Translated Document

AFRICAN DEVELOPMENT BANK GROUP

ORWA DEPARTMENT

October 2013

NIGER

COMBINED 2013-2017 COUNTRY STRATEGY PAPER

AND PORTFOLIO REVIEW

TABLE OF CONTENTS

LIST OF ACRONYMS AND ABBREVIATIONS .................................................................................. ii

EXECUTIVE SUMMARY .................................................................................................................. IV

I. INTRODUCTION ....................................................................................................................... 1

II. COUNTRY CONTEXT AND PROSPECTS ............................................................................ 1

2.1 POLITICAL, ECONOMIC AND SOCIAL CONTEXT ............................................................................. 1

2.2 STRATEGIC OPTIONS ...................................................................................................................... 9

2.3 AID COORDINATION/HARMONIZATION AND BANK POSITIONING .............................................. 11

III. COUNTRY PORTFOLIO REVIEW ....................................................................................... 11

3.1 PORFOLIO OVERVIEW AND PERFORMANCE ................................................................................ 12

3.2 KEY LESSONS FROM THE PORTFOLIO REVIEW………………………………………………….13

IV. 2005-09 STRATEGY AND KEY LESSONS ........................................................................... 15

4.1 IMPLEMENTATION OF THE 2005-09 COUNTRY STRATEGY, EXTENDED TO 2012……………….14

4.2 KEY LESSONS……………………………………………………………………………………15

V. BANK COUNTRY STRATEGY 2013-17 IN NIGER ............................................................. 16

5.1 RATIONALE FOR BANK INVOLVEMENT AND PILLARS ................................................................ 16

5.2 OUTCOMES AND TARGETS .......................................................................................................... 17

5.3 STRATEGY IMPLEMENTATION INSTRUMENTS …………………………………………………..18

5.4 MONITORING/EVALUATION ......................................................................................................... 19

5.5 ISSUES COVERED BY COUNTRY DIALOGUE …………………………………………………….19

5.6 POTENTIAL RISKS AND MITIGATION MEASURES ........................................................................ 19

VI. CONCLUSION AND RECOMMENDATION ....................................................................... 20

6.1 CONCLUSION................................................................................................................................ 21

6.2 RECOMMENDATION ..................................................................................................................... 21

LIST OF GRAPHS Graph 1: Real GDP Growth Rate (%) ........................................................................................................... 2 Graph 2: Budget Balance (% of GDP) .......................................................................................................... 3 Graph 3: Country’s Strategic Option ........................................................................................................... 9 Graph 4: Breakdown by Sector of the Bank’s Active Portfolio in Niger..................................................... 11

LIST OF BOXES Box 1: Potential for the export of crude oil and refined products to enhance the external balance ..... 2 Box 2: High factor costs, an obstacle to the expansion of extractive industries .................................... 9 Box 3: Co-operation between the Bank and Niger ............................................................................... 11

The following conventions have been used in this combined 2013-17 Country Strategy Paper and Portfolio Review:

In the tables, a blank indicates that the corresponding item is "not applicable" in this case; (...) indicates that data are not

available; 0 or 0.0 indicates that the figure is equal to zero or that it is negligible. Given that some figures have been

rounded, the totals may not exactly match the sum of the components.

A dash (-) between years or months (for example, 2010-11 or March-September) indicates the period covered from the

first year or month to the last year or month indicated inclusive; a slash (/) between years (e.g., 2010/11) indicates a

fiscal (or financial) year.

Unless otherwise indicated, all amounts are expressed in CFAF. Where reference is made to the dollar, it is the United

States dollar.

i

LIST OF ANNEXES

Annex 1: Map of Niger ................................................................................................................................. Annex 2: Selected Macroeconomic Indicators ............................................................................................ Annex 3: Comparative Socio-economic Indicators ....................................................................................... Annex 4: Bank Portfolio in Niger at end-September 2013 ........................................................................... Annex 5: Portfolio Performance Improvement Action Plan ......................................................................... Annex 6: Indicative Grant/Loan Programme for the CSP 2013-17 .............................................................. Annex 7: Bank ‘s Fiduciary Strategy in Niger ............................................................................................... Annex 8: Challenges Related to the Environment, Climate Change and Green Growth .............................. Annex 9: Development Partners’ Areas of Intervention in Niger in 2013 .................................................... Annex 10 Implementation Status of the Kandadji Programme – Phase I (Agricultural Component) ........... Annex 11: CSP 2013-17 Indicative Results Framework .................................................................................

