IMF Executive Board Approves US$134.04 Million under the ECF Arrangement for Niger

On January 23, 2017 the Executive Board of the International Monetary Fund (IMF) approved a three-year arrangement under the Extended Credit Facility (ECF) [1] for Niger for an amount equivalent to SDR98.7 million (about US$134.04 million, or 75 percent of Niger’s quota) in support of the authorities’ national plan for economic development.

The new program aims to enhance macroeconomic stability and foster high and equitable growth, boost incomes and create jobs, while strengthening the foundations for sustainable development. The program will build on the lessons from the previous ECF arrangements. The Executive Board’s decision will enable an immediate disbursement of SDR 14.1 million (about US$19.15million). The remaining amounts will be phased over the duration of the program, subject to semi-annual reviews.

During the same meeting, the Board also concluded the 2016 Article IV consultation. A separate press release will be issued shortly.

Following the Executive Board discussion on Niger, Deputy Managing Director Mr. Mitsuhiro Furusawa, and Acting Chair, said:

Niger has been able to maintain macroeconomic stability despite major security challenges, continued low oil and uranium prices, and regional economic slowdown. Growth has improved and inflation remains subdued, well below the WAEMU convergence criterion. Significant progress was made under the 2012-16 Extended Credit Facility (ECF) Arrangement, including in strengthening public financial management, debt management and deepening the financial sector, but the impact of the adverse shocks, policy slippages and weak capacity limited the improvement in broader development indicators. Niger remains one of the least developed countries with numerous social and development challenges.

The new Arrangement under the ECF aims to sustain macroeconomic stability, make growth more inclusive, and reduce poverty, in line with the government’s strategy as laid out in the Economic Development Document. Specific focus is given to enhancing fiscal space and further improving public financial management and the efficiency of spending to facilitate the attainment of Niger’s development goals, in particular to finance infrastructure and social spending.

The medium-term economic outlook is favorable, underpinned by improved agricultural production and a pick-up in natural resource exports. Nevertheless, to address the persisting challenges and risks, policy priorities ahead need to focus on preserving fiscal and debt sustainability. A strong reform agenda anchored on more efficient investment, improved business climate, more inclusive financial development, and a comprehensive strategy for addressing gender issues as well as harnessing the demographic dividend will be critical.rdquo;

[1] The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems.

Source:International Monetary Fund (IMF).