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THE WORLD BANK
Report No. 26269
PROJECT PERFORMANCE ASSESSEMENT REPORT
NIGER
ECONOMIC RECOVERY CREDIT (Credit 2581-NIR)
PUBLIC SECTOR ADJUSTMENT CREDIT
(Credit 2939-NIR)
PUBLIC FINANCE REFORM CREDIT (Credit 3134-NIR)
PUBLIC FINANCE RECOVERY CREDIT
(Credit 3418-NIR)
July 1, 2003 Country Evaluation and Regional Relations Operations Evaluation Department
CURRENCY EQUIVALENTS
Currency Unit = CFA Franc (CFAF) US$ 1.00 = CFAF 710 (2002)
ABBREVIATIONS AND ACRONYMS
CAADIE Centre Autonome d’Amortissement de la Dette Intérieure de l’Etat CAS Country Assistance Strategy CET Common External Tariff CNSS Caisse Nationale de Sécurité Sociale COPRO-NIGER Société Nigérienne de Commercialisation ERC Economic Recovery Credit ESAF Enhanced Structural Adjustment Facility HIPC Highly Indebted Poor Countries HDR Human Development Report ICR Implementation Completion Report I-PRSP Interim Poverty Reduction Strategy Paper NIGELEC Société Nigérienne d’Electricité ONPPC Office National des Produits Pharmaceutiques et Chimiques PAGEF Projet d’Appui à la Gestion Economique et Financière PE Public Enterprise PEAC Public Expenditure Adjustment Credit PEIDP Public Enterprise Institutional Development Project PER Public Expenditure Review PESAP Public Enterprise Sector Adjustment Program PFP Policy Framework Paper PFRC Public Finance Reform Credit PFRecC Public Finance Recovery Credit PIP Public Investment Program PRGF Poverty Reduction and Growth Facility PSAC Public Sector Adjustment Credit PSD Private Sector Development SAL Structural Adjustment Loan SNE Société Nationale des Eaux SONIDEP Société Nigérienne des Produits Pétroliers SONITEL Société Nigérienne des Télécommunications SDR Special Drawing Right UEMOA Union Economique et Monétaire Ouest Africaine UNDP United Nations Development Program VAT Value Added Tax
Director-General, Operations Evaluation : Mr. Gregory K. Ingram Acting Director, Operations Evaluation Department : Mr. Nils Fostvedt Senior Manager, Country Evaluation and Regional Relations : Mr. R. Kyle Peters Task Manager : Ms. Poonam Gupta PPAR prepared by : Mr. Pierre de Raet
OED Mission: Enhancing development effectiveness through excellence and independence in evaluation.
About this Report
The Operations Evaluation Department assesses the programs and activities of the World Bank for two purposes: first, to ensure the integrity of the Bank’s self-evaluation process and to verify that the Bank’s work is producing the expected results, and second, to help develop improved directions, policies, and procedures through the dissemination of lessons drawn from experience. As part of this work, OED annually assesses about 25 percent of the Bank’s lending operations. In selecting operations for assessment, preference is given to those that are innovative, large, or complex; those that are relevant to upcoming studies or country evaluations; those for which Executive Directors or Bank management have requested assessments; and those that are likely to generate important lessons. The projects, topics, and analytical approaches selected for assessment support larger evaluation studies.
A Project Performance Assessment Report (PPAR) is based on a review of the Implementation Completion Report (a self-evaluation by the responsible Bank department) and fieldwork conducted by OED. To prepare PPARs, OED staff examine project files and other documents, interview operational staff, and in most cases visit the borrowing country for onsite discussions with project staff and beneficiaries. The PPAR thereby seeks to validate and augment the information provided in the ICR, as well as examine issues of special interest to broader OED studies.
Each PPAR is subject to a peer review process and OED management approval. Once cleared internally, the PPAR is reviewed by the responsible Bank department and amended as necessary. The completed PPAR is then sent to the borrower for review; the borrowers' comments are attached to the document that is sent to the Bank's Board of Executive Directors. After an assessment report has been sent to the Board, it is disclosed to the public.
About the OED Rating System
The time-tested evaluation methods used by OED are suited to the broad range of the World Bank’s work. The methods offer both rigor and a necessary level of flexibility to adapt to lending instrument, project design, or sectoral approach. OED evaluators all apply the same basic method to arrive at their project ratings. Following is the definition and rating scale used for each evaluation criterion (more information is available on the OED website: http://worldbank.org/oed/eta-mainpage.html).
Relevance of Objectives: The extent to which the project’s objectives are consistent with the country’s current development priorities and with current Bank country and sectoral assistance strategies and corporate goals (expressed in Poverty Reduction Strategy Papers, Country Assistance Strategies, Sector Strategy Papers, Operational Policies). Possible ratings: High, Substantial, Modest, Negligible.
Efficacy: The extent to which the project’s objectives were achieved, or expected to be achieved, taking into account their relative importance. Possible ratings: High, Substantial, Modest, Negligible.
Efficiency: The extent to which the project achieved, or is expected to achieve, a return higher than the opportunity cost of capital and benefits at least cost compared to alternatives. Possible ratings: High, Substantial, Modest, Negligible. This rating is not generally applied to adjustment operations.
Sustainability: The resilience to risk of net benefits flows over time. Possible ratings: Highly Likely, Likely, Unlikely, Highly Unlikely, Not Evaluable.
Institutional Development Impact: The extent to which a project improves the ability of a country or region to make more efficient, equitable and sustainable use of its human, financial, and natural resources through: (a) better definition, stability, transparency, enforceability, and predictability of institutional arrangements and/or (b) better alignment of the mission and capacity of an organization with its mandate, which derives from these institutional arrangements. Institutional Development Impact includes both intended and unintended effects of a project. Possible ratings: High, Substantial, Modest, Negligible.
Outcome: The extent to which the project’s major relevant objectives were achieved, or are expected to be achieved, efficiently. Possible ratings: Highly Satisfactory, Satisfactory, Moderately Satisfactory, Moderately Unsatisfactory, Unsatisfactory, Highly Unsatisfactory.
Bank Performance: The extent to which services provided by the Bank ensured quality at entry and supported implementation through appropriate supervision (including ensuring adequate transition arrangements for regular operation of the project). Possible ratings: Highly Satisfactory, Satisfactory, Unsatisfactory, Highly Unsatisfactory.
Borrower Performance: The extent to which the borrower assumed ownership and responsibility to ensure quality of preparation and implementation, and complied with covenants and agreements, towards the achievement of development objectives and sustainability. Possible ratings: Highly Satisfactory, Satisfactory, Unsatisfactory, Highly Unsatisfactory.
Contents Ratings and Responsibilities ..........................................................................................................i
Preface .......................................................................................................................................... iii
Summary ........................................................................................................................................v
1. Introduction ......................................................................................................................1 2. Background .......................................................................................................................2 Country Strategy..................................................................................................................3 3. Objectives and Design ......................................................................................................6 Relevance of Objectives ....................................................................................................10 4. Implementation................................................................................................................11 5. Outcome and Assessment ...............................................................................................17 Outcome ............................................................................................................................17 Institutional Development Impact .....................................................................................17 Sustainability .....................................................................................................................18 Bank Performance .............................................................................................................19 Borrower Performance ......................................................................................................20 6. Main Findings and Program Impact .............................................................................22 7. Lessons Learned ..............................................................................................................25 Text Tables Table 2.1: Key Economic Indicators, 1990–1993 ...........................................................4 Table 6.1: Key Macro-economic Indicators—Targets vs. Actuals, 1994-2001 ............23 Table 6.2: Civil Service Wage Bill, 1993-2001.............................................................24 Figure Figure 1.1: Four Assessed Projects and Related Credits...................................................1 Figure 4.1: Fiscal Profile (1990 – 2001) .........................................................................11 Annexes Annex A: Key Social Indicators..................................................................................................27 Annex B: Economic Recovery Credit ........................................................................................28 Annex C: Public Sector Adjustment Credit ................................................................................31 Annex D: Public Finance Reform Credit ....................................................................................35 Annex E: Public Finance Recovery Credit .................................................................................44 Annex F: Key Economic Indicators............................................................................................51 Annex G: Basic Data Sheets........................................................................................................52 Annex H: Comments from the Government ...............................................................................60
This report was prepared by Pierre de Raet (Consultant), with Poonam Gupta as Task Manager. Betty Casely-Hayford and Agnes Santos provided administrative support.
i
Ratings and Responsibilities
Economic Recovery Credit ES PPAR Outcome Unsatisfactory Unsatisfactory Sustainability Uncertain Highly Unlikely Institutional Development Impact Negligible Negligible Bank Performance Satisfactory Unsatisfactory Borrower Performance n.a. Highly Unsatisfactory
Public Sector Adjustment Credit ES PPAR Outcome Satisfactory Moderately Satisfactory Sustainability Likely Unlikely Institutional Development Impact Modest Modest Bank Performance Satisfactory Satisfactory Borrower Performance Satisfactory Satisfactory
Public Finance Reform Credit ES PPAR Outcome Unsatisfactory Unsatisfactory Sustainability Unlikely Highly Unlikely Institutional Development Impact Modest Modest Bank Performance Satisfactory Satisfactory Borrower Performance Unsatisfactory Unsatisfactory
Public Finance Recovery Credit ES PPAR Outcome Satisfactory Satisfactory Sustainability Likely Likely Institutional Development Impact Modest Substantial Bank Performance Satisfactory Satisfactory Borrower Performance Satisfactory Satisfactory
ii
Key Project Responsibilities Project Staff Appraisal Completion
ERC Task Manager Amadou Cisse Amadou Cisse Division Chief Jean-Louis Sarbib Charles P. Humphreys Director/Country Director Katherine Marshall Theodore O. Ahlers Public Sector Adj. Credit Task Manager Antonella Bassani Antonella Bassani Division Chief Charles P. Humphreys Charles P. Humphreys Country Director Theodore O. Ahlers Theodore O. Ahlers Public Finance Reform Cr. Task Manager Antonella Bassani Jean-Luc Bernasconi Division Chief Charles P. Humphreys Charles P. Humphreys Country Director Theodore O. Ahlers Antoinette M. Sayeh
Public Finance Recovery Cr. Task Manager Jean-Luc Bernasconi Jean-Luc Bernasconi Division Chief Charles P. Humphreys Cadman Atta Mills Country Director M. Plessis-Fraissard Antoinette M. Sayeh
iii
Preface
This is the Project Performance Assessment Report (PPAR) on four lending operations to the Republic of Niger in the 1990s, a period marked by considerable political instability, the devaluation of the CFA franc, and attempts by the Government to overcome the critical development and poverty challenges faced by the country.
The Economic Recovery Credit (ERC) (Credit 2581-NIR), in the amount of SDR
18.2 million, was approved on March 17, 1994, became effective on March 25, 1994, and was closed on June 30, 1995, the original closing date. The one-tranche operation was fully disbursed. The Credit was complemented by a Supplemental Credit, in the amount of SDR 6.9 million, to the 1991 Public Works and Employment Credit (Credit 2209-NIR), approved on November 10, 1994.
The Public Sector Adjustment Credit (PSAC) (Credit 2939-NIR), in the amount
of SDR 21.6 million, was approved on March 20, 1997, became effective on March 21, 1997, and was closed on March 31, 1998, the original date. The Credit was a one-tranche operation fully disbursed.
The Public Finance Reform Credit (PFRC) (Credit 3134-NIR), in the amount of
SDR 48.0 million, was approved on October 13, 1998, became effective on October 20, 1998, and was closed on June 30, 2000, the original date. The Credit was a three-tranche operation, the first one of which, for SDR 18.0 million, was fully disbursed upon effectiveness, while the second and third tranches, for SDR 15.0 million each, were cancelled.
The Public Finance Recovery Credit (PFRecC) (Credit 3418-NIR), in the amount
of SDR 26.5 million, was approved on September 14, 2000, and became effective on October 13, 2000. The Credit was of one tranche. A Supplemental Credit, in the amount of SDR 9.4 million, was approved on December 22, 2000. The Credit was closed on June 30, 2001, the original date. Both the original and the supplemental credits were fully disbursed.
This PPAR is based on all relevant Bank and Fund documents. A mission visited
Niger in January 2003 to discuss performance with officials who implemented the projects, representatives of civil society, and members of the Bank resident mission. By letters of June 6, 2003 and June 20, 2003, the Government requested to make some corrections, which were incorporated. These letters, along with an unofficial translation, are in Annex H.
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Summary
1. The four operations must be seen against the background of unsuccessful adjustment during the 1980s and a painful transition to democracy in the early 1990s. Even after achieving a multi-party system in 1993, the ensuing years were marked by political instability, social unrest, rebellions in the northern and eastern parts of the country, and two coups d’Etat, the first one in January 1996 by General Baré, and the second one in April 1999, in which the latter, President since mid-1996, was assassinated.
2. In response to the devaluation of the CFA franc in January 1994 and the sharp fall in oil prices between 1992 and 1994, the March 1994 Economic Recovery Credit (ERC) was a one-tranche operation whose objectives were to support the post-devaluation reform program and help mitigate the adverse social impact of the change in parity in the short-term. After the return of relative stability under a military regime in 1996, the March 1997 Public Sector Adjustment Credit (PSAC) was designed to support the public finance component of the medium-term program agreed with the Fund, with focus on the long-standing and interlinked public finance and public enterprises (PE) problems.
3. Based on progress achieved under the PSAC, the October 1998 Public Finance Reform Credit (PFRC) aimed at restoring the credibility in the Government’s ability to manage public finance in a responsible way by focusing on the reduction of salary arrears to civil servants and other arrears to Government suppliers which had dramatically increased over the preceding two years. After the coup of April 1999, the fiscal situation deteriorated so much that the conditions for release of the second and third tranches could not be met and the latter were cancelled. Only after a return to power of a civilian Government in early 2000, was it possible to prepare a new medium term program under the Poverty Reduction and Growth Facility. The September 2000 Public Finance Recovery Credit (PFRecC) aimed at resuming the agenda left incomplete under the PFRC and at compensating for the fall in revenue following the introduction of the common external tariff of the Union Economique et Monétaire Ouest Africaine (UEMOA) in January 2000. By end 2000, an Interim Poverty Reduction Strategy Paper and the decision point under the Highly Indebted Poor Countries initiative were approved.
4. The implementation of the first three projects was adversely affected by the civil unrest and political instability that prevailed throughout the 1990s, by resistance to reforms, and, to a lesser extent, by droughts. Virtually all measures were taken with delay or not at all. Progress was achieved in tax administration and collection, but efforts at widening the tax base produced meager results. As a result, the revenue to GDP ratio stayed below 10 percent, severely constraining fiscal management. The wage bill was contained, but at the expense of eroding the human resource base of the administration. Budget allocations to the social sectors were raised, but not sufficiently to have a major impact. The settlement of large domestic arrears proved an elusive goal and is still being addressed today. Although a privatization law was enacted, PE reforms met with strong resistance and were very slow. Progress under the fourth operation, the PFRecC, was notably different: the new civilian Government was strongly committed to the program while project design was well tailored to the Government’s priorities and focused on remedying past loopholes. Only under this last project were the foundations laid for a medium-term improvement in public resource management.
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5. ERC: the assessment confirms the ES rating of unsatisfactory for outcome and of negligible for institutional development impact. It downgrades the sustainability rating from uncertain to highly unlikely because of lack of ownership at the political and administrative levels and very weak resilience to exogenous factors. Bank performance is downgraded from satisfactory to unsatisfactory because the Bank misjudged the depth of the political crisis, wrongly interpreted the Government’s declaration for reforms as true commitment, and overlooked the lack of commitment within the administration. The Borrower performance is rated highly unsatisfactory (it was not rated in the ES).
6. PSAC: the outcome is downgraded from satisfactory to moderately satisfactory because the all-important objective of raising revenue was not attained. However, expenditures were contained and the wage bill was on target. The privatization program was only partly implemented due to strong resistance and to legal and administrative obstacles that had been underestimated or neglected by the Bank and the Government at the time of preparation/appraisal. The sustainability is downgraded from likely to unlikely because there was not enough time before the April 1999 coup to fully internalize improvements in a sustainable manner. The other ratings are confirmed: modest institutional development impact, and satisfactory Bank and Borrower performance.
7. PFRC: the ES ratings of unsatisfactory outcome, modest institutional development impact, satisfactory Bank performance, and unsatisfactory Borrower performance are confirmed. Sustainability is downgraded from unlikely to highly unlikely on the basis that of the objectives that were achieved, in the case of the civil service reform, some positive measures taken under the PSAC were reversed.
8. PFRecC: all original ratings of satisfactory outcome, likely sustainability, and satisfactory performance for both the Bank and Borrower are confirmed. The rating for institutional development impact is upgraded from modest to substantial because the revenue agencies were strengthened with better staff and the flow of information improved, budgetary procedures were streamlined and strengthened, legal requirements applicable to fiscal reporting and external auditing were reinstated after a 20-year interruption, and an appropriate framework for the settlement of domestic arrears was established.
9. The main lessons are:
(i) except for the obvious sine qua non condition of political stability, ownership by the Government is not sufficient to ensure success; support within the administration and better communication between the Government and civil society are necessary;
(ii) in countries with a large informal sector and a low tax base, the Bank and the Fund should explore ways to adapt taxation to the particularities of the country, for instance through modest taxation of the agricultural sector (as was the case in Niger prior to the discovery of uranium);
(iii) addressing the problem of very weak institutional capacity cannot be limited to a piecemeal approach via different operations but requires a full-fledged medium-term strategy agreed with the authorities, targeted at least at the
vii
central ministries and combined with a monitoring and evaluation system in the country;
(iv) in countries endowed with very limited resources, devaluation unaccompanied by longer-term investment and institutional support of the few existing productive sectors is unlikely to generate a lasting supply response, even if the macro policies are sound;
(v) adjustment operations must include a domestic Monitoring and Evaluation mechanism to enable senior officials to assess progress and initiate corrective actions; and
(vi) single tranche operations justified by the contention that future lending will depend on continued performance are not a guarantee of good performance.
Gregory K. Ingram Director-General Operations Evaluation
1
1. Introduction
1.1 The four operations selected for assessment provide an opportunity to review Niger’s adjustment efforts in the 1990s and determine whether after the 1994 devaluation of the CFA franc progress was made in launching the basis for sustainable long-term growth and reducing poverty.
1.2 Since the mid-1980s, Niger has struggled to develop policies and mechanisms to: (i) adjust to the difficulties arising from the collapse of the uranium market in the early 1980s and diversify the sources of growth; (ii) improve the management of public resources; (iii) liberalize economic activity and develop the private sector; and (iv) strengthen the basis for long-term growth.
1.3 The Bank has financed 8 operations to help address these issues: four in the 1980s, two adjustment operations, two technical assistance projects,1 and four in the 1990s. The latter are reviewed here: the Economic Recovery Credit (ERC) of 1994, the Public Sector Adjustment Credit (PSAC) of 1997, the Public Finance Reform Credit (PFRC) of 1998, and the Public Finance Recovery Credit (PFRecC) of 2000. The time sequence of these 8 operations is in Figure 1.1.
Figure 1.1: Four Assessed Projects and Related CreditsProjects SDR 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01
PAGEP (TA) 11.0 SAL I* 18.3PESAP** 46.0PEIDP (TA) 4.3ERC*** 18.2PSAC 21.6PFRC 48.0PFRecC**** 26.5In bold: Projects included in this assessment* Accompanied by a SRD 36.0 million Credit under the Special Facility for Africa** Accompanied by a SDR 15.4 million Credit under the Special Facility for Africa*** Complemented by a Supplemental Credit of SDR 6.9 million to the Public Works and Employment Project**** Supplemented by a Credit of SDR 9.4 million
1 The SAL-I - Credit 1660-NIR in 1986, the Public Enterprise Sector Adjustment Program - PESAP - Credit 1833-NIR in 1987, the Projet d'Appui à la Gestion Economique et Financière - PAGEF - Credit 1493-NIR in 1984, and the Public Enterprise Institutional Development Project - PEIDP - Credit 1838NIR in 1987. The PEIDP was closed only in 1995.
2
2. Background
2.1 Niger faces formidable obstacles to long-term development. It is landlocked and remote from the sea, and has a meager resource base, recurrent droughts, environmental degradation, heavy dependence on a single export, uranium, and a very weak human resource base. The population, growing at 3.4 percent p.a., is estimated at about 11.5 million, with 79 percent in rural areas and about 85 percent concentrated in a narrow corridor of 100-150 km along the border with Nigeria. The informal sector is very large, at some 70 percent of GDP, and highly integrated with the economy of northern Nigeria. Niger is one of the least advanced countries in terms of poverty and human development: per capita GNP stood at about US$ 180 in 2001 (WB Atlas method), and the country ranked 161 out of 162 listed in the UNDP's 2001 Human Development Index. Based on the most recent data (1992-93), the incidence of poverty is at 63 percent and of extreme poverty at 34 percent.2 Life expectancy is 46 years, adult illiteracy is 84 percent, gross primary school enrollment is 42 percent (33 percent for girls), infant mortality is 11 percent, under-five mortality 25 percent, and child malnutrition 40 percent. HIV/AIDS prevalence is relatively low at 0.8 percent. Niger’s key social indicators are in Annex A. Institutional development impact is very low.
2.2 Since independence in 1960 the country’s political landscape has been marked by two distinct periods: 1974 to 1991, and 1991-onwards. From 1974 to 1991, Niger was dominated by two military regimes. The first, from 1974 to 1987, was under the authoritarian leadership of General Kountche while the second, from 1987 to 1991 was led by General Ali Saibou who established a single-party state. Since 1991, it has known a long period of instability, during which attempts to establish a multi-party democracy have been disrupted by political turmoil, social tensions, and two coups d’Etat. The operations under review fall within this latter period.
2.3 The discovery of uranium in the late 1960s led to a boom over the second half of the 1970s and early 1980s, with two major consequences. First, the boom led to the emergence of a strong and rapidly growing public sector and introduced serious distortions in the structure of the economy. Second, Niger, traditionally vulnerable to erratic rainfall, became also subject to the vagaries of the international uranium market. The plunge of uranium prices in the early 1980s revealed not only the structural weaknesses of the economy but also the boom-induced distortions and the mounting debt obligations.
2.4 In 1983, the Government sought the assistance of the IMF and the Bank to formulate a reform program. The program focused on improving public resource management and launching structural reforms aimed at diversifying the economy. The difficult political and social context and the complexity of the reform program led to disappointing results. The two adjustment operations financed by the Bank were rated unsatisfactory by OED with sustainability highly unlikely.3 After the death of General Kountche in 1987, a weaker military regime was not able to contain the calls for a multi-
2 Based on the household survey of 1992-93. Work on a new household survey began in 2002, drawing on the results of the 2001 population census, but was interrupted as of January 2003 for lack of financing. 3 OED Performance Audit Report No. 12104 of June 29, 1993.
3
party system. Economic management became weaker and political commitment to reforms diminished, while the CFA franc became increasingly overvalued vis-à-vis the Nigerian currency. By 1991, the IMF-supported program derailed as political instability and social turmoil intensified. A National Conference, held in late 1991, appointed a transitional Government that made vain attempts at stabilization. The Conference led to the adoption of Niger’s first multi-party constitution in December 1992, and by March 1993, a newly elected civilian Government took office, based on a fragile coalition of several parties.
