131638-NE INTERNATIONAL DEVELOPMENT ASSOCIATION PROGRAM DOCUMENT FOR A PROPOSED DEVELOPMENT POLICY CREDIT IN THE AMOUNT OF EURO 47.5 MILLION (US$55 MILLION EQUIVALENT) AND A PROPOSED DEVELOPMENT POLICY GRANT IN THE AMOUNT OF SDR 39.5 MILLION (US$55 MILLION EQUIVALENT) This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization . 566.43 AF Additional Financing AFDB African Development Bank AFREA African Evaluation Association ANSI National Agency for Information (Agence Nationale pour la Société d’Information) APCA National Agriculture Advisory System (Agence de Promotion et de Conseil Agricole) ARTP Regulatory Body of the Telecoms Sector (Agence de Regulation des Telecommunications et de la Poste) ASM Artisanal Small-scale Mining ASYCUDA Automated System for customs Data BAGRI Agricultural Bank of Niger (Banque Agricole du Niger) BCEAO Central Bank of West African States (Banque Centrale des Etats de l’Afrique de l’Ouest) BCP Popular Central Bank (Banque Centrale Populaire) BEEEI Office of Environmental Assessment and Impact Studies (Bureau d'Evaluation Environnementale et des Etudes d'Impacts) BIA International Bank for Africa in Niger (Banque Internationale pour l’Afrique au Niger) CAIMA Supply Center for Agricultural Inputs and Equipment (Centrale d’Approvisionnement en Intrants et Matériels Agricoles) CFAF West African CFA Franc CNSEE National Center of Ecology and Environmental Surveillance (Centre National de Surveillance Ecologique et Environnementale) COTEN Technical Committee for Fertilizers of Niger CPF Country Partnership Framework CPS Country Partnership Strategy DPF Development Policy Financing DPO Development Policy Operation DSA Debt Sustainability Analysis EBITDA Earnings Before Interest, Tax, Depreciation and Amortization ECB European Central Bank ECF Extended Credit Facility ECOWAS Economic Community of West Africa States EU European Union FAO Food and Agriculture Organization FCV Fragility, Conflict and Violence FDI Foreign Direct Investment FY Fiscal Year GDP Gross Domestic Product GRS Grievance Redress Service GSMA Global System for Mobile Association HFO Heavy Fuel Oil i ICT Information and Communications Technology IDA International Development Association IEG Independent Evaluation Group IFC International Finance Corporation IMF International Monetary Fund IPP Independent Power Producer IRM Immediate Response Mechanism kWh Kilowatt Hour LIC Low-income Country M&E Monitoring and Evaluation MFD Maximizing Financing for Development MFI Micro Finance Institutions MTEF Medium-term Expenditure Framework NEITI Niger Extractive Industries Transparency Initiatives NELACEP Niger Electricity Access Expansion Project NESAP Niger Solar Electricity Access Project NGO Non-governmental organization NIGELEC Nigerien Electricity Company (Société Nigérienne d’Electricité) NPLs Non-performing Loans OMEN Niger Fertilizer Market Observatory PAMOGEF Program to Strengthen Economic and Financial Governance (Programme d’Amélioration de la Gouvernance Economique et Financière) PDES Social and Economic Development Plan (Plan de Développement Economique et Social) PDO Program Development Objective PEFA Public Expenditure Framework Assessment PER Public Expenditure Review PFM Public Financial Management PIMA Public Investment Management Assessment PIRSC Public Investment Reform Support Credit PPG Public and Publicly Guaranteed PPP Public and Private Partnership PRACC Competitiveness and Growth Support Project PSIA Poverty and Social Impact Analysis PV Present Value R&D Research and Development RECA Agriculture Chambers Network (Réseau National des Chambres d'Agriculture du Niger) RMF Road Maintenance Fund RMR Risk Mitigation Regime SCD Systematic Country Diagnostic SDR Special Drawing Rights SESA Strategic Environmental and Social Assessment SISIC Computerized Tax and Taxpayer Monitoring System (Système intégré du suivi des impôts et des contribuables) SME Small and Medium Enterprise SNCA National Agriculture Advisory Council (Système National de Conseil Agricole) SORT Systematic Operations Risk-rating Tool SPCR Strategic Program for Climate Resilience SSA Sub-Saharan Africa SSATP Sub-Saharan Africa Transport Policy TA Technical Assistance ii TATTIE Tax on International Incoming Calls (Taxe sur la Terminaison du Trafic International Entrant) TIN Tax Identification Number TURTEL Tax on the Use of Telecom Networks (Taxe sur l’Utilisation des Réseaux de Télécommunications) US$ United States Dollar USF Universal Service Fund VAT Value-added Tax VSAT Satellite Antenna and Generators WAEMU West African Economic and Monetary Union WAPP West African Power Pool WBG World Bank Group : : : : : iii 1. INTRODUCTION AND COUNTRY CONTEXT ............................................................................... 1 2. MACROECONOMIC POLICY FRAMEWORK ............................................................................... 3 2.1 Recent Economic Developments ......................................................................................3 2.2 Macroeconomic Outlook and Debt Sustainability ............................................................7 2.3 IMF Relations ..................................................................................................................12 3. THE GOVERNMENT’S PROGRAM ........................................................................................... 13 4. THE PROPOSED OPERATION .................................................................................................. 13 4.1 Links to the Government’s Program and Operational Description ................................13 4.2 Prior Actions, Results and Analytical Underpinnings ......................................................14 4.3 the CPF and Other World Bank Operations and World Bank group strategy ................37 4.4 Consultations and Collaboration with Development Partners .......................................38 5. OTHER DESIGN AND APPRAISAL ISSUES ................................................................................ 38 5.1 Poverty and Social Impacts .............................................................................................38 5.2 Environmental Aspects ...................................................................................................39 5.3 PFM, Disbursement and Auditing Aspects......................................................................40 5.4 Monitoring, Evaluation, and Accountability ...................................................................42 6. SUMMARY OF RISKS AND MITIGATION ................................................................................. 42 Outlook 2018-2019 ................................................................................................................70 List of Tables Table 1: Key Macroeconomic and Financial Indicators, 2014-2021 ................................................ 4 Table 2: Financial Operations of the Central Government, 2014-2021 .......................................... 6 Table 3: GDP Contribution 2015-2020............................................................................................. 8 Table 4: Balance of Payments Financing Requirements and Sources ............................................. 8 Table 5: External Debt Stock Composition .................................................................................... 12 Table 6: Niger - Projected Impact of Selected Key Fiscal Measures (2018) .................................. 29 Table 7: Changes to the Policy and Results Matrix Regarding Prior Actions................................. 33 Table 8: Pillars and Analytical Underpinnings ............................................................................... 35 Table 9: Systematic Operations Risk-rating Tool (SORT) ............................................................... 44 List of Annexes Annex 1: Policy and Results Matrix ............................................................................................... 45 Annex 2: Letter of Development Policy ......................................................................................... 49 iv Annex 3: IMF Relations .................................................................................................................. 86 Annex 4: Environment and Poverty /Social Analysis Table ........................................................... 88 Annex 5: Lessons Learned ............................................................................................................. 91 Annex 6: Sectoral GDP Growth Rates (%) ...................................................................................... 92 List of Boxes Box 1: Reforming the extension service systems in Niger............................................................. 16 Box 2: The contribution of risk mitigation regime (RMR) to the risk mitigation. .......................... 44 List of Figures Figure 1: Debt Sustainability Analysis ............................................................................................ 11 Acknowledgements This operation is prepared by an IDA team consisting of Luc Razafimandimby (Sr. Economist and Task Team Leader, GMTA2), Manuel Luengo (Senior Energy Specialist, GEEDR), Marcel Nshimiyimana (Economist, GMTA2), Affouda Leon Biaou (Senior Energy Specialist, GEE07), Amadou Ba (Senior Agriculture Economist, GFADR), Kirsten Lori Hund (Senior Mining Specialist, GEEX1), Fatoumata Fadika (Financial Sector Specialist, GFM01), Charles Pierre Marie Hurpy (ICT Policy Specialist, GTI11), Anca Cristina Dumitrescu (Lead Transport Specialist, GTD08), Cheick Omar Tidiane Diallo (Transport Specialist, GTD08), Aly Sanoh (Economist, GPV07), Bougadare Kone (Environmental Specialist, GPEN07), Michel Ragnvald Mallberg (Senior Public Sector Specialist, GG013), Emelyne Calimoutou (Associate Counsel, LEGAM), Eric Ranjeva (Finance Officer, WFACS), Zeljka Sedlo (Consultant), Xavier Stephane Decoster (Consultant, GDD11), Salimata Bessin Dera (Team Assistant AFMNE), Micky O. Ananth (Operations Analyst, GMTA2), Maude Valembrun (Language Program Assistant, GMTA2), Theresa Adobea Bampoe (Program Assistant, GMTA2). The team benefited from guidance provided by Soukeyna Kane (Country Director, AFCW3), Lars Christian Moller (Practice Manager, GMTA2), Christine Richaud (Lead Economist, GMTA2) Jose Lopez-Calix (Program Leader, AFCW3), Michel Rogy (Program Leader AFCW3), Joelle Dehasse (Country Manager, AFMNE) and Michael Hamaide (Senior Country Officer, AFCW3). v on standard IDA regular credit terms Pillars of the Operation and The program development objective (PDO) is to foster rural growth. The DPF has Program two pillars: “Increasing rural productivity growth” and “Supporting growth- Development enabling sectors”. Objective(s) The following key outcomes are expected to be achieved by end-December 2019. Pillar 1 Increasing rural productivity growth 1. Beneficiaries (households) of subsidized inputs (seeds and fertilizers) distributed through e-vouchers: Baseline end-2016: 0; July 2018: 26,000; Target end-2019: 20,000 2. Number of farmers receiving extension services electronically: ; 3. Number of financial institutions (MFIs and commercial banks) that offer leasing and warrantage products: Baseline end-2016: 2; July 2018: 3; Target end-2019: 7 (out of 22 viable financial institutions) 4. Number of artisanal miners with permits: July 2018: N.A • 5. Reduction in government transfer arrears to the affected communities: Baseline end-2016: 0; July 2018: [0]; Target end-2019:10 percent Pillar 2 Supporting growth enabling sectors • 6. Share of localities covered by at least one telecommunications network (3G and above). Baseline end-2016: 13.6 percent; July 2018: 24 percent; Target end-2019: 25 percent • 7. NIGELEC’s Earnings Before Interest, Taxes Depreciation and Amortization (EBITDA). Baseline end-2016: CFAF 1.586 billion; July 2018: CFAF 3.418 billion; Target end-2019: CFAF 5.000 billion • December 2017: 13.0 percent; • 9. Proceeds of fuel levy transferred to Road Maintenance Fund. Baseline (average 2015-2016): 50 percent; July 2018: 50 percent; Target end-2019: 100 percent There are NO short and long-term climate and disaster risks relevant to the operation. vi 1. INTRODUCTION AND COUNTRY CONTEXT 1 2 2. MACROECONOMIC POLICY FRAMEWORK 2.1 RECENT ECONOMIC DEVELOPMENTS 1 AfDB has launched a feasibility study for 30 villages and investment in around 50 villages is being discussed within the Government. 3 Table 1: Key Macroeconomic and Financial Indicators, 2014-2021 2014 2015 2016 2017 2018P 2019P 2020P 2021P Real Economy (annual percentage change, unless otherwise specified) Real GDP 7.5 4.0 4.9 4.9 5.2 6.5 6.0 5.6 Non-resources GDP 8.2 4.5 4.9 4.5 5.3 5.4 6.0 6.1 Exports volume 11.1 -4.5 -2.0 13.5 2.1 11.8 10.3 5.4 Real GDP per capita 3.9 0.1 1.0 1.0 1.3 2.6 2.1 1.5 Imports volume 5.5 7.3 -14.1 10.2 12.7 16.4 13.8 -5.8 GDP deflator -0.5 0.5 0.2 -0.1 3.3 2.4 1.9 2.0 CPI Annual average -0.9 1.0 0.2 2.4 3.3 2.4 2.1 2.0 CPI End-of-period -0.6 2.2 -2.2 4.8 2.9 2.2 2.0 2.0 Fiscal Accounts (Percent GDP, unless otherwise indicated) Total revenue and grants 23.0 23.4 20.5 21.4 22.7 24.3 25.2 24.9 Total expenditure and net lending 31.0 32.5 26.3 26.8 28.5 28.4 28.0 27.1 Current expenditure 14.6 15.5 14.0 14.1 13.6 13.5 13.1 12.8 Capital expenditure 16.4 17 12.3 12.7 14.9 14.9 14.9 14.4 Overall balance (commit. basis, incl. grants) -8.0 -9.1 -6.1 -5.7 -4.4 -4.5 -3.0 -2.7 Selected monetary Accounts (Annual change, in percent of beginning-of-period broad money) Broad money 25.7 4.6 8.7 -4.9 12.0 7.4 8.5 7.5 Credit to non-government 6.1 6.3 3.8 5.3 13.1 12.5 11.7 11.2 Balance of payments (Percent GDP, unless otherwise indicated) Exter. current ac. balance (including grants) -15.4 -20.5 -15.5 -16.2 -19.2 -21.1 -23.3 -19.4 Imports 26.2 27.4 22.6 24.7 26.3 28.4 30.2 27.0 Exports 17.6 15.1 13.6 14.6 14.3 14.7 14.8 14.9 Foreign Direct investment 8.9 6.9 3.7 3.7 5.3 6.9 9.1 6.7 Total public and publicly guaranteed debt 33.8 41.6 43.7 49.3 50.5 50.8 49.8 48.3 Public and publicly guar. external debt 25.1 30.3 32.6 32.4 34.0 34.9 36.1 36.6 Public domestic debt 8.7 11.4 11.1 16.8 16.5 15.8 13.6 11.8 Terms of Trade (percentage change) -19.4 -7.5 -4.4 -4.2 -1.7 -0.7 -1.7 0.1 Memorandum items: GDP (Nominal-local currency) 4,069 4,269 4,511 4,726 5,235 5,600 6,051 6,518 4 5 Table 2: Financial Operations of the Central Government, 2014-2021 Projections (2018-2021) 2014 2015 2016 2017 2018 2019 2020 2021 (Percent GDP, unless otherwise indicated) Overall balance (commitment including -8.0 -9.1 -6.1 -5.7 -4.4 -4.5 -3.0 -2.7 grants) Primary balance -7.7 -8.4 -5.2 -4.0 -4.7 -3.3 -2.5 -2.0 Total revenue and grants 23.0 23.4 20.5 21.4 24.2 24.3 25.2 24.9 Tax revenue 15.6 16.0 13.5 13.1 14.9 14.9 15.8 16.3 Nontax revenue 1.9 1.8 0.6 1.0 1.3 0.7 0.8 0.8 Special accounts revenue 0.1 0.2 0.2 0.3 0.2 0.3 0.3 0.4 Grants 5.5 5.4 6.0 6.7 7.6 8.1 8.0 6.9 Total expenditure and net lending 31.0 32.5 26.3 26.8 28.5 28.4 28.0 27.1 Total current expenditure 14.6 15.5 14.0 14.1 13.6 13.5 13.1 12.8 Budgetary expenditure 14.3 15.0 13.5 13.6 13.1 13.1 12.6 12.4 Wages and salaries 5.3 5.9 5.9 5.7 5.4 5.1 4.9 4.8 Materials and supplies 3.1 3.7 2.4 243 2.2 2.3 2.3 2.3 Other current expenditure 5.4 4.8 4.4 4.6 4.3 4.3 4.2 4.1 Interest 0.4 0.6 0.9 1.0 1.2 1.3 1.2 1.1 Of which: external debt 0.2 0.3 0.4 0.3 0.4 0.5 0.5 0.5 Special accounts expenditure1 0.4 0.5 0.5 0.5 0.5 0.5 0.4 0.4 Capital expenditure 16.4 17 12.3 12.7 14.9 14.9 14.9 14.4 Domestically financed 9.4 9.9 4.5 5.3 5.6 5.2 4.9 5.7 Externally financed 7.1 7.1 7.9 7.4 9.3 9.7 10.1 8.7 Of which: grants 3.8 3.7 4.5 4.3 6.0 6.0 6.0 5.1 Change in payments arrears and float 1.4 -0.3 0.4 -1.1 -1.1 0.0 0.0 0.0 Overall balance (cash) -6.6 -9.4 -11.6 -13.5 -13.1 -12.6 -11.1 -9.6 Financing 6.6 9.4 11.6 13.5 13.1 12.6 11,1 9.6 11.2 External financing 3.5 4.9 9.8 10.2 11.6 12.1 10.4 Amortization -0.5 -0.6 -0.7 -0.5 -0.8 -1.0 -0.8 -0.9 Domestic financing (net) 3.7 5.1 1.9 3.4 2.0 0.7 -1.0 -0.9 Source: Nigerien authorities – IMF and World Bank staff estimates, October 2018. 6 2.2 MACROECONOMIC OUTLOOK AND DEBT SUSTAINABILITY 7 Table 3: GDP Contribution 2015-2020 2015 2016 2017 2018 2019 2020 2021 GDP growth (in percent) 4.0 4.9 4.9 5.2 6.5 6.0 5.6 Consumption 6.5 2.1 4.7 6.9 4.4 4.5 5.0 Private 4.7 3.5 2.0 6.0 3.8 4.0 4.5 Public 1.8 -1.4 2.7 0.9 0.6 0.5 0.5 Investment 2.5 -5.3 -1.5 1.5 3.6 2.8 2.3 Public 2.2 -2.8 -1.7 1.2 3.2 1.7 1.9 Private 0.8 -2.3 0.2 0.3 0.4 1.1 0.5 Inventories -0.5 -0.1 0.0 0.0 0.0 0.0 0.0 Net exports -5.1 8.0 1.7 -3.1 -1.5 -1.3 -1.7 Exports, GNFS -2.3 -0.6 2.8 1.4 2.4 2.5 1.3 Imports, GNFS 2.8 -8.6 1.2 4.5 3.9 3.8 3.0 Source: Staff estimates, 2018. Table 4: Balance of Payments Financing Requirements and Sources in Million US$ 2014 2015 2016 2017 2018 2019 2020 2021 Financing Requirements 1257 1184 1248 1350 1772 2150 2551 2313 Current Account Deficit 1171 1286 1192 1313 1702 2054 2470 2214 Long Term Debt Amortization 38 43 55 37 70 97 82 99 Other Short Term Capital Outflows 0 0 0 0 0 0 0 0 Errors and Omissions 48 -145 0 0 0 0 0 0 Financing Sources 1257 1184 1248 1350 1772 2150 2551 2313 FDI (net) 675 495 265 302 468 670 959 765 Capital Grants 287 261 347 345 531 629 732 691 Short term debt disbursements 0 0 0 0 0 0 0 0 Budget Support 15 107 89 57 93 72 80 86 Lgt term debt disb.(excl. IMF) 249 245 257 257 291 366 432 416 Ch.in res (- means accumulation) -210 174 -67 17 -92 146 113 67 Other sources 203 -144 345 338 445 239 231 231 IMF credit (net) 38 45 11 33 36 28 3 -26 8 2 In Niger, the Government does not provide counterpart funding to foreign-financed projects. It is offset by tax relief (on registration fees for contracts, on VAT obligations, and on income taxes) granted to externally-financed projects. In the fiscal accounts, it is recorded on a gross basis—as non-cash revenue (recettes d’ordre de paiement) and a matching entry on the expenditure side under domestically-financed investment. 3 A detailed list of the measures is discussed in 4.2.C. 4 Smuggling of goods is estimated to cause a revenue loss of 2.5 percent of GDP. Informal Trade and Customs Revenue Losses in Niger (2017). 5 2014 World Customs Organization reports (WCO 2014). 6 Système intégré du suivi des impôts et des contribuables. 9 7 These measures are expected to generate 0.7 percent of GDP in 2019. 8 Tax expenditures and exemptions represented 0.9 percent of GDP in 2015 and 50 percent of customs receipts, respectively. 9 In particular, a comprehensive biometric census of civil servants is being conducted to establish an integrated pay-civil service database and the Government has initiated the audit of the agency in charge of administrating scholarships (ANAB). 10 Figure 1: Debt Sustainability Analysis (a) Present Value of Debt-to-Exports (b) Present Value of Public Debt to GDP Most extreme shock Primary Balance Baseline Fix Primary Balance Most extreme shock 1/ Historical scenario Public debt benchmark Source: World Bank 2018. 11 Table 5: External Debt Stock Composition10 US$ % total % of GDP (Billions) debt Multilateral 2.12 81.41 25.83 IMF 0.20 7.59 2.41 World Bank/IDA 0.90 34.57 10.97 Others 1.02 39.25 12.45 Official Bilateral 0.41 15.74 4.99 Paris Club official debt 0.10 3.73 1.18 Non-Paris Club official debt 0.31 12.01 3.81 Commercial 0.07 2.85 0.91 Total 2.61 100.00 31.73 2.3 IMF Relations 10 Debt stock in Table 5 was collected for a low-income country (LIC) DSA update at end-year 2017. 12 3. THE GOVERNMENT’S PROGRAM 4. THE PROPOSED OPERATION 4.1 LINKS TO THE GOVERNMENT’S PROGRAM AND OPERATIONAL DESCRIPTION 13 4.2 PRIOR ACTIONS, RESULTS AND ANALYTICAL UNDERPINNINGS Enhancing the use of modern inputs and improving access to extension services systems 11 Report Number- 76232 – NE. 12 Source: Niger SCD – World Bank, January 2017. 14 13 Both the beneficiaries and input providers, for example a fertilizer shop, receive a matching text message on the needs of the beneficiaries for the redeem of the package. 14 It was backed by a distribution mechanism including a database of beneficiaries with information on the core characteristics of households (characteristics of the households, agricultural practices that determines the input kits tailored to their needs) , the amount and content of subsidies to be distributed based on the recipients’ needs and farm characteristics and mechanisms allowing the identification of beneficiaries by suppliers. 15 Box 1: Reforming the extension service systems in Niger 15The World Bank-funded Climate Smart Agriculture Project (P153420) and West Agriculture Productivity Project (P117148) are supporting actions oriented towards supporting seed foundation production by agricultural research institute and improved seed multiplication by farmers organization and private companies. 