ii

FISCAL YEAR 1 January – 31 December

CURRENCY EQUIVALENTS (September 2013) UA 1 = EUR 1.1449 UA 1 = USD 1.51528 UA 1 = CFAF 751.00517

INDICATIVE SCHEDULE FOR THE PREPARATION OF NIGER CSP 2013-17 Key stages in the preparation of CSP 2013-17 Dates

Consideration of CSP Concept Note by Operations Committee (OpsCom) 9 May 2013

CSP Preparation Mission to Niger 13 to 25 May 2013

Review of CSP Draft Report by Peer Reviewers 24 to 30 June 2013

Review of CSP Draft Report by Niger Country Team and Readiness Review 16 to 22 July 2013

Review by Country Team 24 July 2013

Second virtual review of revised version of Report by Niger Country Team 4 September 2013

Dialogue Mission to Niger 23 September 2013

Review by Operations Committee (OpsCom) 3 October 2013

Board consideration 4 December 2013

LIST OF ACRONYMS AND ABBREVIATIONS

ADF : African Development Fund

AEO : African Economic Outlook

AFD : Agence Francaise de developpement (French Development Agency)

AfDB : African Development Bank

AWF : African Water Facility

BADEA : Arab Bank for Economic Development in Africa

BCEAO : Central Bank of West African States

BTP : Construction and Public Works

CAFER : Autonomous Road Maintenance Financing Fund

CC : Climate Change

CET : Common External Tariff

CFAF : Franc of the African Financial Community

CIF : Climate Investment Fund

CPI : Corruption Perception Index

CPIA : Country Policy and Institutional Assessment

CS : Sector Committee

CSP : Country Strategy Paper

CSRD : Supreme Council for the Restoration of Democracy

CTN : National Technical Council

DAC/OECD

:

Development Assistance Committee of the Organization for Economic Co-operation

and Development

DB : Doing Business

DTS : Trans-Saharan Backbone

EC : European Commission

ECOWAS : Economic Community of West African States

EPA : Economic Partnership Agreement

EU : European Union

FDI : Foreign Direct Investment

GDP : Gross Domestic Product

iii

GER : Gross Enrolment Rate

GWh : Gigawatt per hour

HALCIA : High Authority to Combat Corruption and Related Crimes

HDI : Human Development Index

I3N : “Nigeriens Feeding Nigeriens” Initiative

ICB : International Competitive Bidding

IDB : Islamic Development Bank

IMF : International Monetary Fund

KFAED : Kuwait Fund for Arab Economic Development

LPG : Liquefied Petroleum Gas

LSF : Legal Support Facility

M2 : Money and quasi-money

MDG : Millennium Development Goal

MISMA : International Support Mission for Mali

MUJAO : Movement for Oneness and Jihad in West Africa

NCB : National Competitive Bidding

NIGELEC : Niger Electricity Company

ODA : Official Development Assistance

OFID : OPEC Fund for International Development

PD : Paris Declaration on Aid Effectiveness

PDES : National Commission for Strategic Planning

PDES : Economic and Social Development Plan

PEFA : Public Expenditure and Financial Accountability /

PEMFAR : Public Expenditure Management and Financial Accountability Review

PIE : Independent Energy Producer

PNUD : United Nations Development Programme

PPCR : Climate Resilience Pilot Programme

PPP : Public-Private Partnership

PRGFP : Public Finance Management Reform Programme (PRGFP)

PRSF : Poverty Reduction Strategy Framework

RBCSP : Results-Based Country Strategy Paper

RIS : Regional Integration Strategy

RISP : Regional Integration Strategy Paper

RWSSI : Rural Water Supply and Sanitation Initiative

SCF : Strategic Climate Fund

SME : Small and Medium-Sized Enterprise

SMI : Small and Medium-Sized Industry

SP/PDES : PDES Permanent Secretariat

SRP : Sahel Resilience Programme

TFM : Migrant remittances (Transferts de fonds des migrants)

TFP : Technical and Financial Partners

TSH : Trans-Sahara Highway

U.S. : United States of America

UA : Unit of Account

WAEMU : West African Economic and Monetary Union

iv

SUMMARY

1. Introduction. This paper proposes a strategy for Bank Group intervention in Niger over

the period 2013-17, as well as areas where portfolio management could be enhanced.

