Front Matter

Front Matter Page

IMF Country Report No. 16/247

NIGER: EIGHTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT AND REQUEST FOR WAIVERS OF NONOBSERVANCE OF PERFORMANCE CRITERIA AND FOR MODIFICATION OF PERFORMANCE CRITERIA—PRESS RELEASE, STAFF REPORT AND STATEMENT BY THE ED

July 14, 2016

In the context of the Eighth Review under the extended credit facility arrangement and request for waivers of nonobservance of performance criteria and for modification of performance criteria, the following documents have been released and are included in this package:

  • A Press Release including a statement by the Chair of the Executive Board.

  • The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on July 11, 2016 following discussions that ended on May 9, 2016, with the officials of Niger. Based on information available at the time of these discussions, the staff report was completed on June 24, 2016.

  • A Statement by the Executive Director for Niger.

The documents listed below have been or will be separately released.

  • Letter of Intent sent to the IMF by the authorities of Niger*

  • Memorandum of Economic and Financial Policies by the authorities of Niger*

  • Technical Memorandum of Understanding*

  • *Also included in the Staff Report

The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.

Copies of this report are available to the public from

International Monetary Fund • Publication Services

PO Box 92780 • Washington, D.C. 20090

Telephone: (202) 623-7430 • Fax: (202) 623-7201

E-mail: publications@imf.org Web: http://www.imf.org

Price: $18.00 per printed copy

International Monetary Fund

Washington, D.C.

© 2016 International Monetary Fund

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NIGER: EIGHTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT AND REQUEST FOR WAIVERS OF NONOBSERVANCE OF PERFORMANCE CRITERIA AND FOR MODIFICATION OF PERFORMANCE CRITERIA

June 24, 2016

Key Issues

Context: Growth eased in 2015 due to slower activity in the agricultural and natural resource sectors. Security concerns due to Boko-Haram continue to disrupt trade, generating revenue shortfalls and new expenditure pressures. Presidential and parliamentary elections in February/March resulted in the reelection of the incumbent President with a strong majority in parliament. The new administration’s policy agenda identifies security and domestic resource mobilization as key priorities.

Outlook and risks: Medium-term prospects are closely linked to returns on major projects in oil and mineral extraction that are underway. Key risks include declines in oil and uranium prices that could delay those projects’ implementation and, consequently, projected government revenues; droughts or floods that compound food insecurity and social instability; and the persistence or intensification of armed hostilities that aggravate fiscal pressures and hamper the achievement of development objectives.

Program: The Extended Credit Facility (ECF) program was approved on March 16, 2012 in an amount of SDR 78.96 million (120 percent of quota) and the sixth and seventh reviews were concluded on November 30, 2015, with an extension of the arrangement to December 31, 2016 and an augmentation of access by SDR 41.13 million. Two of the end-2015 performance criteria (PC) for the eighth ECF review were missed (on domestic financing and domestic arrears repayment), as were several indicative targets. This reflected fiscal slippages due to shortfalls in natural resource revenues, partly owing to low capacity of tax and customs administrations, and overruns on security and capital-related spending. Program implementation has improved in the first quarter of 2016, with all but two indicative targets (IT) met. The IT on poverty reduction spending was met throughout 2015 and at end-March 2016. The structural reform agenda is advancing.

Staff views: Staff supports the authorities’ request for waivers for the unmet PC on domestic financing and domestic arrears repayments at end-December 2015, based on corrective actions aimed at improving revenue collection, containing spending, and clearing domestic arrears, including a revised 2016 budget that was approved by the National Assembly on June 10, 2016. Staff also supports the modification of the PC on net domestic financing of the government and on the reduction of domestic payments arrears at end-June 2016 based on the agreed framework. Staff recommends the completion of the eighth review under the ECF-supported program.

Approved By

David Robinson (AFR) and Peter Allum (SPR)

Discussions were held in Niamey during April 25-May 9, 2016. The mission comprised Mr. Gueye (head), Mr. Lopes, Mr. Barry, Ms. Ibrahim, Mr. Ntamatungiro (Resident Representative) and Mr. Abdou (local Economist) (all AFR).

The mission met with the President, the Prime Minister, the Ministers of Finance, Planning, Trade, Petroleum, and Energy, the National Director of the regional central bank, Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), other senior officials and representatives of civil society, the private sector, and development partners. World Bank representatives participated in key meetings.

Contents

  • CONTEXT

  • RECENT DEVELOPMENTS, OUTLOOK AND RISKS

  • A. Economic and Institutional Developments

  • B. Outlook and Risks

  • PROGRAM PERFORMANCE

  • ADJUSTING TOWARD FISCAL SUSTAINABILITY UNDER LIMITED SPACE

  • A. 2016 Revised Budget and Fiscal Policy

  • B. Medium-Term Fiscal Policy

  • C. Public Financial Management

  • D. Management of Natural Resources

  • E. Debt Management

  • F. Business and Financial Sector Reforms

  • CAPACITY TO REPAY THE FUND AND IMPLEMENTATION RISKS

  • A. Capacity to Repay the Fund

  • B. Implementation Risks

  • C. Safeguards Assessment

  • STAFF APPRAISAL

  • BOXES

  • 1. Spillovers from the Economic Slowdown in Nigeria

  • 2. Economic Development Document (EDD), 2016–19

  • 3. Revenue Mobilization

  • FIGURES

  • 1. Recent Economic Developments and Outlook

  • 2. Fiscal Developments 2012–17

  • TABLES

  • 1. Selected Economic and Financial Indicators, 2013–21

  • 2. Financial Operations of the Central Government, 2013–21, (Billions of CFAF)

  • 3. Financial Operations of the Central Government, 2013–21, (In Percent of GDP)

  • 4. Monetary Survey, 2013–21

  • 5. Balance of Payments, 2013–21

  • 6. Indicators of Financial Soundness, December 2011–March 2016

  • 7. Quantitative Performance Criteria and Indicative Targets (Dec. 2014–December 2015)

  • 8. Quantitative Performance Criteria and Indicative Targets (March 2016–2016) and Projections for September 2016–December 2016

  • 9. Structural Benchmarks, 2015

  • 10. Structural Benchmarks, 2016

  • 11. Indicators of Capacity to Repay the Fund, 2016–26

  • 12. Summary of the Government External Borrowing Program for 2015–16

  • 13. Disbursements to Date and Proposed Scheduled Disbursements under the ECF Arrangement, 2012–16

  • APPENDIX

  • I. Letter of Intent

    • Attachment I. Memorandum of Economic and Financial Policies

    • Attachment II. Technical Memorandum of Understanding

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Press Release No. 16/330

FOR IMMEDIATE RELEASE

July 12, 2016

International Monetary Fund

Washington, D.C. 20431 USA

Telephone 202-623-7100

Fax 202-623-6772

www.imf.org

Niger: Eighth Review Under the Extended Credit Facility Arrangement and Request for Waivers of Nonobservance of Performance Criteria and for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the ED
Author: International Monetary Fund. African Dept.