- Economic growth, which has been above 5 percent annually since 2005, is slowly slowing down in Niger this and next year. Niger, being one of Africa's poorest countries, thus is further away of reaching the Millennium Development Goals (MDGs).
According to the latest review of the Nigerien economy by the International Monetary Fund (IMF) published this week, Niamey authorities have achieved an "overall satisfactory performance." Economic growth in 2007 had been sustained for the third year in a row, and prospects for growth in 2008 were said to be "encouraging".
Average growth in Niger reached 5.3 percent from 2005 to 2007, reflecting what the Fund calls "solid performance in agriculture, construction, transports and telecommunications." The impoverished Sahel country thus had made "significant economic progress in recent years."
While the expected overall performance of the Nigerien economy was hailed by the IMF, the government's own predictions foresee a slower GDP growth rate this year and in 2009. The forecast for 2008 says one can expect Niger's GDP to grow by 4.4 percent this year, while a GDP growth of 4.5 percent is expected for 2009. This is much less than the 7 percent growth rate needed to meet MDGs.
Further, some 3.5 percent of this GDP growth is eaten up by one of the world's highest population growths. The increased wealth to be shared by Niger's grown 11 million population this year and next year therefore is only one single percent, if the forecasts are to be believed.
The IMF nevertheless held the Niamey government was doing a good job to secure economic growth and to reduce poverty. Business is booming in Niamey. The investment ratio averaged 22 percent, and was characterised by robust performance in both private and public investment. But rising oil and cereal prices in the second half of 2007 had brought a growing inflation rate.
Government had also managed to increase its fiscal revenue to 15.5 percent of GDP in 2007 from 10.8 percent in 2005. This economic consolidation had secured funds to assure government reform anti-poverty programmes. Growing state revenues and a lessened debt burden had allowed for an increase in public spending to 22.3 percent in 2007 from 20.4 percent in 2005.
While the IMF hailed the government's general efforts to comply with a three-year Poverty Reduction and Growth Facility (PRGF) that started up in 2005, it criticised authorities continued failure to stop subsidising petroleum products.
Nevertheless, the Fund approved a successor three-year PRGF arrangement "to support Niger's efforts to move towards meeting the MDGs while preserving economic stability." An initial disbursement of US$5.4 million was to become available on 2 June.
"The new three-year program supported by a new arrangement under the PRGF aims at promoting growth within a stable macroeconomic framework," commented the Fund's Acting Chair Murilo Portugal. "It appropriately focuses on improving the alignment of the budget with the priorities of the new PRSP, enhancing budgetary execution, boosting tax revenue, and further strengthening budgetary transparency and controls," he added.
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