Public Finances in Niger

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Overview

In a 2011 report, the International Monetary Fund (IMF) suggested that Niger's public finances were particularly vulnerable to external shocks.[1] Such vulnerabilities include recurrent weather-related food crises, fluctuations in global commodity prices and the volatile security situation of the region.[2] In 2011, revenues stood at around US$ 0.89 billion, with total expenditure reaching around US$ 1.55 billion, resulting in a negative net balance of around US$ 0.66 billion.[1] As of 2011, Niger had abudget deficit of 7.7 percent of their gross domestic product (GDP).[3]

Contribution of oil revenues

The IMF estimated in 2011 that government revenues would increase by more than 36 percent in 2012 - jumping from around US$ 0.89 billion to US$ 1.22 billion. This increase was partially attributed to oil and uranium revenues.[1] In October 2011, the government of Niger announced that it was expanding its budget for 2012 by over 50 percent. The government cited increased military spending as the main reason for the increase, to deal with the fallout from the Libyan crisis. Officials said that they planned for 61.3 percent of the extra spending to be covered by additional oil and mining revenues that they hoped to gather in 2012, and that the remaining 38.7 percent would come from grants and budgetary aid from donors.[4]

Export oil revenues in Niger were predicted to reach US$ 0.3 billion in 2012. The government are expected to receive a share of this wealth through a number of mechanisms; upstream and pipeline royalties from the operator China National Petroleum Corporation; a 40 percent share of the dividends from the Soraz Oil Refinery; and they have already received a US$ 300 million signature bonus from China National Petroleum Corporation in 2008 when they made an agreement to start producing from Niger's Agadem Oilfield.[1]

Despite this projected expansion in public finances, in March 2012 the IMF approved a loan of around US$ 121 million for Niger under the Extended Credit Facility.[5] The loan is designed to make Niger more resilient to shocks and to allow for greater transparency in the extractive industries.[2]

References

  1. 1.0 1.1 1.2 1.3 "IMF Country Report No. 11/357" International Monetary Fund, retrieved 20 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. "Africa: Niger" CIA World Factbook, retrieved 20 April 2012.
  4. "Niger increases 2012 budget by 52.7 percent" Reuters Africa, retrieved 20 April 2012.
  5. "IMF approves new three-year $120 mln loan to Niger" Reuters, retrieved 19 April 2012.