16 Niger – Fertilizer Sector Reform Plan (January 2018). 16 Prior action 1. To increase the availability of agricultural inputs, the Recipient’s Ministry of Agriculture and Livestock has scaled-up the E-voucher geographical coverage to 20 communes; set up mechanisms for community-based seed production, pursuant to Arrete No 304, dated August 29, 2018, and operationalized its Seed Certification Division through the issuance of 30 certifications to community- based entities involved in modern seeds multiplication. Prior action 2. To strengthen governance and improve private sector participation in the fertilizer markets, the Recipient’s Ministry of Agriculture and Livestock has created: (i) the Niger Fertilizer Market Observatory (OMEN) in charge of promoting the supply of quality fertilizers by the private sector, and; (ii) the Technical Committee for Fertilizers of Niger (COTEN) in charge of the monitoring of law and regulation implementation in the fertilizer sector by all stakeholders, pursuant respectively to Decree No.2018-598, dated September 5, 2018 and Arrete No.308, dated September 7, 2018. 17This will include setting up the foundation for seed acquisition from research institutes, control and certification arrangements for community seed base production, capacity building for communities involved in seed production and community-based seed marketing regulation (e.g. packaging). 17 18A Food and Agriculture Organization (FAO) study found that the incomes of farmers using the warrantage system, along with the use of the agricultural inputs increased by 52 to 134 percent. Warrantage in Niger, an inventory credit practice adapted to the needs of small-scale farmers. Food and Agriculture Organization (FAO), 2014. 18 19 19 The World Bank, through the PRACC Project, is currently supporting field missions, surveys and geological data collection and analysis by the Ministry of Mines to identify targeted artisanal mining areas in the north and west of Niger. The new Extractives- Governance Project Governance of Extractives for Local Development (GOLD-2018) will zoom in on the formalization of the artisanal mining supply chain and artisanal mining communities, with a focus on women and youth, as well as the capacity of local governments to monitor and manage, and the role of the sector in the fragile situation in the north of the country. 20 The Decree 2015-245 of 8 May 2015 stipulates that 85 percent finances investments, 10 percent the recurrent budget of the regional/local authorities of the mining regions, and 5 percent finances technical support to local and regional authorities and the monitoring and evaluation of development actions by the State. 20 Prior action 4: To start the implementation of a multiyear-arrears clearance plan of revenue from the extractive industry to communities, the Recipient’s Ministry of Finance has transferred 5 percent of the arrears to the concerned communes, pursuant payment receipts of mining revenues issued by the central accounting officer of the Treasury, dated September 4, 2018. 21 Etude pour la formulation d’un mecanisme pour assurer l’effectivité et la gestion efficace des recettes minières rétrocedes aux collectivities territoriales (PAMOGEF Avril 20017) 22 Niger: Africa Extractive Industries Trust Fund 23 Estimate from the Ministry of Finance, meeting July 2017 24 The arrears amount to CFA 27 billion (US$49 million equivalent), 5 percent of which is CFAF 1.4 billion (US$2.4 million equivalent). The plan foresees an incremental payment of 10 percent, 20 percent, 30 percent and 35 percent of the arrears from 2019 to 2022. 21 25 Source: Digital Inclusion and Mobile Taxation in Niger, Deloittes, January 2017. 26 Source: Digital inclusion and mobile sector taxation in Niger, GSMA and Deloitte, January 2017. 27 This agreement, signed in November 2016, includes Mali, Senegal, Côte d'Ivoire, Burkina Faso, Guinea, Togo and Sierra Leone. 22 28 Recommandations pour une mise en œuvre effective du fonds d’accès et service universel au Niger” (June 20, 2017). 23 mproving the financial and the technical performance of NIGELEC 29 The company Moov has operationalized its 3G license in 2017; Airtel obtained 4G in 2018, Orange operates under 3G. 30 Source: The Ministry of Telecom, Niger, 2018. 24 31 72 percent of electricity consumed in 2016 was imported from Nigeria. 32 “Niger’s Infrastructure: A Continental Perspective,” June 2011, pp 29. 33 The Electricity Access Expansion Project (P153743) and its Additional Financing (P164090), approved respectively in December 2015 and in August 2018 support on grid expansion and the Solar Electricity Access Project (P160170) approved in June 2017 focuses on improving energy services for off grid rural consumers. 34 The Regional Off-Grid Project (P160708). 35 The North Core Regional Interconnector Project (P162933). 25 Prior actions 26 Prior action 7. To make the cost reflective pricing effective, the Recipient’s Council of Ministers has implemented the first electricity tariff adjustment, pursuant to Decree No. 2017-796, dated October 6, 2017 approving the tariff methodology and the applicable tariff structure. Prior action 8. To allow NIGELEC to operate in the power sector and improve the company’s performance, NIGELEC and the Republic of Niger have signed a concession contract for the production, transport and distribution of electricity on May 14, 2018, approved by Decree No. 2018-321, dated May 14, 2018. 36 In 2019 without the planned reforms, EBITDA would be negative as the costs of operation, namely the generation costs, would overcome the revenues. Through the reform measures included in the DPO the Operating income target shows a healthy financial situation. Source: Plan d’Affaires NIGELEC – 2016. 27 37In addition to tax expenditures, exemptions are also granted under ordinary law in the national and community customs codes and in the context of diplomatic agreements or headquarters agreements. The exemptions are distributed by type as follows: Investment Code, Mining Code, Petroleum Code, Grants and aid, Nongovernmental organizations and standard memoranda of agreement, Diplomatic privileges, International conventions and protocols, Conditional and exceptional exemptions, other specific exemptions, exemptions granted in the context of public-private partnership contracts, exemptions granted for security reasons. 28 Table 6: Niger - Projected Impact of Selected Key Fiscal Measures (2018) Measures (CFAF billion) As a share of GDP (%) DPO measures. 5.0 0.1 Computerization, digitalization of customs and tax payments DPO measures. VAT taxation at 6.3 0.1 5 percent of previously exempted products DPO measures. Revision of 2.0 0.03 investment code exemptions New non-DPO measures. 41.5 0.82 Housing tax, other new taxes (minimum taxes for small business, etc.), Shift to transactional value of imports Sub-total 54.8 1.1 Reduction in telecoms taxes -24.0 -0.5 Total 30.8 0.6 29 38 There are remaining five border posts that will take more time through end-2018 due to security issues, connectivity problems and geographical access. 30 31 32 Table 7: Changes to the Policy and Results Matrix Regarding Prior Actions Indicative triggers for Fostering Fostering Rural Growth Modifications and Justification Rural Growth Reform DPF II as Reform envisaged at the time of the DPF II preparation of the first operation (Proposed Prior Actions) Prior Action 1 The Government has (i) used E- Strengthened. To increase the The number of communes voucher to deliver agriculture availability of agricultural inputs, the covered by the e-voucher system subsidies for vulnerable Recipient’s Ministry of Agriculture has been doubled to 20. The communities in 10 communes, (ii) and Livestock has scaled-up the E- number of households impacted liberalized the fertilizer markets voucher geographical coverage to 20 is much wider than the number of through the implementation of an communes; set up mechanisms for communes pre- supposes. The action plan - to be prepared. community-based seed production, measures aimed at the pursuant to Arrete No 304, dated liberalization of the fertilizer August 29, 2018, and operationalized markets are the Prior action 2. its Seed Certification Division through the issuance of 30 certifications to community-based entities involved in modern seeds multiplication. Prior Action 2 The Government has (i) taken a Strengthened and combined with Legal Act to set up mechanisms for Prior action 1 to address input community-based seed availability. production, and; (ii) operationalized the Seed Certification Division through the start-up of seed control certificate issuance. The Government has signed (i) the Amended with (i) dropped. The The performance contract was performance contract with Government has signed NIGELEC’s dropped to ensure a timely NIGELEC, detailing NIGELEC’s concession contract aligned with the disbursement of the DPO performance indicators and the new legal and regulatory framework. proceeds. It is scheduled around Government’s financial end-November 2018. Dropping it commitment. does not impact on the PDO and the target indicator. It was also The Government has signed (ii) the dropped to avoid burdening the NIGELEC’s concession contract in matrix as a new prior action on compliance with the new legal and transport was added to the regulatory framework. matrix. Prior Action 6 To align Niger’s telecom tax policy Replaced. To enhance transparency The Government first fulfilled the to the sub-regional agreement on in the management of resources of trigger but then reinstated the international roaming, the the ICT sector, and to create an TATTIE owing to its tax revenue Recipient’s Ministry of Finance enabling environment for public- impact and unmet expectation of abolished TATTIE, pursuant to private partnership collaboration, investment by operators. Recipient’s Finance Law No. 2017- the Recipient through its Regulatory 82, dated 28 November 2017. Authority for Telecommunications The trigger was replaced by a PA and Post, has published its 2015- establishing transparency in the 2017 financial statements on the management of regulatory fees ARTP website, as well as the related financing the expansion of access financial reports of the external in rural areas and the auditor in the Official Journal. development of the sector. This 33 Indicative triggers for Fostering Fostering Rural Growth Modifications and Justification Rural Growth Reform DPF II as Reform envisaged at the time of the DPF II preparation of the first operation (Proposed Prior Actions) substitute PA contributes to the PDO of the operation. Prior Action 8 To increase tax revenue, the Amended. To reduce fraudulent Only the measure on customs has Government has implemented the manipulations and tax losses, and been identified. The Tax recommendations of a tax increase taxpayers’ compliance to Expenditure Study supported by a expenditure study and the payment schedule and rules, the World Bank TA will be delivered in assessment of the government Recipient’s Ministry of Finance has calendar year 2019. customs reforms. deployed ASYCUDA World in eight border posts and established ASYCUDA connection between Niger’s customs offices with Togo and Benin customs, digitalized all the payments at customs and tax offices, and created eleven new tax offices throughout the country and one property tax center in Niamey, pursuant respectively to Ordinance No. 90 dated December 22, 2017 and Arrete No. 42 dated on January 19, 2018. Prior action 10 New. To secure road maintenance This measure will ensure that the funds and improve governance in RMF receives the full amount of their management, the Recipient’s the dedicated fund to road Council of Ministers has changed the maintenance. It is critical for status of road maintenance fund into ensuring donors’ continued a 2nd generation road fund in charge involvement in road infrastructure of collecting revenue arising from financing. the use of the road and dedicated to road maintenance, pursuant to Decree No. 2018-460 dated July 6, 2018. 34 Table 8: Pillars and Analytical Underpinnings Prior Actions Analytical Underpinnings Pillar 1 Increasing rural productivity growth Enhancing the use of modern input and improve access to extension services systems Prior action 1. To increase the availability of agricultural inputs, the Recipient’s Ministry of Agriculture and Livestock has scaled- up the E-voucher geographical coverage to 20 communes; set up mechanisms for community-based seed production, pursuant to Arrete No 304, dated August 29, 2018, and operationalized its Seed Certification Division through the issuance of 30 certifications to community-based entities involved in modern seeds multiplication. Prior action 2. To strengthen governance and improve private sector participation in the fertilizer markets, the Recipient’s Ministry of Agriculture and Livestock has created: (i) the Niger Fertilizer Market Observatory (OMEN) in charge of promoting the supply of quality fertilizers by the private sector, and; (ii) the Technical Committee for Fertilizers of Niger (COTEN) in charge of the monitoring of law and regulation implementation in the fertilizer sector by all stakeholders, pursuant respectively to Decree No.2018-598, dated September 5, 2018 and Arrete No.308, dated September 7, 2018. To deepen the involvement of financial institutions Warrantage in Niger, an inventory credit practice adapted and credit products in rural areas, the Recipient’s Council of to the needs of small-scale farmers. Food and Agriculture Ministers has adopted Decree No. 2018-458, dated July 6, 2018 Organization (FAO), 2014. regulating the warrantage system. Main findings: A study of the Niger project found that participating farmers had been able to increase their income by between 19 and 113 percent in six months. And since they were able to buy better seeds and fertilizer their yields went up — by between 44 and 120 percent. Prior action 4. To start the implementation of a multiyear-arrears Élaboration d’une stratégie et d’un plan d’action pour clearance plan of revenue from the extractive industry to mieux intégrer les Industries Extractives dans l’économie communities, the Recipient’s Ministry of Finance has transferred nationale (Sept 2015) ; Strategic Environmental and Social 5 percent of the arrears to the concerned communes, pursuant Assessment (SESA) payment receipts of mining revenues issued by the central Main findings: Artisanal mining assists rural households in accounting officer of the Treasury, dated September 4, 2018 building more dynamic and resilient livelihood strategies portfolios by, for instance, ‘dovetailing’ artisanal mining and farming economies. Further, it is a stimulus for trade and subsidiary business development around mine sites. For workers in a typical ASM environment – increasingly women and children – harsh working and living conditions are the norm. Moreover, unregulated or poorly regulated ASM activities have resulted in significant environmental destruction. Pillar 2: Supporting growth enabling sectors “Digital inclusion and mobile sector taxation in Niger” GSMA and Deloitte January 2017. The current tax level in Niger is one of the highest in the sub-region, and the impact is particularly noticeable for the low-income individuals and households. If the TATTIE on incoming voice traffic had not been introduced, stable traffic volumes combined with rising incoming traffic prices in the sub-region (caused by African 35 Prior Actions Analytical Underpinnings operators increasing their share of the revenues from incoming international traffic) would have brought the same amount of revenues for the Government. Prior action 7. To make the cost reflective pricing effective, the Recipient’s Council of Ministers has implemented the first electricity tariff adjustment, pursuant to Decree No. 2017-796, dated October 6, 2017 approving the tariff methodology and the Main findings: The evolution of NIGELEC's self-financing applicable tariff structure. over 2010–14 shows a relative decline in its ability to Prior action 8. To allow NIGELEC to operate in the power sector generate financial resources from its operations. This and improve the company’s performance, NIGELEC and the evolution is the result of various factors: (i) NIGELEC's Republic of Niger have signed a concession contract for the tariffs have remained broadly constant over the last 10 production, transport and distribution of electricity on May 14, years (in 2001 the GoN opted for a tariff decrease 2018, approved by Decree No. 2018-321, dated May 14, 2018. benefitting water pumping for irrigation, and in 2012 for a tariff decrease for the first tranche—social tranche—of domestic users); (ii) the implementation of a rural electrification program requested by the GoN; and (iii) an increase, albeit moderate, in NIGELEC's operational costs. Prior action 9. To reduce fraudulent manipulations and tax “Informal trade and revenue losses in Niger (2017)” losses, and increase taxpayers’ compliance to payment schedule Main findings: When compared to other countries in SSA and rules, the Recipient’s Ministry of Finance has deployed with equivalent weak governance, Niger’s performance in ASYCUDA World in eight border posts and established ASYCUDA customs revenue collection is quite poor. Niger collects just connection between Niger’s customs offices with Togo and one-third of potential customs revenues. Exemptions equal Benin customs, digitalized all the payments at customs and tax revenues collected, and losses from fraud and smuggling offices, and created eleven new tax offices throughout the almost equal revenues collected. Although there are clearly country and one property tax center in Niamey, pursuant exogenous constraints affecting customs, such as the respectively to Ordinance No. 90 dated December 22, 2017 and length of the borders and the lack of resources, many of the Arrete No. 42 dated on January 19, 2018. problems lie with the customs department itself. D. Creating conditions for sustainable rural road maintenance financing framework “National Transport Strategy of Niger 2016-2025” Main findings: The Strategy identified the need to strengthen the management and financing of the national road network – the biggest public asset of the country – by reforming the current structure of the Road Maintenance Fund and enabling better, direct collection of revenue and additional revenue resources, while becoming accountable and transparent on the maintenance expenditure and quality. 36 4.3 THE CPF AND OTHER WORLD BANK OPERATIONS AND WORLD BANK GROUP STRATEGY 39 Report Number – 123736- NE. 37 4.4 CONSULTATIONS AND COLLABORATION WITH DEVELOPMENT PARTNERS 5. OTHER DESIGN AND APPRAISAL ISSUES 5.1 POVERTY AND SOCIAL IMPACTS 38 5.2 ENVIRONMENTAL ASPECTS 39 5.3 PFM, DISBURSEMENT AND AUDITING ASPECTS 40 40 The 2016 PEFA highlights critical weaknesses in the performance of the PFM systems including the absence of a medium-term expenditure framework and programming budget, weak budget discipline due to structural challenges of cash management. 41 The use of a deposit account is a common feature of budget support operations in WAEMU member states and mitigates fiduciary risks. 