2.5 The results of the first adjustment period (1983-93) were disappointing. Real GDP average was -0.6 percent over the period. The fundamental structural issues remained. A thin revenue base due to a very large informal sector, strong wage bill pressure, and an inefficient public enterprise sector led to persistent budgetary crises. In Niger’s context, raising revenue proved to be a much greater challenge than reducing expenditure. Data for Government revenues, including grants, show that Niger’s revenues are much lower than for Africa as a whole and for selected Francophone countries of the sub-region, standing at 12.8 percent of GDP on average for 1991-93, against 24.7 for Africa, 17.1 for Guinea, 19.2 for Côte d’Ivoire, 19.5 for Senegal, 21.0 for Mali, and 25.0 for Mauritania.
2.6 In August 1993, the authorities attempted to adopt some internal adjustment measures, such as a decrease of 13 percent in public sector wages, and protection measures against fraudulent imports. Despite this, the current fiscal deficit rose from 3.1 percent of GDP in 1991 to 3.9 in 1992 and 5.2 percent in 1993, and the overall fiscal deficit, excluding grants, stood at 9.4 percent of GDP by end 1993. Revenue fell to a level such that 87.6 percent were absorbed by the wage bill, despite the cut in salaries. In addition, the latter went up to four months in arrears in 1993, while further arrears accumulated on account of debts owed by the Government to public utilities. In addition, the overvaluation of the CFA franc made it increasingly difficult for the formal sector, largely dominated by public enterprises, to compete and the agricultural sector to diversify. Table 2.1 presents key economic data for the early 1990s.
Country Strategy
2.7 The 1992 CAS (March 1992) acknowledged that circumstances did not allow for substantial reforms until political stability returned. Although the thrust of the strategy in the 1980s was kept, flexibility became the key operational feature of the Bank’s agenda, which was to respond quickly to the changing political and social situation, while maintaining essential activities and keeping the dialogue open. The CAS proposed a flexible operational program limiting lending for the time to a "core program" of investment operations. Shifting to an "expanded core program" or a "full program" was to be triggered by progress towards a viable macro-economic framework and agreement on a Policy Framework Paper (PFP), respectively. Also, a lower lending profile was to allow for deepening the analytical work, including the preparation of a Poverty Assessment, thus laying the foundations for adjustment lending at a later stage when the situation would allow.
4
Table 2.1: Key Economic Indicators, 1990-1993 (in percentage of GDP, unless otherwise indicated) 1990 1991 1992 1993 Real GDP (% increase) -1.3 2.5 -6.5 1.4 CPI – African (% increase) -2.0 -1.9 -2.9 -0.9 Terms of trade (% change) -9.8 -1.8 -8.4 -1.3 Total Revenue 10.3 8.5 8.2 7.3 Total exp. + net lending 22.7 16.9 16.8 16.8 Current exp. 13.3 11.1 12.6 12.8 Primary budget bal. (comit.) -10.1 -6.5 -6.9 -7.7 Current budget bal. (comit) -3.5 -3.1 -3.9 -5.2 Overall bal. Excl. grants -12.4 -8.4 -8.6 -9.4 Wage bill/total revenue 53.0 69.6 76.3 87.6 Exports fob 12.2 12.2 11.3 11.3 Imports cif 21.9 18.3 14.4 14.8 Current act. Def. (excl. off. Transfers) -11.8 -7.4 -6.7 -7.7 Debt outstanding 63.9 64.6 69.6 57.3 Debt service 3.8 3.7 3.9 4.2 Debt service/XGNS 21.3 26.6 27.4 26.8 Source: IMF
2.8 In late 1993, discussions between France and the CFA countries about the devaluation of the CFA franc intensified, as the fixed rate of CFA francs 50 for FF 1.0 was to be changed to CFA francs 100 (presently, the CFA franc is fixed to the Euro). The Government of Niger had some hesitation about the devaluation on economic grounds as Niger did not have important agricultural sub-sectors prone to a strong supply response as some of its neighbors had, e.g., Côte d’Ivoire with cocoa. When the countries of the monetary union decided in favor of a change in parity, the Government prepared a set of reforms that could form the basis of a new PFP, together with a program aimed at protecting vulnerable groups from increased import prices in the months following the change in parity.
2.9 The 1994 CAS argued for adding supporting actions to facilitate a supply response. It proposed to revert to a “full program” of adjustment and investment operations. However, it was recognized that, if the medium-term program, still under preparation at the time, were to go off-track, the Bank would revert to a "core program." Therefore, the implementation of the lending program was to determine the level of IDA commitments, especially in the light of a history of poor portfolio performance.
2.10 This medium-term vision was quickly overshadowed by reality. Without true ownership of the program at the political and administrative levels, and with persistent political and social turmoil, the efforts at stabilization were short-lived, and, by mid-1994 (hardly two months after the CAS discussion), the Stand-By and the Bank program had derailed completely, prompting the Bank to return to a "core program."
5
2.11 Continued instability persisted through the end of 1995, and led to a coup by General Baré Mainassara in January 1996. The latter declared his commitment to the reform process and established a strict timetable for a return to democracy by year-end (which indeed took place). The situation stabilized after the coup, and, in June, a new Policy Framework Paper (PFP) was agreed, with a three-year (1996-98) arrangement under the Enhanced Structural Adjustment Facility (ESAF) focusing on regaining control over public finance and addressing impediments to growth and poverty reduction, the two key objectives of all IMF programs since the 1980s.
2.12 The 1997 CAS (October 1997) provided the opportunity to undertake a frank reassessment of Niger's bleak situation.4 It also reflected the findings of the Poverty Assessment Report, which had highlighted the severity of Niger's poverty, including the critical water shortage. Both factors pleaded for redirecting the strategy toward a longer-term focus on poverty. The CAS acknowledged, however, that this challenge could be overcome only in the long run by developing human capital and identifying new sources of growth, notably by economic integration with Nigeria and the UEMOA coastal countries. In support of this new approach, and in the face of persistent fragile public finances, the CAS stressed that public resource management needed continued attention as a pre-requisite to deeper reforms. Another factor conditioned the focus of Bank operations since 1998. By 1997, the problem of domestic and external arrears had become particularly acute as a result of an increasingly tight treasury situation exacerbated by the suspension of a substantial portion of external aid in response to political crises.
2.13 After the April 1999 coup, in which President Baré was assassinated, political and social instability led to a rapid deterioration in the fiscal situation with salaries unpaid and some reform measures reversed by the transitional Government. The dire fiscal situation was exacerbated by two factors: (i) the almost total withdrawal of external assistance (by end 1999, cumulative civil service salary arrears reached 13 months); and (ii) the fall in revenues following the introduction on January 1, 2000 of a common external tariff (CET) by the UEMOA countries, which had penalized Niger more severely than other countries because of its large informal trade with Nigeria.
2.14 It was not until the return of a democratic civilian Government in early 2000, that better political and social cohesion could take hold and measures to redress the situation taken. The Government set four priorities for 2000, all geared to improving the balance between revenue and expenditure: (i) paying civil service salaries on time; (ii) servicing the external debt to prompt a resumption of external assistance; (iii) formulating its Poverty Reduction Strategy Paper (PRSP) to obtain the support of the Fund and the Bank; and (iv) reaching the decision point under the Highly Indebted Poor Countries (HIPC) initiative. An Interim Poverty Reduction Strategy Paper (I-PRSP) was prepared and conditions for achieving the decision point under HIPC were met and approved by the Board in December 2000.
4 Over the 30-year period since independence, real GDP had increased on average by 0.3 percent per year while population had doubled, growing at 3.3 percent p.a. Over that period, GDP had increased only twice for more than two years consecutively.
6
3. Objectives and Design
3.1 The Economic Recovery Credit (ERC - March 1994). The overall objective of the ERC was to support the post-devaluation reform program of the Government, and specifically:
• support the measures aiming at minimizing the negative social impact of the devaluation in the short-term;
• provide the necessary financial assistance during the transition period in which follow-up operations were being prepared; and
• support the policy dialogue between the Government and IDA. 3.2 As those approved for all CFA countries at the time, the ERC was meant to be a short-term shot in the arm and not a vehicle to address broader issues. It was prepared quickly and its design was very much influenced by the special circumstances surrounding the devaluation, including the general euphoria of the time. The Credit was subject to approval of a Stand-by (approved on March 4, 1994), that was expected to be replaced by an ESAF as soon as a medium-term program could be agreed. It was a single tranche operation based on actions taken prior to Board presentation and without conditions of effectiveness. The actions taken prior to Board were: (i) realignment of the exchange rate; (ii) tax measures to increase revenue; (iii) freezing of petroleum, water and electricity prices and freeing up of agricultural prices; (iv) customs tariff measures; (v) increase in the Central Bank discount rate from 10.5 to 14.5 percent; and (vi) a supplementary allocation of CFAF 10 billion in the revised 1994 budget for social safety net measures.
3.3 Since there was only one tranche disbursed on effectiveness, there were no further conditions, except the general provision that further lending by the Bank would be based on a judgment made on progress achieved on a wide agenda of measures, all to be taken by end-1994. These covered broadly the following: (i) several revenue mobilization measures focusing on tax simplification and administration and unification of the VAT rate at 17 percent; (ii) control of the wage bill and of scholarships, redirection of expenditure in favor of materials and supplies; (iii) elimination of all external arrears, substantial reduction in internal arrears, and inventory of all domestic arrears and their formal regularization; (iv) formulation of a Public Investment Program (PIP); (v) raising the discount rate from 10.5 percent to 14.5 percent; (vi) introduction of a comprehensive tariff reform, including reduction in some tariffs; (vii) reforms in public enterprises (PE); (viii) adoption of measures to promote Private Sector Development (PSD); and (ix) accompanying social measures to protect the vulnerable groups. In the optimistic mood of the moment, reform measures were added to the program with seemingly little consideration for the Government’s ownership of the program and/or its capacity to carry it out in a timely manner, all the more so since preparation had been minimal. Similarly, in the prevailing context, the risks were considered as moderate. Annex B lists the actions taken prior to Board presentation and the matrix of reform areas that would be monitored by the Bank.
3.4 The Credit was complemented in November 1994 by a Supplemental Credit of SDR 6.9 million to the 1991 Public Works and Employment Credit project on the ground
7
that the devaluation resulted in a substantial short-term increase in urban poverty expected to persist until the supply response to the devaluation materialized.5
3.5 The Public Sector Adjustment Credit (PSAC - March 1997). The Bank focused on the long-standing and interlinked public finance and PE problems. As part of the ESAF program, the Government had decided to renew efforts at restructuring the PE sector and, in November 1996, had created a Privatization Agency.6 Thus, the Bank decided to support an initial phase of PE privatization and restructuring.7 The objective of the Credit was to help sustain the Government’s stabilization and public sector adjustment effort, which aimed at restoring macroeconomic balance and confidence in the economy and at improving the management of public resources. The specific objectives were:
• revenue enhancement through: (i) simplification of the tax system; (ii) strengthening of tax administration; and (iii) widening of the tax base;
• expenditure restructuring by reducing the share of the wage bill, subsidies and transfers in current expenditure in favor of primary education, basic health care and road maintenance;
• reducing arrears; and • implementation of the privatization program.
3.6 Despite a return to relative stability under the Baré Government, the design of the PSAC was very much conditioned by the experience of the past turbulent years. The President’s report acknowledged that a return to a “full program” as advocated by the 1994 CAS was no longer appropriate for three reasons: (i) the uncertainties of the political situation; (ii) Niger’s poor implementation track record; and (iii) the need to re-examine the medium-term priorities in light of a more realistic assessment of Niger’s growth prospects. As a result, instead of a multi-tranche second SAC, as envisaged under the 1994 CAS, a smaller one-tranche operation was proposed for two reasons: (i) to support the authorities’ commitment to the program as demonstrated by the adoption of measures prior to Board presentation; and (ii) to decrease, to the extent possible, the risk of policy reversal. Emphasis was again on actions taken prior to Board presentation and there was no condition of effectiveness.
3.7 Actions taken prior to Board related to: (i) revenue mobilization measures adopted between September 1996 and February 1997; (ii) a 1997 budget law with larger allocations to the social sectors and the maintenance of infrastructure; and (iii) initial 5 The Region submitted a package of five supplemental credits for Sahelian countries as the last in a series of special operations in response to the CFA devaluation. Several EDs expressed strong reservations to these operations on the basis of substance (response time; equality in client orientation; resource mobilization efforts) and procedure (operational guidelines on supplemental credits). In the case of Niger, the criticism was particularly severe because of a lack of medium and longer-term planning capacity, the poor performance in carrying the PFP program, and the absence of a macro-economic framework. 6 The PE reform, initiated with the PESAP in 1987, had largely failed. There had been no substantial improvement in the financial position of PEs and no or little development of the private sector. In fact, reform efforts had been abandoned altogether in the late 1980s and sector performance had further deteriorated in the early 1990s. 7 A second and more in-depth phase of restructuring was to be supported by a PE stand-alone operation (the Privatization and Regulatory Reform Technical Assistance Project of August 1998 - still ongoing).
8
structural reforms of the civil service and the PE sector, including the adoption of a new privatization law and the decision to privatize 12 key PEs. As in the case of the ERC, the conditionality was limited to the provision that further lending by the Bank would be based on a judgment made on progress achieved on a series of measures within specific reform areas to be taken in 1997 and 1998. These covered: (i) revenue enhancement concentrating on simplification of the tax system, tax administration, and widening of the tax base; (ii) expenditure restructuring; and (iii) implementation of the PE privatization program. The detailed actions taken prior to Board presentation and the areas targeted for reform are listed in Annex C.
3.8 The Bank and the Government agreed to set up an Inter-ministerial Committee chaired by the Prime Minister to monitor and evaluate progress under the various components of the program. The committee was to be assisted by three technical groups (public finances; PE privatization and restructuring; civil service reform), that were to be responsible for implementing the program. The operation was considered of high risk in the light of the past troubled years (instability; shortfall in external assistance for 1997-98; and poor implementation capacity).
3.9 The Public Finance Reform Credit (PFRC - October 1998). The objective of the Credit was to help sustain the implementation of the economic reform program in 1998-99. The specific objectives were to:
• restore credibility in the Government’s ability to manage public finance in a responsible way by ensuring budgetary orthodoxy and the orderly clearing of domestic arrears;
• enhance domestic revenue mobilization by supporting measures to consolidate and reinforce the tax reform efforts implemented in 1996-97 (first phase of the program); and
• launch a medium-term effort to improve the efficiency and equity of public spending.
3.10 The design of the PFRC was dictated by internal considerations within the Bank and by the determination of the Baré Government shown in implementing the program. For internal efficiency reasons and to build a longer-term Government’s commitment to reform, the Bank chose to have a single operation with three-tranches for US $64 million. Again, there were no conditions of effectiveness or of release of the first tranche as the Government had implemented a series of measures prior to Board presentation. These related to four areas: (i) budgetary orthodoxy covering budget and payment procedures, audit, and completion of a PER; (ii) creation of an ad hoc Commission for the verification, validation and settlement of domestic arrears; (iii) revenue mobilization covering tax administration, tax exemptions, and strengthening of tax offices; and (iv) civil service reform.
3.11 Independently of the conditions for second and third tranche release (see below), the reform areas for the remaining of 1998 and for 1999 were: (i) improvement in financial and accounting orthodoxy; (ii) settlement of domestic arrears; (iii) strengthening of revenue mobilization with emphasis on widening the tax base; (iv) control and restructuring of expenditure, including control of the wage bill and reallocation of
9
resources to the priority sectors; and (v) continued PE reform. Annex D provides a detailed list of the actions taken prior to Board and of the measures to be taken under different reform areas during project execution.
3.12 Release of the second and third tranches was subject to continuing satisfactory performance on the macro-economic front and implementation of the program. In addition, the second tranche of US$ 20.0 million was contingent upon: (i) presentation to Parliament of a draft 1999 budget consistent with the program and reflecting the recommendations and findings of the PER; (ii) settlement of domestic arrears in a net amount of at least US$ 20 million equivalent according to the priorities agreed upon in the settlement plan; and (iii) completion of the verification and validation of all internal arrears not yet verified and validated, and presentation to the Bank of a settlement plan satisfactory to the Bank. The third tranche of US$ 20.0 million was contingent upon: (i) presentation to Parliament of the expenditure audit covering the execution of the budgets for each fiscal year from 1991 through 1997; and (ii) settlement of a second net amount of domestic arrears of at least US$ 20.0 million equivalent according to the priorities agreed upon in the domestic arrears payment plan. In addition, the Bank and the Government agreed on a set of key performance indicators relating to the most important conditions (Annex D). Despite the relative stability under the Baré Government, the operation was also rated as presenting high risks (renewed political and social instability; weak implementation capacity).
3.13 The Public Finance Recovery Credit (PFRecC September 2000). On the basis of the commitment demonstrated by a new civilian Government and the IMF’s PRGF program, the Credit’s main objectives were to help sustain the stabilization and fiscal management component of the program and to compensate for the tariff revenue shortfall caused by the reduction in tariffs in the context of the implementation of the trade liberalization agenda of the UEMOA. Specifically, the objectives were to be achieved by focusing on the following seven policy areas:
• increasing tax revenue; • improving budget preparation and expenditure programming; • improving expenditure management (budget execution); • strengthening fiscal reporting and expenditure evaluation mechanisms; • establishing effective budget audits; • reviving the domestic arrears settlement process; and • accelerating structural reforms with direct fiscal impact, i.e., civil service reform
and privatization.
3.14 Again, the Credit was a single tranche operation without conditions of effectiveness and based on actions taken prior to Board presentation falling under the following broad categories: (i) the resumption of regular and timely payment of civil service salaries to restore credibility and forestall social unrest; (ii) the revision of the 2000 budget law, including expenditure restructuring in favor of the social sectors; (iii) the implementation of the new UEMOA tariff structure (effective on January 1, 2000); (iv) the introduction of a new tax regime, including an increase in the VAT rate from 18 to 19 percent; (v) the improvement in various budgetary procedures and controls;
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and (vi) structural reforms in the civil service and in the PE sector. In addition, given the failure and ineffectiveness of the ad hoc Commission, which had been set up prior to the PFRC to settle the domestic arrears, the Government decided to remove the verification and settlement process of arrears from political interference, and created an autonomous center under the chairmanship of the Director of Cabinet of the President (the Centre Autonome d’Amortissement de la Dette Intérieure de l’Etat – CAADIE), which took over the responsibilities of the defunct ad hoc Commission.
3.15 There was no other conditionality than the provision that further Bank lending would be conditional to a satisfactory judgment on the progress achieved in the seven reform areas mentioned above. Annex E provides a detailed list of the actions taken prior to Board as well as those under the seven reform areas for implementation in 2000-01.
3.16 The PFRecC was, in several respects, the continuation of the PFRC and the two operations must be seen in conjunction. It had ostensibly a limited purpose: an “urgent” recovery in fiscal management aimed at laying the foundation for resuming a wider agenda,8 as well as rebuilding confidence in the donor community, whose resumption of assistance was critical. As in the case of the PSAC and the PFRC, and notwithstanding the commitment of the new civilian Government, the operation was considered of high risk (political and social instability; incapacity to mobilize sufficient external resources to resolve the financial crisis of 2000; the realization of a low-case macro-economic scenario; and weak implementation capacity). The PFRecC openly recognized the necessity to close the 2000 financing gap in view of the hesitancy of donors to resume their assistance. In this line, and with the situation exacerbated by the increase in oil prices in 2000, the Board approved in December of that year, a Supplemental Credit of SDR 9.4 million to compensate Niger for the additional fiscal burden caused by this increase.9 This Credit was also disbursed upon effectiveness without conditions.
Relevance of Objectives 3.17 The objectives of the four operations were at the time and remain highly relevant to the development priorities of Niger and to the Bank’s past and current country assistance strategy. However, none of the four operations directly addressed the need for better and sustained communication on the reform agenda between the Government and other stakeholders, including members of the National assembly, key civil servants, unions, and student organizations.
8 The PFRecC was followed by a Public Expenditure Adjustment Credit (PEAC) in October 2001. 9 The Bank extended a Supplemental Credit to several African countries for that purpose.
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4. Implementation
4.1 The projects focused on macro-economic stabilization and on controlling the persistent budgetary crises. Six major themes were covered: (i) revenue mobilization, (ii) civil service reform and the wage bill, (iii) expenditure restructuring, (iv) budgetary orthodoxy, (v) arrears, and (vi) PE reform and privatization. There was one subsidiary theme: (vii) the mitigation of the negative social impact of the 1994 devaluation on vulnerable groups under the ERC. Annex F presents key economic indicators for the period 1990-2001 and Figure 4.1 illustrates the fiscal profile over the decade.
Figure 4.1: Fiscal Profile (1990-2001)
-15
-10
-5
0
5
10
15
90 91 92 93 94 95 96 97 98 99 00 01
% o
f GD
P
Total revenue Current expenditure Overall bal. Excl. grants (comit.)
-10
-5
0
5
10
15
90 91 92 93 94 95 96 97 98 99 00 01
Rea
l GD
P(%
incr
ease
)
Source: IMF 4.2 The Economic Recovery Credit. Implementation was limited and fragmented. The lack of ownership and the derailment of the program in mid-1994 prevented the adoption of many of the targeted measures or delayed them considerably beyond the end of 1994. The GDP growth target of 3.9 percent for 1994 was slightly exceeded due to a good rainy season, but the 4.2 percent forecast for 1995 and 1996 was not reached. Inflation was contained within the forecast as a result of the prudent policy of the central monetary authority of the UEMOA. The current account target was achieved in 1994 due
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to a good performance of agricultural exports following the change in parity and reduced import of capital goods.
4.3 The overall fiscal deficit worsened, reaching 12.5 percent of GDP against a target of 9 percent for 1994. Most of the revenue mobilization measures were either not taken or delayed beyond the end of 1994. The revenue/GDP ratio fell to 6 percent in 1994, the lowest level ever. Stabilizing the level of the wage bill, a key objective, proved an elusive goal under the prevailing political and social circumstances. The ratio of the wage bill to total revenue reached 90.8 percent in 1994 and fell only to 73.2 percent in 1995.
4.4 Arrears were partially settled. At end 1993,10 the stock of external arrears was estimated at some 133 percent of total revenues (at the new parity) and at some 50 percent for internal arrears. Only 65 percent of external arrears were settled in 1994 against a target of 100 percent, while the bulk of non-wage domestic arrears was left untouched. An inventory was not completed and a formal mechanism for their regularization not set up.
4.5 Expenditure restructuring and improvement in budgetary orthodoxy were minimal, as only a three-year rolling PIP was prepared in 1994, but without any accompanying institutional strengthening.
4.6 Reforms in the PE sector and promotion of PSD were minimal. The ERC provided for several actions in the PE sector: (i) an inventory of cross-debts of the sector and the preparation of a timetable to clear them; (ii) independent audits of NIGELEC (electricity), ONPPC (pharmaceuticals), SONIDEP (petroleum), and CNSS (social security); (iii) liquidation of COPRO-NIGER (distribution); and (iv) implementation of the reforms of the uranium sector and of NIGELEC. These were either partially taken or delayed: an inventory of cross-debts was partially done while independent audits were carried out on time for NIGELEC and CNSS, but considerably delayed beyond end 1994 for ONPPC and SONIDEP. The liquidation of COPRO-NIGER was delayed to 1995 and the reforms in the uranium sector and of NIGELEC were still underway in 1996. For PSD, the ERC envisaged the elimination of the Government monopoly over hiring and the revision of the Labor Code. Neither was done.
