Niger Report No.41408-NE Report No
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Report No.41408-NE Report No.Niger 41408-NE Goals theMillenniumDevelopment Achieving and Growth Accelerating Niger Accelerating Growth and Achieving the Millennium Public Disclosure AuthorizedPublic Disclosure Authorized Development Goals: Diagnosis and the Policy Agenda Country Economic Memorandum September 2007 PREM 4 Africa Region Public Disclosure AuthorizedPublic Disclosure Authorized Public Disclosure AuthorizedPublic Disclosure Authorized Document of the World Bank Public Disclosure AuthorizedPublic Disclosure Authorized NGO : Non Governmental Organization NIGELEC : Electricity Supply Company (Société Nigérienne d’Electricité) NPV : Net Present Value ODA : Official Development Assistance OHADA : Organisation pour l’Harmonisation en Afrique du Droit des Affaires PEMFAR : Public Expenditure Management and Financial Accountability Review PIP : Public Investment Program PRGF : Poverty Reduction and Growth Facility PRODEM : Multisector Demographic Program PRS : Poverty Reduction Strategy PRSP : Poverty Reduction Strategy Paper RDSs : Rural Development Strategies RSE : Export Statistical Change SAF : Structural Adjustment Facility SAMs : Social Accounting Matrices SBA : Stand-By Arrangement SIMA : Statistical Information Management and Analysis SMEs : Small-and-Medium Enterprises SONITEL : Telecommunications Company (Société Nigérienne des Télécommunications) TB : Tuberculosis TFP : Total Factor Productivity UEMOA : Union Economique et Monétaire Ouest Africaine UNDP : United Nations Development Program UNESCO : United Nations Educational, Scientific and Cultural Organization WAEMU : West African Economic and Monetary Fund WDI : World Development Indicators WHO : World Health Organization WITS : World Integrated Trade Solution Vice President : Obiageli Katryn Ezekwesili Country Director : Madani M. Tall Sector Director : Sudhir Shetty Sector Manager : Antonella Bassani Task Team Leader : Emmanuel Pinto Moreira ACKNOWLEDGEMENTS This Country Economic Memorandum (CEM) is a joint World Bank and Government of Niger report. The CEM is a product of a year of team research and numerous interactions, and dialogue between Bank staff and many people and institutions in Niger: the Government of Niger, the private sector, Non-Government Organizations (NGOs), academia, bilateral and multilateral donors. Two key events were organized to launch the CEM. On September 15, 2005, the Bank team organized a country team brainstorming session to identify key issues and themes to be developed in the CEM. On September 26, 2005, the Bank and the Government of Niger jointly invited distinguished economists and internationally recognized development experts, as well as representatives of development agencies in Niamey (United Nations Development Program, French Development Agency, Embassies of Belgium, France, and United States) to participate in a one-day workshop on Niger. The outcomes of this important workshop helped to lay out the foundations and the strategic directions of the CEM report. The team would like to thank His Excellency Ali Mahaman Zeine (Ministry of Economy and Finance, MEF, Niger), Professor Pierre-Richard Agénor (Hallsworth Professor of International Macroeconomics and Development Economics, University of Manchester, and co-Director, Center for Growth and Business Cycle Research, England), Professor Paul Collier (Director, Center for the Study of African Economies, Department of Economics, University of Oxford, England), Shantayanan Devarajan (Chief Economist, SARVP, World Bank), and Professor Patrick Guillaumont (Professor of Development Economics and Head of Centre d’Etudes et de Recherche sur le Développement International, CERDI, Clermont Ferrand, France) for the useful insights, advice, and policy recommendations they provided during the workshop. The team would also like to thank Alan Gelb (Director, Development Policy, DECVP, World Bank), Cadman Mills (Former Sector Manager, AFTP3), John Page (Chief Economist, AFRCE, World Bank), Roberto Zagha (Senior Economic Adviser, PRMVP, World Bank) and many participants to the conference for their comments. The task team leader of the CEM and author of the report is Emmanuel Pinto Moreira. The CEM core team includes Professor Pierre-Richard Agénor, Hinh Dihn (Lead Economist, AFTP3), Nihal Bayraktar (Assistant Professor, Penn State University and consultant World Bank), and Mélanie Xuereb de Prunelé (Assistant Professor University of Paris II and consultant World Bank). The report is based on several inputs prepared in the form of background papers by members of the core team and other contributors (see list on the website), which include Vincent Caupin (Consultant), Christel Caupin-Fargeas (Consultant), Iain Christie (Consultant), Peter Craig (Consultant), Katharina Gassner (Senior Economist, IEF), Jean-Michel Marchat (Private Sector Development Specialist, AFTPS), Heather Milkiewicz (Junior Professional Associate, AFTP3), Jean-Pascal Nganou (Economist, AFTP3), Jan-Hendrick Van Leeuwen (Consultant), and Michaela Weber (Private Sector Development Specialist, AFTPS). Contribution in the form of a background report covering all themes developed in the CEM was also provided by the Government team led by Mr. Boubacar Moumouni Saidou (Commissioner, MEF). The team comprised: Yacouba Abou (MEF), Soumana Adamou (Ministry of Population), Seydi Assoumana (MEF), Marankan Baone (MEF), Saadou Bakoye (MEF), Madame Diamballa Ramatou (MEF), Madame Rabo Fatemina (MEF), Dr. Moussa Fatimata (Ministry of Health), Hamma Hamadou (MEF), Ibrahim Harouna (MEF), Maman Issoufou (MEF), Zabeirou Kamaye (MEF) Yakoubou Mahaman Sani (MEF), Ousmane Oumarou (Ministry of Health), Aga Salmanou (Treasury, MEF), Abdou Sayo Farno (Ministry of Health), Professor Tarno (University of Niamey), and Tassiou Almadji (National Institute of Statistics). The CEM team is also grateful to the Belgium Government for providing financial support through the Belgium Trust Fund to finance some consultants’ work. Invaluable guidance, inputs, and suggestions throughout the preparation of the CEM were provided by Professor Pierre-Richard Agénor, Madani Tall (Country Director for Niger), Hinh Dinh, Iradj Alikhani (Country Program Coordinator, AFCSN), and Vincent Turbat (Former Resident Representative for Niger). Valuable comments and suggestions were received from Yvonne Tsikata (Sector Manager, AFTP3) and peer reviewers, including Célestin Monga (Lead Economist, DECVP) and Mathew Verghis (Lead Economist, ECSPE). Professor Shalendra D. Sharma (University of San Francisco) provided valuable assistance to editing the report. CONTENTS EXECUTIVE SUMMARY............................................................................................................................... i INTRODUCTION.......................................................................................................................................... xxi CHAPTER 1: SALIENT FEATURES OF NIGER’S ECONOMY FROM A SOCIAL ACCOUNTING MATRIX PERSPECTIVE ............................................................................................................................... 1 1. Striking Features of Niger’s Economy ................................................................................1 A. Structure of Production .......................................................................................................1 B. Structure of Demand ...........................................................................................................3 C. Contribution of Sectors to GDP and Structure of Aggregate Demand ...............................5 D. Structure of Investment.......................................................................................................7 E. Structure of Taxes................................................................................................................7 2. Results of Linkages Analysis...............................................................................................9 3. Policy Simulations: Design and Results ............................................................................10 A. Simulation Design.............................................................................................................10 B. Simulation Results.............................................................................................................11 CHAPTER 2: A REVIEW OF GROWTH PERFORMANCE OVER THE PAST THREE DECADES: DIAGNOSIS, LESSONS AND CHALLENGES .......................................................................................... 14 1. A Retrospective Diagnosis: 1970-2000 .............................................................................14 A. The Uranium Boom Illusion .............................................................................................15 B. Negative Shocks Spurred Recession and Triggered Structural Adjustment Policies (1982-87)...........................................................................................................................17 C. The Lost Decade: 1988-99 ................................................................................................20 2. Reform Progress and Economic Growth: 2000-05............................................................25 A. The Legacy of the Past......................................................................................................25 B. Policy Response and Donor Support.................................................................................26 C. Key Achievements to Date................................................................................................27