2. Country Background. Niger is part of the Sahel region where efforts to promote inclusive

and green growth meet with greater specific structural challenges than elsewhere, resulting from a

combination of factors relating to the environment, climate change, lack of infrastructure, and high

poverty levels. These factors particularly increase the populations’ vulnerability to food insecurity,

and therefore Niger’s stakeholders have defined resilience to such food insecurity as a specific

objective. Moreover, the recent and future context marked by larger scale exploitation of mineral and

oil resources aids the funding of economic growth but also calls for greater focus on governance, in

order to enable the country participate fully in the exploitation of the underground resources and also

use the ensuing national income for its priority development actions. The country has other assets and

opportunities, including: (a) the agro-forestry and pastoral sector which can develop significantly;

and (b) untapped potential for the production of energy, especially renewable energy.

3. The Bank's portfolio in Niger comprises 18 operations (only one in the private sector),

totalling about UA 240 million, with an overall disbursement rate as at end April 2013 of about 24%,

an average age of three years and 27% of projects at risk. As at end November 2013, the overall

disbursement rate (excluding private sector window projects) increased to 31%. The 2.36 score for

the overall performance of the Bank's portfolio in Niger in 2013 (against 2.25 in 2010) is deemed

satisfactory. Despite this overall positive assessment, the portfolio is experiencing difficulties,

including hindrances observed in the implementation of Phase 1 of the Kandadji Project and the

Tibiri-Dakoro Road Project caused by the contractors recruited for the works. The implementation of

the proposed portfolio enhancement action plan should help to improve the quality at entry and

execution of future Bank operations.

4. Country Strategy for the 2013-17 Period. The Bank’s country strategy to help

Niger use its opportunities while addressing its major challenges and remaining selective, will

be based on two pillars: (i) strengthening resilience to food insecurity; and (ii) strengthening

governance, particularly of natural resources.

5. Pillar 1 aims, not only to create and enhance productive capacity in agriculture, but also to

increase market access capabilities by supporting the development of anchor infrastructure that could

contribute to this effort. Special attention will be paid to the areas of water control and management,

transport (to facilitate access to national and regional markets), and energy. The Bank’s experience

in Niger shows that it can effectively remain committed to these strategic infrastructure sectors,

considering its ability to mobilize other actors, especially in the implementation of major structuring

projects.

6. Pillar 2 is aimed at strengthening Niger’s governance framework to enable the country to

take full advantage of its natural resources, ensure sustainable exploitation of these resources,

promote and maintain macroeconomic stability and create an enabling environment for private

investment. These factors are essential to the robust, inclusive and green growth desired by the

country. The strategy will also support cross-cutting themes, with specific emphasis on

gender promotion, since the goal sought is to systematically integrate the dimensions of climate

change and the green economy, gender, capacity building and skills development as well as the

promotion of youth employment into Bank operations, in line with the priorities of the 2013-22 Ten-

year Strategy. Economic and sector-based surveys will also be undertaken to strengthen the Bank's

role as a knowledge institution.

v

7. With specific reference to gender promotion, which is a key issue within Niger’s context,

the Bank’s action will be at three levels. Furthermore, operations that will be prepared will

contribute directly to improving the status of women. In Niger, women are the most vulnerable in

terms of food insecurity – a problem that Pillar 1 of the strategy plans to directly solve. Concerning

Pillar 2, the strategy will seek to support national gender-sensitive budgeting efforts in the area of

governance and public finance management. Therefore, all operations prepared within the

strategy framework will incorporate this objective whose purpose is to promote gender, with precise

indicators to assess progress made. In addition, policy dialogue with Niger’s stakeholders on the

subject will be strengthened, particularly with the involvement of the Bank Group President’s

Special Gender Envoy. Lastly, the envisaged study on women’s status and child trafficking will

generate necessary knowledge to move forward the gender promotion agenda.