4.7 Achievements in limiting the negative impact of the devaluation on vulnerable groups were modest as a result of insufficient counterpart funds and administrative delays. The revised 1994 budget had allocated CFAF 10 billion for social safety measures, including: (i) eliminating tariffs on rice and sugar for 3 months; (ii) freezing of the price of kerosene for 3 months and limitation of the increase in the price of gas oil to 30 percent; (iii) ensuring the proper supply of free essential drugs in public health facilities; (iv) supplying the markets with essential foodstuffs (cereals, sugar, cooking oil) at subsidized prices to break speculative commercial practices; and (v) increasing significantly in real terms current expenditure for health and education. Some of those measures were taken, some were partially taken or not at all, as only CFAF 2.6 billion were effectively allocated (see Annex B for details on implementation of measures). 10 It is difficult to obtain a clear picture of the arrears situation at any given time because definitions varied and partial estimates were made at different times. In addition, new arrears accumulated quite regularly throughout the decade.
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4.8 The Public Sector Adjustment Credit. Implementation was partially successful due to the relative stability under the Baré Government. In 1997, macro-economic performance deteriorated owing to a drought, with GDP reaching 2.8 percent against a target of 4.3 percent, but a more responsible fiscal management led to a reduction in the overall deficit to 7.5 percent against a target of 8 percent. Inflation declined fairly rapidly after 1994 to reach an average of 2.4 percent over 1997-2000, well within the range prescribed by the UEMOA. Again, the current account deficit was smaller than projected on account of reduced economic activity, but wider than in 1996 reflecting a decline in agricultural exports due to the drought.
4.9 Most of the revenue mobilization measures relating to simplification of the tax system and tax administration were taken. The improvement in the revenue/GDP ratio achieved in 1995 and 1996 was sustained in 1997, reaching 8.4 percent, but still well below the target of 9.8 percent.
4.10 Expenditure containment and restructuring were also more forcefully addressed. Control over personnel expenditure was strengthened and the wage bill target met, and scholarships reduced. Allocations for education and health were increased, but fell short for the road fund (see Annex C for details). On arrears, settlement was minimal because of the shortfall in external assistance due to continued political uncertainty. In 1997 and 1998, their clearance was through settlement of cross debts, while external assistance was targeted to the extent possible at arrears to suppliers in the health and education sectors. Some measures were also adopted to avoid accumulation of new arrears. Budgetary discipline was strengthened, mostly with respect to budget execution.
4.11 The Government tackled structural reforms that had remained dormant since the 1980s. In 1997, it initiated the rationalization of the civil service and payroll system: the salary scale was revised by eliminating distortions in the remuneration system and by reducing base wages and housing allowances; a civil service census was completed; a redeployment program for the health sector and the tax collection agencies was launched; and the civil service roster and payroll files were harmonized and integrated. Reforms were maintained through 1998 and strengthened in December 1998 with the adoption of a civil service statute introducing mandatory retirement after 30 years of service or 55 years of age, and basing promotion on merit.
4.12 Similarly, since 1996, the Government had been active, with the support of the Bank, in reviving the PE reform. The PSAC had a fairly tall agenda in this area, with all actions to be completed by end 1998. Twelve enterprises, including the three major utilities, the petroleum company, and eight smaller enterprises had been targeted for privatization, three for liquidation, and eight more for restructuring. By early 1997, the privatization strategies for the three utilities and the petroleum company had been adopted. Finally, the program had called for the settlement of all cross-debts.
4.13 In contrast to the good performance at preparation stage, implementation of the PE reform agenda was partial and very slow reflecting strong resistance by the unions, weak technical and administrative capacities, and poor coordination among the different agencies involved (the Implementation Completion Report of the PSAC recognizes that the calendar had been too optimistic). Implementation accelerated somewhat by end
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1997, after the Government and the Bank signed a memorandum of understanding spelling out the modalities of the process, the guidelines to ensure the transparency in the preparation of the transactions, and the measures to strengthen the privatization agency. As of August 1998, only three small companies had been sold and three liquidated, while the restructuring of eight companies was still underway. In August 1998, advisors were recruited to help prepare the bidding documents for the three utilities.
4.14 The Public Finance Reform Credit. Implementation was very much mixed and broke down completely after the April 1999 coup. No specific growth targets were set for 1998 and 1999 in the President’s Report, but growth was projected to average 4.5 percent over 1998-2001. Due to exceptional rainfall in 1998, GDP grew by 10.4 percent, but fell –0.6 percent in 1999. With both current expenditure and revenue targets not achieved, the overall fiscal deficit, excluding grants, widened substantially in 1999, to 9.0 percent of GDP.
4.15 The wage bill could not be contained and domestic arrears could not be settled, leading to the cancellation of the second and third tranches of the Credit. The wage bill target was slightly surpassed in 1998, but was overshot by 13 percent in 1999 following the rapid deterioration in fiscal management after the April coup. With assistance from the Bank during project preparation, an inventory of domestic arrears as of end 1997 had been prepared, as well as a detailed plan for their settlement in 1998-99 (at March 31, 1998, domestic arrears were estimated at 11 percent of GDP). The ad hoc Commission set up to implement the plan, carried out a substantial amount of technical work in verifying the claims but proved ineffective in achieving the settlement objectives, mainly because of persistent infighting among agencies of the ministry of finance. After the coup, the fiscal situation deteriorated so rapidly, due to the laxity in fiscal management under the transitional Government and the immediate suspension of most external assistance, that the conditions for tranche release could no longer be met. The Government undertook an organizational audit of the Treasury, but the first remedial actions, aimed at restoring accounting discipline, were not taken before the end of 2000.
4.16 Revenue mobilization failed to meet the targets and attempts at widening the tax base were disappointing. The revenue/GDP ratio improved in 1998 due to the good GDP performance. However, at 9.1 percent, it did not reach the target of 9.9 percent, nor in 1999, when it fell to 8.8 percent against a target of 10.3 percent. Virtually all measures adopted to strengthen revenue mobilization were implemented with delay or not at all. While the ERC and the PSAC had focused on simplification of the taxation system and on tax administration, the PFRC put greater emphasis on widening the tax base, mainly by reducing the scope and number of exemptions under the Investment Code and the special tax regimes applicable to petroleum and mining. There was also greater emphasis on combating fraud and enforcing sanctions on fraudulent agents, as the number of exonerations had substantially increased in 1997-98. However, little progress was achieved in widening the tax base.
4.17 The Government showed commitment in undertaking the first PERs in health and education, with good results. Some expenditure restructuring was achieved, as the focus on efficiency of public spending shifted to a more comprehensive approach than in the past through PERs and implementation of their recommendations via the budget. PERs
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for health and education were completed in 1998, as well as audits of the allocation mechanisms for subsidies to major autonomous public agencies (radio, TV, etc.) and for student scholarships. Most of their recommendations were included in the 1999 budget with increased allocations for non-wage spending. The Government demonstrated ownership in these exercises and the PER process was well received at the time by the ministries concerned.
4.18 Progress in reforming the PE sector was limited to the selection of private investors invited to bid for the telecom and water companies, and for two cellular phone licenses.
4.19 The Public Finance Recovery Credit. The transitional Government following the April 1999 coup left an extremely precarious fiscal situation to its successor. Salary arrears accumulated very quickly, up to seven months during 1999, for a cumulative total of 13 months. On the basis of estimates made in March 2000, the stock of domestic arrears stood at CFA 295 billion or 23.7 percent of GDP, at end 1999. Against this background, implementation of the project must be regarded as mostly successful. No specific growth targets were specified for 2000-03 in the President’s Report, but an average GDP growth of 3.9 percent was forecast, supported by a projected increase in the investment ratio. In the event, GDP declined by 1.4 percent in 2000 due to renewed drought, but increased by 7.6 percent in 2001, as a result of good rainfall. With revenue/GDP ratios higher than targeted and expenditure kept under control, the overall fiscal deficit decreased from 9.0 percent in 1999 to 7.6 and 7.4 percent in 2000 and 2001, respectively.
4.20 Revenue mobilization targets were achieved in both 2000 and 2001. Several factors contributed to this result: more realistic targets had been set than in the past; the VAT rate was raised to 19 percent to compensate for the revenue losses incurred with the introduction of the CET; and the exchange of information between revenue agencies on large taxpayers was much improved and facilitated by the effective application of the single taxpayer identification number. However, as in the case of the PFRC, efforts at reducing tax exemptions largely failed.
4.21 Current expenditure was contained. Control of the wage bill remained a challenge and targets for 2000 and 2001 were slightly exceeded. Expenditure restructuring was strengthened with a second round of PERs for education and health and a first PER for the rural sector. These were completed in early 2000, leading to increased allocations for health and education in the revised 2000 budget. A budget-wide PER, capitalizing on the regularization of budgetary accounts for 1997-00 (see below), was delayed, as the Government and the Bank agreed to include not only trends in allocations but also management processes, as well as to associate other donors to the exercise. The full PER was due to start in spring 2003.
4.22 The budgeting cycle was strengthened and a return to budgetary orthodoxy was initiated with good results, with particular attention to the respect of legal requirements and administrative procedures. The budget preparation framework had remained weak for most of the decade. Several programming issues were tackled successfully and progress was achieved in most of them, but problems remained in rationalizing and
16
limiting allocations for scholarships, autonomous entities, and utility consumption. The Government launched corrective measures in budget execution, such as a strict forward-looking cash management system and the prioritization of expenditure, but, here also, progress was limited as some institutional arrangements failed to function properly.
4.23 Fiscal reporting was improved, building on the potential offered by the computerization of budget execution and of payroll/personnel management. But delay was encountered in institutionalizing the reconciliation of data between the different agencies of the Ministry of Finance, especially between budget execution and the Treasury's balance sheet.11 Progress was also achieved in restoring bookkeeping discipline, in reorganizing the Treasury, and in preparing a reconciled balance of entry for the Treasury for 2000.
4.24 External budget oversight and audit were reestablished in accordance with Niger's constitution, a requirement not met since the mid-1980s. In agreement with the Bank and the Fund, the year 1997 was taken as reference year. In December 2002, the Chamber of Accounts sent to the National Assembly for approval the draft budget execution laws for 1997-2000, which were adopted. As of January 2003, the Chamber had completed a detailed audit of the 1997 accounts and had requested clarifications from the Treasury on some issues. Similarly, a draft budget execution law and the closed Treasury accounts for 2001 had been sent to the Cabinet for approval but not yet received by the Chamber. The work of the latter is considerably hampered by a lack of adequate resources.
4.25 An effective settlement plan of domestic arrears was agreed. The Government, in agreement with the Bank, chose to accord absolute priority to the payment of salaries on time (which has been the case since early 2000), leaving salary and other arrears to be liquidated gradually and after a complete reevaluation of the work performed by the ad hoc Commission, including updating the settlement strategy. Under the CAADIE, CFAF 26 billion were settled in 2001-02 out of the total of CFAF 295 billion at end 1999.
4.26 Structural reforms in the civil service and in the PE sector made progress, as the agenda left incomplete under the PFRC was resumed. After the April 1999 coup, some aspects of the civil service reform had been reversed by the transitional Government when the implementation of the retirement provisions had been suspended following the rapid accumulation of salary arrears and related social tensions. In early 2000, the retirement reform was re-enacted with modalities of its implementation agreed with the main trade unions. The PE reform agenda regained some momentum in 2001 with the transactions for SONITEL and SNE completed and the licenses for mobile phone awarded. However, the program encountered not only long delays, but also several important changes, including privatization strategies for some companies, particularly for SONIDEP. As of January 2003, only six companies had been privatized, including the telecom and water companies. NIGELEC was at pre-qualification stage and studies were underway for the opening of capital of SONIDEP; completion of the transactions for the latter two was expected for June 2003.
11 Progress in this area is expected in 2003, as the new UEMOA budget nomenclature and chart of accounts were introduced into the 2003 budget.
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5. Outcome and Assessment
Outcome
5.1 The outcome of the Economic Recovery Credit is rated unsatisfactory, as in the ES, because the fiscal and structural reforms were not implemented. This was the case also for the subsidiary objective of mitigating the negative impact of the devaluation on vulnerable groups.
5.2 The outcome of the Public Sector Adjustment Credit is rated moderately satisfactory, compared to satisfactory in the ES, because it partly achieved the objective of sustaining the stabilization and public sector adjustment efforts. Some specific objectives were achieved such as the reduction and containment of the wage bill and the redirecting of expenditure to the social sectors. However, revenue targets were not achieved while the revival of the structural reforms in the PE sector met with serious obstacles, including strong resistance from the unions, poor commitment within the administration, and long delays in implementation.
5.3 The outcome of the Public Finance Reform Credit is rated unsatisfactory, as in the ES, because the key objectives were not achieved: the overarching objective of restoring credibility in the sound management of public finance through a very substantial reduction in domestic arrears was not attained. In fact, arrears built up. Similarly, the objective of raising revenue was not achieved. The only area of progress was in expenditure restructuring where PERs were undertaken in the education and health sectors. It is difficult to judge whether, in the absence of the April 1999 coup, the limited progress achieved under the PSAC could have been sufficiently sustained and strengthened to enable the Government to meet the second and third tranche conditions.
5.4 The outcome of the Public Finance Recovery Credit is rated satisfactory, as in the ES, because its major objective of sustaining stabilization and fiscal management efforts as well as compensating for the shortfall in revenue caused by the introduction of the CET was met. Also, most of its specific objectives were achieved.
Institutional Development Impact 5.5 The Economic Recovery Credit. The institutional development impact is negligible, as in the ES. The reforms supported by the Credit did not achieve the objective of anchoring the stabilization program and capitalizing on the benefits of the devaluation.
5.6 The Public Sector Adjustment Credit. The project achieved modest institutional development impact, the same rating as in the ES. Some positive changes were made in the institutional environment for managing resources: (i) the revenue agencies were strengthened and their functioning improved; (ii) the civil service and the payroll system were rationalized; (iii) additional allocations to the social sectors were institutionalized; (iv) some budget execution procedures were streamlined; and (v) a legal framework for privatization was adopted, a privatization agency was created, and transactions for some of the major utilities were launched. However, there were significant factors limiting
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progress in institutional strengthening: (i) the Government was distracted by security issues in some parts of the country; and (ii) a lack of cooperation and coordination between various agencies, especially within the ministry of finance.
5.7 The Public Finance Reform Credit. The institutional development impact is rated modest, as in the ES. Improvement was limited to a few areas, such as the setting up of the Large Taxpayer Unit to follow up on the tax obligations of large taxpayers and improve coordination among revenue agencies, and the introduction of the PER process in education and health. But the organizational audit of the Treasury, launched under the project, remained dead letter with the Government failing to follow up on the report recommendations. Similarly, the intensive preparatory work on the settlement plan of domestic arrears did not have any institutional impact, as divisions and frictions between the ad hoc Commission and other agencies, especially the Treasury, led to paralysis.
5.8 The Public Finance Recovery Credit. The institutional development impact is rated substantial, compared to modest in the ES, because progress was made in most areas: the revenue agencies were strengthened and the exchange of information between them improved; the civil service reform was reinstated; the PER process was broadened to involve other donors, although actual work was delayed. But it is especially in the area of budgetary orthodoxy that the greatest impact took place with the strengthening of budget preparation and execution, and renewed fiscal reporting and auditing. Finally, the failure of the PFRC to set up a viable framework for the settlement of arrears was remedied by the abolition of the ad hoc Commission and its replacement by the CAADIE, which has performed effectively since.
Sustainability
5.9 The Economic Recovery Credit. The overall sustainability is rated highly unlikely, compared to uncertain in the ES. Government and stakeholders’ ownership was negligible, while economic resilience and resilience to exogenous influences were very weak. In addition, there was no improvement in institutional capacity, a key requirement for achieving success and mitigating the high risks prevailing in Niger. When the program derailed in mid-1994, donors’ confidence in the program became hesitant and their reduced support accelerated its demise.
5.10 The Public Sector Adjustment Credit. Its overall sustainability is rated unlikely, compared to likely in the ES. Although the risks to civil disturbance had somewhat abated under the military regime at the time, there was not enough time to fully anchor the institutional improvements made in a sustainable manner. Indeed, commitment to the program weakened in the second half of 1997, while continued frictions between the different agencies of the ministry of finance proved to be very damaging for coherent policy-making and implementation.
5.11 The Public Finance Reform Credit. The overall sustainability is rated highly unlikely, compared to unlikely in the ES, on the basis that the objectives were not achieved and that, in some cases like the civil service reform, actions taken under the PSAC were reversed.
19
5.12 The Public Finance Recovery Credit. The overall sustainability is rated likely, as in the ES, on the basis of the commitment shown by the Government during preparation and implementation of the project. Progress is likely to be consolidated and built-upon with renewed political stability.
Bank Performance 5.13 The Economic Recovery Credit. This assessment rates Bank performance as unsatisfactory,12 compared to satisfactory in the ES. Although OED had recently issued its audit of the 1980 adjustment operations (Report No. 12104, 1993), the Bank failed to take past experience into account in conceiving and designing the project. The Bank rightly seized the opportunity of the devaluation, but, in the euphoria of the moment, rushed to throw in a long list of actions, which proved too broad and too demanding for a technically weak Government to absorb in 12 months at a time of high political uncertainty. The Bank misjudged the depth of the political crisis at the time; it wrongly interpreted the Government’s declaration for reforms as long-term commitment and overlooked the lack of commitment among senior and middle-level officials; it neglected to assess the institutional capacity of the administration, especially at a time when many changes in high-level personnel had taken place; and finally, it ignored the increasing informalization of Niger’s economy since the 1980s.
5.14 During implementation, the Bank failed to readjust the dialogue on possibly more focused or realistic measures that the Government could have taken. Instead, the documents show that, while acknowledging the volatility in the political and social situation and continued poor performance, the 1995 supervision missions showed lack of judgment in advocating a deeper and broader cooperation in the form of a SAL II.
5.15 The Public Sector Adjustment Credit. Bank performance is rated satisfactory, as in the ES, both for quality at entry and supervision. The preceding turbulent years and the poor performance under the ERC led the Bank to adopt a much more cautious approach as demonstrated by internal memoranda.13 As a result, preparation was closely coordinated with the Fund on the basis of the 1996 ESAF, and support was better identified and directed to some components of the program. The Bank had a clear vision and understanding of the short-term requirements to redress fiscal management, even though the broader and longer-term lessons of the 1980s were overlooked. The dialogue during preparation over content and design was based on an agenda well known and shared by both parties, although not necessarily by lower level officials. This had not been the case for the ERC. Only the agenda with respect to PE reform was much too ambitious for the time imparted and unrealistic given the social context. There was a
12 It is difficult to assess the quality at entry and the supervision performance of the Bank for the ERC as there are very few documents from that period in Bank files. For instance, until December 1994, there is not a single BTO or Aide-mémoire following supervision missions. The assessment is therefore based on the content of the project as described in the President’s Report, the 1995 supervision missions, the ICR, and discussions with Bank staff and the authorities. 13 The exchange of internal memoranda surrounding the concept paper review, the ROC meeting, and the submission to senior management before Board presentation of the PSAC shows the unusual doubts and caution expressed by many. Clearly, the Bank had become conscious of the risks of pursuing adjustment lending in the circumstances.
20
broad commonality of views, irrespective of the fluid political situation or capacity to deliver. Both parties knew and understood what needed to be done, the consequences, and the risks.
5.16 Bank supervision was close and recognized early on slippages in implementation and reacted accordingly. When weak technical and administrative capacities caused delay in implementing the privatization program, the Bank and the Government signed a memorandum of understanding spelling out modalities and guidelines to ensure transparency in transactions and to strengthen Government capacity. Similarly, the Bank reacted fairly quickly in recommending a series of measures aimed at redressing the situation after it had become clear that lack of coordination between ministries and weakened commitment had caused the program to slip during the second half of 1997.
5.17 The Public Finance Reform Credit. Bank performance is rated satisfactory, as in the ES, for both quality at entry and supervision. As in the case of the PSAC, preparation was well coordinated with the Fund and the authorities, notably for the formulation of the detailed plan for the settlement of domestic arrears. After the program derailed in 1999, the Bank showed initiative and flexibility in proposing to and agreeing with the new civilian Government a set of short-term and well focused measures that could help restore fiscal credibility, transparency and accountability under the next operation, the PFRecC.
5.18 The Public Finance Recovery Credit. Bank performance is rated satisfactory, as in the ES. As soon as the new civilian Government was in place in early 2000, close cooperation with the Fund resumed on the preparation of a PRGF and the I-PRSP. The Bank showed more cognizance of past difficulties and obstacles in designing the project than had been the case in the other operations: objectives and reform areas were more limited and more precise, a necessary requirement for a country with very weak institutional capacity. Moreover, attention very much focused on identifying with the authorities past problems and issues that called for immediate action. At the same time, the Bank and the authorities designed a new institutional framework for the settlement of domestic arrears, a problem that had become acute and politically explosive after the further accumulation of salary arrears in 1999. Supervision was also satisfactory.
Borrower Performance 5.19 The Economic Recovery Credit. This assessment rates the performance as highly unsatisfactory, compared to not available in the ES. In late 1993 and early 1994, the Government had serious reservations on the need to devalue and was ill-prepared for addressing its consequences as well as seizing its opportunities. As a result, with ownership absent, the Government clearly “went along” with an agenda that was not shared and insufficiently assessed in terms of consequences, risks, and requirements for its success. Nor was it ready – and sufficiently supported by external assistance from donors other than the Fund and the Bank – in laying the foundations to capture the potential increase in competitiveness offered by the devaluation or in seizing the opportunity to adopt painful structural reforms, notably in the PE sector. In addition, the period was marked by frequent changes in senior officials, arbitrary political appointments, persistent strikes by the unions, and low morale of civil servants.
21
5.20 The Public Sector Adjustment Credit. Performance is rated satisfactory, as in the ES. The Baré Government took an active part in the preparation of the 1996-98 ESAF and showed determination in implementing the program between mid-1996 and mid-1997 despite strong resistance by the unions to the reduction in wages and the privatization program. However, there were long delays in implementation due to a lack of commitment within the administration and lack of cooperation and coordination between key agencies; implementation slipped considerably during the second half of 1997.
5.21 The Public Finance Reform Credit. Performance is rated unsatisfactory, as in the ES. The Government was fully committed to the program at preparation, with some senior staff actively participating in formulating the content and design of the project. However, implementation suffered from lack of coordination and cooperation among agencies and administrative resistance. This was notably the case in several areas of budgetary orthodoxy, including the lack of effective functioning of the ad hoc Commission and the failings of the expenditure regulation mechanism. In both cases, divisions and frictions between the Treasury and other agencies of the ministry of finance led to paralysis.