41 5.4 MONITORING, EVALUATION, AND ACCOUNTABILITY 6. SUMMARY OF RISKS AND MITIGATION 42 43 Box 2: The contribution of risk mitigation regime (RMR) to the risk mitigation. To mitigate risks related to fragility, conflict and violence which are also the sources of other risks, the WBG will take advantage of a special RMR allocation of US$300 million provided under IDA 18 for Niger. The overall objective of the World Bank’s RMR support in Niger is to mitigate the escalation of existing crises and contribute to the reduction of key fragility and conflict risks. The World Bank’s strategy for risk reduction will pursue a dual focus on (i) addressing short-term drivers of conflict and fragility that may contribute to an escalation of existing conflicts with a focus on the most fragile and crises-affected regions (prevention of escalation); (ii) tackling medium- to long-term drivers and structural factors, for example through investments that can reduce risks of future conflict and strengthen institutions to manage risks and support social cohesion (sustaining peace). The WBG will also take account of the risk of conflict in the planning of projects. It will draw on the findings of the November 2017 RMR mission to Niger and on the Immediate Response Mechanism (IRM) when needed. The IRM allows rapid access to 5 percent of IDA's undisbursed portfolio to meet immediate financing needs. The WBG will also explore ways of operating that are adapted to insecure areas, such as third-party execution and monitoring or reliance on NGOs Table 9: Systematic Operations Risk-rating Tool (SORT) Category Risk Rating 1. Political and governance Moderate 2. Macroeconomic Substantial 3. Sector strategies and policies Moderate 4. Technical design of project or program Substantial 5. Institutional capacity for implementation and sustainability Substantial 6. Fiduciary Substantial 7. Environmental and social Moderate 8. Stakeholder Moderate 9. Other (security) Substantial Overall Substantial 44 Annex 1: Policy and Results Matrix Pillar 1 Increasing rural productivity growth A. Enhancing the use of modern inputs and improving access to extension services systems Prior action 1. To increase access to agricultural Prior action 1. To increase the availability of Indicator 1. Beneficiaries (households) of inputs, the Ministry of Agriculture has (a) agricultural inputs, the Recipient’s Ministry of subsidized inputs (seeds and fertilizers) finalized an e-voucher distribution mechanism Agriculture and Livestock has scaled-up the E- distributed through e-vouchers: for agricultural input subsidies and (b) voucher geographical coverage to 20 communes; Baseline (end-2016): 0 implemented a pilot program for such set up mechanisms for community-based seed July 2018: 26,000 mechanism in four (4) communes. production, pursuant to Arrete No 304, dated Target (end-2019): 20,000 August 29, 2018, and operationalized its Seed Certification Division through the issuance of 30 certifications to community-based entities involved in modern seeds multiplication. Prior action 2. To strengthen governance and improve private sector participation in the fertilizer markets, the Recipient’s Ministry of Agriculture and Livestock has created: (i) the Niger Fertilizer Market Observatory (OMEN) in charge of promoting the supply of quality fertilizers by the private sector, and; (ii) the Technical Committee for Fertilizers of Niger (COTEN) in charge of the monitoring of law and regulation implementation in the fertilizer sector by all stakeholders, pursuant respectively to Decree No.2018-598, dated September 5, 2018 and Arrete No.308, dated September 7, 2018). 45 To increase the outreach in Indicator 2. Number of farmers receiving extension services, the Government has signed extension services electronically: a performance contract with the Agriculture Chambers Network (RECA) for the implementation of an e-extension system ,000 B. Deepening rural financial inclusion Prior action 3. To deepen financial inclusion in Prior action 3. To deepen the involvement of Indicator 3. Number of financial institutions rural areas, the Council of Ministers has adopted financial institutions and credit products in rural (MFIs and comemercial banks) that offer a leasing Law for SMEs and has submitted said areas, the Recipient’s Council of Ministers has leasing and warrantage products draft law to its Parliament. adopted Decree No. 2018-458, dated July 6, 2018 Baseline (end-2016): 2 regulating the warrantage system. July 2018: 3 Target (end-2019): 7 (out of 22 viable financial institutions). C. Strengthening the linkages between the extractive industries and the local economy Prior action 4. To strengthen the linkages Prior action 4. To start the implementation of a Indicator 4. Number of artisanal miners between the extractive industry and the local multiyear-arrears clearance plan of revenue from with permits: economy, the Council of Ministers has adopted the extractive industry to communities, the Baseline (end-2016): 45,000 the draft revised mining law including new Recipient’s Ministry of Finance has transferred 5 July 2018: N.A provisions to formalize artisanal mining, and percent of the arrears to the concerned Target (end-2019): 60,000 submitted said draft revised law to its communes, pursuant payment receipts of mining Parliament. revenues issued by the central accounting officer Indicator 5. Reduction in government of the Treasury, dated September 4, 2018. transfer arrears to the affected communities: Baseline (end-2016): 0 July 2018: [0] Target (end-2019): 10 percent Pillar 2. Supporting growth-enabling sectors A. Developing a framework favorable to Information Communication Technology Prior action 5. To promote rural access to Prior action 5. To promote rural access to internet Indicator 6. Share of localities covered by at internet and mobile services, the Government and mobile services, the Recipient’s “Agence least one telecommunications network (3G has adopted (a) decree on the creation of the Nationale pour la Société de l’Information (ANSI) and above) ANSI in charge of the implementation of the USF has implemented a pilot connectivity project Baseline (end-2016): 13.6 percent strategy; (b) decree on the nomination of the July 2018: 24 percent 46 ANSI’s General Director. targeting a least one rural area funded partially by Target (end-2019): 25 percent the USF. Prior action 6. To enhance transparency in the management of resources of the ICT sector, and to create an enabling environment for public-private partnership collaboration, the Recipient through its Regulatory Authority for Telecommunications and Post, has published its 2015-2017 financial statements on the ARTP website, as well as the related financial reports of the external auditor in the Official Journal. Prior action 6. To incentivize the development of the ICT sector, the Ministry of Finance has adopted the 2017 financial year budget (a) reducing the tax on incoming international interconnection tariff (TATTIE); and (b) abolishing the flat tax on SIM cards (TURTEL). B. Improving the financial and the technical performance of the NIGELEC Prior action 7. To implement the first electricity Prior action 7. To make the cost reflective pricing Indicator 7. - NIGELEC’s EBITDA tariff adjustment, the Ministry of Energy has effective, the Recipient’s Council of Ministers has Baseline (end-2016): CFAF 1.586 billion adopted (a) an electricity tariff methodology implemented the first electricity tariff adjustment, July 2018: CFAF 3.418 billion based on a cost-coverage approach; and (b) a Target (end-2019): CFAF 5.000 billion pursuant to Decree No. 2017-796, dated October 6, multi annual electricity tariff adjustment. 2017 approving the tariff methodology and the applicable tariff structure. Prior action 8. To stabilize NIGELEC, the Ministry Prior action 8. To allow NIGELEC to operate in the of Finance has approved NIGELEC’s financing power sector and improve the company’s plan to stabilize its debt to equity structure. performance, NIGELEC and the Republic of Niger have signed a concession contract for the production, transport and distribution of electricity on May 14, 2018, approved by Decree No. 2018-321, dated May 14, 2018. C. Enhancing tax revenue mobilization 47 Prior action 9. To increase tax revenue, the Prior action 9. To reduce fraudulent manipulations Indicator 8. Tax revenue (% of GDP) Government has adopted a draft Finance Law and tax losses, and increase taxpayers’ compliance including measures to: (a) rationalize tax to payment schedule and rules, the Recipient’s Baseline (end-2016): 13.5 percent expenditures of the investment code; and (b) Ministry of Finance has deployed ASYCUDA World December 2017: 13.1 percent harmonize VAT exemptions with the WAEMU in eight border posts and established ASYCUDA Target (end-2019): 14.9 percent norms,and has submitted said draft Finance Law connection between Niger’s customs offices with 2018 to Parliament. Togo and Benin customs, digitalized all the payments at customs and tax offices, and created eleven new tax offices throughout the country and one property tax center in Niamey, pursuant respectively to Ordinance No. 90 dated December 22, 2017 and Arrete No. 42 dated on January 19, 2018. Prior action 10. To secure road maintenance funds Indicator 9. Proceeds of fuel levy and improve governance in their management, the transferred to Road Maintenance Fund: Recipient’s Council of Ministers has changed the Baseline (average 2015-2016): 50 percent status of road maintenance fund into a 2nd July 2018: 50 percent generation road fund in charge of collecting revenue arising from the use of the road and dedicated to Target (end-2019): 100 percent road maintenance, pursuant to Decree No. 2018- 460 dated July 6, 2018. 48 Annex 2: Letter of Development Policy REPUBLIQUE DU NIGER Fraternité-Travail-Progrès MINISTÈRE DU PLAN CREDIT D’APPUI BUDGETAIRE (2018) LETTRE DE POLITIQUE DE DEVELOPPEMENT Octobre 2018 I. CONTEXTE Le Niger est un vaste pays sahélo-saharien d’une superficie de 1 267 000 kilomètres carrés, enclavé et désertique sur plus de la moitié de son territoire. Il est soumis à une pluviométrie aléatoire, irrégulière et insuffisante dans le temps et dans l’espace. Le Niger fait face à une situation de sécurité fragile du fait des menaces et attaques directes sur le territoire de groupes terroristes installés dans trois de ces pays frontaliers : le Nigéria, le Mali et la Libye. Comme dans les autres pays du G5 Sahel, ce défi sécuritaire continue de peser sur les perspectives socioéconomiques du pays, en particulier les finances publiques. A ces contraintes, il faut ajouter le taux de croissance démographique de 3,9% et le taux de fécondité de 7,1 enfants par femme, tous deux parmi les plus élevés du monde. Par ailleurs, la volatilité des cours de l’uranium et du pétrole sont les principaux risques susceptibles d’affecter les perspectives macroéconomiques en 2018-2019. II. Le cadre macroéconomique Evolution des indicateurs macroéconomiques en 2017 49 Le taux de croissance du PIB réel a été estimé à 4,9% en 2017 identique à celui de 2016. L’analyse de la croissance par secteur d’activité fait ressortir les résultats suivants: ➢ Le secteur primaire a enregistré une croissance estimée à 5,1% en 2017 contre 9.5% en 2016. Ce résultat s’explique par la performance de la branche agriculture qui est passée de 13.6% de taux de croissance a 4.3%, un secteur qui représente 42% du PIB et a contribué pour 2 points de pourcentage à la croissance réelle du PIB ; ➢ Concernant le secteur secondaire, l’activité s’est inscrite en hausse en passant de 3,4% en 2016 à 6,0% en 2017. Cette tendance traduit principalement l’évolution de la production pétrolière qui est passée de 6,013 Millions de barils à 6,67 Millions de barils en 2017 (+10,8%). La contribution du secteur secondaire à la croissance est estimée à 0,9 point de pourcentage et représente 17% du PIB ; ➢ S’agissant du secteur tertiaire, il a enregistré une hausse de 3.9% en 2017 contre 3.0% en 2016 grâce à la bonne tenue des activités de commerce, de transport, d’hébergement et de communication. Sa contribution à la croissance est estimée à 1,7 point de pourcentage et représente 41% du PIB. Par rapport à l’inflation, elle est ressortie à 2,4% en moyenne annuelle en 2017 en dessous de la norme communautaire de 3%. Ce résultat est dû aux actions ciblées de distribution gratuite et de vente à prix modérés pour soutenir les ménages vulnérables pendant les périodes de soudure. Sur le plan des finances publiques, le déficit budgétaire (solde budgétaire global dons compris en pourcentage du PIB), s’est amélioré pour représenter 5% du PIB en 2017 contre 6,1% en 2016 grâce aux efforts des régies financières et la rationalisation des dépenses publiques. La part des dépenses de sécurité dans les dépenses budgétaires totales est passée de 16,2% en 2016 à 17,3% en 2017 dépassant largement la cible annuelle du Programme de la Renaissance Acte 2 (10%). Le taux de pression fiscale est estimé à 13,0% en 2017 contre 13,5% en 2016. Les échanges extérieurs en 2017 se traduiraient par un solde global négatif, résultant du déficit du solde des transactions courantes, atténué par l'excédent du compte du compte de capital et des opérations financières. Le déficit de la balance courante s'améliorerait de 34,9 milliards pour s'établir à 665,4 milliards en 2017 contre 700,3 milliards en 2016 et 878,7 milliards de FCFA en 2015. Cette situation serait imputable aux comptes du revenu secondaire qui bénéficierait de la hausse des aides budgétaires reçues par l’Etat (l’aide budgétaire passe de 76,6 milliards de FCFA en 2015, 66,2 et enfin 155,4 milliards en 2017 soit en moyenne 110,8 milliards de FCFA par an) et des envois de fonds des travailleurs (27,5% de hausse en 2017 contre 1,3% en 2016 et 0,3% en 2015). En ce qui concerne la convergence au sein de l’UEMOA, sur cinq (05) critères, le Niger en a respecté deux (02) en 2017, comme en 2016, à savoir le taux d’inflation et le taux d’endettement (41,7%<=70%). Les critères non respectés concernent le solde budgétaire dons compris en pourcentage du PIB (-5,2%), le taux de pression fiscale et le ratio masse salariale en pourcentage des recettes fiscales (43,6% qui est supérieur à 35%). 50 L'évolution de la situation monétaire sur la période 2015-2017, s'est traduite globalement par une contraction des actifs extérieurs nets et une expansion des créances intérieures et de la masse monétaire. Les avoirs extérieurs nets ont enregistré une baisse de 0,3% par rapport à fin décembre 2016. A fin décembre 2017, l'encours des crédits intérieurs s'est accru de 82,1 milliards de FCFA, ou +10,0% en variation relative par rapport au mois de décembre 2016, pour ressortir à 899,3 milliards de FCFA. Cette évolution résulte d'une dégradation de la Position Nette du Gouvernement de 49,8 milliards de FCFA et d'une augmentation des crédits à l'économie de 5,8 milliards de FCFA. Parallèlement, l'encours des crédits à l'économie a augmenté de 5,8%, pour se situer à 780,3 milliards de FCFA à fin décembre 2017. Globalement, sur la période 2015-2017, les actifs extérieurs nets représentent 12,8% du PIB. Quant aux crédits octroyés à l’économie, ils ont représenté entre 2015 et 2017 16,0% du PIB. Perspectives 2018-2019 En 2018, l’économie devrait enregistrer une croissance de 5,2% contre 4,9% en 2017. Cette évolution de la croissance serait imputable principalement aux secteurs tertiaire et primaire qui bénéficieraient d’une intensification des dépenses publiques consacrées aux cultures irriguées, la modernisation de l’agriculture pluviale dans le cadre de l’Initiative 3N et des projets structurants du développement rural appuyés par le Millénium Chalenge Corporation. Toutefois, les incertitudes liées aux aléas climatiques et aux menaces sécuritaires risquent de limiter les efforts du Gouvernement dans ce domaine. Les principales hypothèses qui sous-tendent les perspectives se présentent comme suit: ➢ Le Prix du baril de pétrole à 62,3 $U ; ➢ Les prix de l’uranium et de l’or resteraient stable; ➢ La sortie définitive du Nigeria de la récession ; ➢ Le renforcement de l’intégration régional ; ➢ La mise en œuvre efficace du PDES portant le taux d’investissement brut à 38,9% en 2018 et 40,4% en 2019 ; ➢ La poursuite de la mise en œuvre des réformes économique et financières (PGRF 2017-2020 et le PEF 2016-2020) ; ➢ La branche agriculture est projetée sur la base des tendances passées ; ➢ La production pétrolière 18517 et 20000 barils/j respectivement en 2018 et 2019. Sur la base des hypothèses ci-dessus, la croissance est attendue à 5,2% en 2018 et est projetée à 5,3% en 2019. Elle serait portée principalement par les secteurs secondaire et tertiaire avec des taux de croissance moyens respectifs de 5,9% et 5,6% sur la période 2018-2019 contre 4,5% pour le primaire. Le secteur secondaire bénéficierait du bon comportement des activités aurifères (+29,5%), les carrières (+7,2%), les activités de fabrication (+8,2%), la production et la distribution d’eau et d’électricité (+7,4%) et construction (+7,2%). 51 Quant au secteur tertiaire, il tirerait profit du dynamisme des branches commerce (+8,7%), hébergement et restauration (+7,2%) et de la reprise dans la branche communications (+7,2%) en prélude au sommet de l’UA en 2019 et de la mise en œuvre du PDES La situation de l’économie ainsi présentée trouve son origine dans plusieurs facteurs que sont : (i) les insuffisances en matière de gestion de l’économie, (ii) la faible diversification du secteur industriel, (iii) la rareté des infrastructures et services économiques, (iv) le faible développement des productions agro-sylvo-pastorales (ASP) et (v) l’environnement des affaires peu attractif. Défis majeurs Au regard du diagnostic de la situation économique, politique, sécuritaire et sociale, de l’évaluation de la prise en compte des Objectifs de Développement Durable (ODD) dans les politiques publiques et des leçons tirées de la mise en œuvre du PDES 2012-2015, il apparaît un certain nombre de défis majeurs à relever pour accroître le bien-être des nigériens. 3.1. Garantir davantage la sécurité des personnes et des biens La situation sécuritaire dans la sous-région, caractérisée par les rebellions armées et des attaques terroristes récurrentes, explique en quoi la sécurité est un défi crucial au Niger. Ceci est d’autant plus vrai que la sécurité est étroitement corrélée avec le développement dont elle est l’une des conditions sine qua non. Aussi les principaux défis du sous-secteur sont-ils la lutte contre le terrorisme, la nécessaire surveillance du territoire, la lutte contre la circulation des armes illicites, le trafic de drogue et la migration irrégulière, la prévention et la gestion des conflits, la lutte contre les attaques à mains armées et le vol de bétail. 3.2. Renforcer la bonne gouvernance Le premier volet de la bonne gouvernance est celui de la modernisation de l’Etat. L’amélioration de l’efficacité de l’administration est essentielle pour le développement économique et social. A ce titre, il est indispensable que les conditions d’un fonctionnement efficace des services publics soient renforcées. Il importe également que les conditions de viabilité des collectivités territoriales soient créées. Un autre pendant important du défi de la gouvernance est la consolidation de l’indépendance de la justice et le rapprochement de celle-ci du citoyen. Le problème de la gouvernance concerne également la problématique de la corruption. En effet, bien que des progrès notables aient été enregistrés en matière de lutte contre la corruption, le phénomène demeure relativement important. Il sied donc que des actions vigoureuses soient envisagées pour lutter contre la corruption à tous les niveaux. 3.3. Assurer la transition démographique La structure de la population et le rythme de sa croissance affectent l’atteinte des objectifs en matière de développement économique et social. En effet, cette forte croissance démographique entraine une énorme pression sur les ressources de manière générale et accentue la demande en services publics (santé, éducation, eau potable et alimentation) et de l’emploi. Cela contribue également à rehausser le ratio de dépendance démographique qui s’est établi à 112% en 2015. Les limites des politiques 52 mises en œuvre ces dernières années doivent conduire à un changement de méthode et à une mobilisation plus forte et mieux concertée de l’ensemble des acteurs. 3.4. Relever le capital humain La qualité des ressources humaines est la clé de voute du développement économique et social de toute nation. Des ressources humaines bien formées et en bonne santé réduisent le risque de se retrouver au chômage. Une bonne formation a trait non seulement à la qualité des enseignements mais aussi et surtout à l’adéquation de la formation aux besoins de l’économie. Aussi, le développement à long terme exige l’éducation pour tous. Une autre dimension majeure de la qualité des ressources humaines a trait à l’analphabétisme qui reste très élevé. En outre, la qualité du capital humain dépend aussi des prestations des services de santé pour tous, qui au regard de la couverture sanitaire, de la situation de la santé de la mère et de l’enfant et de la nutrition est à améliorer. 3.5. Poursuivre la promotion une croissance économique durable et inclusive L’évolution de la croissance telle qu’observée au cours des dernières années traduit une situation erratique qui n’est pas de nature à permettre au pays de réaliser ses objectifs de développement durable, inclusif et équitable. Tendre vers une véritable transformation structurelle de l’économie est un défi majeur pour le Niger. Les principaux éléments liés à ce défi concernent, entre autres, la faible diversification de l’économie, la faiblesse de l’entreprenariat, le faible développement des chaines de valeur agro-sylvo-pastorales, industrielles et minières, le problème du financement (faible niveau de consommation de crédits sur financement extérieur, faible taux de pression fiscale et de rationalisation des exonérations fiscales), la faible efficacité des dépenses publiques et le faible développement des infrastructures économiques (énergie, routes et transports, télécommunications, eau, etc.). 