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World Bank Document Document of The World Bank Public Disclosure Authorized FOR OFFICIAL USE ONLY Report No.76232 NE INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION AND MULTILATERAL INVESTMENT GUARANTEE AGENCY Public Disclosure Authorized COUNTRY PARTNERSHIP STRATEGY FOR THE REPUBLIC OF NIGER Public Disclosure Authorized FOR THE PERIOD FY13-FY16 March 29, 2013 Country Management Unit: AFCW3 Africa Region The International Finance Corporation Africa Region The Multilateral Investment Guarantee Agency Public Disclosure Authorized 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 The date of the last Country Assistance Strategy (CAS) is April 29, 2008 CURRENCY EQUIVALENTS (Exchange Rate Effective March 29, 2013) Currency Unit CFAF 510 = US$1 US$1.5 = SDR1 FISCAL YEAR: January 1 – December 31 ABBREVIATIONS AND ACROYNYMS AAA : Analytical and Advisory Assistance AGRHYMET : Centre Regional de Formation et d'Application en Agrométéorologie et Hydrologie Opérationnelle AQIM : Al Qaida in the Islamic Maghreb CAFER : Caisse Autonome de Financement de l’Entretien Routier CAS Country Assistance Strategy CILSS : Comité Inter-Etate pour la Lutte contre la Sécheresse au Sahel DHS : Demographic and Health Survey DPO : Development Policy Operation DSA : Debt Sustainability Analysis ECOWAS : Economic Community of West African States EITI : Extractive Industries Transparency Initiative ESW : Economic and Sector Work FDI : Foreign Direct Investment GDP : Gross Domestic Product GEF : Global Environment Fund GNI : Gross National Income GER : Gross Enrollment Ratio HALCIA : Haute Autorité pour la Lutte contre la Corruption et les Infractions Assimilées HIPCs : Heavily Indebted Poor Countries HIV-AIDS : Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome ICA : Investment Climate Assessment ICRISAT : International Crops Research Institute for the Semi-Arid-Tropics ICT : Information and Communication Technology IDA : International Development Association IMF : International Monetary Fund INS : Institut National de la Statistique MDGs : Millennium Development Goals MDRI : Multilateral Debt Relief Initiative MIGA : Multilateral Investment Guarantee Agency MSME : Micro, Small and Medium Enterprises MTR : Mid-Term Review ii NBFI : Non-bank Financial Institution NPV : Net Present Value ODA : Official Development Assistance OECD : Organisation for Economic Co-operation and Development OHADA : Organisation pour l’Harmonisation en Afrique du Droit des Affaires PEFA : Public Expenditure and Financial Accountability PEMFAR : Public Expenditure Management and Financial Accountability Review PDES : Plan for Economic and Social Development PETS : Public Expenditure Tracking System PRGF : Poverty Reduction and Growth Facility PRODEM : Multi-sector Demographic Program PRSP : Poverty Reduction Strategy Paper RDS : Rural Development Strategy RSE : Export Statistical Change SMEs : Small-and-Medium Enterprises SSA : Sub-Saharan Africa TVET : Technical and Vocational Education and Training UEMOA : Union Economique et Monétaire Ouest Africaine UNDP : United Nations Development Program UNFPA : United Nations Population Fund WAEMU : West African Economic and Monetary Fund WDR : World Development Report IDA IFC MIGA Vice President Makhtar Diop Bernard Sheahan (Acting) Izumi Kobayashi (Executive Vice President) Director Ousmane Diagana Yolande Duhem Nestor Coffi Michel Wormser Country Manager Marie-Jean Moyo (Task Team Leader) (Vice president and Chief Operating Officer) iii FY13-FY16 COUNTRY PARTNERSHIP STRATEGY FOR THE REPUBLIC OF NIGER TABLE OF CONTENTS EXECUTIVE SUMMARY ............................................................................................... vi I. INTRODUCTION ........................................................................................................... 1 II. COUNTRY CONTEXT ................................................................................................. 1 A. Regional Context…………… ............................................................................ 1 B. Political Context…. ............................................................................................ 2 C. Economic Context.. ............................................................................................ 3 D. Poverty and social context ................................................................................. 7 E. Progress toward the MDGs and human development indicators ....................... 9 III. CHALLENGES AND OPPORTUNITIES ................................................................. 10 A. Vulnerability and Resilience ............................................................................ 