ADF Supports Niger’s 5th Structural Adjustment Programme

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Tunis, 21 September 2005 – The Board of Directors of the African Development Fund (ADF) on Wednesday approved a loan of 18 million Units of Account* (US$ 26.3 million) to finance Niger's 5th Structural Adjustment Programme (2005-2006), aimed at improving management of public finance, promoting good governance, strengthening decentralization and the monitoring/evaluation of poverty reduction programmes.

Apart from the reorganization of public finance and promotion of good governance, another focal point of the programme is the elaboration of medium-term expenditure frameworks (MTEF) and programme budgets in the priority areas of health and education to strengthen poverty reduction. Beginning in 2006, these instruments will be introduced in the other sectors, including rural development, transport, equipment and tourism, to accelerate mobilization of their economic growth potential and job creation.

The programme also includes actions to strengthen decentralization, initiated in Niger to promote grassroots development and local governance, vital to effectively combat poverty.

The economic reforms earmarked under the programme will enable Niger to consolidate macroeconomic stability. The average real GDP growth rate is expected to grow from 3% between 2000 and 2004 to 4.2% between 2005 and 2007, while increasing the investment rate to 15% of GDP, compared to an average of 13.6% between 2000 and 2004. Inflation will be maintained below 3% throughout the entire duration of the programme and total budgetary revenue is expected to increase from 10.3% of GDP in 2004 to 12.15% in 2007. The reforms will help maintain current expenditure at around 10% of GDP, which should yield domestic savings of around 11.1% in 2007 as against 9.9% in 2004, necessary for financing public investments.

The African Development Bank Group operations in Niger started in 1970. To date, the cumulative commitment of the Group in the country amounts to US$ 430 million for 56 operations.

Project Brief

  • Estimated start-up date and duration: October 2005, 18 months
  • Executing Agency: Commissariat chargé de l’Economie (CE) at the Ministry of Finance and the Economy, backed by the Economic Management and Support Group (EMSG).
  • Other funding sources:

o  IDA :  UA 26.60 M

o  IMF :  UA 6.58 M

o  EU :  UA 29.20 M

o  France :  UA 10.30 M

o  Belgium :  UA 6.98 M

o  Denmark :  UA 0.30 M

o  Norway/Netherlands :  UA 2.74 M

o  AFD :  UA 5.03 M

o  Total  UA 87.73 M

* UA 1 = 1.45984 US$ as at 01/09/2005