5.22 The Public Finance Recovery Credit. The rating is satisfactory, as in the ES. Despite the difficult situation inherited from the transitional administration, the democratically-elected Government of early 2000 was quick to address the most urgent matters, such as paying the salaries on time to inspire renewed confidence in the civil service and the administration. It actively prepared with the Bank a set of short-term measures to redress the most urgent fiscal imbalances and to restore credibility in public finances. This was done with clear-sightedness in defining and selecting the priority actions to be taken under the PFRecC. At the same time, the Government engaged in discussions with the Bank and the Fund on medium-term policies, a dialogue which quickly led to an agreement on a PRGF and an I-PRSP. During implementation, the Government continued to exhibit commitment, even when slippages occurred. However, ownership of the program within the administration was insufficient.
22
6. Main Findings and Program Impact
6.1 The implementation of the four projects was adversely affected by continuous political and social instability and the inability of the different Governments to control the persistent budgetary crises, and, to a lesser extent, by exogenous factors such as droughts. These factors thwarted attempts at pursuing the reforms in a consistent and sustained manner. Progress was made only when a stable and relatively strong government, whether military or civilian, was in place, but these periods were short and the gains fragile. In Niger's context, the current Government has been in place for a relatively extended period, since early 2000.
The main findings are: 6.2 Awareness of public finance. Despite all the difficulties encountered, the Bank and Fund operations helped Niger survive the troubled decade of the 1990s and keep a window on the world. They largely contributed to help: (i) address the daunting fiscal management problems faced by the country; and (ii) create an awareness in the public opinion and civil society that public finance matters and requires a sound, responsible, and transparent management. Stakeholders, such as unions and students, who used to staunchly oppose the very notions of liberalization, privatization, fiscal discipline, and the like, have now become open to dialogue in the quest for solutions acceptable to all.
6.3 Ownership. While ownership generally existed at the highest level of the administration, except for the ERC of 1994, there was little or no commitment at lower levels of the administration (even as recently as 2000 for the PPFRecC), or within civil society. There was—and still is—a deficit in participation and communication from the top down and among the different branches of Government. Key senior officials of the three branches of the Government are undoubtedly not sufficiently associated to the preparation and content formulation of economic programs, with the risk of misunderstandings, frustration, and low morale. There is a clear need for the Government and the Bank to actively promote the dissemination of information.
6.4 Realism. When compared to targets, the results achieved over the decade are undoubtedly meager. But were the targets realistic and achievable under the circumstances or was there a lack of judgment in setting them too high, irrespective of the relevance of objectives? There was a wide gap between the reality in the country and the expectations raised—and the messages sent—by the Bank through both the CASs and the first three operations. Indeed, the latter were over-ambitious in their quantitative targets in the light of the 1980 performance, the difficult transition to democracy, and the well-known weak institutional capacity of the country. In this connection, the 1994 devaluation raised unwarranted expectations and blurred the reality of the preceding decade. But, surprisingly, even after the troubled early 1990s, the Bank continued to exhibit unfounded over-optimism. The last operation seems to have recognized this misjudgment by being more realistic and more selective in its focus. This finding is best illustrated by comparing target and actual data for the key benchmarks under each of the four operations (Table 6.1). The same applies to the objectives set for the settlement of arrears and privatization.
23
Table 6.1: Key Macro-economic Indicators – Targets vs. Actuals, 1994-2001 (in percentage of GDP, unless otherwise indicated)
ERC PSAC PFRC PFRecC 1994 1997 1998 1999 2000 2001
Prog. Act. Prog. Act. Prog. Act. Prog. Act. Prog. Act. Prog. Act Real GDP (% increase)
3.9 4.0 4.3 2.8 4.4 10.4 4.5 -0.6 3.5 -1.4 3.7 7.6
CPI- African (% increase)
37.0 35.6 3.0 2.9 3.0 4.5 3.0 -2.3 5.1 2.9 1.2 4.0
Gross dom. inv. 10.4 13.1 10.9 11.1 11.4 11.7 10.2 10.1 10.8 11.0 11.5 Gross dom. savings 2.0 0.0 4.5 3.1 4.5 2.4 4.6 2.6 2.6 3.3 3.4 3.2 Total revenue 9.0 6.0 9.8 8.4 9.9 9.1 10.3 8.8 8.2 8.6 8.9 9.2 Over. fis. bal. (ex. grants/comit.)
-9.0 -12.5 -8.0 -7.5 n.a -8.2 n.a -9.0 -7.9 -7.6 -7.1 -7.4
Cur. act. bal. (ex. off. Trans.)
-16.0 -14.9 -12.1 -8.9 n.a -9.5 n.a -7.8 n.a -7.5 -9.0 -7.5
6.5 Impact on growth and poverty. The impact of the program on growth was small. Over the eight-year period, 1994-2001, GDP growth averaged 3.6 percent, slightly above the rate of increase in population. As a result, poverty was stabilized at best, although there are no data to compare the beginning and the end of the period.
6.6 Devaluation impact. Its impact was short-lived and the opportunity it offered to enhance competitiveness and reverse a rapidly deteriorating situation was largely missed. Three factors appear responsible for this: (i) the paucity of Niger’s resources; (ii) the then Government—weak politically—was not only ill-prepared for it, but was also very skeptical about its economic justification, and, as a result, its attitude was more one of “wait and see” than one of being pro-active in designing supporting and accompanying measures; and (iii) the Bank and the donors were naïve in expecting a lasting response from the agriculture sector beyond a solely “mechanical” and short-term reaction to a change in parity. They failed to provide the necessary support to enable some key agricultural sub-sectors to respond in a more lasting way.
6.7 Revenue mobilization and the informal sector. Together with the settlement of domestic arrears, revenue mobilization was the most challenging objective of the program, but unfortunately remained an elusive goal. Some progress was achieved, thanks to simplification of the taxation system and improvement in tax administration, but was limited because almost all measures were taken partially or implemented with delay. However, little progress was achieved in broadening the tax base, even though the last two operations emphasized the reduction of tax exonerations.
6.8 The record on revenue mobilization calls for the following observations. Despite all the efforts, the revenue/GDP ratio, at 9.2 percent in 2001, not only remained low by any standard, but also did not even revert to its 1990 level. This was due to external shocks, persistent instability and weak administrative capacity, but more importantly to Niger’s large informal sector. The situation in Niger compares as follows to other African countries. For the period 1991-01, Government revenues, including grants, stood at 12.7 percent of GDP on average against 24.2 percent for Africa as a whole, 14.4 for Guinea, 18.8 for Côte d’Ivoire, 19.7 for Senegal, 20.6 for Mali, and 27.0 for Mauritania.
24
6.9 The conclusion on revenue mobilization should not be based on the fact that, for the first three operations, the gap between the targeted and actual revenue to GDP ratio was as much due to overoptimistic—and unrealistic—forecasts as to the factors mentioned above. Rather, the analysis shows that the critical and continued bottleneck to sustainable improvement in fiscal management was and remains Niger’s inability to raise revenue by widening its tax base, a key challenge for a country with 70 percent of its GDP in the informal sector. The contribution of the agricultural sector (including livestock) to GDP is about fifty percent of GDP, that of the rest of the informal sector, mostly trade, is about 20 percent, and that of the formal sector (about the only segment constituting the tax base) is about 30 percent.
6.10 This assessment concludes that the Bank, together with the IMF, focus on three aspects with respect to the tax base and the informal sector. First, examine what and how taxes were levied on agriculture and livestock prior to 1974 (these were taxed until that date). Second, find ways to tax livestock herders and traders, and other traders who trade mostly with Nigeria. These segments are known to be well off enough to be taxed. Third, in addition to discussions with the administration in Niamey, consult with representatives of the targeted segments and with local tax officials in the main livestock regions and in those bordering Nigeria. Unless progress is made in this area, any Government in Niger, for the foreseeable future, will be faced with the necessity of relying on external assistance to provide even the minimal public services expected from the State.
6.11 Wage bill and human capital. Weak performance in revenue mobilization, combined with the relative lack of compressibility in salaries and in personnel, prevented the wage bill/revenue ratio to fall much below a range of 40 to 45 percent depending on the level of revenues collected (Table 6.2). The 2001 performance reflects higher revenues associated with a good GDP performance.
Table 6.2: Civil Service Wage Bill, 1993-2001 (in CFAF billion, unless otherwise indicted) 1993 1994 1995 1996 1997 1998 1999 2000 2001Target - 44.3 - - 44.1 44.0 44.7 51.4 49.6 Actual 40.3 47.4 49.7 33.4 44.2 45.1 50.6 51.8 50.4 Wage bill/total revenue (in %)
87.6 9.8 73.2 42.3 48.7 40.3 46.2 47.0 38.1
6.12 One of the major findings of this assessment is the concern expressed to the OED mission by many Niger's officials and representatives of civil society about the fall of quality in education. There was a perception among them that a reduction in the wage bill and the accompanying compression of the civil service in the 1990s was an important factor explaining the decline in educational quality. This issue was raised often in interviews. Since the OED mission was unable to verify these claims, it would be important for the Region to discuss these concerns with all parties (Government officials, members of Parliament, educators, parents, etc.), disseminate widely the Bank’s own assessment of the factors affecting the quality of education and how this has been reflected in the Bank’s strategy and lending operations. The concern expressed raises
25
the question whether the Bank might have placed undue emphasis on a reduction of the wage bill without a longer-term civil service reform policy.
6.13 Capacity building. In the same vein as the paragraphs above, the Bank is helping to strengthen Niger's capacity in key areas of public sector management through the PEAC, an IDF grant, and the forthcoming PER/CFAA exercise. However, this assessment recommends that the Bank first agree with the authorities on a strategy for capacity building in public sector management in the medium-term, prioritize areas for action, identify activities which other donors will support and direct Bank support to areas unlikely to be supported by donors but which are critical for long-term capacity. In addition, Bank support should have clear monitorable indicators to indicate progress in strengthening the central ministries and other agencies or entities (such as the staff of the Finance Committee of the National Assembly, the Court of Accounts, etc.) responsible for sound public resource management.
7. Lessons Learned
7.1 An assessment of Niger’s adjustment program in the 1990s brings to mind how relevant the lessons from the 1980s are still valid. Very little has changed in Niger and the nature and challenge of the obstacles to sustainable development are basically the same. This is true for fiscal management, as for many other aspects of the economy. This calls for both realistic determination and patience. It seems that the lessons learned from the two adjustment operations of the 1980s (SAL I and PESAP – Report No. 12104, 1993) were hardly absorbed. These lessons were, and still are, very pertinent. Surely, many of the issues raised by the 1993 Audit can be addressed only after fiscal adjustment is sufficiently achieved, as the Bank consistently argued in its CASs. But, at the same time, the record seems to point out that some persistent obstacles to improved fiscal management cannot be removed without tackling some longer-term issues, notably by exploring ways to extend the tax base to the informal sector.
7.2 Ownership. Except for the obvious sine qua non condition of political stability, the case of Niger shows that ownership at the cabinet level is not sufficient to ensure the success of an adjustment program. Much greater attention is needed during preparation to associate and listen to three groups of actors: (i) the senior and middle-level officials responsible for implementing the program; (ii) representatives of the legislative and, if necessary, of the judiciary; and (iii) the other stakeholders in civil society who will be affected by the program, such as labor unions and students organizations, two groups usually vocal on the political scene of low-income countries and vulnerable to any adjustment operation. Niger’s experience demonstrates the need to spend more effort and resources to improve communication, dissemination of information, and coordination not only within the administration itself, but also between the different Government bodies that will be involved in program execution. A participatory approach similar to that currently applied in preparing PRSPs should become normal practice. This requires of course considerable efforts in terms of time and resources from the Bank and donors.
7.3 Informal sector and taxation. In countries with a very large informal sector, greater attention should be directed at identifying, jointly with the IMF, the conditions
26
under which the taxation system can be adapted to the particular characteristics of the economy. In the case of Niger, farmers and livestock growers were taxed until 1974, when it was abolished after the discovery of uranium.
7.4 Capacity building. Addressing the problem of very weak institutional capacity in a piecemeal approach through different lending operations and at different times does not seem to produce the desired results, at least for the proper functioning of the central ministries. The record points to the need for trying another approach, i.e., formulating a full-fledged strategy based on strengthening capacities in key areas of public sector management, tax administration, and other critical government structures. In so doing, all stakeholders should be involved at all stages: conception, design, and execution. Again, this requires considerable time and resources.14
7.5 Devaluation. In countries with very scarce resources, a change in parity alone is unlikely to produce lasting positive effects, unless it is supported by a well prepared program of accompanying measures directed at improving production and marketing and by sound macro-economic policies.
7.6 Monitoring and evaluation. Preparation and appraisal of reform programs should include the establishment of domestic monitoring and evaluation mechanisms to promote sharing of information, transparency, and accountability within the administration. It should be a joint effort by the Bank and the borrower. The information collected on the execution of the programs must be made public.15
7.7 Tranching. Single tranche operations are often accompanied—sometimes justified—by the warning that future adjustment lending will be withheld if, after Board approval, no progress is made in the areas targeted for reform, as measured against monitorable benchmarks. On the basis of the Niger experience in the 1990s, it is not evident that this type of warning is effective or followed by the Bank itself.
14 In commenting on this statement the government indicated that, in recognizing the need to strengthen capacity in the public sector, the Ministry of Economy and Finance set up in 2001 a multidisciplinary structure, called Groupe d’Appui a la Gestion Economique, whose main areas of intervention include the preparation of a financial and economic repot on Niger, statistical and economic analysis based on a macroeconomic model, and technical support to structures in charge of monitoring economic and financial programs. 15 The government’s comment on this point is that information on the execution of programs must be made public provided there are notable improvements in the quality and timeliness of the information.
27 Annex A
Population (million) 11.5Population (annual growth rate) 3.4Poverty (% of population below national poverty line) - 1992-93 * 63Extreme poverty (% of population below national extreme poverty line) - 1992-93 * 34Urban population (% of total population) 21Life expectancy at birth (years) 46Infant mortality (per 1,000 live births) 114Under-five mortality (per 1,000 live births) 250Child malnutrition (% of children under 5) 40Access to an improved water source (% of population) 59Illiteracy (% pf population age 15+) 84Gross primary enrollment (% of school-age population) 42 Male 50 Female 33
Source : Niger- CAS December 16, 2002Note: * : These data are based on the most recent household survey dating back to 1992-93.Work on a new survey began in 2002, based on the results of the 2001 population census.
Niger - Key Social Indicators - 2002, unless otherwise indicated
Annex B 28
Economic Recovery Credit (1994)
Actions taken prior to Board presentation were the following:
a) Realignment of the exchange rate, fixed at 100 CFAF for 1 FF effective January 12, 1994;
b) Adoption of a number of tax measures to increase tax revenue, based on the recommendations of the December 1993 IMF technical mission;
c) Limitation of the civil service wage bill in the revised 1994 Budget to CFAF 44.3 billion (representing an overall nominal increase of 14 percent over 1993);
d) Administered prices (petroleum products, water and electricity) set as specified in the Government's Statement of Economic and Social Policies;
e) Free agricultural producer pricing maintained and restrictions on rice marketing eliminated;
Customs tariff amended as follows:
• doubling of standard values, schedule values, and minimum administrative values (these values were to be eliminated in a subsequent tariff reform);
• 50 percent cut on cumulative taxes and duties on essential and intermediate goods;
• transitional clauses applied exclusively to imports not yet cleared through customs, but already paid at the old exchange rate; and
• ad hoc exemptions eliminated, except those related to projects, diplomatic privileges, and special conventions.
g) Allocation in the revised 1994 Budget of CFAF 10 billion (US$16 million) for social safety net measures, including:
• elimination of tariffs on rice and sugar for three months; • freezing the price of kerosene for three months and limiting the increase in the
price of gas oil to 30 percent; • ensuring proper supply of free essential drugs in public health facilities; • supplying the markets with essential foodstuffs (cereals, sugar, cooking oil) at
subsidized prices to break speculative commercial practices; • increasing significantly in real terms current expenditure for health and education
and ensuring the availability of free essential drugs in public health facilities.
h) Increase in the Central Bank discount rate from 10.0 percent to 14.5 percent.
Annex B (continued) 29
Economic Recovery Credit Action Matrix for 1994 Objectives Measures
Taken Actual at time of ICR
1. Macroeconomic Framework - Realignment of the exchange rate, fixed at 100
CFAF for 1FF
January 12, 1994
Done
2. Public Finance - Adoption of a revised Budget for 1994 in agreement
with the IMF - Adoption of a revised system of public accounts
March 1994 December 1994
Done Done
a. Revenue - Regular payment of mining royalty - Advance payment of BIC and IRVM, and dividends
by Uranium companies - Unification of the VAT at 17 percent - Introduction of the VAT: water, electricity,
transportation - Road toll: Numbered tickets with printed price - Automobile sticker - Administration: Strengthening of tax audits - Administration: Definition of tax collectors and
collection targets - Strengthening of collection of tax arrears - Passing Collections Code in Parliament (New
Budget) - Merging of IGR, ICTS, simplification of rates - BIC exemptions (Investment Code) - Informal sector – stricter application of profit tax - Administration: strengthening of desk audits - Property Tax: levied on all homeowners
Immediate Immediate January 1, 1995 July 1, 1994 Immediate Immediate Immediate Immediate Immediate New 1994 budget January 1, 1995 July 1, 1994 January 1. 1995 Immediate Immediate
Done with much delay Not Done Done Done except for transportation Done in June 1994 Done in January 1995 Done with delay Done Done in September 1994 Done Done for January 1996 Not yet completed Done January 1, 1996 Done with delay Done for 1996 tax law
b. Expenditure - Set wage bill ceiling at CFAF 44.3 billion - Maintain the number of civil servants below 39,080 - Eliminate external payments arrears (CFAF 102
million) - Reduce domestic arrears by at least CFAF 17.5
billion - Make an inventory of all domestic arrears and
regularize them formally - Set a scholarship ceiling at CFAF 4.8 billion and
maintain eligibility criteria - Increase outlays for materials and supplies from
CFAF 16 billion in 1993 to CFAF 28 billion in 1994 - Raise public investment expenditures from CFAF 27
billion in 1993 to 70 billion in 1994
Immediate 1994 1994 1994 March 31, 1994 1994 1994 1994
Actual wage bill of 47.4 bn Number reached 40,761 Only 65 billion eliminated Partially done Inventory not complete CFAF 5.5 billion paid. Eligibility criteria unclear Outlays increased to CFAF 28.1 billion CFAF 109.9 budgeted
3. Public Investment Programming - Prepare a three-year rolling Public Investment
Program for 1994 –96 Strengthen institutional setting for planning, programming and implementation of public investment
April 1994 1994
Done Not done
4. Monetary and Financial Sector Policy - Increase the discount rate of the Central Bank from10.5%
to 14.5% - Closing and liquidation of Caisse Nationale de Credit
Agricole - Completing the restructuring of the Banque Islamique
du Niger (BIN), the Medridien BIAO (MIB), the Banque Commerciale du Niger and the Nigeria
International Bank-Niamey
January 18, 1999 July 1, 1994 1994
Done Done BIAO done in September 1995, others in progress
Annex B (continued) 30
Objectives Measures Taken
Actual at time of ICR
5. Trade Policy - Double standard values, schedule values, and
minimum administrative values - Cut by 50% cumulative taxes and duties on
essential and intermediate goods - Eliminate ad-hoc tariff exception - Introduce transitional clauses for imports paid
before the parity for change - Introduce comprehensive tariff reform
Immediate Immediate Immediate Immediate April 30, 1994
Done Done Not done Done Done in September 1994
6. Price Policy - Set new prices for petroleum products, water and
electricity - Maintain free agricultural producer pricing
Jan – April 1994 1994
Done Done
7. Public Enterprises - Make an inventory of noss-debts of the public sector and
prepare a timetable to clear them - Conduct independent audits for NIGELEC, ONPPC,
SONIDEP, CNSS - Liquidate COPRO-NIGER - Implement reforms of the uranium sector and the
Electricity Company(NIGELEC)
April 1994 1994 1994 1994
Partially done Done on time for NIGELEC and CNSS; delayed for the rest Started in January 1995 Reform underway
8. Promotion of the Private Sector - Eliminate Government monopoly on hiring - Revise Labor Code
1994 1994 - 1995
Not done Not done
9. Accompanying Social Measures - Eliminate tariffs on rice and sugar for three months and
set total taxation at 10% thereafter - Freeze the price of kerosene for three months and increase
the price of gas-oil by less than 30% - Take steps, eventually, to supply the markets with essential
goods (cereals, sugar, cooking oil) at subsidized prices - Increase substantially in real terms appropriations for non -
salary expenditures in education and health in the revised Budget
- Ensure adequate supply of free essential drugs in public health facilities and promote the supply of low-cost generic drugs in private pharmacies
- Provide allocation in the revised 1994 Budget of CFAF 10 billion for the foregoing social measures
Jan – April 1994 January 1994 1994 Immediate 1994 Immediate
Done Not done Partially done No substantial increase Partially done Partially done
Annex C 31
Public Sector Adjustment Credit (1997)
The following actions were taken by the Government between September 1996 and February 1997. Public Finances a) Reduction of the 1996 wage bill to CFAF 42.1 billion (cash basis). b) Increase of budgetary revenue in 1996 to CFAF 79 billion. c) 1996 overall budget deficit (on a commitment basis and excluding grants) limited
to 4.7 percent of GDP. d) Adoption of the 1997 budget law, including:
• limiting the wage bill to CFAF 44.1 billion; • increasing the health sector allocation for non-wage current expenditures from
CFAF 7.2 billion in 1996 to CFAF 8.2 billion in 1997 (representing an increase of 14 percent);
• increasing the education sector allocation for non-wage current expenditures from CFAF 4.6 billion in 1996 to CFAF 5.3 billion in 1997 (representing an increase of 14 percent);
• increasing the allocation for road maintenance from CFAF 2.6 billion to CFAF 3.1 billion;
• increasing material and equipment allocations for tax and customs services from CFAF 459 million in 1996 to CFAF 798 million in 1997;
• introducing a number of tax reform measures including: (i) the streamlining of taxation on petroleum products through a change in the price structure; (ii) the application of a revised grid for the unified income tax on wages and salaries (IUTS); and (iii) a reduction in the maximum length of tax holidays for certain investments from 15 years to 5 years, and a restriction in the number of qualifying investments eligible for such treatment.
e) Completion of inventory of domestic arrears and adoption of plan for their orderly
settlement. f) Initiation of civil service census.
Public Enterprises
g) Adoption of revised PE privatization law. h) Adoption of decree to privatize 12 key public enterprises. i) Adoption of privatization strategies agreed with IDA for the public utilities (SNE,
NIGELEC and SONITEL) and the petroleum company (SONIDEP). j) Initiation of hiring process for financial advisors to complete privatization
transactions for the 12 targeted companies.
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ogra
m m
easu
res
Res
pons
ible
aut
hori
tyan
d tim
etab
le
A
ctua
l at t
ime
of IC
R
1. P
ublic
fina
nce
1.1
Rev
enue
- S
impl
ify th
e ta
x sy
stem
an
d br
oade
n th
e ta
x ba
se
- Stre
ngth
en th
e ta
x an
d cu
stom
s dep
artm
ents
- I
mpr
ove
colle
ctio
n pr
oced
ures
and
pro
vide
the
colle
ctio
n se
rvic
es w
ith
mea
ns o
f brin
ging
co
erci
ve a
ctio
n ag
ains
t ta
x de
faul
ters
- I
ncre
ase
budg
etar
y re
venu
e fr
om 7
.3%
of
GD
P in
199
6 to
9.8
% in
19
97.
