Economic and Financial Indicators, 2018-22

    2018

    2019

    2020

    2021

    2022

    (Annual percentage change)

    National income and prices

    GDP at constant prices

    7.2

    5.9

    3.6

    5.4

    6.5

    Export volume

    -6.9

    -2.2

    -1.1

    -7.8

    8.4

    Import volume

    8.7

    9.7

    1.8

    3.9

    13.7

    CPI (annual average)

    2.8

    -2.5

    2.9

    2.9

    2.5

    CPI (end-of-period)

    1.6

    -2.3

    3.1

    3.0

    2.5

    Money and credit

    Broad money

    -2.1

    15.0

    17.0

    11.6

    14.9

    Domestic credit

    11.4

    -12.2

    25.2

    12.3

    17.9

    Credit to the government (net)

    127.8

    -89.5

    575.8

    45.3

    47.1

    Credit to the economy

    -4.5

    13.0

    8.6

    6.1

    10.4

    (Percent of GDP)

    Government finances

    Total revenue

    12.1

    11.2

    10.8

    10.9

    11.5

    Total expenditure and net lending

    21.1

    21.6

    22.9

    24.0

    22.7

    Current expenditure

    9.9

    9.6

    10.3

    10.9

    10.4

    Capital expenditure

    11.2

    12.0

    12.1

    12.6

    11.7

    Basic balance (excl. grants)

    -2.9

    -3.5

    -5.1

    -5.7

    -4.3

    Overall balance (incl. grants)

    -3.0

    -3.6

    -5.3

    -6.6

    -5.4

    Gross investment

    28.5

    30.0

    31.1

    31.8

    33.7

    Non-government investment

    18.4

    19.3

    20.5

    20.8

    23.5

    Government investment

    10.1

    10.6

    10.5

    11.0

    10.2

    External current account balance (incl. grants)

    -12.7

    -12.6

    -13.5

    -15.3

    -16.3

    External current account balance (excl. grants)

    -14.6

    -15.3

    -15.6

    -17.2

    -18.0

    Total public and publicly-guaranteed debt

    36.9

    39.8

    45.0

    48.8

    49.8

    Public and publicly-guaranteed external debt

    25.3

    26.5

    31.6

    32.8

    32.2

    NPV of external debt

    23.1

    24.5

    24.2

    23.4

    23.0

    Public domestic debt

    11.6

    13.3

    13.4

    16.0

    17.6

    (Billions of CFA francs)

    GDP at current market prices

    7,134

    7,565

    7,909

    8,559

    9,301

    Sources: Nigerien authorities; and IMF staff estimates and projections.

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