8. The strategy proposed above is consistent with government priorities as set out in the

2012-15 Economic and Social Development Plan (PDES). In addition, it will contribute to the

implementation of the Bank Group’s 2013-2022 Ten-Year Strategy, particularly the broad aspects

relating to infrastructure development, regional economic integration, private sector development and

promotion of good governance. The proposed Bank strategy will further contribute to the

implementation of the West Africa Regional Integration Strategy (RISP 2011-15), and the Bank’s

Sahel Initiative under preparation.

9. The strategy will be financed from the resources of the ADF-12 public sector window

for 2013, and those of ADF-13 and ADF-14 for 2017. These resources and those of the regional

envelope and private sector window will all serve as catalysts for mobilizing additional financing,

especially from other technical and financial partners. As part of the implementation of this strategy,

the Bank will pay special attention to the mobilization of resources for Niger. Accordingly, all Bank

Group sovereign and non-sovereign instruments, co-financing and/or guarantee arrangements, as well

as the resources of fiduciary funds or facilities will be used. Furthermore, and in accordance with the

Bank’s Ten-Year Strategy, public-private partnerships (PPP) will be sought, particularly to finance

major infrastructure projects. It is recommended that national procurement procedures be applied for

national competitive bidding (NCB) relating to Bank-financed operations.

1

I. INTRODUCTION

1.1 This report proposes a new strategy for Bank Group involvement in Niger over

the period 2013-2017 and areas where portfolio management needs to be

strengthened. Since 2011, the internal political climate in Niger has normalized and resulting

in the enhanced visibility and stability needed by the Bank Group to develop a country

strategy. In terms of economic development, Niger is facing significant challenges, including

recurrent food insecurity, an obvious vulnerability to climate change, partly due to the country's

location in the Sahel, a regional environment in search of stability and, finally, the need to

strengthen the governance of extractive industries. The government recently adopted an

Economic and Social Development Plan (PDES) as a response to these multiple challenges. All

these factors, as well as the recent adoption by the Bank of a 2013-2022 Ten-Year Strategy,

underpin the need to develop a new country strategy for Niger, covering the period 2013-

17. Beside this introduction, this CSP 2013-17 has six sections. Section II presents the country’s

political, economic and social context, and assesses medium-term prospects. It analyses the

challenges, opportunities and country strategic framework, aid coordination and harmonization,

and the Bank’s positioning in the country. Section III assesses portfolio performance. Section

IV is an overview of the implementation of the Bank’s previous strategy and draws key lessons

for CSP 2013-17. Section V presents the Bank's Niger strategy for the 2013-17 period and

highlights the strategic pillars, expected outcomes and targets, the issues covered by the country

dialogue, potential risks and mitigation measures. Section VI presents the conclusion and

recommendation addressed to the Board.

II. COUNTRY CONTEXT AND PROSPECTS

2.1 Political, Economic and Social Context

2.1.1 Political and Security Context

2.1.1.1 Continuing consolidation of the democratic process is a guarantee of stability,

peace, and the implementation of reforms. However, the interplay of political alliances

and regional threats poses risks for internal balance. A broad-based government was formed

in August 2013. The ruling coalition, the “Movement for the Revival of the Republic/Mouvance

pour la Renaissance de la République (MRN)" has a comfortable majority in the National

Assembly, although political alliances are being re-formed. The situation remains precarious at

the regional level, with potential or actual danger arising from the hybrid forces (identity-related

and religious conflict and trafficking of all kinds). The consequences of the Libyan crisis are

less alarming than a year ago, but the situation is far from being fully stabilized. The threat of

extremist groups like Boko Haram and MUJAO still looms, and the risk of negative impact on

Niger is real, even if it is contained. Finally, Niger has been affected by the crisis in Mali,

particularly through the security and humanitarian impact caused by the influx of refugees.

However, the recent progress achieved in the wake of the election of a new president in Mali

portends a relative stabilization of the situation. It appears that the natural expansionist tendency

of these threats is regional. In this context, any tentative solution can and should be considered

only at regional level.

2.1.2 Economic Context

Economic Growth Boosted by the start of oil production (see Box 1) and a good harvest,

real GDP growth in 2012 is estimated at over 13% (see Figure 1 below). Primary, secondary

and tertiary sector contribution is expected to stand at 6.9%, 4.0% and 2.5%, respectively.