- Uni
ficat
ion
of th
e th
ree
VA
T ra
tes a
t 17%
- M
ergi
ng o
f the
gen
eral
inco
me
tax
(IG
R) a
nd th
e sc
hedu
lar t
ax o
n w
ages
and
inco
me
(IC
TS) i
nto
a si
ngle
tax
on w
ages
and
sala
ries (
IUTS
) - C
onso
lidat
ion
of a
ll im
port
levi
es in
to tw
o ta
xes
(cus
tom
s dut
y an
d st
atis
tical
tax)
, and
a re
duct
ion
in th
e nu
mbe
r of r
ates
to th
ree
(10,
15
and
35%
) - E
limin
atio
n of
dut
ies o
n no
n-ur
aniu
m e
xpor
ts an
d un
ifica
tion
of re
-exp
ort d
uty
rate
s at 1
0%
- Ref
orm
of i
nfor
mal
sect
or ta
xatio
n th
roug
h in
trodu
ctio
n of
a si
ngle
pro
fess
iona
l tax
(pat
ente
sy
nthe
tique
) enc
ompa
ssin
g al
l for
mer
taxe
s - E
stab
lishm
ent o
f a p
re-s
hipm
ent i
mpo
rt in
spec
tion
syst
em (O
ctob
er 1
996)
- 7
4% in
crea
se in
bud
geta
ry a
lloca
tions
for t
ax a
nd
cust
oms d
epar
tmen
t ope
ratio
ns in
199
7 - R
edep
loym
ent o
f tax
and
cus
tom
s dep
artm
ent s
taff
- Stre
amlin
ing
of ta
xatio
n on
pet
role
um p
rodu
cts
thro
ugh
a ch
ange
in th
e pr
ice
stru
ctur
e - A
pplic
atio
n of
revi
sed
grid
for t
he u
nifie
d in
com
e ta
x on
wag
es a
nd s
alar
ies
- Red
uce
the
max
imum
leng
th o
f tax
hol
iday
s for
ne
w in
vestm
ents
from
15
to 5
yea
rs a
nd re
stric
t the
nu
mbe
r of q
ualif
ying
inve
stmen
ts el
igib
le fo
r suc
h tre
atm
ent
- Enf
orce
the
prop
erty
tax
and
the
tax
on re
ntal
inco
me
- Har
mon
ize
the
real
est
ate
law
s - S
treng
then
the
cada
stra
l se
rvic
es
- Red
uce
the
volu
me
of
exem
ptio
ns
- Stre
ngth
en su
perv
ision
ove
r the
sy
stem
of e
xem
ptio
ns a
nd sp
ecia
l co
nven
tions
Min
istry
of F
inan
ce 1
997
Min
istry
of T
rade
, 199
7
8.4%
1.2
Expe
nditu
re
- Red
uce
the
shar
e of
the
wag
e bi
ll an
d sc
hola
rshi
ps in
to
tal e
xpen
ditu
re
- I
ncre
ase
the
shar
e of
non
- w
age
curre
nt e
xpen
ditu
res
for t
he b
asic
soci
al se
rvic
es
(edu
catio
n an
d he
alth
) and
- Red
uctio
n of
the
wag
e bi
ll fro
m C
FAF
49.7
bill
ion
in 1
995
to C
FAF
44.1
bill
ion
in 1
997
thro
ugh
a re
duct
ion
in b
ase
sala
ries a
nd b
enef
its
- Ado
ptio
n of
a n
ew sa
lary
scal
e - C
uts i
n sc
hola
rshi
ps (f
rom
4.2
bill
ion
to 3
.5 b
illio
n in
199
7) a
nd in
tran
sfer
s and
subs
idie
s - 1
4% in
crea
se in
allo
catio
ns fo
r non
-wag
e cu
rrent
- Kee
p th
e w
age
bill
with
in
limits
com
patib
le w
ith re
venu
e gr
owth
, ass
igni
ng p
riorit
y to
the
soci
al se
ctor
s - C
ontin
ue to
impl
emen
t cut
s in
scho
lars
hips
and
subs
idie
s - E
xerc
ise
stric
t con
trol o
ver a
ll pu
blic
exp
endi
ture
- Min
istry
of F
inan
ce
- Min
istry
of C
ivil
Serv
ice
- Min
istry
of E
quip
men
t, 19
97
CFA
F 44
.2 b
illio
n C
FAF
3.2
billi
on
Obj
ectiv
e M
easu
res t
aken
Pr
ogra
m m
easu
res
Res
pons
ible
aut
hori
ty
and
timet
able
A
ctua
l at t
ime
of IC
R
for t
he ta
x ad
min
istra
tion
agen
cies
- R
atio
naliz
e th
e ci
vil
serv
ice
and
payr
oll s
yste
m
expe
nditu
re in
the
educ
atio
n an
d he
alth
sect
ors i
n 19
97
- Inc
reas
e in
allo
catio
ns to
the
Roa
d Fu
nd fr
om 2
.6
billi
on in
199
6 to
3.1
bill
ion
in 1
997
- Rev
ise
the
civi
l ser
vice
re
gula
tions
- C
arry
out
a c
ivil
serv
ice
cens
us
- App
ly a
rest
rictiv
e hi
ring
polic
y - I
ntro
duct
ion
of a
cen
tral
com
pute
rized
civ
il se
rvic
e (p
erso
nnel
and
pay
roll)
dat
abas
e - I
ncre
ase
non-
wag
e ex
pend
iture
in
the
heal
th a
nd e
duca
tion
sect
ors
in li
ne w
ith th
e re
com
men
datio
ns o
f the
Pub
lic
Expe
nditu
re R
evie
w
12%
incr
ease
on
aver
age
Obj
ectiv
e m
et
CFA
F 1.
1 bi
llion
1.3
Paym
ent a
rrea
rs
- Res
tore
the
Gov
ernm
ent’s
cr
edib
ility
and
solv
ency
- Ado
ptio
n of
a p
lan
to re
duce
the
dom
estic
arr
ears
on
the
Trea
sury
’s b
ooks
at D
ecem
ber 3
1, 1
996
by
19.2
bill
ion
- Inv
ento
ry o
f oth
er a
ccou
nts p
ayab
le
- Im
plem
ente
d a
settl
emen
t pla
n fo
r 19.
2 bi
llion
in 1
997,
and
co
ntin
ue th
is o
pera
tion
in 1
998.
- Min
istry
of F
inan
ce
CFA
F 13
.8 b
illio
n cl
eare
d in
199
7 an
d C
FAF
11.8
bi
llion
in fi
rst h
alf o
f 19
98; m
easu
res a
dopt
ed to
av
oid
accu
mul
atio
n of
new
ar
rear
s 2.
Pub
lic E
nter
pris
es
- Gov
ernm
ent d
ives
titur
e to
le
ssen
the b
urde
n of
non
- vi
able
pub
lic e
nter
pris
es o
n pu
blic
fina
nces
- R
educ
e fa
ctor
cos
ts a
nd
incr
ease
ent
erpr
ise
com
petit
iven
ess
- Inc
reas
e pr
ivat
e se
ctor
ac
tiviti
es
- Res
truct
ure
ente
rpris
es
rem
aini
ng w
ithin
the
gove
rnm
ent p
ortfo
lio
- Liq
uida
te n
onvi
able
en
terp
rises
- Ado
ptio
n of
the
ordi
nanc
e es
tabl
ishi
ng c
ondi
tions
fo
r priv
atiz
atio
n an
d its
impl
emen
ting
decr
ee
- Cre
atio
n of
a p
rivat
izat
ion
agen
cy to
impl
emen
t th
e pr
ivat
izat
ion
prog
ram
- A
dopt
ion
of a
div
estit
ure
stra
tegy
and
tim
etab
le
for S
NE,
NIG
ELEC
, SO
NID
EP, a
nd S
ON
ITEL
- A
bolit
ion
of m
onop
olie
s on
impo
rts o
f pet
role
um
prod
ucts
and
drug
s - L
iqui
datio
n of
FIP
MEN
(Sm
all a
nd M
ediu
m-S
ize
Ente
rpris
e Pr
omot
ion
Fund
)
- Brin
g to
the
poin
t of s
ale
OLA
NI,
SNC
, and
AB
ATT
OIR
- R
eque
st bi
ds fo
r con
cess
ion
cont
ract
for N
IGEL
EC
- Req
uest
bids
for l
ease
con
tract
fo
r SN
E - -
Brin
g to
the
poin
t of
sale
maj
ority
of s
hare
s of
SON
ITEL
- F
or S
ON
IDEP
, cre
atio
n of
a
priv
ate
com
pany
to
man
age
stora
ge fa
cilit
ies a
nd a
dopt
ion
of
- Min
istry
of E
cono
mic
- R
efor
ms &
Priv
atiz
atio
n - J
une,
Sep
tem
ber &
O
ctob
er 1
997,
re
spec
tivel
y - J
anua
ry 1
998
- Jan
uary
199
8 - J
uly
1997
OLA
NI &
SN
C:
com
plet
ed. B
ids w
ere
issu
ed fo
r man
agem
ent o
f A
batto
ir, b
ut n
o in
vest
or
cam
e fo
rwar
d; b
ids w
ill b
e re
-issu
ed in
199
8. SO
NIT
EXTI
L: C
ompl
eted
SN
E: U
nder
pre
para
tion
(fin
anci
al a
dvis
ors f
or
prep
arat
ion
of b
ids
docu
men
ts h
ave
been
re
crui
ted
inA
ugus
t199
8)
Obj
ectiv
e M
easu
res t
aken
Pr
ogra
m m
easu
res
Res
pons
ible
aut
hori
ty
and
timet
able
A
ctua
l at t
ime
of IC
R
regu
lato
ry fr
amew
ork
for p
rivat
e im
ports
of p
etro
leum
pro
duct
s - B
ring
to th
e po
int o
f sal
e SP
EHG
, SO
NIT
EXTI
L, R
INI,
ON
AH
A, a
nd O
FED
ES
- R
estru
ctur
ing
of 8
ent
erpr
ises
rem
aini
ng in
the- go
vern
men
t po
rtfol
io: O
RTN
(Rad
io
andT
elev
isio
n O
ffic
e), C
PCT
(Cre
dit A
genc
y), C
redi
t du
Nig
er, S
ON
ICH
AR
, SO
NU
CI
(Urb
an P
lann
ing
and
Rea
l E
stat
e B
uild
ing
Com
pany
), O
NPP
C, S
NTN
(Nat
iona
l Tr
ansp
orta
tion
Com
pany
), C
NU
T (C
ounc
il of
Publ
ic
Tran
spor
tatio
n U
sers
)
- Liq
uida
tion
of 3
ent
erpr
ises
: O
NT
(Nat
iona
l Tou
rism
Off
ice)
, SO
NH
OTE
L (H
otel
M
anag
emen
t Com
pany
), an
d LA
BO
CEL
(Cen
tral L
ives
tock
La
bora
tory
)
- Oct
ober
199
7 19
97
1997
recr
uite
d in
Aug
ust 1
998)
SO
NIT
EL: U
nder
pr
epar
atio
n (f
inan
cial
and
re
gula
tory
adv
isor
s for
pr
epar
atio
n of
bid
s do
cum
ents
hav
e be
en
recr
uite
d in
Aug
ust 1
998)
SO
NID
EP: R
egul
ator
y fr
amew
ork
form
ulat
ed;
prot
ocol
for t
he c
reat
ion
of
priv
ate
com
pany
; com
pany
to
be
crea
ted
in F
ebru
ary
1999
N
IGEL
EC: U
nder
pr
epar
atio
n (f
inan
cial
and
re
gula
tory
adv
isor
s for
pr
epar
atio
n of
bid
s do
cum
ents
hav
e be
en
recr
uite
d in
Aug
ust 1
998)
SP
EHG
, RIN
I, O
NA
HA
an
d O
FED
ES: O
ngoi
ng
3. L
egis
lativ
e an
d re
gula
tory
fram
ewor
k - C
reat
e an
env
ironm
ent
cond
uciv
e to
priv
ate
sect
or
deve
lopm
ent
- Sim
plify
the
regu
lato
ry
and
legi
slat
ive
fram
ewor
k
- Rev
ision
of t
he L
abor
Cod
e an
d its
impl
emen
tatio
n de
cree
s - A
bolit
ion
of th
e m
onop
oly
on m
inin
g fre
ight
- A
dopt
ion
of B
ook
3 of
the
Com
mer
cial
Cod
e (C
ontra
cts a
nd b
ankr
uptc
y la
ws)
- A
dopt
ion
of p
harm
aceu
tical
legi
slat
ion
and
abol
ition
of t
he m
onop
oly
on d
rugs
impo
rt - L
egis
latio
n su
pple
men
ting
the
Rur
al C
ode
(dec
ree
regu
latin
g th
e de
velo
pmen
t of r
ural
nat
ural
re
sour
ces,
decr
ee g
over
ning
her
ders
' acc
ess t
o gr
azin
g la
nds,
decr
ee g
over
ning
org
aniz
atio
n,
func
tions
, and
ope
ratio
ns o
f ins
titut
ions
enf
orci
ng
the
guid
ing
prin
cipl
es o
f the
Rur
al C
ode)
N.A
.
Annex D 35
Public Finance Reform Credit (1998)
Actions taken prior to Board presentation were the following:
Budgetary Orthodoxy
a) Completion of a comprehensive inventory of domestic arrears and adoption of a plan for their orderly settlement and of measures to avoid their future recurrence;
b) Launching of a comprehensive audit of the Treasury, including of its accounts to ensure reconciliation between actual expenditures and budgeted amounts for the 1982-97 period;
c) Elimination of all expenditure payments outside normal budgetary procedures (PPAs);
d) Adoption of implementation decree keeping expenditures strictly in line with resources mobilized;
e) Following the completion of the civil service census in September 1997, removal from the payroll and civil service roaster of 319 employees whose status had been found to be irregular;
f) Integration of the civil service database and payroll files to ensure full control of the government wage bill; and
g) Completion of a Public Expenditure Review with detailed recommendations and an action plan for their implementation, including through the 1999 Budget Law.
Revenue Mobilization
h) Making fully operational the large taxpayer unit in the tax administration office and providing it with adequate personnel and material to enhance its effectiveness;
i) Introduction of the single taxpayer identification number system for all revenue agencies and introduction of computerized value records;
j) Completion of a review of procedures for tax exonerations granted under the petroleum and mining code and under the tax regime for the uranium sector and implementation of their recommendations;
k) Elimination of all ad hoc exemptions and no granting of new exonerations under the investment code to enterprises to be privatized starting from September 1, 1998;
l) Provision to the General Tax Directorate of an additional 75 permanent staff and 30 fixed-term employees to accelerate revenue collection, and provision to tax agencies of CFAF 1 billion for equipment and supplies to strengthen their effectiveness;
m) Effective implementation of the system of Treasury checks for the payment of import duties under externally-financed government procurement contracts; and
n) Extension to NGOs of the system of Treasury checks to pay import duties and other applicable indirect taxes.
Publ
ic F
inan
ce R
efor
m C
redi
t Pol
icy
Mat
rix
Obj
ectiv
e M
easu
res
Stat
us o
f Exe
cutio
n
Pe
rfor
man
ce In
dica
tors
Res
pons
ible
Aut
hori
ty
Act
ual a
t tim
e of
IC
R
Res
tore
C
redi
bilit
y of
Fi
nanc
es
1. C
ontro
l the
w
age
bill
and
the
civi
l ser
vice
size
2.
Re-
esta
blis
h fin
anci
al a
nd
acco
untin
g or
thod
oxy
and
budg
etar
y di
scip
line
3. A
void
a n
ew
build
-up
of
dom
estic
arr
ears
du
ring
1998
and
- Har
mon
izat
ion
of th
e re
sults
of t
he
civi
l ser
vice
cen
sus,
the
payr
oll a
nd
the
civi
l ser
vice
dat
abas
e - S
et u
p a
mec
hani
sm fo
r kee
ping
ex
pend
iture
stric
tly in
line
with
re
sour
ces m
obili
zed
1) a
dopt
impl
emen
tatio
n de
cree
for
the
setti
ng o
f thi
s mec
hani
sm
2) st
reng
then
the
role
of t
he
Trea
sury
Com
mitt
ee
- Aud
it of
the
Trea
sury
- P
repa
re T
reas
ury
acco
unts
(TA
) fo
r 198
8 to
199
6 an
d ye
ar-e
nd
expe
nditu
re a
udits
(loi
s de
regl
emen
t) (E
A) f
or 1
982
to 1
997
Don
e: a
n in
tegr
ated
civ
il se
rvic
e da
taba
se w
ill b
e co
mpl
eted
by
Dec
embe
r 19
98
Don
e; q
uarte
rly re
ports
of
expe
nditu
re c
omm
itmen
ts
Perm
anen
t mea
sure
Th
e au
dit w
as la
unch
ed in
A
ugus
t 199
8; th
e au
dit w
ill
be c
ompl
eted
by
Janu
ary
31, 1
999
Pres
enta
tion
of th
e ye
ar-
end
expe
nditu
re a
nd a
udits
co
verin
g th
e ex
ecut
ion
of
the
budg
et fo
r eac
h fis
cal
year
from
199
1 to
199
7 to
th
e Pa
rliam
ent d
urin
g th
e fir
st h
alf o
f 199
9
Con
tain
the
wag
e bi
ll at
CFA
F 44
.0 b
illio
n in
199
8 an
d C
FAF
44.7
bill
ion
in 1
999;
exi
sten
ce in
19
99 o
f an
inte
grat
ed d
atab
ase
linki
ng th
e pa
yrol
l, th
e ci
vil
serv
ice
data
base
and
oth
er
min
istri
es.
Gap
bet
wee
n ex
pend
iture
co
mm
itmen
ts a
nd in
tern
al
reso
urce
s mob
ilize
d+ e
xter
nal
reso
urce
s. Pe
rman
ent a
pplic
atio
n of
the
mec
hani
sm.
Impl
emen
tatio
n of
the
reco
mm
enda
tion
of th
e Tr
easu
ry
audi
t dur
ing
the
perio
d 19
98-9
9.
Ava
ilabi
lity
of th
e TA
and
dra
ft EA
up
to th
e ye
ar 1
997
on th
e ba
sis o
f the
resu
lts o
f the
Tre
asur
y au
dit ;
exp
erie
nce
of a
co
mpu
teriz
ed p
rogr
am to
pre
pare
th
e TA
and
EA
, inc
ludi
ng th
e pr
oced
ure
man
ual
No
new
acc
umul
atio
n of
dom
estic
ar
rear
s sta
rting
from
July
1, 1
998
- Min
istry
of F
inan
ce,
Econ
omic
Ref
orm
s and
Pr
ivat
izat
ion
(MF)
M
F w
ith e
xter
nal
supp
ort
Gen
eral
Bud
get
Dire
ctor
ate(
GB
D)
Trea
sury
(T)
MF
1998
wag
e bi
ll: C
FAF
48.6
bn.
; 199
9 w
age
bill:
CFA
F 50
.8 b
n.
Inte
grat
ed d
atab
ase
fully
inst
alle
d an
d op
erat
iona
l in
2000
but
ad
just
men
ts st
ill
nece
ssar
y to
cle
an
data
base
; Ex
pend
iture
regu
latio
n m
echa
nism
inst
alle
d in
19
99 b
ut u
nsuc
cess
ful;
Tr
easu
ry a
udit
com
plet
ed in
199
9;
Act
ion
plan
ado
pted
in
Sept
embe
r 200
0 an
d fir
st re
com
men
datio
ns
impl
emen
ted
in la
te
2000
; B
udge
t rev
iew
law
for
FY 1
997
and
FY 1
998
sent
to P
arlia
men
t in
2000
and
200
1 re
spec
tivel
y; (d
) Tr
easu
ry a
ccou
nts f
or
FY 1
997
trans
ferr
ed to
C
ham
ber o
f Acc
ount
s in
200
0.
Obj
ectiv
e M
easu
res
Stat
us o
f Exe
cutio
n Pe
rfor
man
ce In
dica
tors
R
espo
nsib
le
Aut
hori
ty
Act
ual a
t tim
e of
IC
R
1999
- TO
TAL
ELIM
INA
TIO
N o
f PPA
s. Th
is e
limin
atio
n w
as a
ccom
pani
ed
by a
retu
rn to
and
stric
t res
pect
of,
expe
nditu
re p
roce
dure
s - M
easu
res t
aken
for u
rgen
t ex
pend
iture
s tha
t are
a so
urce
of
PPA
s a)
med
ical
eva
cuat
ion
and
offic
ial
trave
ls; c
reat
ion
of “
regi
es
d’av
ance
s”, s
tudy
of m
edic
al
evac
uatio
ns to
iden
tify
mea
sure
s to
bette
r con
trol t
hem
b)
cre
atio
n of
“de
posi
t acc
ount
s” fo
r ot
her p
oten
tial s
ourc
es o
f PP
As
(Sec
urity
fund
, Par
liam
ent,
expe
nditu
res f
or th
e pe
ace
proc
ess,
etc)
M
easu
res t
o av
oid
the
accu
mul
atio
n of
new
dom
estic
arr
ears
(a
) exp
endi
ture
s for
wat
er,
elec
trici
ty a
nd te
leph
one
- stre
ngth
en m
anag
emen
t of w
ater
, el
ectri
city
and
tele
phon
e bi
lling
(in
clud
ing
thro
ugh
the
unit
crea
ted
for t
his p
urpo
se )
- pro
vide
ade
quat
e bu
dget
ary
allo
catio
ns in
the
revi
sed
1998
B
udge
t Law
and
the
1999
Bud
get
Law
to c
over
act
ual c
onsu
mpt
ion
- ide
ntifi
catio
n an
d im
plem
enta
tion
of m
easu
res t
o re
duce
Gov
ernm
ent
cons
umpt
ion
of th
ese
serv
ices
(b
) exp
endi
ture
for e
mba
ssie
s - s
treng
then
mon
itorin
g of
em
bass
y ac
coun
ting
- con
duct
an
insp
ectio
n of
the
occa
sion
of e
very
cha
nge
of o
ffic
ial
in c
harg
e of
mak
ing
paym
ent a
nd
acco
untin
g pr
oced
ures
The
elim
inat
ion
was
ef
fect
ive
on A
pril
1, 1
998
Don
e D
one
Rev
ised
199
8 B
udge
t Law
an
d 19
99 B
udge
t Law
Se
e de
taile
d m
easu
re in
the
Foot
note
2 o
f the
Let
ter o
f D
evel
opm
ent
Perm
anen
t mea
sure
Pe
rman
ent m
easu
re
Poss
ibili
ty o
f rev
iew
ing
at a
ny
mom
ent t
he li
st o
f ope
ratio
ns
reco
rded
in th
e Tr
easu
ry a
ccou
nt
112-
61-1
0 to
ver
ify th
e la
ck o
f PP
As
Impl
emen
t pla
n to
redu
ce th
e co
st
of m
edic
al e
vacu
atio
ns b
y D
ecem
ber 1
998
No
new
acc
umul
atio
n of
arr
ears
fo
r wat
er, e
lect
ricity
and
te
leph
one
Gov
ernm
ent
cons
umpt
ion
star
ting
July
1, 1
998
(on
the
basi
s of S
NE/
NIG
ELEC
/S
ON
ITEL
bill
ing
and
“bas
e po
int
age”
stes
/ D
CF
of M
F)
Red
uctio
n of
20%
of G
over
nmen
t co
nsum
ptio
n of
wat
er, e
lect
ricity
an
d te
leph
one
(on
the
basi
s of
1997
con
sum
ptio
n le
vels
) by
Dec
embe
r 31,
199
9
MF
New
arr
ears
est
imat
ed
by a
utho
ritie
s to
have
ris
en b
y C
FAF
8.5
bn
in 1
998
and
by 3
6.9
in
1999
, inc
ludi
ng o
n ut
ility
exp
endi
ture
U
tility
exp
endi
ture
ro
se in
199
8 be
fore
co
min
g do
wn
to 1
997-
leve
ls in
199
9.
