Information about Asia and the Pacific Asia y el Pacífico
Journal Issue

In the news: IMF joins the Niger relief effort

International Monetary Fund. External Relations Dept.
Published Date:
August 2005
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Information about Asia and the Pacific Asia y el Pacífico
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In recent weeks, the world’s attention has been focused on the severe food shortages afflicting Niger as a result of the confluence of natural disasters: prolonged drought and a locust invasion. According to the United Nations, about 2.5 million of Niger’s 12 million people are directly affected by the crisis.

UN agencies have launched a series of appeals for international donations totaling $57.6 million. While the initial response to the call for aid was slow, donations and assistance now are arriving more rapidly because of the intense media attention given to the issue.

Disaster relief is the responsibility of the whole international community, especially the UN agencies, the World Bank, and nongovernmental organizations. The IMF also is playing a role—working closely with international donors to mobilize additional resources to address the food shortages and assist long-term development. In addition, the IMF is in close consultation with the Nigerien authorities on a range of related issues. The IMF has encouraged the government to take every possible step to deal with the immediate needs, fully supporting all government spending aimed at addressing the food crisis and alleviating the effects of the drought.

In addition, the IMF has signaled that it is prepared to increase Niger’s access to IMF financing if grant aid proves to be insufficient. An IMF mission is expected to visit Niger later this month to assess recent developments and to assist the government in its efforts to address the food crisis.

Toward debt and poverty reduction

The food crisis is occurring in a country that already faces many economic difficulties. One of the poorest countries in Africa, Niger has been working hard in recent years to address the needs of its population. Over the past five years, Niger has made significant progress in restoring macroeconomic stability and liberalizing its economy. In recognition of those efforts, the international community agreed to provide substantial debt relief when Niger reached the completion point under the Heavily Indebted Poor Countries Initiative in April 2004.

IMF policy advice to Niger draws largely on a Poverty Reduction Strategy (PRS) outlined by the Nigerien authorities in 2002 after consultation with the country’s civil society. The PRS identifies priorities that are regarded as critical for strengthening economic growth and reducing poverty. In particular, it focuses on increasing spending on human capital, with an emphasis on access by vulnerable groups to basic social services, and on agricultural development. Niger’s PRS also underscores the need to preserve fiscal sustainability. Efforts are aimed at strengthening revenue mobilization, improving public expenditure management, and ensuring that maximum government spending is directed toward propoor and pro-growth projects.

Since 2000, IMF financial support to Niger under the Poverty Reduction and Growth Facility (PRGF) has totaled $88 million. The IMF has also provided extensive technical assistance, especially in the area of fiscal management. The IMF-supported program mirrors the PRS’s focus on agriculture by stressing the need for Niger to deal with the effects of unfavorable weather through the introduction of much needed irrigation systems. The authorities have been urged to expand their domestic revenue base and seek increased donor support. Notwithstanding relatively large donor financial assistance so far, it is recognized that Niger needs additional resources to make adequate progress toward the Millennium Development Goals, which target a halving of key poverty indicators by 2015.

Briefing the press on August 3, Thomas C. Dawson, Director of the IMF External Relations Department, said that as important as the long-term development issues are, the key challenge at this stage for the international community is to provide “all possible assistance as quickly as possible” to relieve the food crisis. And that, he added, “is what we intend to do.”

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