- After making its regular review of economic trends in Niger, the International Monetary Fund (IMF) yesterday announced that the impoverished nation qualified for a new US$ 12.4 million loan disbursement to "fight poverty". The loan is also to finance further privatisation in Niger.
The Washington-based Fund yesterday informed it had completed a review of the Nigerien state economy's performance on Monday and generally praised authorities for their policy to "reduce poverty". In conclusion, the IMF board decided on a US$ 12.4 million "final loan disbursement" to finance the Nigerien poverty reduction programme.
Agustín Carstens of the IMF board stated that "Nigerien authorities are to be commended for their overall strong policy performance under their three-year programme supported by the Fund." The poverty reduction programme obliges Niger to implement prudent economic policies and privatise state companies.
According to the IMF review, economic activity in Niger had continued to be strong in 2003, with GDP growth "benefiting from a good agricultural crop and sustained activity in the construction and trade sectors, along with improved economic policies."
Further, inflation had now been below one percent for the second year in a row, and Niger's external current account deficit was lower than originally envisaged in the IMF-funded programme. "There were some delays, however, in implementing structural and financial sector reforms," Mr Carstens commented, pointing in particular to privatisation efforts.
- Looking ahead, Niger's main challenge is to sustain broad-based growth in a low inflation environment, in order to achieve a substantial reduction in poverty, Mr Carsten commented. "This will require the pursuit of prudent macroeconomic policies, vigorous implementation of the structural reform agenda - especially in the public enterprise and financial sectors - and the development of a close dialogue with the private sector on economic policymaking," he added.
Against this background, the Nigerien authorities' anti-poverty programme for 2004 was seeking to "preserve macroeconomic stability and sustain strong growth, with a view to further reducing poverty," the Fund had been informed.
- Continued fiscal consolidation is an essential element of the programme, Mr Carstens warned Nigerien authorities. Achievement of the fiscal targets would "require determined efforts to strengthen revenue mobilisation and to closely monitor non-essential expenditure, so as to allow for adequate resources for the social sectors."
Attempts to privatise Nigerien state companies have so far been far from successful, despite large efforts by the authorities and the Fund. Niger's government is now intending to expedite the privatisation of the electricity and petroleum importing companies - NIGELEC and SONIDEP - and the state-owned Credit du Niger.
Due to the very limited economic activity in Niger at large, it has however been difficult to find interested serious private partners. Large investments from the Nigerien government have been necessary to make the state companies attractive, meaning that much of the IMF funds going to "fight poverty" are invested in those companies. This is totally in line with the IMF's policy.
Niger's structural reform agenda for 2004 further includes measures to strengthen fiscal management, following a World Bank-assisted review of the state's public expenditure management and financial accountability. According to Mr Carstens, Nigerien authorities thereby are further advancing "their poverty reduction programme."
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