Niger's Interaction with International Financial Institutions (IFIs)

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Overview

In 2011 Niger was ranked at 186 out of 187 for their Human Development Index (HDI) as defined by the United Nations Development Programme (UNDP) - making it one of the least developed countries in the world.[1] Niger's vulnerability to exogenous shocks, including recurrent, weather-related food crises, fluctuations in global commodity prices and the volatile security situation of the region, have meant that it has often been a target for financial and technical assistance from International Financial Institutions (IFIs).[2]

World Bank

The International Development Association (IDA), part of the World Bank, aims to reduce poverty by providing interest-free credits and grants to the world's poorest nations.[3] The IDA had a specific Country Assistance Strategy (CAS) for Niger that ran from 2008 to 2011.[4] The strategy was backed by US$349 million of funds to finance investments in:

  • water infrastructure
  • rural and agricultural development
  • HIV/AIDS treatment and prevention
  • basic education
  • reform and restructuring of the financial sector
  • health sector development
  • natural disaster management
  • emergency food security support to mitigate the impact of food price hikes

Niger's Country Assistance Strategy was designed in 1997, before being altered first in 2003 and again in 2008. As of February 2012 the IDA had approved over US$ 600 million of loans and grants to Niger with US$ 260 million of that amount yet to be released. In return, Niger's debt obligation to the IDA stood at US$ 360 million.[5]

International Monetary Fund

International Monetary Fund (IMF) Managing Director Christine Lagarde visited Niger (as well as Nigeria) during December 2011,[6] marking her first trip to Africa following her appointment in July 2011.[7] Lagarde commented at the conclusion of her visit that she had discussed the importance of natural resources revenues. She highlighted the need for such finances to be well-managed and channeled toward efficient public investments in infrastructure, agriculture, health and education.[8] Lagarde said in an address to Nigerien National Assembly that the IMF will also assist Niger through technical advice in fields such as budget execution and management, tax policy, and analysis of natural resource projects.[9]

The IMF has long been involved in providing financial assistance to Niger - the country received a series of loans under the Enhanced Structural Adjustment Facility from 1996.[10] In 2000 the form of support changed to the Poverty Reduction and Growth Facility (PRGF).[11] Financial support under the PRGF was renewed in 2005[12] and 2008.[13]

The PRGF was establish in 1999 by the IMF to help recipients achieve their objectives of poverty reduction, with funds loaned at an interest rate of 0.5 percent.[14] The Extended Credit Facility (ECF) succeeded the PRGF as the IMF's primary tool for providing medium-term support to low income countries. All financing under the ECF carries a zero percent interest rate.[15] In March 2012, the IMF approved a loan of around US$ 121 million for Niger under the ECF. The decision was made by the IMF to immediately release US$ 17 million of the new loan.[16] According to the IMF the loan is designed to bolster macroeconomic stability and increase Niger's resilience to shocks. The IMF say that the loan will be used to strengthen public finances, develop a fully transparent legal and supervisory framework for the fast-growing mining and petroleum sectors, and supporting private and financial sector development.[2]

Islamic Development Bank

The spreadsheets of the Islamic Development Bank (IDB) show that between 1976 and 2005, the IDB invested nearly US$ 307 million in Niger.[17] In particular, funds have been spent on fighting malaria and improving water quality.[18]

External Links

Official site of International Development Association (World Bank): www.worldbank.org/ida

Official site of IMF: www.imf.org

Official site of Islamic Development Bank: www.isdb.org

References

  1. "Niger Country Profile" United Nations Development Programme, retrieved 19 April 2012.
  2. 2.0 2.1 "IMF Executive Board Approves Three-Year US$120.97 Million Extended Credit Facility Arrangement" International Monetary Fund, retrieved 19 April 2012.
  3. "What is IDA?" World Bank, retrieved 20 April 2012.
  4. "Niger: Country Profile World Bank, retrieved 20 April 2012.
  5. "IDA: Summary of Current Credits for Niger" World Bank, retrieved 20 April 2012.
  6. "Christine Lagarde to Visit Nigeria and Niger on First Trip to Africa as IMF Managing Director" International Monetary Fund, retrieved 20 April 2012.
  7. "Christine Lagarde named IMF chief" BBC News, retrieved 20 April 2012.
  8. "Statement by IMF Managing Director Christine Lagarde at the Conclusion of her Visit to Niger" International Monetary Fund, retrieved 20 April 2012.
  9. "Securing Niger’s Economic Future in Uncertain Global Economic Times" International Monetary Fund, retrieved 19 April 2012.
  10. "IMF Approves Three-Year Loan for Niger under ESAF" 'International Monetary Fund, retrieved 20 April 2012.
  11. "IMF Approves in Principle Three-Year US$76 Million PRGF Loan for Niger" International Monetary Fund, retrieved 20 April 2012.
  12. "IMF Executive Board Completes Sixth and Final Review Under the PRGF Arrangement with Niger" International Monetary Fund, retrieved 20 April 2012.
  13. "IMF Executive Board Completes Third Review Under the Extended Credit Facility Arrangement for Niger" International Monetary Fund, retrieved 20 April 2012.
  14. "The Poverty Reduction and Growth Facility (PRGF)" International Monetary Fund, retrieved 20 April 2012.
  15. "IMF Extended Credit Facility" International Monetary Fund, retrieved 20 April 2012.
  16. "IMF approves new three-year $120 mln loan to Niger" Reuters, retrieved 19 April 2012.
  17. "Facts and Figures on IDB Member Countries" Islamic Development Bank, retrieved 20 April 2012.
  18. "Press Conference by Vice-President of Islamic Development Bank" United Nations, retrieved 20 April 2012.