2

2.1.2.1 Although some growth was recorded

in 2012 (16.5% against 3.7% in 2011), the

primary sector is has shown an erratic

performance, contributing somewhat to food

insecurity in rural and even urban areas of the

country. A long-term analysis shows that

agricultural production is often affected by

weather conditions. Niger was among the Sahel

countries that experienced the drought-related

acute food crises of 2005 and 2010, which

affected more than 10 million people in the

region, including 2 million in Niger. The country

therefore considers the search for greater food security a priority. To foster this objective, the

authorities, in April 2012, adopted the initiative dubbed “Nigeriens Feeding Nigeriens” (les

nigériens nourrissent les nigériens) or 3N, which aims to promote sustainable food security and

agricultural development.

2.1.2.2 The relative weight of the primary

sector in the economy stood at 46.2% of

GDP in 2012, compared with 45.4% in 2011

and 48% in 2010. The primary sector’s

volume expansion is mainly driven by

agriculture (+24.8%). This may be attributed to

rainy season cropping, an uptrend in irrigated

agricultural production resulting from

increased investment in agricultural

infrastructure and the supply of improved

seeds.

2.1.2.3 The secondary sector (15% of

GDP) experienced high volume growth of

37.7% in 2012, compared with 3% in

2011. The increased activity in this sector in

2012 (traditionally the lowest contribution to

GDP) may be attributed to “extractive

activities” which recorded a 152.5% growth

related to oil production. After declines in

2011, uranium and gold production rose by

13.2% and 11.9% respectively in 2012. After a 12.1% decline in 2011, refining operations, well

in excess of domestic demand, and improved power generation contributed to the 5.7% increase

in energy sector value added in 2012. Furthermore, the continued implementation of State

infrastructure projects helped to strengthen the construction industry, which recorded a 7.4%

growth rate in 2012, compared with a 3.3% decline in 2011. Rechanneling financing to non-

extractive sectors in order to diversify the economy would help avoid any likelihood of Dutch

disease.

2.1.2.4 The uptrend in the service sector, which accounts for 38.8% of GDP, continued.

After a 7.7% growth in volume in 2011, the pace of growth in the sector continued with a 6.6%

rate in 2012. This trend was due to increased activity in freight transport, including oil, which

rose by 8.5%.

2.1.2.5 Macroeconomic Management. Inflation increased to 3.9% in 2012, but could fall

to 1.8% in 2013. After rising to 2.9% in 2011 from 0.9% in 2010, following a poor crop season,

it climbed to 3.9% in 2012, due to the inflationary impact of the floods of July 2012. The

decision to temporarily place a cap on food prices, adopted in 2012 following the floods, should

-2

0

2

4

6

8

10

12

14

2004 2005 2006 2007 2008 2009 2010 2011 2012

Graph 1: Real GDP Growth (%)

Niger West Africa Africa

Box 1: Crude oil and refined products export potential to strengthen the external trade balance.

Niger officially joined the circle of African petroleum producing and exporting countries from November 2011. The inauguration of the Zinder refinery in 2011 enabled it to take a step towards consolidating its public finances. By providing the country with the means to produce and exchange crude oil and refined products, especially in the sub-region, the refinery made it possible for the country to strengthen its productive fabric and also reduce the structural deficit in its balance of payments. The Zinder refinery has a capacity of 20 000 barrels/day (or 1 million tonnes per year), and is able to produce the following derivatives:

Liquefied petroleum gas (LPG): 69 900 tonnes per year;

Super petrol: 306 200 tonnes per year;

Diesel: 505 400 tonnes per year

The Agadem deposits were estimated to be able to produce between 60 000 and 80 000 barrels of crude oil per day (3 to 4 million tonnes per year) for export. The route chosen will be the Chad-Cameroon oil pipeline (to the Kribi terminal). The current project consists in building a pipeline connecting the Agadem fields to the Doba pipeline (Chad-Kribi) running from Chad to Cameroon.

.

3

bring inflation down to 1.8% in 2013, which is below the community’s 3% threshold. The

downtrend should be accelerated by the BCEAO’s common monetary policy, which lays

emphasis on price stability.