Con
sum
ptio
n es
timat
ed to
hav
e de
clin
ed b
y ab
out 1
0%
year
-on-
year
in 2
000.
Obj
ectiv
e M
easu
res
Stat
us o
f Exe
cutio
n Pe
rfor
man
ce In
dica
tors
R
espo
nsib
le
Aut
hori
ty
Act
ual a
t tim
e of
IC
R
4. P
repa
ratio
n an
d im
plem
enta
tion
of
a do
mes
tic a
rrea
rs
settl
emen
t pla
n
(c) i
nves
tmen
t exp
endi
ture
-in
clud
e th
e co
unte
rpar
t fun
ds fo
r in
vest
men
t pro
ject
s am
ong
oblig
ator
y ex
pend
iture
(d
) Sub
sidi
es a
nd sc
hola
rshi
ps
- aud
it of
the
Uni
vers
ity, t
he O
RTN
, th
e EN
A a
nd th
e IN
RA
N
- aud
it of
the
man
agem
ent o
f un
iver
sity
scho
lars
hips
and
fin
aliz
atio
n of
the
cen
sus o
f un
iver
sity
stud
ents
(e
) Oth
er e
xpen
ditu
res
- stri
ct a
pplic
atio
n of
the
syst
em o
f ex
pend
iture
con
trol a
nd re
gula
tions
- s
ubje
ct d
eleg
ated
exp
endi
ture
s to
the
expe
nditu
re c
ontro
l and
re
gula
tion
syst
em
- con
duct
an
insp
ectio
n on
the
occa
sion
of e
very
cha
nge
of o
ffic
ial
in c
harg
e of
mak
ing
paym
ents
and
ac
coun
ting
proc
edur
es
- Inv
ento
ry o
f dom
estic
arr
ears
1)
The
inve
ntor
y of
dom
estic
ar
rear
s has
bee
n co
mpl
eted
on
the
basi
s of i
nfor
mat
ion
prov
ided
by
rele
vant
uni
ts (T
-GD
ER-P
ED-
GB
D-D
PD) w
ith a
ssis
tanc
e of
co
nsul
tant
s Th
e st
ock
of a
rrea
rs a
mou
nts t
o C
FAF
118
billi
on a
s of M
arch
31,
19
98
Perm
anen
t mea
sure
A
udit
is o
ngoi
ng
Aud
it is
ong
oing
Pe
rman
ent m
easu
re
Perm
anen
t mea
sure
Pe
rman
ent m
easu
re
Don
e
Impl
emen
tatio
n of
the
audi
t’s
reco
mm
enda
tion
in 1
998
App
licat
ion
of th
e au
dit’s
re
com
men
datio
ns in
199
8
Ad
hoc
Com
mis
sion
+ T
+ G
en.
Dir.
Of E
con.
Ref
orm
s (G
DER
) + P
ublic
En
terp
rise
Dir.
(PED
) +
GB
D+D
ir. P
ublic
Deb
t (D
PD)
Ad
hoc
Com
mis
sion
+
T+ G
DER
+ P
ED +
G
BD
+D
PD
Stud
ies c
ompl
eted
in
1999
. Im
plem
enta
tion
of so
me
reco
mm
enda
-tio
ns in
itiat
ed in
200
1 (c
ensu
s of s
chol
arsh
ip
reci
pien
ts).
Obj
ectiv
e M
easu
res
Stat
us o
f Exe
cutio
n Pe
rfor
man
ce In
dica
tors
R
espo
nsib
le
Aut
hori
ty
Act
ual a
t tim
e of
IC
R
- Im
plem
enta
tion
of th
e se
ttlem
ent
plan
1)
The
mod
aliti
es a
nd p
riorit
ies f
or
the
settl
emen
t of t
hese
arr
ears
are
de
taile
d in
the
Lette
r of
Dev
elop
men
t Pol
icy
2) T
hese
arr
ears
will
be
valid
ated
by
an
ad h
oc c
omm
issi
on w
hose
at
tribu
tions
are
det
aile
d in
the
Lette
r
Impl
emen
tatio
n of
the
settl
emen
t pla
n in
199
8 –
99
Impl
emen
tatio
n of
the
settl
emen
t pla
n in
199
8 –
99
Cas
h se
ttlem
ent o
f dom
estic
ar
rear
s in
a ne
t am
ount
of U
S$20
m
illio
n in
199
8 ac
cord
ing
to th
e m
odal
ities
and
prio
ritie
s of t
he
settl
emen
t pla
n de
taile
d in
the
Lette
r. C
ash
settl
emen
t of d
omes
tic
arre
ars i
n a
net a
mou
nt o
f U
S$20
mill
ion
in th
e fir
st q
uarte
r of
199
8 ac
cord
ing
to th
e m
odal
ities
and
prio
ritie
s of t
he
settl
emen
t pla
n de
taile
d in
the
Lette
r.
Prel
imin
ary
estim
ates
sh
ow th
at th
e eq
uiva
lent
of a
bout
U
SD 1
9 m
illio
n of
the
pre-
1998
stoc
k w
ere
settl
ed b
etw
een
1998
an
d 20
00.
Impr
ove
the
effic
ienc
y of
pu
blic
spen
ding
- Fin
aliz
e th
e dr
aft P
ublic
Ex
pend
iture
Rep
ort(P
DR
) - D
raft
1999
Bud
get L
aw
satis
fact
ory
to ID
A a
nd re
flect
ing
the
PER
reco
mm
enda
tions
Aug
ust 1
998
Oct
ober
31,
199
8
Exec
utio
n of
the
1999
bud
get
whi
ch in
tegr
ates
the
reco
mm
enda
tions
of t
he P
ER
PER
Com
mitt
ee
Gen
eral
Bud
get
Dire
ctor
ate
The
1999
bud
get l
aw
incl
uded
reco
mm
en-
datio
ns fr
om th
e PE
R
in te
rms o
f inc
reas
ed
allo
catio
ns fo
r non
-w
age
curr
ent
expe
nditu
res i
n he
alth
an
d ed
ucat
ion.
Sha
re in
al
loca
tion
of th
ese
expe
nditu
res i
ncre
ased
fu
rther
in F
Y 2
000.
R
even
ue
Mob
iliza
tion
and
redu
ctio
n of
tax
exon
erat
ions
1.
Stre
ngth
en
cont
rol o
f ex
oner
atio
ns a
nd
redu
ce th
eir
num
ber a
nd
scop
e.
- stri
ctly
lim
it ex
oner
atio
ns to
goo
ds
and
serv
ices
list
ed in
con
vent
ions
an
nexe
s
Mea
sure
s stri
ctly
app
lied
by D
CR
ES;
com
mun
icat
ion
sent
to
conc
erne
d en
terp
rises
to
ensu
re th
e st
rict r
espe
ct o
f th
e co
nven
tions
Inex
iste
nce
of e
xone
ratio
ns B
asic
do
cum
ents
for m
onito
ring
ALL
ex
oner
atio
ns: r
epor
ts o
f ex
oner
atio
ns g
rant
ed a
re p
repa
red
perio
dica
lly a
nd w
ill b
e us
ed fo
r th
e m
onito
ring
of e
xone
ratio
ns
(all
code
s)
gran
ted
outs
ide
of th
e sc
ope
of th
e
Min
. of C
omm
erce
+ G
ener
al C
usto
ms
Dire
ctor
ate
(GC
D)+
Gen
eral
Tax
D
irect
orat
e
Tota
l exe
mpt
ions
re
porte
d by
cus
tom
s de
crea
sed
from
38.
1%
of ta
xabl
e va
lue
in
1997
to 3
6.8%
in 1
998
and
34.2
% in
199
9.
Obj
ectiv
e M
easu
res
Stat
us o
f Exe
cutio
n Pe
rfor
man
ce In
dica
tors
R
espo
nsib
le
Aut
hori
ty
Act
ual a
t tim
e of
IC
R
- ens
ure
bette
r con
trol o
f the
fina
l de
stin
atio
n of
exe
mpt
ed g
oods
- S
trict
ly a
pply
the
Inve
stm
ent C
ode
(IC
): 1)
with
draw
exo
nera
tions
whe
n a
com
pany
doe
s not
com
plet
e th
e in
vest
men
t pro
gram
with
in 1
2 m
onth
per
iod
2) n
on-r
enew
al e
xpiri
ng e
xem
ptio
ns
gran
ted
unde
r the
Inve
stm
ent c
ode
3) d
ecis
ion
to e
xclu
de a
ll en
terp
rises
that
will
be
priv
atiz
ed
star
ting
from
Sep
t1, 1
998
from
ex
empt
ions
und
er th
e pr
ovis
ion
of
Inve
stm
ent C
ode
- con
duct
a re
view
of e
xist
ing
proc
edur
es fo
r exo
nera
tions
gra
nted
un
der
the
petro
leum
and
min
ing
code
and
und
er t
he ta
x re
gim
e fo
r th
e ur
aniu
m se
ctor
and
who
se
reco
mm
enda
tions
will
be
impl
emen
ted
durin
g 19
98
- int
rodu
ce a
syst
em o
f Tre
asur
y ch
ecks
as a
mea
ns to
mon
itor
exem
ptio
ns re
late
d to
impo
rts u
nder
fo
reig
n-fin
ance
d go
vern
men
t pr
ocur
emen
t con
tract
s - e
xten
d to
NG
Os t
he sy
stem
of
Trea
sury
che
cks t
o pa
y im
port
dutie
s and
oth
er a
pplic
able
indi
rect
ta
xes
- elim
inat
e al
l ad
hoc
exem
ptio
ns
Perm
anen
t mea
sure
: co
ntro
l act
iviti
es, m
obile
un
its a
nd D
ECD
/ST
Com
mun
icat
ion
sent
to
conc
erne
d en
terp
rises
; the
m
easu
re is
bei
ng a
pplie
d C
omm
unic
atio
n se
nt to
co
ncer
ned
ente
rpris
es; t
he
mea
sure
is b
eing
app
lied
Com
plet
ed
Com
plet
ed
Com
plet
ed
Com
plet
ed
No
ad h
oc e
xem
ptio
ns h
as
been
gra
nted
sinc
e Ja
nuar
y
conv
entio
ns a
nnex
es
Num
ber o
f sur
veill
ance
mis
sion
s an
d co
ntes
ted
case
s In
exis
tenc
e of
exo
nera
tions
on
equi
pmen
t goo
ds fo
r ent
erpr
ises
w
hich
hav
e no
t exe
cute
d th
eir
inve
stm
ent p
rogr
am w
ithin
a 1
2 m
onth
per
iod
Inex
iste
nce
of e
xone
ratio
ns fo
r en
terp
rises
who
se a
gree
men
t va
lidity
for t
he e
xplo
itatio
n ph
ase
has e
xpire
d N
o ne
w e
xone
ratio
n gr
ante
d un
der t
he p
rovi
sion
of t
he
Inve
stm
ent C
ode
to th
e en
terp
rises
that
will
be
priv
atiz
ed
from
Sep
t. 1,
199
8 A
pplic
atio
n in
199
8 of
the
reco
mm
enda
tions
of t
he re
view
Pr
ogre
ssiv
e di
sapp
eara
nce
of
exon
erat
ions
und
er C
odes
8 &
9
No
exon
erat
ion
gran
ted
for N
GO
-fin
ance
d pu
blic
pro
cure
men
t co
ntra
ct
No
new
ad
hoc
exem
ptio
n gr
ante
d (c
ode
12)
Obj
ectiv
e M
easu
res
Stat
us o
f Exe
cutio
n Pe
rfor
man
ce In
dica
tors
R
espo
nsib
le
Aut
hori
ty
Act
ual a
t tim
e of
IC
R
2. S
impl
ify th
e ta
xatio
n sy
stem
, br
oade
n th
e ta
x ba
se a
nd
stre
ngth
en th
e ta
x ad
min
istra
tion
- elim
inat
e ex
empt
ions
from
dut
ies
and
taxe
s on
all i
mpo
rts o
f lu
bric
ants
and
spar
e pa
rts w
ith a
un
it va
lue
unde
r CFA
F 10
0,00
0 -in
trodu
ce a
syste
m o
f exe
mpt
ions
ap
plic
able
to p
etro
leum
pro
duct
s ba
sed
on th
e ad
vanc
e pa
ymen
t of
cust
oms d
utie
s and
taxe
s and
thei
r re
imbu
rsem
ent o
n th
e ba
sis o
f de
liver
y re
ceip
ts
- int
rodu
ce th
e si
ngle
taxp
ayer
id
entif
icat
ion
num
ber s
yste
m to
all
reve
nue
agen
cies
- s
impl
ify th
e pr
oper
ty ta
x an
d tra
nsfe
r res
pons
ibili
ty fo
r its
co
llect
ion
from
the
Trea
sury
to th
e G
ener
al T
ax D
irect
orat
e (G
TC)
- set
up
the
Larg
e Ta
xpay
er U
nit
- lau
nch
the
activ
ities
of t
he V
AT
mon
itorin
g un
it
1998
C
ompl
eted
U
nder
pre
para
tions
C
ompl
eted
C
ompl
eted
Th
e un
it st
arte
d au
dit
activ
ities
in F
eb. 1
998;
as
of A
pril
30, 1
998,
53
verif
icat
ions
wer
e la
unch
ed, 3
6 w
ere
com
plet
ed. V
AT
asse
ssed
: C
FAF
132,
580,
894;
IUTS
: C
FAF6
,609
,316
; pen
altie
s fo
r VA
T:
CFA
F79,
650,
567;
IUTS
: C
FAF
8,23
2,94
8
No
exon
erat
ion
gran
ted
from
du
ties a
nd ta
xes o
n im
ports
of
lubr
ican
ts a
nd sp
are
parts
with
a
unit
valu
e un
der C
FAF
100,
000
App
licat
ion
of th
e m
easu
re b
y M
arch
31,
199
9 In
crea
se b
udge
tary
reve
nues
from
8.
4% o
f GD
P in
199
7 to
9.9
% in
19
98 a
nd 1
0.3%
in 1
999
Perf
orm
ance
indi
cato
rs: f
rom
July
to
Dec
embe
r 199
8: C
FAF
200,
000,
000;
Janu
ary
to
Dec
embe
r 199
9: C
FAF
700,
000,
000
GTC
+ G
DC
+ Tr
easu
ry
Bud
geta
ry re
venu
es to
G
DP:
19
98: 9
.1%
19
99: 8
.8%
C
olle
ctio
ns fr
om
verif
icat
ion:
H
2/ 1
998
: CFA
F 20
3 m
illio
n 19
99: C
FAF
1,31
2 m
illio
n
Obj
ectiv
e M
easu
res
Stat
us o
f Exe
cutio
n Pe
rfor
man
ce In
dica
tors
R
espo
nsib
le
Aut
hori
ty
Act
ual a
t tim
e of
IC
R
- pre
pare
com
pute
rized
val
ue
reco
rds f
or u
se b
y th
e G
ener
al
Cus
tom
s Dire
ctor
ate
(GD
C)
- Ope
n N
iam
ey /r
oad
and
Nia
mey
/righ
t pilo
t rev
enue
off
ices
- u
se st
atem
ents
of r
econ
cilia
tion
betw
een
the
AD
Vs o
f CO
TEC
NA
an
d th
e cu
stom
s dec
lara
tions
- P
rovi
de in
199
8 th
e ta
x ag
enci
es
with
a b
udge
tary
allo
catio
n of
C
FAF
1 bi
llion
for l
ogis
tical
eq
uipm
ent
- Rec
ruit
at th
e G
ener
al T
ax D
irect
-or
ate
an a
dditi
onal
75
perm
anen
t st
aff a
nd 3
0 fix
ed-te
rm e
mpl
oyee
s
Com
plet
ed
Nia
mey
/road
and
N
iam
ey/ri
ght b
ank
pilo
t re
venu
e of
fices
es
tabl
ishe
d; e
xten
sion
to
othe
r off
ices
in 1
998-
99
use
of th
e fir
st
reco
ncili
atio
n st
atem
ent i
s on
goin
g; p
erm
anen
t m
easu
re
Exec
utio
n of
the
1998
bu
dget
19
98
Use
of a
com
para
tive
valu
e re
cord
s sys
tem
by
the
GC
D
Red
uctio
n of
the
diff
eren
ces
betw
een
the
GC
D a
nd th
e Tr
easu
ry d
ata
on in
tern
atio
nal
trade
taxe
s col
lect
ed to
impr
ove
reve
nue
mob
iliza
tion
Qua
rterly
repo
rts o
n th
e us
e of
st
atem
ent o
f rec
onci
liatio
n Ex
ecut
ion
of th
e 19
98 b
udge
t
GTD
G
TD
GC
D
GC
D
Annex D (continued) 43
Public Finance Reform Credit Key Performance Indicators
The following key performance indicators were agreed between IDA and the Government to evaluate implementation progress and outcomes of the program supported by the PFRC:
• Increase in budgetary revenues from 8.4 percent of GDP in 1997 to 9.9 percent in 1998 and 10.3 percent in 1999;
• Contain the wage bill at CFA 44.0 billion I 1998 and 44.7 billion in 1999, and
establish by start of 1999 an integrated database for the civil service, the payroll, and the other ministries;
• Implement the recommendations of the audit of the Treasury during 1998-99;
• No accumulation of new internal arrears starting from July 1, 1998;
• Elimination of the use of advance expenditure payments procedures (PPA);
• Execution of the 1999 budget reflecting the PER recommendations, and
• No granting of new exonerations under the provisions of the Investment Code to
enterprises to be privatized starting from September 1, 1998. Detailed performance indicators were defined in the policy matrix of the Letter of Development Policy.
Annex E 44
Public Finance Recovery Credit (2000)
Actions taken between December 1999 and Board presentation in September 2000 were the following: a) Revision and implementation of a new tariff structure, in accordance with the
requirements of the WAEMU treaty, with the effect of reducing the maximum tariff rate from 25 to 20 percent, the (non-weighted) average tariff form 22.3 to 12.3 percent, and the statistical tax on imports from 5 to 1 percent1;
b) Enactment of new legislation setting forth a new tax regime and increasing the
value added tax rate from 18 to 19 percent2; c) Enactment of a revised budget law for FY 2000 based on revenue projections
consistent with tax collection capacity and increase, under the said budget law, of the budgetary allocations for the health and education sectors3;
d) Adoption of adequate steps to reduce the government's utility and
telecommunications bill, including through the enforcement of regulation discontinuing government subsidies of private utility consumption of public officials4;
e) Re-enactment of the legislation governing the civil service retirement and pension
regime5 and agreement with the main federations of trade unions (Union des Syndicats de Travailleurs du Niger and Confédération Nationale des Travailleurs) on the implementation of the reform;
f) Enactment of legislation establishing a Road Maintenance Fund, and transferring
road maintenance operation to private sector operators6; g) Launching the privatization process with respect to SONITEL and SNE by
selecting, through a transparent pre-qualification process, potential private sector investors, and formally inviting such investors to submit bids;
1 Ordinance No. 99/65 of December 20, 1999. 2 Law No. 2000-003 of May 2, 2000. 3 In particular, the 2000 Budget Law included all-time highs in terms of (i) the share of health allocations in total current spending (8.2 percent) and of non-wage and non-subsidy health expenditure in total current spending (3.8 percent); (ii) the share of basic education allocations (primary, secondary, literacy) in total current spending (14.1 percent), and the share of non-wage expenditure for primary education in total spending for basic education (13.1 percent). The revised Budget Law also eliminated any allocation to the budget line debited in the past years for the discretionary settlement of domestic arrears. 4 Decree No 99-363 of August 31, 1999. 5 Ordinance No. 98-380 of December 24, 1998. 6 Respectively Ordinance No. 99-55 of November 22, 1999, and Decree No. 2000-101 of April 7, 2000.
Annex E (continued) 45
h) Launching the process of awarding two cellular phone licenses to private operators by formally inviting private companies, through advertisement in the international press, to submit bids to that effect;
i) Adoption of instructions requiring all government agencies to execute their
expenditures in accordance with the relevant payments procedures in effect in Niger, and confirming the ban on exceptional payment procedures;7
j) Regularization of all advance payments of public expenditure made during FY
2000, in accordance with relevant budgetary and Government accounting rules and standards;
k) Implementation of the regulation establishing the Treasury Committee (Comité
National de Suivi de la Trésorerie de 1 'Etat)8, by making the Committee fully operational, and ensuring adequate financial reporting (budget execution reports, monthly financial plans) to guide expenditure and cash management;
l) Establishment of adequate financial control mechanisms to monitor the
expenditures of all autonomous public sector agencies or enterprises that benefit from government subsidies (Correspondants du Trésor);
m) Submission to the National Assembly of a draft Loi de Règlement for FY 1997; n) Adoption of an action plan, for the reorganization of the Treasury Department
(Trésorerie Générale), based on the recommendations of the functional audit performed in 2000; and
o) Completion of an evaluation report on the work of the former Arrears Settlement
Commission (Commission ad hoc de Gestion des Arriérés Intérieurs de 1' Etat).
7 Prime ministerial instruction No. 536, dated May 29, 2000. 8 Ministerial instruction No. 491/MF/RE, dated November 29, 1999.
Publ
ic F
inan
ce R
ecov
ery
Cre
dit -
Fis
cal M
anag
emen
t Ref
orm
pro
gram
: Pol
icy
Mat
rix
Obj
ectiv
esPr
ior
actio
nsFu
ture
mea
sure
s and
tim
etab
le
Perf
orm
ance
ben
ch
mar
ks
Res
pons
ible
au
thor
ity
Act
ual a
t tim
e of
ICR
1. In
crea
se
Eff
icie
ncy
of
Rev
enue
M
obili
zatio
n
- The
Com
mon
Ext
erna
l Tar
iff
of th
e WA
EMU
is
impl
emen
ted,
redu
cing
the
max
imum
tarif
f fro
m 2
5 to
20
%
- Dom
estic
tax
syste
m w
as
revi
sed
to re
duce
corp
orate
in
com
e tax
(for
m 4
5 to
42.
5 %
),and
raise
VA
T (fr
om 1
7 to
19
%)
(a) C
ontin
ued
redu
ctio
n in
tax
exem
ptio
ns
- Im
prov
e mon
itorin
g of
tax
exem
ptio
ns an
d ta
ke
addi
tiona
l mea
sure
s to
strea
mlin
e gra
ntin
g of
ex
empt
ions
(200
1 Bu
dget
Law
) - I
mpr
ove s
yste
m o
f exe
mpt
ion
cont
rol o
n ex
tern
ally
fin
ance
d pr
ocur
emen
t (Q
4/20
00)
(b) I
mpr
ove t
axpa
yer m
onito
ring
syste
ms
- Effe
ctiv
e use
of T
IN d
atab
ase
- For
mal
ize e
xcha
nge o
f dat
a bet
wee
n PS
I age
nt G
CD
on tr
ade v
alue
s; str
ict e
nfor
cem
ent o
f con
trols
whe
n da
ta d
iver
ges.