3.6. Renforcer la sécurité alimentaire et nutritionnelle L’éradication de la faim et de la malnutrition constitue le principal défi à relever. Les aspects de ce défi portent pour l’essentiel sur la diversification des productions agro-sylvo-pastorales, la sécurisation des systèmes de production agricole et animale, la promotion des chaines de valeur des produits agro- sylvo-pastoraux et halieutiques. On note également, la problématique de la transformation et l’approvisionnement régulier des marchés ruraux et urbains en produits agricoles et animaux et agro- alimentaires. En outre, le faible accès aux produits agricoles, pastoraux et halieutiques a un impact négatif sur l’état nutritionnel de la population. 3.7. Adapter les systèmes de production aux changements climatiques Le Niger fait face à une dégradation accélérée du couvert végétal, une fragilisation des écosystèmes et un appauvrissement de la diversité biologique. La récurrence des crises alimentaires et nutritionnelles due aux aléas climatiques est aussi une préoccupation permanente à laquelle il faut faire face. 2.8. Promouvoir le changement de comportements et mentalités Le recul de l’éthique au travail, notamment dans la fonction publique, le recul de la valeur du mérite, l’incivisme fiscal et par rapport au bien public, les perceptions sur les questions démographiques et 53 sur l’école et particulièrement la scolarisation des filles ne sont pas de nature à favoriser le développement. Le changement de ces comportements et de ces mentalités est indispensable pour la modernisation sociale, politique et économique du pays. III. Politique de développement à moyen terme Pour relever ces défis, dans un contexte de chocs exogènes persistants et poser les jalons d’une politique économique de moyen terme qui permettra d’impulser une dynamique de développement équilibré, porté par une forte croissance économique inclusive et durable reposant sur l’exploitation des importantes ressources minières et pétrolières, le Gouvernement a élaboré le Plan de Développement Economique et Social (PDES) 2017-2021. Il tire ses fondements de la SDDCI qui décline la vision du Niger à l’horizon 2035. A travers cette vision, le Niger affirme sa ferme volonté de transformation à tous les niveaux et surtout son désir d’éradiquer la pauvreté et les inégalités. Il est également fondé sur les orientations du «Programme de Renaissance Acte-2 ». Il capitalise les leçons tirées de la formulation et de la mise en œuvre du PDES 2012-2015 Le PDES 2017-2021 ambitionne de contribuer au développement du pays à travers cinq (5) axes stratégiques. Ils sont inter-reliés et reflètent, dans leur ensemble, les principales dimensions du développement humain durable. Il s’agit de : (i) la renaissance culturelle; (ii) le développement social et la transition démographique ; (iii) l’amélioration de la croissance économique ; (iv) l’amélioration de la gouvernance, paix et sécurité et (v) la gestion durable de l’environnement. IV. Principaux résultats de la mise en œuvre du PDES 2017-2021 à fin décembre 2017 L’impact attendu du PDES est « le bien-être de la population nigérienne est amélioré » qui est mesuré à travers deux indicateurs : l’Indice de Développement Humain (IDH) et la proportion de la population vivant en dessous du seuil national de pauvreté. Ce résultat sera atteint à travers les 5 axes stratégiques suivants : (i) la renaissance culturelle ; (ii) le développement social et la transition démographique ; (iii) l’accélération de la croissance économique ; (iv) l’amélioration de la gouvernance, paix et sécurité et (v) la gestion durable de l’environnement. Tableau 1: Indicateurs d'impact Impact Code Indicateur Référence Cibles Valeur atteinte 2017 2017 01 Indice de Le bien-être Développement 0,353 (2015) 0,364 0,370 (E) de la Humain (IDH) population 02 Proportion de la nigérienne population vivant en est amélioré 45,1% (2014) 40,80% 42,20% (E) dessous du seuil national de pauvreté 54 Source : INS L’IDH est passé de 0,353 en 2015 à 0,370 en 2017 pour une cible de 0,364. Cette amélioration de l’IDH serait essentiellement liée au progrès enregistré au niveau de l’espérance de vie à la naissance qui est passée de 61,4 ans en 2015 à 64,5 ans en 2017 en lien avec les progrès enregistrés dans le domaine de la santé. Pour ce qui est de la proportion de la population vivant en dessous du seuil national de pauvreté, elle est passée de 45,10 % en 2014 à une valeur estimée de 42,2% en 2017, soit un progrès de 4,30 points de pourcentage. V. PROGRAMME D’APPUI BUDGETAIRE 2017-2018 Le nouveau programme d’appui budgétaire pour la période 2017-2018 de la Banque mondiale pour le Niger s’inscrit parfaitement dans le PDES en particulier dans son axe 3 « Accélération de la croissance économique ». Le programme est structuré autour de trois composantes : (i) : Créer un cadre favorable à l’amélioration de la croissance en milieu rural ; (ii) : Instaurer un cadre légal favorable au développement durable du secteur d’électricité et des TIC ; (iii) amélioration des recettes publiques. 6.1 Réformes réalisées en 2017 Toutes les réformes programmées en 2017 ont été réalisées. La situation par composante et par action se présentent comme suit A) Créer un cadre favorable à l’amélioration de la croissance en milieu rural L’objectif des réformes prévues est d’améliorer la gouvernance du secteur, d’assurer une allocation efficace des ressources financières et de responsabiliser les acteurs à tous les niveaux. Il s’agit de bâtir une approche à la fois sectorielle et intersectorielle dans laquelle toutes les composantes de l’administration publique, le secteur privé, les communautés et les collectivités locales, le système financier, les organisations socioprofessionnelles, les organisations de la société civile et aussi les partenaires du Niger, chacun selon ses fonctions et rôles, puissent concourir à la réalisation des objectifs du programme et ce dans l’esprit de l’Initiative 3N. L’amélioration de la gouvernance et de la coordination du secteur est au cœur du cadre stratégique de l’initiative 3N qui prévoit un leadership fort de l’Etat et de ses administrations dans les processus de décision et d’orientation et un renforcement de la concertation des acteurs. Les actions mises en œuvre ont concerné : ➢ L’introduction d’un système de subvention électronique appelé E- subvention qui consiste à développer une base de données électronique des bénéficiaires en engrais et semences et à leur envoyer des bons électroniques par SMS leur indiquant les subventions qui leur ont été octroyées et le lieu où ils doivent les recevoir. Pour son opérationnalisation des tests pilotes ont été réalisés dans deux communes. 55 L’objectif principal de cette mesure est d’améliorer la productivité agricole par l’augmentation des terres cultivées couvertes par les semences sélectionnées et celle du taux d’utilisation d’engrais. Pour soutenir les ménages vulnérables, l’Etat nigérien intervient à travers la distribution gratuite et/ou la vente à prix modéré des intrants agricoles. Ce sont des sommes importantes d’argent qui sont injectées dans ces opérations sans attendre les résultats escomptés à cause d’une faiblesse du dispositif de distribution et de suivi évaluation. En effet, les véritables bénéficiaires de cette subvention ne sont pas toujours les mieux servis, car il apparait de réelle perdition tout au long de la chaîne de distribution. Pour assurer l’efficacité, la transparence et la traçabilité de l’octroi de ces paquets sous forme de subventions, la base de données est conjointement financée par deux projets financés par la Banque mondiale (PPAAO et PASEC) et permettra également de suivre l’utilisation des subventions et de mesurer leurs effets et impacts au niveau des utilisateurs. Le système fonctionne sur la base de trois éléments fondamentaux : une base de données des producteurs ; un répertoire des fournisseurs d’intrants et équipements agro-sylvo-pastoraux et halieutiques ; une plateforme électronique composée d’un serveur, d’un site web et de téléphones portables permettant la mise en relation des bénéficiaires des subventions et les fournisseurs d’intrants et équipements agro-sylvo-pastoraux et halieutiques. Ce modèle innovant permet de surmonter les problèmes inhérents à la distribution classique d’intrants et équipements agro-sylvo-pastoraux et halieutiques. Il a pour avantage de : cibler les producteurs bénéficiaires des subventions ; s’assurer que les intrants distribués sont bel et bien reçus par les bénéficiaires ; s’assurer que les subventions servent effectivement à payer les intrants livrés et reçus par les bénéficiaires ; mettre en adéquation les superficies des ménages bénéficiaires avec les quantités d’intrants distribués ; éviter les retards dans la livraison des intrants. ➢ L’introduction d’un programme de vulgarisation électronique (e-extension) visant la délivrance de services de conseils agricoles s’appuie sur les nouvelles technologies de l’information et de la communication, dans au moins une région. Ce programme sera mis en œuvre par le Réseau des Chambres d’Agriculture (RECA), avec qui le Ministère de l’Agriculture et de l’Elevage a signé un contrat de performance. Ce programme fait suite au constat que la demande de services agricoles est de plus en plus croissante alors que le nombre de conseillers agricoles et le financement du conseil agricole ont tendance à baisser. ll va comprendre plusieurs outils dont un centre d’appels, un serveur vocal - outil permettant de mettre à la disposition des producteurs agricoles des messages prédéfinis, enregistrés dans différentes langues locales - et des applications à l’usage des conseillers agricoles permettant la collecte et la diffusion de données. Le RECA vient de lancer le Centre d’appels pour une phase test de 2 mois visant la région de Tillabéry. Compte tenu des préoccupations des producteurs, deux thèmes ont été choisis : (i) La protection des cultures maraichères et le choix des semences ; (i) Les prix de gros des produits maraichers sur les marchés de Niamey et les tendances. 56 ➢ La promotion du crédit-bail. Le Gouvernement renforce le cadre légal des finances rurales en adoptant en conseil des Ministres la loi communautaire sur le crédit-bail et en la transmettant au Parlement pour transposition. Cette mesure vise non seulement à transposer la loi uniforme relative au crédit-bail dans les Etats membres de l’UEMOA, mais aussi et surtout à améliorer l’environnement juridique pour le développement de cette activité dans la zone. En effet, le crédit-bail a été reconnu comme un mode de financement souple et adapté aux différentes entreprises, notamment les Petites et Moyennes Entreprises (PME) qui éprouvent des difficultés à fournir des garanties pour l’obtention d’un crédit bancaire. Le Crédit-bail constitue une alternative innovante susceptible de répondre largement à cette problématique. L’introduction du Crédit-bail/Leasing sur le marché du financement du Niger contribuera de façon significative : ✓ A l’accès au financement d’une population de PME/PMI et Très Petites Entreprises et entrepreneurs qui en sont exclus pour l’heure, ✓ Au développement des investissements, tant mobilier qu’immobilier, et à la mise en place d’un parc de qualité, ✓ A la dynamisation du marché du financement de l’investissement qui en deviendrait progressivement plus concurrentiel, ✓ A la mise à la disposition des Systèmes Financiers Décentralisés les plus dynamiques de nouvelles ressources au travers des financements dont pourraient bénéficier leurs adhérents/clients. ✓ Au développement du marché des assurances par l’arrivée sur ce marché d’un nouveau segment de clientèle, ✓ A la naissance et au développement d’un marché financier à moyen terme, par les opérateurs du Crédit-bail/Leasing, pour leur refinancement, à travers tous instruments adéquats, existants comme l’émission d’emprunts obligataires, ou à créer comme le refinancement des contrats de crédit-bail auprès de la Banque Centrale. L’ordonnance relative au Crédit-Bail a été examinée et adoptée en Conseil des Ministres du jeudi 10 aout 2017. ➢ Le renforcement de l’impact des industries extractives sur l’économie locale à travers l’élaboration de dispositions relatives à la formalisation des artisans miniers dans le Code minier. Dans le domaine du pétrole, les activités de prospection, de recherche, d’exploitation et de transport des hydrocarbures au Niger sont régies par la loi n° 2007-01 du 31 janvier 2007. Après 10 ans de mise en œuvre, il est apparu des insuffisances dans ladite loi impactant négativement les activités de prospection et de promotion de l’investissement du secteur pétrolier. 57 La loi sur le nouveau code pétrolier a été élaborée pour corriger ces insuffisances en y introduisant des innovations notamment sur : • les obligations du titulaire d’une autorisation exclusive d’exploitation ; • le renforcement des mesures limitant les atteintes à l’environnement ; • l’obligation de paiement des bonus de signature et de production ; • le renforcement des achats locaux pour promouvoir le contenu local par le biais de la sous- traitance notamment. Pour ce qui est du domaine minier, il été fait le constat que malgré les efforts déployés dans l’organisation de l’artisanat minier depuis les années 80, les résultats enregistrés restent encore mitigés tant dans la maitrise de la production, de la commercialisation que des recettes de l’Etat. Par ailleurs, l’artisanat minier a beaucoup évolué ces dernières années avec la multiplication des sites d’exploitation artisanale de l’or dans les régions de Tillabéry et d’Agadez et l’utilisation de matériel et de produits chimiques dangereux pour l’homme et l’environnement. Pour prendre en charge ces évolutions, le gouvernement a adopté, le 30 juin 2017, l'ordonnance n° 2017-03, portant modification de l'ordonnance n° 93-16 du 02 mars 1993 portant loi minière. Cette ordonnance modifie les articles de la loi minière relatifs à l'exploitation minière artisanale. Elle réorganise cette activité en y ajoutant deux titres miniers à savoir l'autorisation d'exploitation minière semi-mécanisée et l'exploitation des haldes, terrils et résidus de mines et de carrières. Aussi, les objectifs de la réforme de la loi minière consistent notamment en l’encadrement et la sécurisation des acteurs, la sauvegarde de l’environnement ainsi que la maîtrise de la production et du circuit de commercialisation. La mise en œuvre de ces réformes du secteur minier et pétrolier permettra d’apporter une contribution plus significative à la croissance économique. B) Instaurer un cadre légal favorable au développement durable du secteur d’électricité et des TIC ➢ Le Gouvernement a rendu effectif le Fonds de Service Universel en créant un établissement public à caractère administratif dénommé « Agence Nationale pour la Société de l’Information (ANSI) et a nommé son Directeur Général Dans le domaine des Technologies de l’Information et de la Communication (TIC), en dépit des améliorations constatées, les problèmes persistants concernent : (i) la faible qualité de la communication téléphonique et internet, (ii) la faible pénétration de l’internet, (iii) la cherté du coût de la communication. Pour adresser ces problèmes, le Gouvernement s’est doté d’une stratégie nationale d’accès universel aux TIC. C’est dans ce cadre que le Gouvernement a adopté en conseil des Ministres le 20 juillet 2017 le décret portant création de l’ANSI qui est chargée de la mise en œuvre opérationnelle de la stratégie nationale d’accès universel aux TIC ainsi que les programmes et projets de développement des TIC sur toute 58 l’étendue du territoire national afin d’assurer un accès universel au service de meilleures qualités et à des prix abordables. Ce qui contribuera à rendre le secteur privé plus compétitif et l’administration publique plus efficace. ➢ Le Gouvernement a procédé à une réduction de la TATIE et la suppression de la partie fixe de la TURTEL pour encourager le développement du secteur des TIC Cette mesure s’inscrit dans le même souci du Gouvernement d’assurer un accès universel aux services des communications en instaurant une fiscalité appropriée par la réduction de la Taxe sur la Terminaison du Trafic Entrant (TATIE) et suppression de la Taxe d’Utilisation des Réseaux de Télécommunications (TURTEL). En effet, il a été fait le constat que la (TATIE) de 20% sur les recettes des opérateurs mobiles a entrainé une chute de 37% du trafic international entrant. Si cette taxe n’avait pas été introduite, la stabilité du volume du trafic et la hausse des prix du trafic entrant dans le pays auraient permis au Gouvernement d’obtenir les mêmes recettes fiscales. Cette politique de promotion des TIC sera poursuivie par la mise en œuvre des réformes définies dans la stratégie nationale en la matière afin que le secteur contribue à créer les conditions d’une croissance économique plus forte, soutenue et créatrice d’emplois notamment pour la frange la plus jeune des populations nigériennes. ➢ Le Gouvernement a (i) fixé des nouveaux tarifs et a assuré leur publication dans les supports adéquats, et (ii) procédé à la restructuration de la dette de la NIGELEC. En matière d’énergie, le programme de développement d’infrastructures résilientes, durables et de qualité notamment le barrage de Kandadji avec une production de 130MW sera poursuivi. Des investissements à moyen terme dans le domaine des énergies renouvelables notamment le solaire (centrale solaire d’Agadez, Malbaza, électrification solaire, etc.) seront également réalisés. Ces investissements seront accompagnés par les mesures suivantes (i) la formulation d’une politique avec des objectifs ambitieux d’électrification notamment en zone rurale, (ii) l’ouverture du secteur à la concurrence pour la production, et de la libéralisation complète du transport et de la distribution de l’électricité afin de permettre la mise en relation directe des producteurs privés avec leur clientèle située hors du réseau interconnecté, (iii) la standardisation des équipements et des approches en préparant pour chaque région un schéma directeur d’électrification. La mesure sur la restructuration de la dette de la NIGELEC (Société Nigérienne d’électricité) consiste en la transformation de la part de l’Etat dans le financement de la centrale thermique Gorou Banda en participation à l’augmentation du capital de la NIGELEC à hauteur de 60 milliards FCFA. Ce montant représente le cumul des financements contractés par l’Etat et qui ne sont pas rétrocédés à la NIGELEC. Cette mesure, combinée à la mise en œuvre des nouveaux tarifs au premier trimestre 2018, permettra de maintenir le ratio fonds propres sur capitaux permanents au-dessous de 50%, qui est la norme d’équilibre financier minimum et de réaliser l’équilibre bilanciel ainsi que de financer le programme d’investissement du Gouvernement visant à satisfaire la demande d’énergie du pays. C) Amélioration de la gestion des finances publiques ➢ Le Gouvernement a procédé à la révision de certaines dispositions du Code des Investissements et de son décret d’application 59 Cette mesure consiste plus spécifiquement en : • La révision de l’article 34 de la loi N°2014-09 portant Code des investissements relativement à la taxation des matières premières. ➢ Le Gouvernement a procédé à l’extension du champ de la TVA en soumettant à cette taxe certaines activités, biens et produits bénéficiant auparavant d’exonérations notamment les produits agricoles après acquisition auprès de producteurs ruraux et de certaines activités, biens et produits. (article 219 de la Section I du Titre III du Livre premier du Code Général des Impôts) Ces mesures sont prises en réponse à la demande de la Commission de l’UEMOA qui a relevé la non application de certaines dispositions notamment en matière de TVA. Elles s’inscrivent dans la dynamique de la rationalisation des exonérations en réduisant les exonérations fiscales contenues dans les dispositions nationales notamment le code des investissements. Elle est en adéquation avec la politique de la gestion des finances publiques qui reprend les ambitions affichées dans le Programme de Réformes en matière de Gestion des Finances Publiques (PRGFP 2017-2020), adopté en janvier 2012. L’objectif global de ce programme est de co ntribuer à la stabilisation du cadre macroéconomique et au renforcement des finances publiques. Les réformes portent sur l’internalisation des directives de l’UEMOA, l’informatisation de toute la chaîne budgétaire, la formation de tous les acteurs de la gestion des finances publiques et le mécanisme de mise en œuvre des réformes. 