11 B. Weak Business Environment and Lack of Diversification .............................. 13 C. Governance and Public Sector ......................................................................... 14 IV. GOVERNMENT POVERTY REDUCTION STRATEGY 2012-2015 ..................... 16 V. BANK GROUP PARTNERSHIP STRATEGY .......................................................... 16 A. Lessons Learnt from previous CAS, Stakeholder Feedback and Gender Assessment…………. ........................................................................................... 16 B. Strategic Approach…………. .......................................................................... 20 C. Bank Group Program ....................................................................................... 21 D. Delivering the Bank Group’s Program ............................................................ 31 E. Aligning Current Portfolio ............................................................................... 33 F. Managing Program Implementation ................................................................. 34 G. Partnerships and Donor Coordination .............................................................. 35 H. Monitoring and Evaluation .............................................................................. 35 VI. MANAGING RISKS .................................................................................................. 37 iv Annex 1. Niger CPS Results Matrix FY13-16..................................................... 40 Annex 2: CAS Completion Report ....................................................................... 49 Annex 3: Country at Glance ................................................................................. 86 Annex 4: Selected Indicators of Bank Portfolio Performance and Management . 88 Annex 5: Niger Social Indicators .......................................................................... 89 Annex 6: Niger Key Economic Indicators ............................................................ 90 Annex 7: Niger Key Exposure Indicators ............................................................. 92 Annex 8: Operations Portfolio .............................................................................. 93 Annex 9: Statement of IFC’s Held and Disbursed Portfolio ................................ 94 Annex 10: Donor Mapping, Bank sectoral mapping in FY16 and ODA Coordination………… ......................................................................................... 95 Annex 11: Country Financing Parameters ............................................................ 96 Annex 12: Debt Sustainability Analysis ............................................................... 97 Annex 13: Proposed WBG Assistance for FY13-16 and Corresponding PDES Axes…………………………………………………………………………….110 Annex 14: Results of Stakeholder Consultations and FY12 Country Survey .... 112 Annex 15: Central Government Operations (% of GDP), 2009-2015 ................ 114 Annex 16: Axes of the PDES.............................................................................. 116 Annex 17: EITI process in Niger: Challenges and Achievements ..................... 118 Annex 18: Progress on MDGs ............................................................................ 119 Annex 19: Trust Fund Country Report on Niger ................................................ 119 LIST OF TABLES Table 1: Key Macroeconomic Indicators ................................................................ 4 Table 2: Assessment of Niger Progress on MDGs ............................................... 10 Table 3: CPS Strategic Objectives and Outcomes……………………………… 21 Table 4: Indicative Lending & AAA Program mapped to CPS Pillars FY13- 16…………………………………………………………………………………39 v EXECUTIVE SUMMARY i. Niger has recently embarked on a path to political stability and has attained positive results in reducing poverty, albeit not without uncertainties. In 2009, efforts by then President Tandja to circumvent a two-term limit resulted in a severe political crisis that led to the February 2010 military coup d’état. Following a referendum and the adoption of a new constitution in November 2010 and a series of local, legislative, and presidential elections in early 2011, a new President took office in April 2011. Poverty has declined from 64 percent in 2005 to 61 percent in 2007/08 and 56 percent in 2011 based on preliminary World Bank estimates. ii. Despite progress, Niger’s development challenges continue to be magnified by significant internal and external stresses. Weak institutions, economic grievances and potential spill-over effect of the Mali crisis, and the risk of a growing young population, could alter the country’s
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