- IMF Staff and Nigerien Authorities have reached an agreement at the staff level on the sixth review of Niger's economic program under the Extended Credit Facility (ECF) and the second review under the Resilience and Sustainability Facility (RSF) and conducted discussions on the 2024 Article IV consultation.
- The economic outlook is favorable over the near term, with growth projected at 8.8 percent this year, driven by oil exports, the lifting of sanctions, and a good agricultural season. But this positive outlook is subject to downside risks.
- The authorities' ongoing efforts to simplify the tax system and adopt an oil revenue management strategy are key reforms to create fiscal space to address development spending needs.
Washington, DC: An International Monetary Fund (IMF) staff team led by Mr. Antonio David held meetings from October 28 to November 9, 2024, on the sixth review of the agreement with Niger under the Extended Credit Facility (ECF) and the second review of the arrangement under the Resilience and Sustainability Facility (RSF) and conducted discussions on the 2024 Article IV Consultation.
At the end of the mission, Mr. David issued the following statement:
"The Nigerien authorities and the IMF team reached a staff-level agreement on the sixth review of Niger's economic program under the Extended Credit Facility, on the second review of the arrangement under the Resilience and Sustainability Facility and the 2024 Article IV consultation. The staff-level agreement is subject to IMF Management and Executive Board approval. The Board meeting is expected to take place in December 2024. The ECF review's completion would allow the disbursement of SDR 13.16 million (about US$ 17.4 million, or 10 percent of Niger's quota) to cover external financing needs. In turn, completion of the second review of the RSF would allow for the disbursement of SDR 25.66 million (about US$ 34 million, or 19.5 percent of Niger's quota).
"Despite a delicate context stemming from factors such as the humanitarian and material effects of the recent floods, liquidity tensions in the banking sector, and tight financing conditions; economic activity is expected to strongly recover this year. Growth is projected at 8.8 percent in 2024, mainly driven by oil exports, a favorable agricultural season, and the lifting of sanctions. Economic activity is expected to remain robust next year, with growth reaching 7.9 percent, while inflation should recede to 3.7 percent. However, risks to the outlook are skewed to the downside. A deteriorating security situation could further impact economic activity, while fiscal space may shrink if regional financing conditions continue to tighten. Additional external risks include commodity price volatility and the economic fallout of escalating regional conflicts (such as tensions in the Middle East).
"The arrangement under the Extended Credit Facility aims to strengthen macroeconomic stability and lay the foundations for resilient, inclusive, and private sector-led growth. There were deviations from certain fiscal targets under the program at end-June and end-September 2024, notably concerning tax revenues and the accumulation of debt service arrears. Nonetheless, the Nigerien authorities are taking steps to address them. The authorities have also reaffirmed their commitment to meet the WAEMU criterion of an overall fiscal deficit of 3 percent of GDP by 2025. The implementation of reforms to simplify the tax system, broaden the tax base, and adopt an oil revenue management strategy is on track. These efforts will contribute to create fiscal space to address development spending needs.
"RSF financing supports efforts to advance reforms and investments to address rising risks and challenges associated with climate change, thereby building resilience and safeguarding livelihoods. The Nigerien authorities made significant progress in implementing reforms aiming at tracking climate-related expenditures, analyzing fiscal risks linked to natural disasters, and incorporating climate-aspects in the assessment of public investment projects.
"The mission also engaged in discussions with the authorities on macroeconomic policies to increase Niger's resilience. Discussions focused on the efficient use of the country's natural resources, expanding fiscal space, managing fiscal risks, strengthening the private sector's contribution to growth, as well as enhancing transparency and anti-corruption measures.
"The mission met his Excellency Prime Minister and Minister of the Economy and Finance, Mr. Ali Mahamane Lamine Zeine. The mission also held working sessions with the Deputy Minister of the Economy and Finance, Mr. Moumouni Boubacar Saidou, the National Director of the BCEAO, Mr. Maman Laouali Abdou Rafa, as well as other senior government officials, private sector representatives, civil society, and development partners.
"The IMF team wishes to thank the authorities for their excellent cooperation and constructive discussions during the mission."