6.2 Réformes réalisées en 2018 La mise en œuvre des réformes convenues au titre de l’année 2018 est présentée ci-après : Pilier 1 : Créer un cadre favorable à l’amélioration de la productivité et de la croissance en milieu rural ➢ Pour accroître la disponibilité des intrants agricoles, le gouvernement a : (i) déployé la distribution des bons électroniques à 20 communes : (ii) pris un acte juridique pour mettre en place des mécanismes de production de semences communautaires (iii) opérationnalisé la Division de certification des semences en délivrant 30 certificats aux entités impliquées dans la multiplication des semences modernes. Cette mesure est une continuité des mesures entreprises 2017 dans le cadre de l’amélioration de la productivité agricole par l’augmentation des terres cultivées couvertes par les semences sélectionnées et celle du taux d’utilisation d’engrais. En effet, vingt (20) communes sont déjà couvertes par le système e-voucher. Des travaux préparatoires sont été effectués en cours pour la mise en place des mécanismes de production communautaire de semences, il s’agit essentiellement de l’élaboration de la stratégie d’appui aux systèmes communautaires de production des semences de qualité dont l’objectif global est de rendre accessibles ces semences aux producteurs pour une amélioration de la productivité et de la production. Pour rendre opérationnelle la division de certification des semences, soixante-onze (71) certificats ont été émis sur une cible de 30. 60 ➢ Pour renforcer la gouvernance sur le marché des engrais, le gouvernement a pris un acte légal pour créer (i) l'Observatoire du marché des engrais au Niger (OMEN), et (ii) le Comité Technique des Engrais du Niger (COTEN) La production agricole au Niger est devenue de plus en plus dépendante des aléas climatiques et des sols de moins en moins fertiles. Les terres agricoles perdent en moyenne 377 000 tonnes d’éléments nutritifs qui ne sont pas compensés par manque de disponibilité et d’accès aux quantités d’engrais nécessaires. En effet, l’analyse de la performance du système des engrais a mis en évidence : - le cout élevé de l’importation et de la distribution des engrais ; - le problème de subvention à faible ciblage des producteurs nécessiteux ; - les engrais livrés en retard et en quantités limitées ; - des prix trop élevés en dépit de la subvention ; - les systèmes d’approvisionnement et de distribution peu performants pour atteindre les objectifs assignés par le gouvernement. Il ressort par ailleurs que : - la moyenne de consommation d’engrais au Niger est estimée à 3kg/ha/an, pour une moyenne africaine de 12kg/ha/an ; alors que les besoins en engrais du Niger sont de l’ordre de 20 kg/ha/an, soit un besoin potentiel national de 200 000 tonnes d’engrais par an ; - la moyenne annuelle d’importation des engrais sur les 10 dernières années s’établit entre 20 000 et 30 000 tonnes, soit 10% à 15% seulement des besoins potentiels. Pour faire face aux défis d’atteindre les objectifs de l’Initiative 3N et dans la perspective de la mise en œuvre de l’important programme MCA-Niger, le Gouvernement a entrepris cette réforme du secteur des engrais avec l’adoption du décret n°2018-046 PRN/MAG/EL du 12 janvier 2018, portant adoption du plan de réforme de secteur des engrais. Cette réforme du secteur des engrais vise à : (i) accroitre la disponibilité des engrais dans tout le pays, (ii) garantir l’approvisionnement des marchés grâce à l’émergence d’un secteur privé dynamique des engrais ; (iii) améliorer l’accessibilité des engrais grâce à une meilleure compétitivité des prix ; (iv) établir un mécanisme de distribution ciblée des engrais subventionnés en faveur des groupes vulnérables. Pour la mise en œuvre de cette réforme, deux organes ont été créés à savoir : • un Observateur du Marché des Engrais au Niger (OMEN) ; • un Comité Technique des Engrais (COTEN). Ces organes sont mis en place pour s’assurer que les agriculteurs bénéficient des effets positifs attendus à savoir l’amélioration de la sécurité alimentaire et nutritionnelle des populations et l’atteinte de l’objectif « faim zéro ». Il convient de souligner que le Comité Technique des Engrais (COTEN) a été créé par arrêté du Ministre d’Etat, Ministre de l’Agriculture et de l’Elevage. Par ailleurs, l’OMEN a pour principales missions de surveiller et de réguler les approvisionnements et la distribution des engrais au Niger. ➢ Pour renforcer l'inclusion financière dans les zones rurales, le gouvernement a adopté un décret régissant le système de warrantage. Le financement par warrantage est une pratique qui se fait à travers une avance de fonds consentie par une banque sur la base d’un stock de marchandises placées en garantie dans un magasin de stockage, le remboursement du crédit étant conditionné par la vente de ces marchandises. Cette pratique a connu un succès remarquable au Niger. Cependant, il a été relevé quelques facteurs 61 limitatifs à sa pérennité, en particulier la dégradation de la majorité des magasins par manque de moyens d’entretien et l’absence d’un cadre juridique approprié et favorable au développement de cette activité d’entreposage et du financement agricole. L’adoption de ce décret vient combler ce vide juridique et permettre d’une part de corriger les insuffisances relevées, notamment le risque de contrepartie auquel les banques et les systèmes financiers décentralisés sont exposés et d’apporter des améliorations à la pratique actuelle du warrantage au Niger d’autre part. ➢ Le gouvernement a mis en œuvre le plan d'apurement multi annuel de remboursement des arriérés des revenus provenant secteurs minier et pétrolier aux communes concernées, dont 5% des arriérés pour le premier transfert. Depuis les années 2000, le gouvernement a entrepris des projets de réformes dans les secteurs clés de l’économie nationale afin de réduire la part prédominante du secteur agricole. Ainsi, le secteur des mines et industries extractives a connu de profondes réformes allant vers une transparence dans gestion des ressources minières mais aussi vers une meilleure utilisation de fonds générés par ce secteur. C’est dans ce cadre que l’ordonnance n°93-16 du 02 mars 1993, portant loi minière, a été modifiée et complétée par la loi n°2006-26 du 09 aout 2006 et la loi n°2014-08 du 16 avril 2014. Ces principales modifications témoignent de l’engagement de l’Etat du Niger à être à l’avant-garde du respect de l’environnement et de la défense des droits des populations dans le partage des ressources minières. Cet élan de redistribution a été matérialisé par les dispositions des lois précitées où l’Etat a concédé 15% de recettes minières aux collectivités territoriales des régions minières (il s’agit de la région d’Agadez pour l’uranium, de Diffa pour le pétrole et de Tillabéry pour l’or). A travers ces mesures, l’Etat entend d’une part satisfaire la demande sociale dans les zones d’exploitation minière et d’autre part créer les conditions de développement économique de ces régions. Cependant, le mécanisme de rétrocession des recettes minières a connu des dysfonctionnements liés aux difficultés de trésorerie de l’Etat dues au contexte sécuritaire qui sévit au Niger depuis 2010. Toutefois, le gouvernement s’est engagé à mettre en œuvre le plan d’apurement des redevances par matières premières et par régions sur la 2018-2022 tel que indiqué dans ledit plan transmis à la Banque mondiale. Aussi, le Gouvernement procédera, comme convenu, au paiement de 5% du reste à payer qui s’élève à vingt-six milliards neuf cent cinquante-sept millions deux cent cinquante-cinq mille cinq cent cinquante-quatre francs CFA 26 957 255 554 F CFA, soit environ 1 347 862 778 F CFA. En ce qui concerne l’indicateur relatif à cette action préalable, on note que le processus d'attribution de permis aux mineurs artisanaux a démarré et avance bien. En effet, les orpailleurs ont commencé à se regrouper en coopérative et en Groupement d’Intérêt Economique et en sociétés. Ainsi, ces personnes physiques ou morales ont bénéficié entre autres de : • 78 autorisations d’exploitation minière semi-mécanisée de l’or ; • 02 autorisations d’exploitation minière semi-mécanisée de cuivre ; • 09 autorisations d’exploitation des haldes, terrils et résidus de mine et de carrière de l’or ; • 01 autorisation d’exploitation des haldes, terrils et résidus de mine et de carrière de cassitérite ; • 02 autorisations d’exploitation artisanale de l’or ; • 15 agréments à la commercialisation de l’or ; 62 • 01 agrément à la commercialisation de cuivre ; • 03 agréments à la commercialisation de cassitérite ; • 02 agréments à la commercialisation des pierres semi-précieuses et précieuses. En plus, une convention d’établissement entre la République du Niger et la société AFRIOR SA pour l’installation et l’exploitation d’une chaine d’affinage de l’or a été signée. En dix (10) mois (aout 2017 à mai 2018) d’application des nouvelles dispositions, il a été mobilisé des recettes de 705 584 766 FCFA contre 28 000 000 FCFA réalisées pendant les sept (7) premiers mois de l’année 2017. Pilier 2 : Soutenir les secteurs porteurs de croissance ➢ le Gouvernement a publié en ligne sur le site web de l’ARTP les états financiers de 2015 à 2017 de cette institution, et dans le Journal Officiel le Rapport général du Commissaire aux Comptes sur ces états financiers. Cette mesure s’inscrit dans le cadre de la mise en œuvre de l’engagement du Gouvernement de promouvoir la transparence dans le secteur des télécommunications afin qu’il contribue à créer les conditions d’une croissance économique plus forte, soutenue et créatrice d’emplois notamment pour la frange la plus jeune des populations nigériennes. En outre, le Gouvernement s’engage à mettre en place un cadre de concertation public-privé visant à élaborer une feuille de route pour renforcer le développement du secteur des télécommunications, y compris concernant son cadre légal et réglementaire. Cette plateforme de concertation permettrait une consultation avec tous les acteurs pertinents du secteur et a fortiori, le renforcement de la gouvernance, la transparence et la performance du secteur. ➢ Le Gouvernement a mis en œuvre un projet pilote de connectivité ciblant au moins une zone rurale financée (entièrement ou partiellement) par le Fonds de Service Universel. Cette action s’inscrit dans le cadre des « villages intelligents », un axe stratégique de l’Agence Nationale pour la Société de l’Information (ANSI) visant à faire des TIC un véritable outil “transversal” de développement, un outil additionnel d’unité Nationale, de communication pour la paix, de décentralisation, de démocratisation et de responsabilisation. Un outil de création d’emplois pour la jeunesse, un outil d’expansion de la cause des femmes, un outil d’amélioration de l’éducation et d’accès aux soins de santé pour tous, enfin un outil permettant d’améliorer la Défense et la Sécurité de notre territoire. En effet, la commune de Fashi a été choisie comme zone pilote. Il a été mis en place un pont de contact comprenant un guichet de transfert d’argent, un autre pour le paiement des salaires et un cyber-café. Le Premier Ministre a procédé à l’inauguration dudit centre le 29 juin 2018. ➢ Le gouvernement a mis en œuvre le premier ajustement tarifaire de l'électricité par un décret. Les nouveaux tarifs sont mis en œuvre depuis le 1er janvier 2018. En effet, les principales innovations ont porté sur l’introduction d’un tarif social, le rééquilibrage de la répartition des couts fixes et variables, l’adéquation des tarifs de basse et moyenne tension et la fusion de la haute et moyenne tension. Le tarif social a connu une baisse de 33,2% pour les usagers 63 consommant au plus 50 Kw par mois. Cette mesure a touché plus de 100 000 abonnés selon l’ARSE. La réduction a été aussi appliquée au niveau de l’éclairage public de l’ordre de 34%. En dehors des réductions sur le tarif social, les augmentations vont de 8 à 48% dans les autres catégories. Ces nouvelles mesures visent à aider à aider les couches sociales à faible consommation, susciter l’économie d’énergie par la lutte contre le gaspillage quotidien de l’électricité et procurer au système électrique national les ressources nécessaires aux investissements pour l’atteinte d’un taux d’accès de 60% en 2035. La nouvelle méthodologie va permettre de garantir l’équilibre financier du secteur, 24 ans après le gel des tarifs d’énergie électrique applicables aux usagers publics. Aussi, cette nouvelle mouture tarifaire est mise en application pour mettre fin à l’incapacité de la NIGELEC à assurer, sur le long terme, la continuité de service public d’électricité sur le territoire national en matière de qualité et de couverture. ➢ Le gouvernement a signé le contrat de concession de la NIGELEC aligné sur le nouveau cadre légal et réglementaire. Conformément aux dispositions de la loi n° 2016-05 du 17 mai 2016, portant Code de l’Electricité, les activités de production, de transport, d’importation, d’exportation, de transit, de distribution et de commercialisation de l’énergie électrique en République du Niger, constituent le service public de l’énergie électrique. Les activités du service public de l’énergie électrique peuvent être déléguées, sous forme de concession, d’affermage, de régie intéressée ou de toute autre forme de délégation, suivant les conditions fixées par les textes en vigueur. Cependant, les activités de production, de transport et de distribution sont déléguées ensemble, sous forme de concession. Au Niger, c’est la Société NIGELEC qui exerce les activités de production, de transport et de distribution sous le régime de concession avec une dérogation accordée à la SONICHAR dans la région d’Agadez pour la production et la vente de l’énergie électrique à la NIGELEC et aux sociétés minières d’Arlit. A ce jour, les activités de service public assurées par la NIGELEC sont régies par le Traité de concession signé le 03 mars 1993 avec l’Etat du Niger pour une durée de 50 ans. Or, le nouveau Code de l’Electricité dispose en son article 81, que les Conventions signées entre l’Etat et les délégataires actuels dont la NIGELEC, restent en vigueur jusqu’à la signature de nouvelles Conventions de délégation, dans un délai de deux ans à partir de l’entrée en vigueur dudit Code. Il convient de rappeler qu’en plus de l’ouverture progressive du sous-secteur de l’électricité à des opérateurs autres que la NIGELEC et la SONICHAR, déjà consacrée dans le Code de l’Electricité de 2003, le Code de l’Electricité de 2016 a introduit de nouvelles dispositions. Il s’agit principalement de : • la régulation du sous-secteur de l’électricité ; • l’accès des tiers au réseau de transport de l’énergie électrique ; • la possibilité de recours à la production indépendante privée pour le renforcement des capacités de production ; 64 • la possibilité d’attribuer aux opérateurs qui le désirent, des concessions de distribution et de commercialisation dans des périmètres déterminés, notamment l’électrification rurale. Par ailleurs, le décret d’application n° 2016-514/PRN/ME/P du 16 septembre 2016, fixant les conditions et les modalités de conclusion des Conventions de délégation et d'attribution des licences dans le cadre du service public de l'énergie électrique précise en son article 20 que les Conventions en cours doivent être mises en conformité avec les nouvelles dispositions du Code de l’Electricité dans un délai de deux (2) ans. ➢ Afin de réduire les fraudes et pertes fiscales, le gouvernement a (i) déployé SYDONIA World dans trois des huit bureaux à la douane qui restent à être connectés et avec les bureaux des douanes du Togo et du Bénin et (ii) opérationnalisé la bancarisation des paiements à la DGI et à la DGD Dans le cadre de son processus de modernisation, l’Administration des Douanes a réalisé l’interconnexion de toutes les Directions Régionales au site centrale informatique de la Douane à travers la fibre optique de NIGER TELECOMS. En plus, pour assurer la continuité du service, même en cas de rupture des connexions par fibre optique, l’Administration des Douanes a réalisé des liaisons secours à travers des réseaux par VSAT entre les sites distants et par Boucle Radio Local (BRL) entre les sites locaux. Ainsi, la réalisation de l’interconnexion a rendu possible la migration à SYDONIA World de tous les bureaux des douanes. Elle a aussi permis la généralisation du transit électronique national avec la prise en charge électronique des documents de transit aux bureaux de destination dès leur émission par les bureaux d’entrée. Il convient de rappeler que SYDONIA est un système douanier automatisé qui a été développé par la Conférence des Nations Unies pour le Commerce et le Développement (CNUCED) en 1981, à la demande de la CEDEAO, en vue de faciliter la production des statistiques du commerce extérieur. A son tour, la CEDEAO a recommandé l'exploitation de ce système à ses Etats membres. C'est ainsi que ''le Niger a adhéré à ce projet qui, en plus de la production des statistiques du commerce extérieur, permet la facilitation, l'amélioration et la sécurisation des transactions commerciales. Le programme SYDONIA a démarré depuis 1986 et a connu plusieurs versions jusqu'à la toute dernière à savoir SYDONIA World. En ce qui concerne la bancarisation des paiements, celle-ci est effective à la DGI et à la DGD. ➢ Pour sécuriser les fonds d'entretien routier et améliorer leur gestion, le gouvernement a changé le statut de la CAFER en un fonds routier de 2ème génération par décret. Le Gouvernement a adopté le décret portant approbation des statuts du Fonds d’Entretien Routier « FER ». Ce décret est pris en application des dispositions de l’article 11 de la loi n° 2017-37 du 22 mai 2017, portant création d’un établissement public de financement dénommé « Fonds d’Entretien Routier » (FER) qui dispose que les statuts dudit établissement sont approuvés par décret pris en Conseil des Ministres. Le FER, dénommé jadis Caisse Autonome de Financement et d’Entretien Routier (CAFER) a entre autres missions : le recouvrement des ressources affectées à l’entretien du réseau routier national et le paiement des prestations conformément au manuel de procédures et aux programmes adoptés par le Conseil des Routes. 