IMF Executive Board Completes the Sixth Review Under the Extended Credit Facility Arrangement for Niger and Approves a US$19.9 Million Disbursement | WPN World People News

● The COVID-19 outbreak remained well contained and this year’s setback of economic growth should be largely overcome in 2021, though risks remain tilted to the downside.

● Larger fiscal deficits are appropriate for 2020 and 2021, but must not become entrenched, and efforts to improve spending quality and revenue mobilization should be stepped up.

● Program implementation has been mixed, with clearance of arrears and advances in public financial management but challenges in mobilizing revenues and controlling spending.

On October 26, 2020, the Executive Board of the International Monetary Fund (IMF) completed the sixth and final review of Niger’s economic and financial program supported under the Extended Credit Facility (ECF) framework. The completion of the review enables the disbursement of SDR 14.1 million (about US$19.9 million), bringing total disbursements under the arrangement to SDR 118.44 million (about US$167.86 million).

The Executive Board also approved the authorities’ request for a waiver for the non-observance of the performance criterion on domestic budget financing at end-December 2019.

Niger’s three-year ECF arrangement was approved on January 23, 2017 for SDR 98.7 million (about US$134.04 million) in support of the authorities’ national plan for economic development. It aims to enhance macroeconomic stability and foster high and equitable growth, boost incomes and create jobs, while strengthening the foundations for sustainable development. On December 10, 2018, the Executive Board agreed to augment the overall amount of the arrangement to SDR 118.44 million (about US$167.86 million, or 90 percent of Niger’s quota). The Executive Board also granted extensions of the arrangement until October 31, 2020.

Following the Executive Board’s discussion on Niger, Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair, issued the following statement:

“The COVID-19 outbreak remained limited in Niger but confinement measures and delays in foreign projects will likely reduce economic growth in 2020. Given the structure of the Nigerien economy, long-lasting effects are likely to be limited. The construction of a pipeline for crude oil exports, scheduled to commence during 2022, will be an important boon for the economy. However, downside risks to the outlook dominate, owing to the uncertain global outlook, the tense security situation in the Sahel, and more frequent natural disasters.

“Overall program performance has been mixed. Three out of four performance criteria and two out of five indicative targets were met at end-December 2019. Sizeable fiscal overruns, continued challenges with mobilizing domestic revenue, and limited progress with strengthening the frameworks for good governance remain the main areas of concern. The authorities have taken some corrective measures recently, including more conservative budgeting for 2020 and 2021, better management of tax exemptions, and measures to combat petroleum smuggling. The implementation of the structural reform agenda is progressing reasonably well.

“The need to protect the economy and vulnerable populations in the face of the COVID-19 pandemic justifies larger fiscal deficits in 2020 and 2021. However, to safeguard Niger’s public finances, it will be important to guard against high deficits becoming entrenched, step up revenue collection, improve the quality of public spending, and ensure good management of forthcoming additional oil revenues.

“A much stronger private sector and greater diversification of the economy are imperative to durably increase living standards in Niger. Achieving this goal will require sustained and focused efforts by the government and development partners aimed at narrowing in infrastructure and education gaps, improving access to credit, continuing to promote good governance, and steadfastly implementing the anti-corruption agenda.”

Source: International Monetary Fund