A review of Niger’s economic performance by the Executive Board of the International Monetary Fund (IMF) shows the country is doing well, with the country delivering strong macroeconomic outcomes based on the continued implementation of a sound policy framework.
“The medium-term economic outlook remains positive, but outcomes will depend on the materialization of major projects in the natural resource sectors and the authorities’ ability to leverage related revenues to reduce the infrastructure gap and promote inclusive growth,” said Mr. David Lipton, First Deputy Managing Director and Acting Chair of the IMF Executive Board, following the board’s sixth and seventh reviews of Niger’s economic performance under the program supported by an Extended Credit Facility (ECF) arrangement.
The completion of these reviews enables an immediate disbursement of SDR39.005 million, (about $53.7 million), bringing total disbursements under the ECF arrangement to SDR 95.405 million ($131.35million), a statement by IMF said.
The Board also approved a request for an extension of the program until December 31, 2016 as well as an increase in access of 62.5 percent of quota under the program to meet larger balance of payments needs. These, IMF notes will provide a policy framework and additional fiscal space to further strengthen development in the landlocked West African state.
The ECF provides financial assistance to countries with protracted balance of payments problems. It replaced the Poverty Reduction and Growth Facility as IMF’s main tool for medium-term financial support to low-income countries at a zero interest rate, with a grace period of 5.5 years, and a final maturity of 10 years.
The Fund stressed that in order to reduce the infrastructure gap and promote inclusive growth in Niger, it is important that the fiscal framework be further strengthened and public financial management enhanced. The IMF also called for the establishment of strong institutions to manage the natural resource sector and related revenues in an effective and transparent manner. With 46 percent of Nigeriens saying the government is doing well in fighting corruption (compare to Nigeria’s 22 percent), hopes are high that the IMF’s recommendations would be set in motion soon.
Niger is blessed with one of the world’s largest uranium deposits, among other natural resources, but low commodity prices, as well as volatility in its agricultural sector have fluctuated growth. The country recorded a growth of 6.9 percent in 2014 and growth is projected to ease to 4.4 percent in 2015.
IMF had in 2005 forgiven debts of approximately $86 million and has made recommendations to ensure continued growth in Niger.
Lipton added: “Advancing the development of the financial sector can play a key role in supporting inclusive growth.”