(Q4/
2000
)
(c) I
mpr
ove r
even
ue co
llect
ion
outsi
de th
e cap
ital
- Red
eplo
ymen
t and
trai
ning
of t
ax co
llect
ion
agen
ts;
- Stri
cter
mon
itorin
g of
tax
perfo
rman
ce in
majo
r ur
ban
cent
ers
(d) I
mpr
ove e
ffici
ency
of p
etro
leum
pro
duct
s tax
atio
n (Q
2/20
01)
Rea
ch fi
scal
rev
enue
to
GD
P ta
rget
s:
FY 2
000:
8.2
%FY
200
1: 8
.9 %
Incr
ease
d do
mes
tic ta
x re
venu
e per
form
ance
: FY
200
0: C
FAF
47.6
bill
ion
FY 2
001:
CFA
F 51
.2
billi
on
Impr
oved
custo
ms t
ax
perfo
rman
ce:
FY 2
000:
55.
7 bi
llion
FY
200
1: 5
9.7
billi
on
MO
C, G
CD
, G
TD
TR, G
CD
, G
TD, G
BD
G
CD
FY 2
000:
8.6
%
FY 2
001:
9.2
%
FY 2
000:
CFA
F 44
.3
billi
on
FY 2
001:
CFA
F 60
.3
billi
on
FY 2
000:
CFA
F 58
.5
billi
on
FY 2
001:
CFA
F 64
.8
billi
on
2. Im
prov
e B
udge
t Pr
epar
atio
n an
d E
xpen
ditu
re
Prog
ram
min
g
- A re
vise
d B
udge
t law
was
ad
opte
d, b
ased
, on
reve
nue
proj
ectio
ns c
onsi
sten
t with
cu
rren
t tax
col
lect
ion
capa
city
.
(a) R
atio
naliz
e bu
dget
allo
catio
ns fo
r non
-wag
e sp
endi
ng it
ems:
- Util
ities
: Det
erm
ine c
onsu
mpt
ion
stand
ards
for
wat
er, e
lect
ricity
and
tele
phon
e (Q
2/20
01)
- Sub
sidie
s: bu
dget
allo
catio
ns o
n re
cipi
ent a
genc
y's
subm
issio
n of
pre
viou
s yea
r acc
ount
s, cu
rrent
yea
r es
timat
es, a
nd a
budg
et p
ropo
sal f
or th
e fu
ture
fisc
al
year
(Q4/
2000
) - E
stabl
ish fi
nanc
ial m
anag
emen
t and
acco
untin
g sy
stem
s for
auto
nom
ous a
genc
ies (
EPA,
EPI
C;
Q3/
2001
) - S
chol
arsh
ips:
Upd
ate s
tude
nt d
atab
ase t
o co
ntro
l el
igib
ility
; rev
iew
allo
catio
n cr
iteria
(Q4/
2000
)
Avo
id n
ew d
omes
tic
arre
ars o
n ut
ilitie
s co
nsum
ptio
n,
auto
nom
ous a
genc
ies
spen
ding
, or
scho
lars
hips
GD
B, U
tility
co
mpa
nies
G
DB
, TR
, M
HE,
oth
er
line
min
istri
es
In F
Y 2
000,
util
ity
cons
umpt
ion
rem
ains
a
prob
lem
in so
me
min
istri
es, b
ut st
ringe
nt
mea
sure
s hav
e be
en
take
n (e
.g. c
ut-o
ff in
se
rvic
es) a
nd b
ills a
re
paid
on
time;
Li
mite
d im
plem
enta
tion
of th
e ra
tiona
lizat
ion
in
the
dete
rmin
atio
n of
su
bsid
ies i
n FY
200
1;
Lim
ited
chan
ge in
sc
hola
rshi
p al
loca
tions
m
echa
nism
s for
FY
200
1
Obj
ectiv
es
Prio
r ac
tions
Fu
ture
mea
sure
s and
tim
etab
le
Perf
orm
ance
ben
ch
mar
ks
Res
pons
ible
au
thor
ity
Act
ual a
t tim
e of
ICR
- Effe
ctiv
e use
of t
he in
tegr
ated
ci
vil s
ervi
ce d
atab
ase f
or
payr
oll m
anag
emen
t
(b) R
atio
naliz
e bud
get a
lloca
tion
for p
erso
nnel
sp
endi
ng:
- Det
erm
ine t
he v
olum
e of d
epar
ture
s and
new
re
crui
tmen
t, an
d ev
alua
te fi
scal
impa
ct (w
ages
and
pens
ions
) by
usin
g th
e int
egra
ted
payr
oll/p
erso
nnel
da
taba
se (o
ngoi
ng)
- c) I
ntro
duce
med
ium
term
bud
get p
rogr
amm
ing
proc
edur
es
- Pre
pare
sec
tor b
udge
t env
elop
es in
tegr
atin
g in
vest
men
t and
recu
rren
t bud
gets
(Q4/
2000
) - I
ntro
duce
con
cept
s of
Med
ium
-Ter
m
Expe
nditu
re F
ram
ewor
ks (M
TEFs
), in
tegr
atin
g ag
greg
ate
fisca
l dis
cipl
ine
and
pove
rty re
duct
ion
obje
ctiv
es (Q
3/20
01)
(d) R
efor
m B
udge
t nom
encl
atur
e in
line
with
R
egio
nal g
uide
lines
(Q2/
2001
)
- Sec
tor-
wid
e bu
dget
sh
eets
- D
eter
min
atio
n of
m
ediu
m-te
rm a
ggre
gate
fis
cal t
arge
ts
- Eva
luat
ion
of se
ctor
ex
pend
iture
targ
ets
linke
d to
sec
tor d
evel
opm
ent
stra
tegy
GB
D, p
ilot
MTE
F m
inis
try
(MPH
)
New
bud
get n
omen
-cl
atur
e fin
aliz
ed; t
o be
im
plem
ente
d fo
r the
ex
ecut
ion
of th
e 20
03
budg
et.
3. Im
prov
e E
xpen
ditu
re
Man
agem
ent
- Adv
ance
pay
men
t pr
oced
ures
form
ally
ban
ned
and
regu
lariz
ed [B
oard
co
nditi
on]
- Est
ablis
hmen
t of a
Tr
easu
ry C
omm
ittee
- Est
ablis
hmen
t of f
inan
cial
co
ntro
l on
expe
nditu
res
of
stat
e au
tono
mou
s ag
enci
es•
- Int
erru
ptio
n of
util
ity
deliv
ery
in c
ase
of n
on-
paym
ent
(a) E
nfor
ce b
udge
tary
dis
cipl
ine
with
resp
ect t
o ur
gent
exp
endi
ture
requ
ests
(mis
sion
s, m
edic
al
emer
genc
ies,.
.) - S
trict
ly a
nd p
arsi
mon
ious
ly a
pply
exi
stin
g ru
les
for u
rgen
t exp
endi
ture
man
agem
ent (
régi
es
d'av
ance
) (on
goin
g)
(b) R
atio
naliz
e ex
pend
iture
regu
latio
n an
d ca
sh
man
agem
ent
- Wee
kly
oper
atio
nal c
ash
man
agem
ent p
lans
va
lidat
ed b
y Tr
easu
ry C
omm
ittee
(Q3/
2000
) - E
valu
atio
n of
the
exis
ting
budg
et re
gula
tion
mec
hani
sms,
and
ado
ptio
n of
cor
rect
ive
mea
sure
s fo
r the
200
1 bu
dget
exe
cutio
n (Q
4/20
00)
(c) S
treng
then
of c
ontro
l ove
r non
-wag
e cu
rrent
ex
pend
iture
- F
urth
er re
info
rce
over
sigh
t ove
r EPA
/EPI
C ex
pend
iture
(ong
oing
) - C
ompl
ete
rem
aini
ng te
chni
cal m
easu
res
need
ed
to p
reve
nt a
busi
ve c
onsu
mpt
ion
of u
tility
co
nsum
ptio
n (Q
2/20
01)
- Vol
ume
of re
gies
d'
avan
ces;
30
days
. - N
on-a
ccum
ulat
ion
of
new
dom
estic
arr
ears
fr
om 2
000
onw
ard
- Red
uce
utili
ty
cons
umpt
ion
in r
eal
term
s ove
r 20
00-2
001
GB
D, T
R,
GFI
G
BD
, TR
, G
CD
, GTD
G
BD
, TR
Out
stan
ding
arr
ears
for
FY 2
000:
CFA
F 0.
2 bi
llion
;
Obj
ectiv
es
Prio
r ac
tions
Fu
ture
mea
sure
s and
tim
etab
le
Perf
orm
ance
ben
ch
mar
ks
Res
pons
ible
au
thor
ity
Act
ual a
t tim
e of
ICR
- Ful
ly in
tegr
atio
n of
pe
rson
nel a
nd p
ayro
ll fil
es;
editi
on o
f sal
arie
s f
rom
the
new
inte
grat
ed d
atab
ase
- Pre
para
tion
of a
n ac
tion
plan
in fo
llow
-up
to T
R
audi
t and
IMFI
FAD
m
issi
on re
ports
(com
plet
ed)
- Re-
esta
blis
hmen
t of s
ame-
day
acco
untin
g pr
actic
es
(d) S
tren
gthe
n w
age
bill
cont
rol
- Und
erta
ke c
lean
-up
of in
dem
nity
allo
catio
n by
el
imin
atin
g al
l leg
ally
unj
ustif
ied
allo
wan
ces
(Q1/
2001
) - D
esig
n st
rate
gy fo
r the
stre
amlin
ing
and
redu
ctio
n of
inde
mni
ties (
Q4/
2000
)
(e) R
efor
m p
ublic
exp
endi
ture
pro
cess
- R
evis
e co
mm
itmen
t and
acc
ount
ing
proc
edur
es
of d
econ
cent
rate
d ex
pend
iture
s (d
eleg
atio
ns d
e cr
edit)
(Q2/
2001
) - S
horte
n pr
oces
sing
tim
e be
twee
n in
itial
co
mm
itmen
t pro
posa
l and
eff
ectiv
e in
itiat
ion
of th
e ex
pend
iture
(Q2/
2001
) - P
repa
re a
ctio
n pl
an fo
r the
refo
rm o
f the
ex
pend
iture
pro
cess
follo
win
g re
com
men
datio
ns
of a
n "o
rgan
ic"
PER
(Q3/
2001
) f)
Reo
rgan
izat
ion
of th
e Tr
easu
ry a
nd
mod
erni
zatio
n of
acc
ount
ing
proc
edur
es
- Stre
amlin
e an
d cl
arify
acc
ount
ing
nom
encl
atur
e, h
arm
oniz
ed w
ith b
udge
t no
men
clat
ure
refo
rm (Q
4/20
00)
- Red
uctio
n in
use
of s
uspe
nse
acco
unts
(o
ngoi
ng)
- Gen
eral
ize
doub
le-p
art a
ccou
ntin
g fo
r tax
co
llect
ing
agen
cies
, in-
coun
try T
R n
etw
ork
(Q2/
2001
)
- Res
pect
wag
e bi
ll ta
rget
s:
2000
: CFA
F 51
.4
billi
on
2001
: CFA
F 49
.6
billi
on
- Act
ion
plan
for
expe
nditu
re p
roce
ss
form
fina
lized
- V
olum
es o
f sus
pens
e ac
coun
ts
- Rev
ised
acc
ount
ing
nom
encl
atur
e
GB
D, M
LMA
G
BD
, TR
TR
FY 2
000:
CFA
F 51
.8
billi
on
FY 2
001:
CFA
F 50
.4
billi
on
4. S
tren
gthe
n Fi
scal
R
epor
ting
and
Exp
endi
ture
E
valu
atio
n Sy
stem
s
- Int
rodu
ctio
n of
a n
ew
com
pute
rized
bud
get
info
rmat
ion
syst
em
a) Im
prov
e tim
elin
ess a
nd q
ualit
y of
fisc
al
repo
rting
- I
nstit
utio
naliz
e an
d fo
rmal
ize
regu
lar d
ata
reco
ncili
atio
n m
eetin
gs b
etw
een
conc
erne
d ag
enci
es
(ong
oing
) - A
dopt
pro
visi
onal
bal
ance
of e
ntry
for 2
000
Trea
sury
bal
ance
she
et (Q
4/20
00)
(b) E
xpan
d ut
iliza
tion
of th
e bu
dget
info
rmat
ion
syst
em:
- Exp
ansio
n to
spen
ding
uni
ts an
d th
e Tr
easu
ry D
ept.
(Q3/
2001
) - I
ntro
duct
ion
of a
utom
ated
con
trol p
roce
dure
s (Q
1/20
01)
- Reg
ular
reco
ncili
atio
n be
twee
n G
DB
bud
get
info
rmat
ion
and
TR
bala
nce
of a
ccou
nts
with
ex
plan
atio
n of
di
verg
ence
s - 2
000
Bal
ance
of e
ntry
- Reg
ular
fisc
al r
epor
ts
- Int
egra
ted
budg
et
man
agem
ent i
nfor
mat
ion
syst
em in
pla
ce
GB
D, T
R,
GC
D, G
TD
GB
D, C
IS,
TR, S
pend
ing
Age
ncie
s
Fully
inte
grat
ed d
ata
avai
labl
e B
alan
ce o
f ent
ry h
as n
ot
been
fully
reco
ncile
d w
ith o
uttu
rn o
f pre
viou
s ye
ar in
200
0;
Inte
grat
ed F
MIS
es
tabl
ishe
d in
ear
ly 2
002;
Obj
ectiv
es
Prio
r ac
tions
Fu
ture
mea
sure
s and
tim
etab
le
Perf
orm
ance
ben
ch
mar
ks
Res
pons
ible
au
thor
ity
Act
ual a
t tim
e of
ICR
- Com
plet
ed se
ctor
al P
ublic
Ex
pend
iture
Rev
iew
s (H
ealth
, Edu
catio
n, R
ural
se
ctor
).
- Reg
ular
pro
duct
ion
of b
udge
t exe
cutio
n ta
bles
(Q
3/20
00)
- Int
egra
tion
of re
venu
e an
d pa
yrol
l dat
a in
to th
e bu
dget
info
rmat
ion
syst
em (Q
2/20
01)
(c) S
treng
then
exp
endi
ture
eva
luat
ion
mec
hani
sms
- Int
egra
te re
com
men
datio
ns o
f com
plet
ed se
ctor
PE
Rs in
Bud
get p
repa
ratio
n pr
oces
s (Q
4/20
00)
- Und
erta
ke a
nd c
ompl
ete
budg
et-w
ide
PER
for
1997
-99
focu
sing
on:
(i) i
nter
-sec
tora
l exp
endi
ture
tre
nds;
(ii)
revi
ew o
f bud
geta
ry p
roce
dure
s
- 200
1-02
bud
get
allo
catio
ns fo
r hea
lth,
educ
atio
n, ru
ral
deve
lopm
ent,
HIV
/AID
S re
flect
ing
PER
re
com
men
datio
ns
- Com
plet
ed b
udge
t-w
ide
PER
Star
t on
PER
del
ayed
(e
xpec
ted
com
plet
ion:
m
id-2
003)
5. R
esto
re E
x Po
st E
xter
nal
Aud
it of
the
Bud
get
Bud
get e
xecu
tion
law
s fo
r 19
97 is
subm
itted
to th
e N
atio
nal A
ssem
bly
- The
199
7 ac
coun
ts a
re
trans
ferr
ed to
the
Stat
e C
ourt
's C
ham
ber
of
Acc
ount
s
(a) R
e-es
tabl
ish
the
regu
lar p
rodu
ctio
n an
d su
bmis
sion
of b
udge
t rev
iew
law
s (lo
is d
e re
glem
ents
) - S
ubm
it 19
98 B
udge
t rev
iew
law
for 1
998
to th
e N
atio
nal A
ssem
bly
(4/2
000)
- A
ll 19
99 e
xpen
ditu
res a
re re
gula
rized
and
bud
get
revi
ew la
w fo
r 199
9 su
bmitt
ed to
the
Nat
iona
l A
ssem
bly
(Q2/
2001
) - W
ork
plan
is p
repa
red
and
adop
ted
to e
nsur
e re
gula
r pro
duct
ion
of b
udge
t exe
cutio
n la
ws
by
the
Bud
get D
irect
orat
e (Q
1/20
01)
(b) R
esto
re S
tate
Cou
rt co
ntro
l ove
r Tre
asur
y cl
osin
g ba
lanc
es(c
ompt
es d
e ge
stio
n)
- The
199
8 ac
coun
ts a
re c
lose
d an
d tra
nsfe
rred
to
the
Cha
mbe
r of A
ccou
nts
(Q1/
2001
) - T
he a
nd 1
999
acco
unts
are
clo
sed
and
trans
ferr
ed to
the
Cha
mbe
r of A
ccou
nts
(Q4/
2001
) - W
ork
plan
is p
repa
red
and
adop
ted
to e
nsur
e re
gula
r clo
sing
of a
ccou
nts
by th
e Tr
easu
ry
(Q1/
2001
) - C
ham
ber o
f Acc
ount
s rep
ort o
n 19
97 a
ccou
nts i
s su
bmitt
ed to
Nat
iona
l Ass
embl
y (Q
3/20
01)
- Pub
lishe
d bu
dget
revi
ew
law
s for
199
8, 1
999
- Com
plet
ed C
ham
ber o
f A
ccou
nts R
epor
t for
199
7 B
udge
t
GB
D, N
A
TR. C
HA
C
Bud
get r
evie
w la
ws/
Tr
easu
ry a
ccou
nts f
or
1998
-99
subm
itted
. B
udge
t rev
iew
law
for
2000
sent
to P
arlia
men
t 20
00 a
ccou
nts c
lose
d in
la
te 2
001.
Firs
t aud
it re
port
expe
cted
by
mid
-20
02; B
udge
t Rev
iew
La
w fo
r 200
0 co
mpl
eted
in
Mar
ch 2
000.
Clo
sed
acco
unts
for 2
000
sent
o
the
Cha
mbe
r of A
ccou
nts
6. R
eviv
e D
omes
tic
Arr
ears
Se
ttle
men
t Pr
oces
s
- Eva
luat
ion
repo
rt on
the
past
set
tlem
ent i
nitia
tives
is
prep
ared
, and
ach
ieve
men
ts
of p
revi
ous
wor
k (p
hysi
cal
and
elec
troni
c ar
chiv
es,
- Rev
ise
inst
itutio
nal f
ram
ewor
k fo
r arr
ears
se
ttlem
ent,
incl
udin
g cl
arifi
catio
n of
the
decr
ee
crea
ting
the
"aut
onom
ous
cent
er fo
r the
am
ortiz
atio
n of
the
Stat
e's in
tern
al d
ebt"
(C
AAD
IE, Q
4/20
00)
- Up-
date
d ar
rear
s-st
atist
ical
tabl
e an
d up
-dat
ed se
ttlem
ent
stra
tegy
CA
AD
IE,
DG
B, T
R St
rate
gy fi
naliz
ed in
Se
ptem
ber 2
001;
C
FAF
37.8
bill
ion
clea
red
in F
Y 2
001
(incl
udin
g su
pple
men
tary
Obj
ectiv
es
Prio
r ac
tions
Fu
ture
mea
sure
s and
tim
etab
le
Perf
orm
ance
ben
ch
mar
ks
Res
pons
ible
au
thor
ity
Act
ual a
t tim
e of
ICR
clai
ms v
erifi
catio
n w
ork)
are
pr
eser
ved
- Tak
e st
ock
of a
ll in
tern
al a
rrea
rs b
y ye
ar-e
nd
1999
, und
erta
ke p
rope
r sta
tistic
al a
nd a
ccou
ntin
g cl
assi
ficat
ion
(Q4/
2000
) - U
pdat
e se
ttlem
ent p
lan
to in
clud
e al
l arr
ears
, id
entif
y tra
nspa
rent
set
tlem
ent m
odal
ities
ac
cord
ing
to th
e na
ture
of t
he a
rrea
rs a
nd
finan
cing
stra
tegy
(Q4/
2000
)
settl
emen
t per
iod)
7. A
ccel
erat
e St
ruct
ural
R
efor
ms w
ith
Fisc
al Im
pact
- Civ
il Se
rvic
e re
tirem
ent
refo
rm w
as re
-ena
cted
- P
re-q
ualif
ied
inve
stor
s fo
r SO
NIT
EL, S
NE
wer
e se
lect
ed a
nd in
vite
d to
su
bmit
finan
cial
bid
s. - I
nvita
tions
to s
ubm
it fin
anci
al o
ffer
s for
two
cellu
lar p
hone
lice
nses
la
unch
ed
(a) C
ivil
serv
ice
refo
rm
- Rev
ise- no
men
clat
ure
of b
udge
tary
pos
ts
atta
ched
to a
civ
il se
rvic
e po
sitio
n an
d up
date
da
taba
se w
ith re
vise
d bu
dget
ary
post
s (Q
2/20
01)
- Ini
tiate
pro
cess
of d
ecen
traliz
atio
n of
bud
geta
ry
posi
tions
(Q3/
2001
) - P
repa
re h
uman
reso
urce
man
agem
ent p
lans
for
key
min
istri
es fo
cusi
ng o
n re
depl
oym
ent a
nd
alte
rnat
ive
recr
uitm
ent s
trate
gies
(Q1/
2001
) (b
) Priv
atiz
atio
n an
d re
gula
tory
refo
rm p
rogr
am
- Sta
ffin
g an
d op
erat
iona
l est
ablis
hmen
t of t
he
Mul
ti-se
ctor
Reg
ulat
ory
Age
ncy
(Q1/
2001
) - D
esig
natio
n of
the
inve
stor
to ta
ke o
ver t
he
SON
ITEL
stra
tegi
c ca
pita
l sha
re, a
nd a
ttrib
utio
n fo
r tw
o ce
llula
r pho
ne li
cens
es to
the
priv
ate
sect
or (Q
4/20
00)
- Des
igna
tion
of th
e in
vest
or to
take
ove
r the
m
anag
emen
t con
tract
of t
he w
ater
dis
tribu
tion
com
pany
SN
E (Q
1/20
01)
- Des
igna
tion
of th
e in
vest
or to
be
gran
ted
the
conc
essi
on fo
r the
pow
er d
istri
butio
n co
mpa
ny
NIG
ELEC
(Q3/
2001
) - D
esig
natio
n of
the
shar
ehol
ders
for t
o ta
ke o
ver
the
petro
leum
impo
rt co
mpa
ny (Q
2/20
02)
- Ref
orm
the
petro
leum
pric
ing
syst
em (Q
1/20
01)
- New
bud
geta
ry p
ositi
ons
nom
encl
atur
e - S
ecto
ral h
uman
reso
urce
m
anag
emen
t pla
ns
(hea
lth, e
duca
tion)
- C
ompl
eted
tele
-co
mm
unic
atio
ns s
ecto
r lib
eral
izat
ion
(att
ribu
tion
of c
ellu
lar
phon
e lic
ense
s, SO
NIT
EL
pri
vatiz
atio
n)
- Com
plet
ed S
NE,
N
IGEL
EC tr
ansa
ctio
ns
MF,
MLM
A,
MPH
, MN
E M
P/R
SE,
MC
, MF
Mar
ch 2
001:
two
mob
ile
phon
e lic
ense
s sol
d to
pr
ivat
e se
ctor
ope
rato
rs;
tele
phon
e co
mpa
ny
priv
atiz
ed o
n D
ecem
ber
2001
. W
ater
dis
tribu
tion
com
pany
priv
atiz
ed.