65 Le Fonds d’Entretien Routier est un outil de promotion et de développement de l’entretien routier de deuxième génération dont les principes de base sont : l’autonomie de gestion, l’intervention directe du secteur privé dans son administration, la perception directe des redevances et le financement aussi bien de l’entretien routier courant que de l’entretien routier périodique. L’approbation des statuts du FER permettra à cette structure de disposer du cadre réglementaire nécessaire à l’accomplissement de ses missions. Le décret portant approbation des statuts du Fonds d’Entretien Routier « FER » a été adopté lors du Conseil des Ministres du vendredi 06 juillet 2018. Le Niger demeure confronté aux effets négatifs de facteurs exogènes que sont notamment les chocs climatiques, sécuritaires, et de la baisse des prix des produits miniers. Ces effets continuent à se traduire par une aggravation des déficits budgétaires, particulièrement en 2017 et 2018, qui interviennent dans un contexte d’accroissement significatif des besoins de financement nés de la prise en charge des questions sécuritaires et de la satisfaction de la demande sociale de plus en plus importante. Toutefois, à la faveur des réformes structurelles (sectorielles et fiscales), le cadre macroéconomique est globalement satisfaisant, la croissance économique positive, la gouvernance en amélioration et le processus démocratique en bonne marche. Le Gouvernement est déterminé à poursuivre et à accélérer la mise en œuvre de son programme de réformes de gestion des finances publiques convenues avec les partenaires. C’est dans ce contexte que le Gouvernement est déterminé à poursuivre les réformes en cours qui s’avéreraient nécessaires pour créer les conditions de renforcement de la résilience de l’économie nigérienne par sa diversification, l’amélioration de la gestion des finances publiques au moyen de mesures budgétaires et fiscales centrées sur l’augmentation des recettes et la rationalisation des dépenses publiques ainsi que par une politique d’endettement prudente qui permettra le financement adéquat des investissements publics tout en assurant la viabilité de la dette. Outre les réformes entreprises et considérées comme actions préalables 2018, le Gouvernement s’est engagé à mettre en œuvre des réformes additionnelles pour renforcer la matrice des mesures du Niger. Parmi ces réformes figure le renforcement du maillage territorial. Conformément au Programme des réformes de gestion des finances publiques (PRGFP) 2017-2020 adopté le 25 février 2017 par le Gouvernement de la République du Niger et ses partenaires techniques et financiers, la Direction Générale des Impôts (DGI) a fait l’objet d’une évaluation selon la méthodologie du Tax Administration Diagnostic Assessment Tool (TADAT) dont le but est de connaître les forces et les faiblesses de notre Administration fiscale par rapport aux normes internationales. Les résultats de cette étude insinuent que la DGI doit faire des efforts pour alléger les procédures et opérations fiscales. Le renforcement du maillage territorial s’inscrit dans cette optique. Les objectifs assignés à cette réforme se déclinent ainsi qu’il suit : - restaurer l’égalité devant l’impôt et l’équité du système fiscal ; - garantir un service de proximité au contribuable à travers la création des nouveaux services fiscaux ; 66 - améliorer le rendement de certains impôts notamment l’impôt synthétique et la taxe immobilière à travers l’élargissement et la maîtrise de leur assiette ; - améliorer la qualité du service au contribuable en réduisant significativement les coûts des opérations fiscales. Pour répondre à ces objectifs, des nouvelles structures (recettes et centres d’impôts) ont été créées comme suit : • Région de Niamey : la création de deux Directions régionales (Niamey Nord et Niamey Sud), la création de 4 recettes des Impôts (Grand marché, Katako, Wadata et Yantala), 4 centres des Impôts (Grand marché, Katako, Wadata et Yantala ) et 1 centre des impôts fonciers (Yantala) ; • Région de Maradi : 2 recettes (recette du Grand marché et recette des impôts de Gazaoua) et deux centres des impôts à Aguié et Grand marché Maradi ; • Région de Tahoua : 2 recettes (celle de Malbaza et celle de Galmi) ; • Région de Tilabéri : 2 recettes (celle de Balleyara et celle de Torodi) ; • Région de Zinder : 1 recette (celle de Marché Dollé) et un centre des Impôts marché Dolé. Le choix de ces sites s’explique par le souci d’une plus grande couverture des services fiscaux notamment au niveau des départements nouvellement créés et des grands centres urbains en vue d’atteindre les objectifs sus-évoqués. Dans cette perspective, le Gouvernement sollicite l’appui de la Banque mondiale par l’octroi de la deuxième tranche d’appui budgétaire pour le compte de l’année 2018 dans les meilleurs délais. VI. CADRE INSTITUTIONNEL DE MISE EN ŒUVRE Le Ministère du Plan a la responsabilité de l’exécution de la suite du programme, en parfaite synergie avec les Ministères sectoriels et les structures concernés par la mise en œuvre des réformes et mesures. Niamey, le 26 Octobre 2018 Ministre du Plan, Gouverneur de la Banque mondiale pour le Niger 67 REPUBLIC OF NIGER LETTER OF DEVELOPMENT POLICY (Unofficial Translation) 2018 BUDGET SUPPORT CREDIT LETTER OF DEVELOPMENT POLICY October 2018 I. CONTEXT Niger is a vast, landlocked Sahelo-Saharan country with an area of 1,267,000 square kilometers. Desert covers more than half the country. It is subject to unpredictable, erratic, and insufficient rainfall in time and space. Niger faces a fragile security situation owing to threats and direct attacks in the country from terrorist groups operating in three of its bordering countries: Nigeria, Mali, and Libya. Like in the other G5 Sahel countries, this security challenge continues to weigh on the country’s socio- economic prospects, in particular on its public finances. In addition to these constraints, the population is growing at a rate of 3.9% and the fertility rate is 7.1 children per woman. Both figures are among the highest in the world. Volatility in uranium and oil prices is the primary risk overhanging the macroeconomic outlook for 2018-2019. II. The Macroeconomic Context Evolution of Macroeconomic Indicators in 2017 The rate of growth in real GDP is estimated at 4.9% in 2017, the same as in 2016. A breakdown of growth by sector of the economy gives the following results: ➢ The primary sector posted an estimated growth rate of 5.1% in 2017, compared with 9.5% in 2016. This result is explained by the performance of the agricultural sector, where growth fell from 13.6% to 4.3%. This sector represents 42% of GDP and contributed 2 percentage points to real GDP growth; 68 ➢ Growth in the secondary sector increased from 3.4% in 2016 to 6.0% in 2017. This trend primarily reflects growth in oil production, which increased from 6.013 million barrels to 6.67 million barrels in 2017 (+10.8%). The contribution of the secondary sector to growth is estimated at 0.9 percentage points, accounting for 17% of GDP; ➢ Activity in the tertiary sector increased by 3.9% in 2017 compared with 3.0 percent in 2016 on the back of good performances in trade, transport, accommodation, and communication. Its contribution to growth is estimated at 1.7 percentage points, accounting for 41% of GDP. Annual inflation came to 2.4% on average in 2017, which is below the community standard of 3%. This result was due to targeted actions to distribute inputs free of charge and/or sell them at reduced prices to support vulnerable households during the lean period. In terms of public finances, the budget deficit (overall budget balance including grants as a percentage of GDP) improved to 5% of GDP in 2017, compared with 6.1% in 2016 thanks to the efforts of the financial authorities and to the rationalization of government expenditure. The share of security expenditure in total budgetary expenditure increased from 16.2% in 2016 to 17.3% in 2017, which is well in excess of the annual target under the Renaissance Act II Program (10%). The tax ratio is estimated at 13.0% in 2017, compared with 13.5% in 2016. The overall external balance was negative in 2017 as a result of a deficit in the balance of current account transactions, partially offset by a surplus in the capital and financial transactions account. The current account deficit improved by 34.9 billion to 665.4 billion CFA francs in 2017, compared with 700.3 billion CFA francs in 2016 and 878.7 billion in 2015. This was due to the secondary income account, which benefited from increases in budget support received by the state (budget support went from 76.6 billion CFA francs in 2015 to 66.2 billion in 2016 and 155.4 billion in 2017, i.e. 110.8 billion CFA francs per year on average) and in worker remittances (which increased by 27.5% in 2017, compared with 1.3% in 2016 and 0.3% in 2015). Regarding the WAEMU convergence criteria, Niger met two of the five criteria in 2017—namely the inflation rate and the debt ratio (41.7%<=70%)—like in 2016. The criteria it did not meet were the budget balance including grants as a percentage of GDP (-5.2%), the tax ratio, and the payroll as a percentage of tax revenue (43.6%, which is higher than 35%). Regarding the monetary situation over the period 2015-2017, net foreign assets contracted and domestic debt and the money supply expanded. Net foreign assets declined by 0.3% from end- December 2016. At end-December 2017, the stock of domestic credit had increased by 82.1 billion CFA francs, or +10.0% compared with December 2016, to 899.3 billion CFA francs. This trend resulted from a deterioration in the net position of the government of 49.8 billion CFA francs and an increase in credit to the economy of 5.8 billion CFA francs. At the same time, the stock of credit to the economy increased by 5.8% to 780.3 billion CFA francs at end-December 2017. On average over the period 2015-2017, net foreign assets represented 12.8% of GDP. Credit to the economy, meanwhile, accounted for 16.0% of GDP between 2015 and 2017. 69 OUTLOOK 2018-2019 In 2018, the economy is expected to grow at 5.2%, compared with 4.9% in 2017, primarily on the back of the tertiary and primary sectors. These sectors are set to benefit from an increase in government expenditure on irrigated cropping, the modernization of rain-fed agriculture under the 3N Initiative, and anchor projects in rural development with support from the Millennium Challenge Corporation. However, uncertainties relating to climate change and security threats could undermine the government’s efforts in this area. The main assumptions underlying the outlook are as follows: ➢ An oil price of USD 62.30; ➢ Stable uranium and gold prices; ➢ A definitive exit from recession in Nigeria; ➢ Strengthening regional integration; ➢ The effective implementation of the PDES (Economic and Social Development Plan), lifting the gross investment rate to 38.9% in 2018 and to 40.4% in 2019; ➢ Continued implementation of economic and financial reforms (PRGF 2017-2020 and PEF 2016- 2020); ➢ A continuation of past trends in the agricultural sector; ➢ Oil production of 18,517 and 20,000 barrels per day in 2018 and 2019, respectively. Based on the above assumptions, growth is forecast to reach 5.2% in 2018 and 5.3% in 2019. It is expected to be driven primarily by the secondary and tertiary sectors, with average growth rates of 5.9% and 5.6%, respectively, over the period 2018-2019, compared with 4.5% for the primary sector. The secondary sector is likely to benefit from good performances in gold mining (+29.5%), quarrying (+7.2%), manufacturing (+8.2%), production and distribution of water and electricity (+7.4%), and construction (+ 7.2%). The tertiary sector, meanwhile, is expected to benefit from the dynamism of commerce (+8.7%), accommodation and food services (+7.2%), and the recovery in the communications sector (+7.2%) in the lead-up to the African Union summit in 2019 and the implementation of the PDES. Several noteworthy factors have influenced the evolution of the economy: (i) shortcomings in terms of economic management, (ii) the low diversification of the industrial sector, (iii) scarcity in infrastructure and economic services, (iv) weak development of agro-sylvo-pastoral production, and (v) an unattractive business environment. Major Challenges The diagnosis of the economic, political, security, and social situation, the assessment of the appropriation of the Sustainable Development Goals (SDGs) in public policy, and the lessons learned 70 from the implementation of the PDES 2012-2015 raise a number of major challenges for improving the wellbeing of the Nigerien people. 3.1. Ensuring Greater Security for People and Property Armed rebellions and recurring terrorist attacks illustrate just how crucial the challenge posed by the security situation is for Niger. This is especially the case given that security is closely correlated with development, for which it is a precondition. The main challenges facing the subsector are the fight against terrorism, the need for territorial surveillance, the fight against illegal arms trafficking, drug trafficking and clandestine migration, conflict prevention and management, the fight against armed attacks, and livestock theft. 3.2. Strengthening Good Governance One precondition of good governance is the modernization of the state. Improving the efficiency of the civil service is essential to economic and social development. As such, it is vital that the conditions for the efficient functioning of public services are strengthened. The conditions for sustainable local authorities must also be created. Another important governance challenge is the consolidation of the independence of the judiciary and its democratization. Governance problems are also affected by corruption. Although significant progress has been made in the fight against corruption, the phenomenon remains significant. It is therefore appropriate that vigorous measures are planned to combat corruption at all levels. 3.3. Ensuring the Demographic Transition The structure of the population and the pace of its growth are barriers to meeting the economic and social development goals. Indeed, strong population growth places huge pressure on resources in general and drives up demand for public services (healthcare, education, drinking water, and food) and employment. It also contributes to raising the demographic dependency ratio, which stood at 112% in 2015. The limits of the policies implemented in recent years must lead to a change in methodology and to a greater and better-coordinated mobilization of all stakeholders. 3.4. Lifting Human Capital Quality human resources are the cornerstone of all nations’ economic and social development. Educated and healthy human resources reduce the risk of unemployment. Good education relates not only to the quality of the teaching, it also requires courses that match the needs of the economy. Also, long-term development requires education for all. Illiteracy, which remains very high in Niger, is another major dimension to the quality of human resources. The quality of human capital also depends on the provision of healthcare for all, which, judging by the level of health coverage, mother and child health, and nutrition, must be improved. 3.5. Continuing to Promote Sustainable and Inclusive Economic Growth The evolution of growth in recent years reflects an erratic situation that is not likely to see the country achieve its goals of sustainable, inclusive, and equitable development. Finding the path of structural economic transformation is a major challenge for Niger. 71 The main factors relating to this challenge include the weak diversification of the economy, weak entrepreneurship, the underdevelopment of value chains in the agro-sylvo-pastoral and industrial and mining sectors, finance problems (low consumption of externally financed credit, a low tax ratio and insufficient reduction in tax exemptions), inefficient government expenditure, and underdeveloped economic infrastructure (energy, roads and transport, telecommunications, water, etc.). 3.6. Strengthening Food and Nutrition Security The eradication of hunger and malnutrition is the greatest challenge to overcome. It will essentially require diversifying agro-sylvo-pastoral production, securing crop and livestock production systems, and promoting value chains in the agro-sylvo-pastoral and fishery sectors. The issue of processing and regularly supplying rural and urban markets with crop, livestock, and food products is also salient. In addition, poor access to agricultural, pastoral, and fish products has a negative impact on the nutritional status of the population. 3.7. Adapting Production Systems to Climate Change Niger is experiencing an accelerating degradation of vegetation cover, a weakening of ecosystems, and an impoverishment of biological diversity. The recurrence of food and nutrition crises due to climate change is also an ongoing concern that must be addressed. 3.8. Promoting Behavioral and Attitude Change The decline of the work ethic, especially in the civil service, the decline in the value of merit, tax avoidance and lack of concern for the public good, views on demographic issues and on education— especially the education of girls—are not conducive to development. Changing these behaviors and attitudes is vital to the country’s social, political, and economic modernization. III. Medium-Term Development Policy To address these challenges in a context of persistent exogenous shocks and to lay the foundations of a medium-term economic policy that will spur a balanced development dynamic, supported by strong, inclusive, and sustainable economic growth based on the exploitation of substantial mineral and oil resources, the government has developed the Economic and Social Development Plan (PDES) 2017- 2021. It draws heavily from Niger’s Strategy for Sustainable Development and Inclusive Growth (SDDCI), which sets out a vision for the country by 2035. Through this vision, Niger declares its determination to transform at all levels and especially its desire to eradicate poverty and inequality. It is also based on the principles of the Renaissance Act II Program and builds on the lessons learned in the design and implementation of the PDES 2012-2015. The PDES 2017-2021 aims to contribute to the country’s development through five strategic pillars. They are interrelated and reflect, taken together, the key dimensions of sustainable human development. They are: (i) Cultural renaissance; (ii) social development and the demographic transition; (iii) accelerating economic growth; (iv) improving governance, peace, and security; and (v) sustainable management of the environment. IV. Main Results of the Implementation of PDES 2017-2021 at End-December 2017 72 It is expected that the PDES will have an impact such that “the wellbeing of the Nigerien population is improved.” This is measured by two indicators: The Human Development Index (HDI) and the proportion of the population living below the national poverty line. This result is to be obtained by pursuing the five strategic pillars: (i) cultural renaissance; (ii) social development and the demographic transition; (iii) accelerating economic growth; (iv) improving governance, peace, and security; and (v) sustainable management of the environment. Table 2: Impact Indicators Impact Code Indicator Benchmark 2017 2017 value targets achieved 01 Human Development The wellbeing Index (HDI) 0.353 (2015) 0.364 0.370 (E) of the Nigerien population is 02 Proportion of the improved population living below 45.1% (2014) 40.80% 42.20% (E) the national poverty line Source: National Institute of Statistics - 2018 The HDI rose from 0.353 in 2015 to 0.370 in 2017, while the target was 0.364. This improvement in the HDI was essentially linked to an increase in life expectancy at birth, which rose from 61.4 years in 2015 to 64.5 years in 2017 thanks to progress made in healthcare. With regard to the proportion of the population living below the national poverty line, it fell from 45.10% in 2014 to an estimated value of 42.2% in 2017, i.e. an improvement of 4.3 percentage points. V. BUDGET SUPPORT PROGRAM 2017-2018 Niger’s new World Bank budget support program for the period 2017-2018 fits seamlessly with the PDES, in particular with its third pillar of “accelerating economic growth.” The program is designed around three components: (i) Creating an environment conducive to increasing growth in rural areas; (ii) establishing a legal framework conducive to the sustainable development of the electricity and ICT sectors; (iii) improving government revenue. 