IMF Staff and Nigerien Authorities have reached an agreement at the staff level on the fourth and fifth reviews of Niger’s economic program under the Extended Credit Facility (ECF) and the first review under the Resilience and Sustainability Facility (RSF).
The economic outlook is promising over the near and medium term, with growth projected at 10.6 percent this year, driven by oil exports and the lifting of sanctions, according to a statement by the IMF on Saturday.
But this positive outlook is subject to downside risks, in particular those linked to the security situation and vulnerabilities to climate shocks.
Measures to enhance domestic revenue mobilization are crucial to increase fiscal space for priority social and security spending. In that context, the authorities’ ongoing efforts to simplify the tax system and adopt an oil revenue management strategy aiming at insulating the budget from fluctuations in international oil prices are key reforms.
An International Monetary Fund (IMF) staff team led by Mr. Antonio David held meetings from May 20 to June 1, 2024, on the fourth and fifth reviews of the arrangement with Niger supported by the Extended Credit Facility (ECF) and the first review of the arrangement under the Resilience and Sustainability Facility (RSF).
At the end of the mission, Mr. David said ”The ECF reviews’ completion would allow the disbursement of SDR 19.7 million (about US$ 26.1 million, or 15 percent of Niger’s quota) to cover external financing needs. In turn, completion of the first review of the RSF would allow for the disbursement of SDR 34.2 million (about US$ 45.3 million, or 26 percent of Niger’s quota)”.
He added: “Growth is estimated to have decelerated to 2.4 percent in 2023, mainly because of the effects of sanctions and a relatively unfavorable agriculture season. The economic outlook is promising over the near and medium term, despite the uncertainty over the economic effects of the decision to leave ECOWAS. Real GDP growth is projected at 10.6 percent in 2024 due to the start of oil exports and ensuing spillover effects across the economy, the lifting of sanctions, as well as increased production in the agricultural sector. The last two factors should also help to contain inflationary pressures in 2024. Nevertheless, this positive outlook is subject to downside risks, in particular those linked to the security situation and vulnerabilities to climate shocks”.
He said: “The fiscal deficit outturn for 2023, at 5.4 percent of GDP, was marginally higher than programmed in part due to revenue shortfalls. Going forward, the deficit trajectory is calibrated to adhere to the authorities’ commitment to reach the WAEMU regional convergence criterion of 3 percent GDP by 2025. As a result of the sanctions imposed after the military takeover, Niger incurred external and domestic debt service arrears. The Nigerien authorities are pursuing commendable efforts to fully clear these overdue obligations”.