Sele
ctio
n of
the
pre-
qual
ified
inve
stor
s for
the
pow
er c
ompa
ny e
nd Ju
ne
2001
and
pro
cess
to b
e fin
aliz
ed b
y en
d D
ecem
ber.
Lim
ited
prog
ress
N
ew p
etro
leum
pric
ing
syst
em e
stab
lishe
d (A
ugus
t 200
1).
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Est
.R
eal G
DP
(% in
crea
se)
-1.3
2.5
-6.5
1.4
4.0
2.6
3.4
2.8
10.4
-0.6
-1.4
7.6
GD
P pe
r cap
ita (U
S$)
225.
021
0.0
197.
016
9.0
180.
0C
PI -
Afr
ican
(% in
crea
se)
-2.0
-1.9
-2.9
-0.9
35.6
10.9
5.3
2.9
4.5
-2.3
2.9
4.0
Term
s of t
rade
(% c
hang
e)-9
.8-1
.8-8
.4-1
.3-1
3.7
4.9
-8.7
-7.6
5.8
Term
s of t
rade
199
5=10
0 (%
cha
nge)
-16.
7-1
.19.
89.
3-1
2.8
3.8
Nat
iona
l Acc
ount
s19
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
01C
onsu
mpt
ion
96.0
92.5
95.6
96.7
100.
010
0.2
97.6
96.9
97.6
97.4
96.7
96.8
Gro
ss in
v.11
.47.
85.
45.
710
.47.
39.
710
.911
.410
.210
.811
.5Pu
blic
inv.
4.2
6.6
5.2
4.6
5.8
6.5
6.4
5.9
6.5
Priv
ate
inv.
1.9
2.3
1.8
4.7
4.8
4.6
3.6
4.6
4.8
Gro
ss d
om. s
avin
gs4.
07.
54.
43.
30.
0-0
.22.
43.
12.
42.
63.
33.
2Pu
blic
savi
ngs
-1.0
1.0
0.2
1.2
-0.6
0.9
2.0
Priv
ate
savi
ngs
0.8
1.4
2.9
1.2
3.2
2.3
1.3
Res
ourc
e ga
p-4
.1-1
.7-1
.1-2
.4-1
0.3
-7.5
-7.3
-7.7
-9.0
-7.6
-7.5
-8.2
Publ
ic F
inan
ce, R
even
ue, T
ax19
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
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tal r
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58.
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36.
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27.
88.
49.
18.
88.
69.
2Ta
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e7.
97.
06.
76.
65.
46.
66.
77.
37.
98.
18.
08.
7To
tal e
xp. +
net
lend
ing
22.7
16.9
16.8
16.8
18.6
15.2
13.1
16.0
17.3
17.9
16.2
16.6
Cur
rent
exp
.13
.311
.112
.612
.812
.511
.39.
311
.111
.612
.411
.211
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.0-6
.6-7
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.9-5
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urre
nt b
udge
t bal
. (co
mit)
2/
-3.5
-3.1
-3.9
-5.2
-6.4
-1.4
-1.5
-2.7
-2.5
-3.6
-2.6
-1.8
Bas
ic fi
scal
bal
. (co
mit.
) 3/
-2.1
0.0
-2.4
-3.7
-4.8
-3.7
0.0
-3.0
-1.7
-4.8
-3.0
-3.4
Ove
rall
bal.
excl
. gra
nts (
com
it.) 4
/-1
2.4
-8.4
-8.6
-9.4
-12.
5-8
.0-5
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vera
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rant
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sh) 5
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-5.1
-5.5
-19.
5-6
.2-8
.9-8
.6-8
.5-5
.1-1
6.3
-8.6
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Wag
e bi
ll (C
FA b
illio
n)36
.738
.738
.940
.347
.449
.733
.444
.245
.150
.651
.850
.4W
age
bill/
tota
l rev
enue
53.0
69.6
76.3
87.6
90.8
73.2
42.3
48.7
40.3
46.2
47.0
38.1
Scho
lars
hips
(CFA
bill
ion)
3.6
5.6
3.5
4.5
2.2
3.2
3.0
2.8
Ext
erna
l Sec
tor
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Expo
rts fo
b12
.212
.211
.311
.314
.415
.316
.414
.716
.114
.215
.714
.5Im
ports
cif
21.9
18.3
14.4
14.8
21.0
20.3
21.3
20.2
22.7
19.5
21.9
n.a.
Cur
rent
act
. def
. (in
cl. o
ff. t
rans
fers
)-4
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.9-0
.7-6
.4-7
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.7C
urre
nt a
ct. d
ef. (
excl
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. tra
nsfe
rs)
-11.
8-7
.4-6
.7-7
.7-1
4.9
-8.9
-7.6
-8.9
-9.5
-7.8
-7.5
-7.5
1/ P
rimar
y bu
dget
bal
. = B
udge
t rev
. min
us to
tal e
xp.,
excl
udin
g in
t. pa
ymen
ts2/
Cur
rent
bud
get b
al. =
Bud
get r
ev. m
inus
cur
rent
exp
.3/
Bas
ic fi
scal
bal
. = B
udge
t rev
. exc
ludi
ng g
rant
s min
us to
tal e
xp. a
nd e
xclu
ding
fore
ign-
finan
ced
inve
stm
ent p
roje
cts
4/ O
vera
ll ba
l. =
Bud
get r
ev. m
inus
tota
l exp
. exc
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ng g
rant
s5/
Ove
rall
bal.
= B
udge
t rev
. min
us to
tal e
xp. e
xclu
ding
gra
nts p
lus a
rrea
s Sources:
IMF
Nig
er -
Key
Eco
nom
ic In
dica
tors
199
0-20
01(I
n pe
rcen
t of G
DP,
unl
ess o
ther
wis
e in
dica
ted)
For 1
990:
SM
/95/
34- 2
/10/
95Fo
r 199
1: S
M/9
7/18
8 - 7
/14/
97Fo
r 199
2-93
: SM
/98/
207
- 8/1
4/98
For 1
994:
SM
/00/
265
- 11/
29/0
0Fo
r 199
5-20
00: S
M/0
2/24
- 1/
24/2
002
and
EBS/
02/7
of 1
/18/
02
Annex G 52
Basic Data Sheet
ECONOMIC RECOVERY CREDIT (CREDIT 2581-NIR)
Key Project Data (amounts in US$ million) Appraisal
estimate Actual or
current estimate Actual as % of
appraisal estimate Total project costs 25.0 25.0 100 Loan amount 25.0 25.0 100 Cofinancing Cancellation
Cumulative Estimated and Actual Disbursements FY94 Appraisal estimate (US$M) 25 Actual (US$M) 25.8 Actual as % of estimate 103.2 Date of final disbursement April 28, 1995
Project Dates Planned Actual Initial Discussions with IDA January 10-14, 1994 January 10-14, 1994 Appraisal January 17-25, 1994 January 1994 Negotiations February 28, 1994 February 28, 1994 Board Presentation March 17, 1994 March 17, 1994 Effectiveness March 31, 1994 March 25, 1994 Closing date June 30, 1995 June 30, 1995
Staff Inputs (staff weeks) Planned Revised Actual Weeks US$ Weeks US$ Weeks US$ Preappraisal - Appraisal 0 0 0 0 2.7 9,300 Appraisal - Board 0 0 0 0 0 0 Board – Effectiveness 0 0 0 0 0 0 Supervision 0 0 0 0 9 16,200 Completion 8 7,600 13 19,000 8.1 31,800 Total 8 7,600 13 19,000 19.8 57,300 Mission Data
Date (month/year)
No. of persons
Staff days
in field
Specializations represented
PerformanceRating
Types of problems
Implementation Status
Development Objectives
Preparation & Appraisal
January 1994 3 8 2 Economists 1 Country Officer
Appraisal Supervision I Nov. 10-22,
1994 1 12 Economist
Supervision II May 3-13, 1995 1 10 Economist Unsatisfactory Unsatisfactory Project Management. Performance
Supervision III Sept. 17-25, 1995
1 8 Economist
Completion April 1-12, 1996 2 11 Consultant Economist
Annex G (continued) 53
Other Project Data Borrower/Executing Agency: Ministry of Finance FOLLOW-ON OPERATIONS Operation Purpose.
Year of Approval Status
Public Sector Adjustment Credit To improve fiscal management
FY97 Closed
Annex G (continued) 54
Basic Data Sheet
PUBLIC SECTOR ADJUSTMENT CREDIT (CREDIT 2939-NIR)
Key Project Data (amounts in US$ million) Appraisal
estimate Actual or
current estimate Actual as % of
appraisal estimate Total project costs 30.0 30.0 100 Loan amount 30.0 30.0 100 Cofinancing Cancellation
Cumulative Estimated and Actual Disbursements FY97 Appraisal estimate (US$M) 30,000 Actual (US$M) 29,725 Actual as % of appraisal 99 Date of final disbursement: March 21, 1997
Project Dates Original Actual Identification October 1-5, 1996 October 1-5, 1996 Preparation October 31-November 13, 1996 October 31-November13, 1996 Appraisal February 6-12, 1997 February 6-12, 1997 Negotiations February 12-13, 1997 February 12-13, 1997 Letter of Development Policy February 14, 1997 February 14, 1997 Board Presentation March 20, 1997 March 20, 1997 Signing March 21, 1997 March 21, 1997 Effectiveness March 21, 1997 March 21, 1997 Single Tranche Release March 21, 1997 March 21, 1997 Closing date March 31, 1998 March 31, 1998
Staff Inputs (staff weeks) Planned Revised Actual Weeks US$ Weeks US$ Weeks US$ Preparation - Appraisall 56.0 157.8 56.0 157.8 62.9 160.0 Appraisal 11.6 25.3 11.6 25.3 7.7 21.7 Negotiations – Board 7.1 17.7 7.1 17.7 8.0 18.7 Supervision 34.5 97.7 34.5 97.7 20.6 57.1 Completion 3.0 4.1 3.0 4.1 4.6 7.4 Total 112.2 302.6 112.2 302.6 103.8 264.9 Mission Data
Date (month/year)
No. of Persons*
Staff days in field
Specializations represented
PerformanceRating
Types of problems
Imp. Status Deve. Obj. Identification/ Appraisal
11/96 6 12 Macroeconomists,Privatization spec.
S S none
Appraisal- Board
02/97 8 10 Macroeconomists,Privatization spec.
S S none
Supervision 05/97 8 8 Macroeconomists, privatization spec.
S S none
10/97 6 2 Macroeconomists, privatization spec
S S
02/98 5 6 Macroeconomists, privatization spec
S S
Completion * Excluding consultants
Annex G (continued) 55
Other Project Data Borrower/Executing Agency: Ministry of Finance FOLLOW-ON OPERATIONS Operation Purpose. Year of Approval Status Public Finance Reform Project To improve
fiscal management
FY99 Closed
Annex G (continued) 56
Basic Data Sheet
PUBLIC FINANCE REFORM (CREDIT 3134-NIR)
Key Project Data (amounts in US$ million)
Appraisal estimate
Actual or current estimate
Actual as % of appraisal estimate
Total project costs 64.0 25.0 Credit amount 64.0 25.0 37.3 Cofinancing Cancellation
Cumulative Estimated and Actual Disbursements FY99 Appraisal estimate (US$M) 64.0 Actual (US$M) 23.0 Actual as % of appraisal 38.8 Date of final disbursement: January 26, 2000
Project Dates Original Actual Preappraisal 03/05/98 Appraisal 05/04/98 Approval 10/13/98 Effectiveness 10/20/98 10/20/98 Closing date 06/30/2000 06/30/2000
Staff Inputs (staff weeks) Stage of Project Cycle No. Staff Weeks US$ (‘000) Identification/Preparation 27.2 57.6 Appraisal/Negotiation 18.1 44.6 Supervision 34.2 64.2 ICR 3.1 6.0 Total 79.5 172.4 Mission Data
Date (month/year)
No. of persons
Specializations represented Performance Rating
Implementation Status
DevelopmentObjective
Identification/ Preparation
March-April 1998
2 Economists
2 Public Sector Specialists 2 Sector Specialists (health,
education)
2 Consultants (public finance specialists)
Appraisal/Negotiations May-Sept. 1998
2 Economists
Supervision October 1998- March 2000
2 Economists
2 Consultants (public finance specialists
Completion 2 Economists
Annex G (continued) 57
Other Project Data Borrower/Executing Agency: Ministry of Finance FOLLOW-ON OPERATIONS Operation Purpose Year of Approval Status Public Finance Recovery Credit To improve
fiscal management
FY01 Closed
Annex G (continued) 58
Basic Data Sheet
PUBLIC FINANCE RECOVERY CREDIT (CREDIT 3418-NIR)
Key Project Data (amounts in US$ million) Appraisal
estimate Actual or
current estimate Actual as % of
appraisal estimate Total project costs 47.00 47.00 100 Original Credit amount 35.00 35.00 100 Supplemental Credit 12.00 12.00 100 Cofinancing Cancellation
Cumulative Estimated and Actual Disbursements FY01 Appraisal estimate (US$M) 47.0 Actual (US$M) 47.0 Actual as % of appraisal 100 Date of final disbursement: October 18, 2000
Project Dates Original Actual Identification – Preappraisal 07/18/2000 Appraisal 08/01/2000 Approval 09/14/2000 Effectiveness 10/13/2000 10/13/2000 Closing date 06/30/2001 06/30/2001
Staff Inputs (staff weeks) Actual/Latest Estimates No. Staff weeksx US$ (‘000) Identification/Preparation l 4.9 9.8 Appraisal/Negotiation 8.9 28.8 Supervision 13.8 44.8 ICR 1.9 6.5 Total 29.5 89.9 Mission Data Date
(month/year) No. of
persons Specializations
represented Performance Rating
Implementation Progress
Development Objective
Identification/ Preparation
July 2000 2 Economists
Appraisal/Negotiations August 2000 2 Economists Supervision February 2001 2 Economists S S May-June 2001 2 Economists S S 2 Public Finance Specialists Completion Feb.-June 2002 2 Economists S S
Annex G (continued) 59
Other Project Data Borrower/Executing Agency: Ministry of Finance FOLLOW-ON OPERATIONS Operation Purpose. Year of Approval Status Public Expenditure Adjustment Credit
Support fiscal management FY02 Fully disbursed
. Annex H 60
Government's Comments dated June 6, 2003 on the Draft Niger PPAR
REPUBLIQUE DU NIGER
Niamey, le
L6 JUIN c~ :~
MINISTERE DE LA PRIVATISATION ET DELA RESTRUCTURATION DES ENTREPRISESCELLULE DE cOORDIyATION DU PROGRAMMEDE PRIVATISATI t~4{O
LA MINISTRE
l-)N°MP/RE/CCPP~
Obiet : Evaluation retrospective des operations de la 'Banque Mondiale au Niger
Reference : Votre projet de rapport du 23 mat 03
Apres examen de votre projet de rapport, j'ai I'honneur de porter a votreconnaissance les observations suivantes
A la oage 15,- point 4.12 : lire % au debut de 1997, les strategies de privatisation des
trois sodetes de services publics et de la societe petroliere avalent eteadoptees . au lieu de : au debut de 1977 . . .point 4.13 : supprlmer les deux derrieres phrases sulvantesToujours en 1998, le monopole d'importat1on des prodults petroliers a
ete aboli et un cadre reglementaire a ete adopte pour les Importateursdu secteur prive . Enfln, un protocole a ete signe avec une societeprivee en vue de gerer les installations de stockage de la SONIDEP z .Ces propositions etaient contenues dans le schema initial et n'ontjamals ete miles en oeuvre .
A la me 36 Annexe C- g) Au lieu de 4c Adoption d'une lol revisee concernant la privatisation
des entreprises prNees. " lire « Adoption d'une ordonnancemodiflant I'ordonnance 96 - 75 du 11 d6cembre 1996 portantconditions generales de privatisation * .
A la Dage 39- derniere colonne du tableau : SONIDEP : Cadre de reglementatlon
elabore au lieu de adopte et protocole pour la creation dune socleteprivee etabli au lieu de condu avec un groupe prive.
Monsieur R. Kyle PetersChef de Division - Departementde ('Evaluation Retrospective desOperations
Ix : 202 522 3124Washington DC
61
A la Dam SZg) supprimer le terme d'achat car dans le cas de la SNE, it s'agitd'un affermage. Idem a la page 58 au 26"` tiret du point 7 .
Veulllez agreer, Monsieur, ('expression de mes sinceres salutations .
,.
'r\
Cl .Rfv
r4.
r
Annex H (continued)
Annex H (continued)
62
Subject : PPAR of World Bank Operations in Niger
Reference : Your draft report of May 23, 2003
After reviewing your draft report, I have the honor to inform you of the following :
At page 15 :para. 4.12: read "at the beginning of 1997, the privatization strategies ofthe three utilities and of the petroleum company had been adopted,"instead of: at the beginning of 1977para.4.13 : delete the last two sentences : "Also in 1998, the importmonopoly for petroleum products was cancelled and a regulatoryframework governing private sector importers adopted . Finally, a protocolwas signed with a private company to manage the storage facilities ofSONIDEP ." These proposals were part of the initial plan, but were neverimplemented.
At page 36 Annex C- g) instead of "Adoption of revised privatization law" read : "Adoption of
an ordinance modifying the ordinance 96-75 of December 11, 1996 on thegeneral conditions of privatization ."
At page 39last column of table : SONIDEP: Regulatory framework formulatedinstead of adopted and protocol for the creation of a private companyinstead of concluded with a private group .
Government's Comments dated June 6, 2003 on the Draft Niger PPAR(Unofficial Translation of French Letter)
Republic of Niger
Niamey, June 6, 2003Ministry of Privatization and
Enterprise RestructuringPrivatization Program Coordination Unit
The Minister
No . 00199 MP/RE/CCPP
To
Mr. R. Kyle PetersSenior ManagerOperations Evaluation DepartmentWashington, D .C .
At page 52
Sincerely,
g) delete the word purchase, because in the case of SNE, it is aconcession. Idem at page 58 at item 2 of paragraph 7 .
Signed : Mrs. TRAPSIDA, Fatima.
6 3
Annex H (continued)
Ob'et : Observations sur le Rapport d'Evaluation Retrospective
Monsieur le Chef de Division,
J'ai 1'honneur de vous faire parver#ir les observations au sujet du documentetabli par le Departement de 1'evaluation gretrospective des operations .
Page 2/point2 .2
Formuler la deuxieme phrase ainsi qu'il slit : " De 1974 a 1991, it a ete doming pardeux regimes militaires . Le premier, de 074 a 1987, etait place sous la directionautoritaire du General Kountche tandis qUe le second, de 1987 a 1991 fut dirige parle General Ali SAIBOU qui instaura alor Ie parti unique ."Le reste sans changement .
1141
Page 23/point 5.20 : Lire "Credit d'ajud'ajustement du secteur prive" .
ment du secteur public" et non " Credit
TII
Annex H (continued)
64
Government's Comments dated June 20, 2003 on the Draft Niger PPAR
REPUBLIQUE DU NIGER Niamey, le2, 0 JUIN 2003MINISTERE DES FINANCES ET DE L'ECONOMIE
DIRECTION GENERALE DES PROGRAMMESDIRECTION DES ETUDES FINANCIERES SETDES REFORMES
1 11
N.. .O . .. 6 .9 . . /MF/E/ I ,•" t_ DEF/R,,, Le Ministre,
A
Monsieur R . Kyle PetersChef de DivisionDepartement de ('EvaluationRetrospective des OperationsFax no 202-522-3124
65
Annex H (continued)
Page29/point 7.4: ajouter a la fin du paragraphe
Cependant, le Ministere des Finances 't de l'Economie, conscient de cettenecessite, a mis en place en aout 2001 iihe structure multidisciplinaire appeleeGroupe d'Appui a la Gestion Economique dont les principaux domainesd'mtervention sont entre autres la reahsah n d'un rapport economique et financiersur le Niger, 1'analyse statistique et conometrique a partir d'un modelemacroeconomique, 1'appui technique structures chargees du suivi desprogrammes economiques et financiers .
Page 30/point 7.6: Reformuler la derniere phrase ainsi qu'il suit
Les informations recueillies sur 1'execution des programmes doivent etre renduespubliques dans la mesure ou l'on cons une certaine amelioration dans leurfiabilite et leur regularite .
~1Page 51(suite de 1'Annexe E) L'intitule du credit est "Credit a l'ajustement desfinances publiques ( 2000) .
Page 68(Fiche de donnees de base)semblent incorrects. Ii s'agit en fait duPubliques ( Credit 3428-NIR) >> .
Je vous prie d'agreer, MonsieurI0
haute consideration .
'intitule ainsi que le numero du creditCredit a 1'ajustement des Finances
Chef de Division, 1'expression de maLit
Annex H (continued)
66
Government's Comments dated June 20, 2003 on the Draft Niger PPAR(Unofficial Translation of French Letter)
Republic of Niger
Niamey, June 20`h , 2003Ministry of FinanceGeneral Directorate for ProgramsDirectorate for Financial Studies and Reforms
No. 02069/MF/E/DGP/DEF/R
The Minister
To
Subject : Remarks concerning the Country Assistance Evaluation .
To the OEDCR Senior Manager,
I have the honor to send you some remarks concerning the document that the OperationsEvaluation Department elaborated .
Page 2/paragraph 2.2 :
Formulate the second sentence the following way : `From 1974 to 1991, it was dominatedby two military regimes . The first one, from 1974 to 1987, was an authoritarian regimeled by General Kountche while the second one, from 1987 to 1991 was under the controlof General Ali SAIBOU who then instituted the single party .'The rest does not change .
Page 23/paragraph 5.20 : Read `public sector adjustment credit' and not `private sectoradjustment credit' .
Page 29/paragraph 7.4 : Add at the end of the paragraph :
Nevertheless, the Ministry of Finance and the Economy, which is conscious of thisnecessity, has set up in August of 2001 a multidisciplinary structure named EconomicManagement Support Group, whose principal fields of intervention are the elaboration ofan economic and financial report on Niger, the statistical and econometric analysis
Mr. R. Kyle PetersSenior ManagerOperations Evaluation DepartmentFax No . 202-522-3124
67
Annex H (continued)
starting from a macroeconomic model, and the technical support provided to thestructures in charge of the economic and financial programs follow-up .
Page 30/paragraph 7 .6 : Rewrite the last sentenced as indicated below :
The collected information concerning the implementation of programs must be madepublic when a subsequent improvement of their liability and regularity is observed .
Page 51/(continuation of Annex E) : The name of the credit is `Public FinanceAdjustment Credit (2000)' .
Page 68 (Basic data annex) : The name and the credit number appear to be incorrect . Itis in fact the `Public Finance Adjustment Credit (Credit 3428-NIR)' .
Sincerely yours .
HABOU HAMIDINE