6.1 Reforms Carried Out in 2017 All the reforms scheduled for 2017 were carried out. The following section details the situation by component and action. A) Creating an environment conducive to increasing growth in rural areas The aim of the planned reforms is to improve the governance of the sector, ensure that financial resources are allocated efficiently, and empower actors at all levels. The idea is to form an approach that is both sectoral and cross-sectoral in which all components of public administration, the private sector, communities and local authorities, the financial system, professional organizations, civil society 73 organizations, and also Niger’s partners are able to work towards achieving the program’s objectives, each according to its functions and roles, in the spirit of the 3N Initiative. Improving the governance and coordination of the sector is at the heart of the strategic framework of the 3N initiative, which provides for a strong leadership from the state and its services in the decision and orientation process, as well as improved stakeholder consultation. The following measures were implemented: ➢ The introduction of an electronic “e-voucher” subsidy system, which consists in developing an electronic database of the beneficiaries of fertilizers and seeds, sending them electronic vouchers by SMS, and informing them of the subsidies that they have been granted and where they can retrieve them. Pilot tests were run in two communes. The main objective of this measure is to improve agricultural productivity by increasing the area of cultivated land covered by improved seeds, as well as the rate of fertilizer use. To support vulnerable households, the Nigerien government intervenes by distributing agricultural inputs free of charge and/or selling them at reduced prices. Large sums of money are injected into these operations without tangible results due to weaknesses in the distribution and monitoring evaluation systems. Indeed, the real beneficiaries of these subsidies are not always best served as a result of severe deficiencies throughout the supply chain. To ensure the efficiency, transparency, and traceability of these grant packages, the database is jointly funded by two projects financed by the World Bank (WAAPP and PASEC). It will also make it possible to monitor the use of the subsidies and to measure their effects and impact at the level of the users. The system works on the basis of three fundamental components: a database of producers; a directory of suppliers of agro-sylvo-pastoral and fishing inputs and equipment; an electronic platform comprising a server, a website, and mobile phones to put subsidy beneficiaries in contact with the suppliers of agro-sylvo-pastoral and fishing inputs and equipment. This innovative model helps to overcome the problems inherent in the traditional distribution of agro- sylvo-pastoral inputs and equipment. It has the advantage of targeting the producers that receive the subsidies; ensuring that the beneficiaries actually receive the inputs supplied; ensuring that the subsidies are actually used to pay for the inputs delivered and received by the beneficiaries; adjusting the quantity of inputs distributed to suit the area cultivated by the beneficiary households; and avoiding delays in the delivery of the inputs. ➢ The introduction of an e-extension program to provide agricultural advisory services, using new information and communication technologies, in at least one region. This program will be implemented by the Network of Chambers of Agriculture ( Réseau des Chambres d’Agriculture—RECA), with which the Ministry of Agriculture and Livestock has signed a performance contract. This program is based on the finding that demand for agricultural services is growing at an increasing rate while the number of agricultural advisors and funding for agricultural advisory services are on a 74 downward trend. It will entail several tools, including a call center, a voice server (a tool that offers predetermined messages recorded in different local languages to agricultural producers), and applications for agricultural advisors to use for gathering and disseminating data. RECA recently launched the call center for a two-month trial targeting the Tillabéry region. In view of the concerns of producers, two themes were selected: (i) Vegetable crop protection and the choice of seeds; (i) wholesale prices for crops in the Niamey markets and trends. ➢ The promotion of leasing. The government has strengthened the legal framework for rural finance by adopting the community law on leasing in the Council of Ministers and submitting it to parliament for transposition. This measure is intended not only to transpose the uniform law on leasing in the WAEMU Member States, but also and above all to improve the legal environment for the development of this activity in the region. In fact, leasing has been recognized as a flexible financing method that is suited to different companies, particularly small and medium‐sized enterprises (SMEs) which struggle to provide collateral to obtain a bank loan. Leasing is an innovative alternative suited to widely addressing this problem. The introduction of leasing in Niger’s financing market will contribute significantly to: ✓ Access to finance for a population of SMEs, micro‐businesses, and entrepreneurs that are currently excluded; ✓ The development of investments, in both equipment and real estate, and the creation of a quality equipment fleet; ✓ The revitalization of the investment finance market, which will become progressively more competitive; ✓ The availability of new resources to the most dynamic decentralized financial systems, from which their members/customers may benefit; ✓ The development of the insurance market, thanks to the arrival of a new customer segment; ✓ The emergence and development, in the medium term, of a financial market for refinancing by leasing operators, using all appropriate instruments, both existing (such as bond issuance), and yet to be created, such as the refinancing of leasing contracts with the central bank. The leasing bill was examined and adopted by the Council of Ministers on Thursday August 10, 2017. ➢ The government has strengthened the impact of mining on the local economy through the development of provisions for the formalization of artisanal miners in the Mining Code. In the oil sector, the activities of prospecting, research, exploitation, and transport of hydrocarbons in Niger are governed by Law No. 2007‐01 of January 31, 2007. Ten years into its existence, deficiencies 75 in the law have appeared that have a negative impact on the activities of prospecting and promotion of investment in the oil sector. The new petroleum code has been developed to correct these deficiencies by introducing innovations, including: • the obligations of the holder of an exclusive operating permit; • the strengthening of measures limiting damage to the environment; • the obligation to pay signing and production bonuses; • the strengthening of local procurement to increase local content, especially through outsourcing. With regard to mining, it has been observed that despite the efforts deployed in the organization of artisanal mining since the 1980s, the results still remain mixed both in terms of the control of production and commercialization, and state revenues. Furthermore, artisanal mining has evolved considerably in recent years with the proliferation of artisanal gold mines in the Agadez and Tillabéry regions and the use of materials and chemicals that are hazardous for humans and the environment. To manage these developments, on June 30, 2017, the government adopted Statute No. 2017‐03, amending Statute No. 93‐16 of March 2, 1993 on the Mining Code. This statute modified the articles of the Mining Code relating to artisanal mining. It reorganizes this activity by adding two paragraphs on mining, namely the authorization of semi-mechanized mining and the exploitation of waste piles, slag heaps, and tailings from mines and quarries. The objectives of the Mining Code reform also include the management and safety of stakeholders, environmental protection, and control of production and marketing channels. The implementation of these reforms in the oil and mining sector will ensure it makes a more significant contribution to economic growth. B) Establishing a legal framework conducive to the sustainable development of the electricity and ICT sectors ➢ The government has brought into effect the Universal Service Fund by creating a public administrative body called the “National Agency for the Information Society” (Agence Nationale pour la Société de l’Information—ANSI) and appointing its Director General In the information and communication technology (ICT) sector, despite the progress made, persistent problems affect: (i) The poor quality of telephone and internet communication, (ii) low internet penetration, and (iii) the high cost of communication. To address these problems, the government has adopted a national strategy of universal access to ICT. In this context, on July 20, 2017, the government adopted in the Council of Ministers the decree creating ANSI, which is responsible for the operational implementation of the national strategy of universal access to ICT together with programs and projects for the development of ICT throughout 76 the country in order to ensure universal access to the service with the best quality and at affordable prices. This will help make the private sector more competitive and government more efficient. ➢ The Government has enhanced transparency by publishing the 2015-2017 financial statements of the Regulator (ARTP) on its website and the related financial reports by the External Auditor in the Official Journal ➢ Enhanced transparency in the management of these resources would create an enabling environment for PPP collaboration. It will also set the basis for an access expansion of ICT services, mainly in rural areas. In particular, it will allow for an informed investment plan for the Smart Village to which the USF should contribute. The Government is making efforts to increase the transparency on the private sector’s contribution to the existing funding mechanisms for the sector. This was done with the publication of the financial statements of the Regulator which includes the details of the use of mandatory fees paid by the private sector. ➢ The government has (i) set new electricity tariffs and ensured their publication in the appropriate media, and (ii) proceeded with the restructuring of the debt of NIGELEC. With regard to energy, the program to develop of resilient, durable, and quality infrastructure, including the 130 MW Kandadji Dam, is to be continued. In the medium term, investments in renewable energy, including solar energy (the solar power plant in Agadez, Malbaza, solar electrification, etc.), will also be made. These investments will be accompanied by the following measures: (i) The formulation of a policy with ambitious electrification targets, especially in rural areas; (ii) the opening up of the sector to competition in production, and the complete liberalization of electricity transport and distribution in order to allow direct links between private producers and their customers outside the national grid; (iii) the standardization of equipment and approaches to preparing an electrification blueprint for each region. The measure of restructuring the debt of NIGELEC (Niger’s national electricity company) involves transforming the government’s share in the financing of the Gorou Banda thermal power station into a participation in the capital of NIGELEC to the tune of 60 billion CFA francs. This amount represents the sum of the financing contracted by the state, which had not been retroceded to NIGELEC. This measure, combined with the implementation of new tariffs in the first quarter of 2018, will maintain the ratio of equity to debt below 50%, which is the minimum standard for financial balance, and to balance the accounts as well as to finance the government investment program aiming to meet the country’s energy demand. C) Improving Public Finance Management ➢ The government has proceeded with the review of the provisions of the Investment Code and its implementing decree More specifically, this measure consists in: • The revision of Article 34 of Law No. 2014‐09 on the Investment Code relating to the taxation of raw materials. ➢ The government has expanded the scope of VAT, making some previously exempt activities, goods, and products subject to it, including agricultural products after their 77 purchase from rural producers (Article 219, Section I, Heading III of the General Tax Code) These measures have been taken at the request of the WAEMU Commission, which noted the non‐ application of certain provisions, including in relation to VAT. They are part of the initiatives aimed at rationalizing exemptions by reducing tax exemptions under national law, in particular in the investment code. They are consistent with the public finance management policy, which pursues the goals set in the Public Financial Management Reform Program (PRGFP 2017‐2020) adopted in January 2012. The overall objective of this program is to contribute to the stabilization of the macroeconomic environment and the strengthening of public finances. The reforms involve the enforcement of the WAEMU guidelines, the computerization of the entire budget chain, the training of all actors involved in public finance management, and the implementation mechanism for the reforms itself. 6.2 Reforms Carried Out in 2018 The implementation of the reforms agreed for 2018 is presented below: Pillar 1: Creating an environment conducive to increasing productivity and growth in rural areas ➢ To increase access to agricultural inputs, the government has: (i) Rolled out an e-voucher distribution mechanism in 20 communes; (ii) taken a legal act to set up community- based seed production; (iii) operationalized the Seed Certification Division by issuing 30 certificates to entities involved in multiplying modern seeds. These measures follow on from the ones undertaken in 2017 to improve agricultural productivity by increasing the area of cultivated land covered by improved seeds as well as the rate of fertilizer use. Twenty communes are already covered by the e-voucher system. Preparatory work has been carried out to introduce community-based seed production. Primarily, this has entailed the development of the strategy to support quality community-based seed production systems with the wider goal of making these seeds available to producers to lift productivity and production. To make the Seed Certification Division operational, 71 certificates were issued for a target of 30. ➢ To strengthen governance of the fertilizer market, the government has taken a legal act to create (i) the Observatory of the Fertilizer Market of Niger ( Observatoire du marché des engrais au Niger—OMEN) and (ii) the Fertilizer Technical Committee of Niger (Comité Technique des Engrais du Niger—COTEN) Agricultural production in Niger has become increasingly susceptible to climate change and declining soil fertility. Agricultural land loses on average 377,000 tons of nutrients that are not offset for lack of availability of and access to the necessary quantities of fertilizer. The analysis of the performance of the fertilizer system has highlighted: - the high cost of importing and distributing fertilizers; - the problem of poor targeting in the subsidies for needy producers; - fertilizer delivered late and in insufficient quantities; 78 - excessive prices despite the subsidies; - supply and distribution systems that perform poorly with regard to the objectives assigned by the government. It was also highlighted that: - average fertilizer consumption in Niger is estimated at 3kg/ha/year, while the average in Africa is 12kg/ha/year. Niger’s fertilizer needs are in the order of 20kg/ha/year, i.e. a potential nationwide need of 200,000 tons of fertilizer per year; - average annual fertilizer imports over the past 10 years stand at between 20,000 and 30,000 tons, i.e. only 10% to 15% of potential needs. To address the challenges of meeting the objectives of the 3N Initiative and with a view to the implementation of the important MCA-Niger program, the government embarked on this reform of the fertilizer sector with the adoption of Decree No. 2018-046 PRN/MAG/EL of January 12, 2018, on the reform plan for the fertilizer sector. This reform of the fertilizer sector aims to: (i) Increase the availability of fertilizer throughout the country, (ii) guarantee supply in the markets thanks to the emergence of a dynamic private fertilizer sector; (iii) improve access to fertilizers thanks to better price competitiveness; (iv) establish a distribution mechanism for subsidized fertilizer targeted toward vulnerable groups. Two administrative bodies were created to implement the reform: • the Observatory of the Fertilizer Market of Niger (Observatoire du marché des engrais au Niger—OMEN); • the Fertilizer Technical Committee of Niger (Comité Technique des Engrais du Niger— COTEN). These bodies were established to make sure that farmers benefit from the expected positive effects, namely improved food and nutrition security among the populations and achievement of the “zero hunger” goal. It should be noted that COTEN was created by ministerial order issued by the Ministry of the State and the Ministry of Agriculture and livestock. OMEN’s main tasks are to monitor and regulate the supply and distribution of fertilizers in Niger. ➢ To strengthen financial inclusion in rural areas, the government has adopted a decree governing the warrantage system. Warrantage is a system under which a bank grants credit against an inventory of produce placed as collateral in a warehouse. The loan is repaid once the produce is sold. This practice has had remarkable success in Niger. However, a few factors have been showed to limit its sustainability, in particular the deterioration of most warehouses for lack of maintenance and the absence of an appropriate legal framework to foster the development of this crop storage and finance activity. 79 The adoption of this decree fills this legal gap by addressing these shortcomings, notably the counterparty risk to which banks and decentralized financial systems are exposed, and improving the current practice of warrantage in Niger. ➢ The government has implemented the multiyear plan to clear arrears of revenue transfers from the mining and oil sectors to the communes concerned, including 5% in the first transfer. Since 2000, the government has initiated reforms in key sectors of the national economy designed to reduce the dominant share of the agricultural sector. For example, the mining sector has been the subject of in-depth reforms in search of transparency in the management of mineral resources, but also better use of the funds generated by this sector. It was in this context that Order No. 93-16 of March 2, 1993, on the Mining Code, was amended and supplemented by Law No. 2006-26 of August 9, 2006, and Law No. 2014-08 of April 16, 2014. These major changes reflect the Nigerien state’s commitment to being at the forefront of respect for the environment and the defense of the rights of populations in the distribution of mineral resources. This redistributive drive materialized in the measures adopted in the abovementioned laws, in which the government granted 15% of mining revenue to the local authorities of the mining regions (the region of Agadez for uranium, Diffa for oil, and Tilabéri for gold). With these measures, the state sought to both meet social demand in the mining regions and to lay the foundations for economic development in these regions. However, the mining revenue redistribution mechanism has been beset by dysfunction related to government cash shortages as a result of the security situation ravaging Niger since 2010. That said, the government has committed to implementing the plan to settle commodity royalties with the regions over 2018-2022 as stated in the plan submitted to the World Bank. The government will also proceed, as agreed, with the payment of 5% of the outstanding balance, which totals 26,957,255,554 CFA francs, i.e. around 1,347,862,778 CFA francs. Regarding the indicator related to this prior action, we note that the process of awarding permits to artisanal miners has begun and is progressing well. Indeed, panners have started to form cooperatives, economic interest groups, and companies. These natural or legal persons have received, inter alia: • 78 permits for semi-mechanized gold mining operations; • 2 permits for semi-mechanized copper mining operations; • 9 permits to exploit waste piles, slag heaps, and tailings from gold mines and quarries; • 1 permit to exploit waste piles, slag heaps, and tailings from cassiterite mines and quarries; • 2 permits for artisanal gold mining; • 15 consents to commercialize gold; • 1 consent to commercialize copper; • 3 consents to commercialize cassiterite; • 2 consents to commercialize semi-precious and precious stones. In addition, an establishment agreement between the Republic of Niger and the company Afrior has been signed to set up and operate a gold refining chain. 80 In 10 months (August 2017 to May 2018) of the existence of the new provisions, revenues of 705,584,766 CFA francs have been generated, compared with 28,000,000 CFA francs during the first seven months of 2017. Pillar 2: Supporting Growth-Enabling Sectors ➢ The government has aligned its telecommunications tax policy with the sub-regional agreement on roaming by abolishing the TATTIE After halving the tax on incoming calls (TATTIE) in 2017, in 2018 parliament abolished both it and the tax on the use of telecommunications networks (TURTEL) with a view to ensuring universal access to communications services. This will lead to cheaper incoming international calls in Niger. The 2018 Finance Law containing these measures has been submitted to the World Bank as agreed. ➢ The government has implemented a pilot connectivity project targeting at least one rural area financed (fully or partially) by the Universal Service Fund. This measure is part of the “smart villages” framework, a strategic pillar of the “National Agency for the Information Society” (ANSI) with the aim of making ICT a veritable “cross-cutting” development tool, an additional tool for national unity, communication for peace, decentralization, democratization, and empowerment. A tool for creating jobs for youth, a tool for the emancipation of women, a tool for improving education and access to healthcare for all, and a tool to improve defense and security of the nation. The commune of Fashi has been chosen as the pilot area. A contact point has been set up comprising a money transfer desk, another desk for paying wages and an internet cafe. The Prime Minister opened the center on June 29, 2018. ➢ The government has implemented the first electricity tariff adjustment by decree. The new tariffs have been in force since January 1, 2018. The main innovations were the introduction of a social tariff, rebalancing the distribution of fixed and variable costs, adjustments to low and medium tension tariffs, and the merger of high and medium tensions. The social tariff was reduced by 33.2% for users who consume no more than 50 kW per month. According to ARSE, this measure has affected more than 100,000 customers. Public lighting also received a tariff reduction of around 34%. To offset the reductions in the social tariff, increases for the other categories range from 8% to 48%. The new measures are designed to help low-consumption socio- economic groups, encourage energy savings by reducing daily electricity waste, and give the national electricity system the resources it needs to invest to achieve an access rate of 60% by 2035. The new methodology will ensure the sector’s financial balance, 24 years after electricity tariffs were frozen for public users. The updated tariff framework is also designed to put an end to the inability of NIGELEC to ensure, over the long term, continuity in public electricity provision throughout the country in terms of quality and coverage. ➢ The government has signed NIGELEC’s concession contract aligned with the new legal and regulatory framework. 