Staff members of the IMF and authorities in Niger have reached an agreement at the staff level regarding 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).
As per an IMF statement on Saturday, the economic prospects for Niger appear favourable in the short and medium term, with growth forecasted at 10.6 percent this year. This growth is primarily attributed to oil exports and the removal of sanctions.
However, this optimistic economic forecast is accompanied by potential risks, notably concerning security challenges and susceptibilities to climate-related crises.
Enhancing efforts to boost domestic revenue mobilisation is essential to expand fiscal capacity for critical social and security expenditures.
Therefore, the ongoing initiatives by the authorities to streamline the tax system and establish a strategy for managing oil revenues, aimed at shielding the budget from fluctuations in global oil prices, are pivotal reforms.
IMF Staff, led by Mr. Antonio David, conducted meetings from May 20 to June 1, 2024, to discuss the fourth and fifth reviews of Niger’s arrangement under the Extended Credit Facility (ECF) and the first review of the arrangement under the Resilience and Sustainability Facility (RSF).
Mr. David highlighted that the completion of the ECF reviews would pave the way for the disbursement of SDR 19.7 million (about US$ 26.1 million), addressing external financing needs.
Similarly, completion of the first RSF review would enable the disbursement of SDR 34.2 million (about US$ 45.3 million).
He further remarked, “Growth is estimated to have decelerated to 2.4 percent in 2023, primarily due to the impact of sanctions and less favourable agricultural conditions. Despite uncertainties surrounding
the economic implications of leaving ECOWAS, the economic forecast remains promising in the near and medium term.
“Real GDP growth is anticipated to reach 10.6 percent in 2024, driven by the commencement of oil exports, resulting spillover effects across various sectors, the removal of sanctions, and increased agricultural production.
“These factors are expected to mitigate inflationary pressures in 2024. However, the positive outlook is contingent upon several risks, particularly those associated with security challenges and susceptibility to climate-related shocks.”
He stated, “The fiscal deficit for 2023, standing at 5.4 percent of GDP, slightly exceeded projections, partly due to revenue gaps.
“Moving forward, deficit management aims to align with the authorities’ pledge to meet the WAEMU regional convergence target of 3 percent GDP by 2025.
“Following the sanctions imposed post the military transition, Niger accrued arrears in external and domestic debt service.
“The government of Niger is actively engaged in commendable endeavours to settle these outstanding liabilities in full.”
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