The International Monetary Fund has given Niger’s economy a clean bill of health, following preliminary findings during a visit to the landlocked West African country named after the Niger River.
In a statement to TODAY NEWS AFRICA on Tuesday, the Washington D.C.-based global institution said an IMF staff team led by Christoph A. Klingen visited Niamey, the capital of Niger, from October 29 to November 12, 2019.
The visit was to conduct discussions on the fifth review of the program supported by the Extended Credit Facility (ECF) arrangement. Niger’s program was approved by the IMF Board on January 23, 2017.
IMF said its team found that Implementation of the government’s reform program has been “satisfactory despite a challenging environment”, adding that “economic growth was solid thanks to important large-scale projects”.
It said fiscal “policy was geared toward striking the difficult balance between attending to public needs and supporting macroeconomic stability”.
IMF, however, cautioned that the views expressed by its staff members did not necessarily represent the views of the IMF’s Executive Board.
Based on the preliminary findings of the mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
Mr. Klingen, the team lead, issued a statement at the end of the visit saying that the government of Niger “remains strongly committed to the reforms in its PDES 2017-2021, supported by the ECF arrangement. It is making commendable reform efforts, implementing its program with the IMF in a satisfactory manner”.
Read full statement below.
“The Nigerien authorities and the IMF team reached staff-level agreement for the completion of the fifth review of the ECF-supported program. It could be considered by the Executive Board of the IMF in early-January 2020.
“The government of Niger remains strongly committed to the reforms in its PDES 2017-2021, supported by the ECF arrangement. It is making commendable reform efforts, implementing its program with the IMF in a satisfactory manner.
“Macroeconomic stability remains firmly in place on the back of prudent fiscal policy and solid growth. Economic activity is benefitting from the government’s success in attracting foreign investors and the scaling-up of donor support, as well as favorable harvests, despite a tense security situation and the closure of the border with Nigeria. Growth should reach 6.3 percent this year and average more than 7 percent over the next five years. The construction of the pipeline for crude oil and the expected onset of oil exports in 2022 are an important boon for the economy. The mission will continue to work closely with the authorities with a view to devising policies that maximize the benefits from the large-scale projects for the Nigerien economy.
“The fiscal situation remains broadly satisfactory, with the overall deficit on track to improve this year and comply with the WAEMU deficit ceiling of 3 percent of GDP in 2020. While revenue mobilization remains an uphill battle, especially considering the Nigeria border closure, the government’s unrelenting reform efforts and prudent expenditure management keep public finances solid. The 2020 budget marks an important step toward generating fiscal space for priority expenditures. High quality and transparency in public spending remains imperative to make the best of limited resources.
“The IMF team congratulates the authorities on securing the construction of a pipeline for the export of crude oil and the associated oil field development. Fiscal revenues should rise by at least 2 percent of GDP from 2022 and local suppliers and employees of oil-related activity should benefit as well. It will now be important to carefully design the contracts and institutional arrangements governing the petroleum sector to make Niger’s impending oil exporter status an unqualified success.
“Persistently seeking to improve conditions for the formal local private sector is critical, not least to allow it to benefit fully from the dynamism surrounding the large-scale projects. In this context, the government’s efforts to improve the readings of business environment indicators is commendable. Improving access to financing is rightly high on the agenda. Formalizing the informal sector simultaneously levels the playing field and spreads the tax burden more widely. The mission welcomes ongoing efforts to improve governance, including the strengthening of HALCIA, the application to rejoin the EITI, and plans to upgrade the asset declaration regime for high-ranking public officials.
“The team met with the Prime Minister Brigi Rafini, Minister of State for Petroleum, the Ministers of Finance and Justice, the Minister Delegate for the Budget, the Special Presidential Advisor in charge of the business environment, as well as other senior government officials. Staff also exchanged views with representatives of the private sector and the donor community.”