81 In accordance with the provisions of Law No. 2016-05 of May 17, 2016 on the Electricity Code, production, transport, import, export, transit, distribution, and marketing of electricity in the Republic of Niger constitute a “public electricity service”. Public electricity service activities may be delegated in the form of a concession, lease, a third- party agreement, or any other form of delegation, according to the conditions laid down by the legislation in force. However, production, transport, and distribution activities are delegated as a whole under a concession. In Niger, it is the company NIGELEC that performs the activities of production, transport, and distribution under the concession regime with an exemption granted to SONICHAR in the region of Agadez to produce and sell electricity to NIGELEC and the mining companies of Arlit. To date, the public service activities provided by NIGELEC are governed by a 50-year concession treaty signed on March 3, 1993 with the Nigerien state. Under article 81 of the new Electricity Code, the agreements signed between the state and current concession operators, including NIGELEC, shall remain in force until new delegation contracts are signed, within two years following the entry into force of the Code. It should be recalled that in addition to the gradual opening-up of the electricity sector to operators other than NIGELEC and SONICHAR already established in the 2003 Electricity Code, the 2016 Code introduced new provisions. They include: • the regulation of the electricity sector; • third-party access to the electricity transport network; • the ability to use independent private production to increase production capacity; • the ability to award distribution and marketing concessions to willing operators in specific areas, notably rural electrification. Elsewhere, article 20 of the implementing Decree No. 2016-514/PRN/ME/P of September 16, 2016, establishing the terms and conditions for awarding delegation agreements and licenses under the public electricity service framework, states that existing agreements must be brought into line with the new provisions of the Electricity Code within two years. ➢ In order to reduce fraud and tax losses, the government has (i) deployed ASYCUDA World in three of the eight customs offices that are yet to be connected and with the customs offices of Togo and Benin, and (ii) operationalized bank processing of payments to the tax (DGI) and customs (DGD) authorities As part of its modernization, the customs department has interconnected, with Niger Telecoms’ optical fiber, all regional directorates with the central customs exchange. Moreover, to ensure service continuity even in the event of a breakdown in the fiber optic connection, the customs department 82 has created back-up connections through VSAT networks between remote sites and the local radio loop (LRL) between local sites. This interconnection has made it possible for all customs offices to migrate to ASYCUDA World. It also made possible the generalization of the national electronic transit system, with electronic processing of transit documents at the offices of destination once issued by the office of entry. It should be recalled that ASYCUDA is an automated customs system developed by the United Nations Conference on Trade and Development (UNCTAD) in 1981, at the request of ECOWAS, to facilitate the production of foreign trade statistics. ECOWAS recommended this system be used by its Member States. Thus, Niger joined the project, which, in addition to the production of foreign trade statistics, facilitates, improves, and secures commercial transactions. The ASYCUDA program was launched in 1986. It has had several versions, the latest being ASYCUDA World. Both the DGI and the DGD use banking services to process payments. ➢ To secure road maintenance fund and improve road management, the government has changed the status of CAFER to a second-generation road fund by decree. The government has adopted the decree approving the statutes of the Road Maintenance Fund (Fonds d’entretien routier—FER). This decree was issued pursuant to the provisions of article 11 of Law No. 2017-37 of May 22, 2017, establishing a public “road maintenance fund,” according to which the fund’s statutes shall be approved by decree issued by the Council of Ministers. The FER, formerly known as the Caisse Autonome de Financement et d’Entretien Routier (CAFER), is responsible for collecting the resources allocated to the national road network and paying for services in accordance with the procedure manual and the programs adopted by the Roads Council (Conseil des Routes). The Road Maintenance Fund is a tool to promote and develop second-generation road maintenance, the basic principles of which are: autonomous management, direct private sector intervention in its administration, direct receipt of charges as well as financing of both routine road maintenance and periodic road maintenance. Approval of the statutes of the FER will give the fund the regulatory framework it needs to fulfil its mission. The decree approving the statutes of the Road Maintenance Fund was adopted by the Council of Ministers on Friday, July 06, 2018. Niger continues to face the negative effects of exogenous factors, in particular climate and security shocks and falls in the prices of mining products. These effects continue to exacerbate budget deficits, especially in 2017 and 2018, against the backdrop of a significant increase in borrowing requirements due to the need to address security questions and meet rising social demands. However, thanks to structural (sectoral and tax) reforms, the macroeconomic environment is satisfactory on the whole, economic growth is positive, governance is improving, and the democratic process is functioning adequately. The government is determined to continue and accelerate the implementation of the public finance management reform program it has agreed to with its partners. 83 It is in this context that the government is determined to continue the reforms underway to create the conditions required for building resilience in the Nigerian economy through its diversification, improvement in public finance management thanks to budget and tax measures focused on increasing revenue and rationalizing government expenditure, as well as a cautious debt policy that will enable adequate financing of public investments while ensuring debt sustainability. In addition to the reforms undertaken and considered as prior actions in 2018, the government is committed to implementing further reforms to strengthen Niger’s matrix of measures. These reforms include strengthening the territorial network. In accordance with the Public Financial Management Reform Program (PRGFP) 2017-2020 adopted on February 25, 2017 by the Nigerien government and its technical and financial partners, the Directorate General of Taxes (DGI) has been the subject of an assessment as per the methodology of the Tax Administration Diagnostic Assessment Tool (TADAT), the aim of which is to ascertain the strengths and weaknesses of the tax administration relative to international benchmarks. The results of this study suggest that the DGI must strive to lighten tax procedures and operations. The strengthening of the territorial network fits in this context. The objectives of this reform are as follows: - restore equality in taxation and equity in the tax system; - guarantee local tax services by creating new tax services; - improve the performance of some taxes, including the general tax (impôt synthétique) and the estate tax (taxe immobilière) by broadening and controlling their base; - improve service quality for the taxpayer by significantly reducing the cost of tax operations. To meet these objectives, the following new structures (tax offices and centers) have been created: • Niamey region: Creation of two regional directorates (Niamey North and Niamey South), creation of four tax offices (recettes des impôts: Grand Marché, Katako, Wadata, and Yantala), four tax centers (centres des impôts: Grand Marché, Katako, Wadata, and Yantala), and one property tax center (Yantala); • Maradi region: Two tax offices (Grand Marché and Gazaoua) and two tax centers in Aguié and Grand Marché Maradi; • Tahoua region: Two tax offices (Malbaza and Galmi); • Tilabéri region: Two tax offices (Balleyara and Torodi); • Zinder region: One tax office (Marché Dolé) and one tax center (Marché Dolé). 84 These sites were chosen to extend the coverage of tax services including at the level of the newly created departments and major urban centers with a view to achieving the abovementioned objectives. In this context, the government seeks the support of the World Bank to grant the second tranche of budget support for fiscal year 2018 as soon as practicable. VI. IMPLEMENTING INSTITUTIONAL FRAMEWORK The Ministry of Planning is responsible for executing the next phase of the program in perfect synergy with the sector ministries and structures concerned with the implementation of the reforms and measures. Niamey, October 26, 2018 Minister of Planning World Bank Governor for Niger KANE AICHATOU BOULAMA 85 Annex 3: IMF Relations IMF Staff Completes Review Mission to Niger October 30, 2018 • A staff level agreement was reached with the authorities on economic and financial policies that could support the completion of the third program review and the authorities’ request for an augmentation of access to IMF resources. • Implementation of the government’s reform program supported by the IMF under the Extended Credit Facility arrangement has been satisfactory. • Sound public finances and a stronger private sector are the linchpin for achieving higher living standards An International Monetary Fund (IMF) staff team led by Christoph A. Klingen visited Niamey from October 17 to October 30, 2018 to conduct discussions on the third review of the program supported by the Extended Credit Facility (ECF) arrangement. Niger’s program was approved by the IMF Board on January 23, 2017 (see Press Release no 17/18 ). At the end of the visit, Mr. Klingen issued the following statement: “The Nigerien authorities and the IMF team have reached staff -level agreement for the completion of the third review of the ECF-supported program and for the augmentation of access to IMF resources (SDR 19.7 million, about CFAF 15.5 billion). Consideration by the Executive Board of the IMF is tentatively scheduled for mid-December 2018. “The government of Niger remains strongly committed to the reforms in its Social and Economic Development Program 2017-2021, supported by the ECF arrangement. Program implementation has been satisfactory. “Macroeconomic stability remains firmly in place and growth is picking up despite a challenging external environment. It is expected to rise from 5.2 percent this year to 6.5 percent in 2019, with a favorable crop season and the start of several large-scale projects. Annual growth is expected to average just above 7 percent over the next five years buttressed by a series of new projects, notably a pipeline for crude oil exports, and greater efficiency in agriculture supported by the 3N Initiative. These projects’ local content and fiscal contributions are the key benefits to the domestic economy. Inflation is expected to decline below the WAEMU norm in 2019. “The fiscal situation remains broadly satisfactory, with the overall deficit expected to improve markedly to 4.5 percent of GDP in 2018. The draft budget for next year aims to generate fiscal space for priority expenditures while advancing toward WAEMU deficit targets. The emphasis 86 is on revenue mobilization and higher quality and transparency in public spending. The augmentation of IMF financing will help protect social spending in the face of adverse shocks. “On the broader structural reform agenda, the IMF team welcomes the authorities’ continuing efforts to improve the business environment through financial inclusion and clearance of domestic payments arrears. Recent measures to increase school attendance, especially for girls, will help realize national objectives for gender equality. Ongoing reforms of the civil service and public administrations will help make government more efficient and transparent. The authorities are further committed to improve governance in the public sector. “The team met with President Issoufou Mahamadou and Prime Minister Brigi Rafini. It also met with the Minister of Finance Massoudou Hassoumi, Madame Minister in charge of Planning, and the Ministers of Petroleum, Special Counsel to the President, the High Commissioner for the 3N Initiative, the Minister Delegate for the Budget, and the National Director of the BCEAO, as well as other senior government officials. Staff also met with representatives of the private sector and the donor community.” 87 Annex 4: Environment and Poverty /Social Analysis Table Prior Actions Significant positive or Significant poverty, negative environment social or distributional effects (yes/no/to be effects positive or determined) negative (yes/no/to be determined) Pillar 1 Increasing rural productivity growth Enhancing the use of modern inputs and improving access to extension services systems Prior action 1. To increase the availability of Yes – Positive Yes - Positive agricultural inputs, the Recipient’s Ministry of Agriculture and Livestock has scaled-up the E- voucher geographical coverage to 20 communes; set up mechanisms for community-based seed production, pursuant to Arrete No 304, dated August 29, 2018, and operationalized its Seed Certification Division through the issuance of 30 certifications to community-based entities involved in modern seeds multiplication. Prior action 2. To strengthen governance and Yes – Positive Yes- Positive improve private sector participation in the fertilizer markets, the Recipient’s Ministry of Agriculture and Livestock has created: (i) the Niger Fertilizer Market Observatory (OMEN) in charge of promoting the supply of quality fertilizers by the private sector, and; (ii) the Technical Committee for Fertilizers of Niger (COTEN) in charge of the monitoring of law and regulation implementation in the fertilizer sector by all stakeholders, pursuant respectively to Decree No.2018-598, dated September 5, 2018 and Arrete No.308, dated September 7, 2018. Prior action 3. To deepen the involvement of No No financial institutions and credit products in rural areas, the Recipient’s Council of Ministers has adopted Decree No. 2018-458, dated July 6, 2018 regulating the warrantage system. Prior action 4: To start the implementation of a No Yes - Positive multiyear-arrears clearance plan of revenue from the extractive industry to communities, the Recipient’s Ministry of Finance has transferred 5 percent of the arrears to the concerned communes, pursuant payment receipts of mining revenues issued by the central accounting officer of the Treasury, dated September 4, 2018. Pillar 2. Supporting growth enabling sectors Developing a framework favorable to Prior action 5. To promote rural access to No internet and mobile services, the Recipient’s 88 Prior Actions Significant positive or Significant poverty, negative environment social or distributional effects (yes/no/to be effects positive or determined) negative (yes/no/to be determined) “Agence Nationale pour la Société de Yes – Positive l’Information (ANSI) has implemented a pilot connectivity project targeting a least one rural area funded partially by the USF. Prior action 6. To enhance transparency in the management of resources of the ICT sector, and to create an enabling environment for public- private partnership collaboration, the Recipient through its Regulatory Authority for Telecommunications and Post, has published its 2015-2017 financial statements on the ARTP website, as well as the related financial reports in the Official Journal. Improving the financial and the technical performance of the NIGELEC Prior action 7. To make the cost reflective No Yes – Negative but a pricing effective, the Recipient’s Council of PSIA was conducted to Ministers has implemented the first electricity design favorable tariff tariff adjustment, pursuant to Decree No. 2017- 796, dated October 6, 2017 approving the tariff for the poorest methodology and the applicable tariff structure. segments measures. Prior action 8. To allow NIGELEC to operate in No No the power sector and improve the company’s performance, NIGELEC and the Republic of Niger have signed a concession contract for the production, transport and distribution of electricity on May 14, 2018, approved by Decree No. 2018-321, dated May 14, 2018. Prior action 9. To reduce fraudulent No No manipulations and tax losses, and increase taxpayers’ compliance to payment schedule and rules, the Recipient’s Ministry of Finance has deployed ASYCUDA World in eight border posts and established ASYCUDA connection between Niger’s customs offices with Togo and Benin customs, digitalized all the payments at customs and tax offices, and created eleven new tax offices throughout the country and one property tax center in Niamey, pursuant respectively to Ordinance No. 90 dated December 22, 2017 and Arrete No. 42 dated on January 19, 2018. D. Creating conditions for sustainable rural road financing maintenance framework Prior action 10. To secure road maintenance No No funds and improve governance in their management, the Recipient’s Council of 89 Prior Actions Significant positive or Significant poverty, negative environment social or distributional effects (yes/no/to be effects positive or determined) negative (yes/no/to be determined) Ministers has changed the status of road maintenance fund into a 2nd generation road fund in charge of collecting revenue arising from the use of the road and dedicated to road maintenance, pursuant to Decree No. 2018-460 dated July 6, 2018. 90 Annex 5: Lessons Learned 6. Using DPO series could be instrumental in advancing critical medium-term reforms when supported by investment projects. The policy reforms in the electricity sector started under the shared growth DPO, gained momentum under the PIRCS series and are expected to make significant progress under the proposed series. The DPO helped support the persistence of the Government to advance a difficult reform agenda which otherwise may have been more challenging. These reforms were in turn supported by the World Bank supported investment financing project (NELACEP) which provided the resources and technical expertise to the sector for critical investment and TA. 91 Annex 6: Sectoral GDP Growth Rates (%) Niger: Real GDP growth rates, 2015-21 2015 2016 2017 2018 2019 2020 2021 Primary sector 0.7 -15.9 5.8 5.5 7.1 6.0 5.4 Agriculture -22.6 15.2 6.3 5.7 7.5 6.5 5.5 Livestock, forestry and fishing -21.5 2.8 4.2 5.5 6.2 6.2 6.4 Mining+ Upstream oil -29.7 2.5 7.3 4.7 6.8 2.4 1.8 Uranium -39.8 -2.6 6.2 8.3 3.7 4.2 3.1 Oil -6.0 10.2 8.6 0.0 11.2 0.0 0.0 Secondary sector -21.4 4.3 4.8 3.9 6.7 6.3 4.6 Manufacturing industries + refinery -22.3 5.9 5.9 2.3 4.8 4.4 4.4 Electricity and water -18.8 4.3 -4.9 5.0 6.0 7.0 7.0 Construction & Public Works -19.7 0.1 6.0 8.2 12.3 11.0 4.3 Services -18.8 1.8 4.7 5.5 6.5 6.4 6.0 Commerce -19.5 1.8 4.6 5.9 7.4 5.6 5.5 Transport + Pipeline -18.9 -0.1 5.2 5.1 5.7 7.4 6.2 Other services -17.3 3.6 4.5 5.4 5.8 6.9 6.8 Government -16.7 4.7 3.6 3.6 4.8 5.5 6.0 Import taxes and duties -11.4 -14.8 1.0 6.0 5.0 5.0 6.0 GDP at (constant) prices -20.4 4.9 4.9 5.2 6.5 6.0 5.6 Source: IMF and World Bank Staff - 2018. 92