IMF国际货币组织全球-Niger_Fifth-Review-Under-the-Extended-Credit-Facility-Arrangement-and-Request-for-Modification-of-Performance-Criteria_65页_1mb

IMF Country Report No. 20/7: Niger's Fifth Review Under the Extended Credit Facility Arrangement

Core Content

The International Monetary Fund (IMF) conducted the Fifth Review Under the Extended Credit Facility (ECF) Arrangement for Niger and approved a US$19.5 million disbursement (equivalent to SDR14.1 million), bringing total disbursements under the arrangement to SDR104.34 million (US$144.1 million). The review was based on discussions held in Niamey from October 26 to November 11, 2019, and the report was finalized on December 23, 2019.

The review also included approval for the modification of performance criteria related to domestic budget financing and the contracting of external public debt.

Main Views and Key Information

Program Implementation and Performance

• Overall program performance was broadly satisfactory, with all performance criteria and indicative targets met for the first half of 2019.
• Fiscal results started to slip in the third quarter, due to revenue shortfalls and higher-than-expected foreign grants.
• Corrective measures are being taken by the authorities, and targets for end-December 2019 were adjusted.
• Structural reform agenda is progressing, albeit with delays.
• Two out of five structural benchmarks (SBs) were met, including tax exemption cuts and the reorganization of debt management.

Economic Outlook

• Annual economic growth is expected to average above 7% over the next five years, driven by large-scale donor projects, foreign direct investment (FDI), and the construction of a crude oil export pipeline (scheduled for 2022).
• Oil exports will significantly boost GDP, exports, and fiscal revenues if managed well.
• Inflation is expected to remain comfortably below the 3% WAEMU ceiling.
• Security risks and climate change are identified as downside risks to growth, while Nigeria's border closure negatively impacted growth and fiscal revenues.

Fiscal Developments

• The 2019 fiscal program was updated to reflect higher budget support and revenue shortfalls.
• Cash tax revenues grew by 16% in the first three quarters, but fell short of the targeted 20% due to Nigeria's border closure and revenue administration delays.
• The 2020 fiscal program aims to bring the deficit below 3% of GDP, aligning with the WAEMU convergence criterion.
• Budget support grants have increased to 3.6% of GDP, which helped reduce the overall fiscal deficit to 3.9% of GDP.
• Domestic financing needs are now negative, allowing Niger to retire domestic debt equivalent to 0.9% of GDP.

Oil Exporter Status

• Niger is advancing in becoming an oil exporter, with oil production starting in 2011 and a pipeline to Benin's coast planned for 2022.
• The project is expected to cost US$6.1 billion, including US$4 billion for oil field development and US$2.1 billion for the pipeline and terminal.
• Niger receives about 25% of oil export receipts, and the project is already underway.
• The pipeline is 2,000 km long and has a capacity of 185,000 bpd, with half initially utilized.
• Public-private partnership (PPP) contracts will be subject to registration fees and stamp duties.
• Third-party access rules, local content shares, and transportation fees are outlined in the transport convention signed with CNPC in September 2019.

Fiscal Risks and Reforms

• Fiscal risks from PPPs need to be addressed through rigorous cost-benefit analyses.
• Tax exemption cuts are a priority, with the 2020 budget law eliminating VAT exemptions for services purchased by beneficiaries under the Investment, PPP, Petroleum, and Mining Codes.
• Exemptions are being reduced, with the 2020 budget targeting a revenue increase of 0.28% of GDP from tax exemption cuts, and a medium-term target of 0.49% of GDP.
• Additional tax measures are being implemented, including VAT machines, a "lifestyle test" to tackle underpayment, tougher sanctions for non-cooperation, and transfer tax on foreclosed real estate.
• The tax base is being expanded through cooperation between tax and customs administrations, post-clearance control, and identification of inactive tax payers.

Spending and Structural Reforms

• Spending quality remains a challenge, and efforts to improve it must be intensified.
• The 2020 budget includes a 16.4% increase in security spending, which is necessary but should not come at the expense of other priorities.
• Public financial management (PFM) reforms are ongoing, including the upgrade of the Ministry of Finance's Budget Department and improving capacity in Line Ministries.
• A tracking system for main social spending programs is in prospect, and technical assistance from the IMF is being sought to review the tax system and improve its efficiency and administration.

Debt Sustainability

• Public and publicly guaranteed debt is rated as "moderate" risk of external debt distress.
• Debt sustainability analysis (DSA) indicates that external and overall debt risks remain moderate, with limited capacity to absorb shocks.
• Budget support has been increased by 1.6% of GDP, and earlier plans for a Policy Based Guarantee (PBG) operation with the World Bank have been abandoned.

Recommendations and Next Steps

• Performance criteria on domestic financing should be tightened, while those on external debt contracting should be loosened.
• New performance plans will be used to monitor administrative reforms.
• The public expenditure review with the World Bank is scheduled for early 2020.
• Reforms to improve financial inclusion, boost access to credit, and enhance the business environment are also emphasized.

Conclusion

The IMF staff supports the conclusion of the fifth review and the disbursement of US$19.5 million. The program remains broadly on track, and Niger is making progress in fiscal consolidation and structural reforms. However, ongoing challenges such as security risks, climate change, and fiscal risks from PPPs require continued attention. Oil exports are expected to provide a major boost to the economy, but their successful implementation depends on good governance, prudent revenue management, and strong institutional frameworks.