2.1.2.6 The budget deficit is below 3% for 2012, reflecting a significant improvement on

2011, but could drop further to 2% in 2013. In spite of the expansionary fiscal policy adopted

in 2012, the overall budget deficit which had widened (see Figure 2), from 2.4% of GDP in

2010 to 6.8% in 2011, shrank to 2.8% in 2012. It is expected to 2% for 2013. This performance

is attributable to the huge revenue generated by the extractive industries. Moreover, the revenue

derived from the review of various tax rates, the expiry of certain exemptions and the continued

strengthening of the tax and customs services have also enhanced the performance1.

2.1.2.7 The current account balance is still

structurally in deficit although slightly

improved. In 2012, foreign trade witnessed 29%

growth in export volume related to the sale of

petroleum products and a 25% increase in import

volume. The structural deficit in the balance-of-

payments current account stabilized at 22.7% of

GDP in 2012 and 2011, compared with 20% in

2010. Imports of capital goods used in the

construction of the Zinder refinery and the

pipeline that will supply it with crude largely oil

account for this deficit. Foreign direct investment (FDI)2, notably Chinese and French, has

helped to make this deficit level sustainable.

2.1.2.8 Niger’s debt distress risk went from “low” to “moderate” in 2012. Debt ratios were

reduced substantially when the country became eligible for the Enhanced HIPC Initiative in

April 2004. At end-2010, the level of public debt was low, with the total public debt (internal

and external) accounting for about 19.8% of GDP. The release of a full internal debt inventory

and the signing in July 2010 of a bank loan repayment agreement with the BCEAO helped to

improve the State’s financial situation. However, the public debt has increased since 2011. The

stock of external debt rose from 16.8% of GDP in 2010 to 20.1% of GDP in 2012, as a result

of the provision of State guarantee of the non-concessional Chinese loan granted for the oil

refinery (SORAZ), a loan obtained to finance State participation in the Imouraren uranium

mine and a loan of CFAF 50 billion contracted with Congo. The debt sustainability analysis

thus revealed that the country’s debt distress risk had gone from “low” to “moderate”.

Governance

2.1.2.9 Natural Resource Management. The authorities are committed to strengthening

natural resource management and environmental governance. Although the recent increase

in mineral and oil exploitation is potentially an important source of income to support the

country’s economic and social progress, it also poses challenges for governance, particularly

environmental governance, which needs to be strengthened. The authorities are working on this

issue. Niger recently adopted a national charter on good governance and the management of

mineral resources and hydrocarbons. Moreover, in 2012 the country achieved the status of full

compliance with the Extractive Industries Transparency Initiative (EITI), implying that any

investor involved in the mining and hydrocarbons sector is required to carry out an

environmental and social impact assessment (ESIA) and have an Environmental and Social

Management Plan (ESMP). Furthermore, as part of the revision of the Mining Code and the

Investment Code, the Government plans to strengthen the environmental standards in line with

1 Despite the significant increase, (from 13.3% of GDP in 2010 to 14.4% in 2011), the tax burden rate is still low compared to the Community

target of 17%. 2 Representing 16.2% of GDP in 2011, compared with an average of 4% for Africa.

-10

0

10

20

30

40

50

2004 2005 2006 2007 2008 2009 2010 2011 2012

Graph 2: Fiscal Balance(% of GDP)

Niger West Africa Africa

4

international standards. Environmental management is moreover reflected in the 3N Initiative

through: (i) sustainable natural resource management; (ii) capacity building for stakeholders;

(iii) land tenure support; and (iv) the establishment of a participatory system of governance.

2.1.2.10 Quality of Policies and Institutions. Efforts are still needed despite the progress

recorded in some areas. Mo Ibrahim Foundation African Governance Indicators highlight the

urgent need for targeted reforms. Moreover, structural policy and social inclusion and equity

policy indicators have stagnated. The country has however made progress in the area of

transparency and the fight against corruption3, although the situation had initially

deteriorated. The overall assessment of policies and institutions conducted by the Bank over

the period 2010-11 shows that there has been a substantial improvement in the quality of

economic management and governance beyond the average for West Africa. This resulted in

an increase in Niger’s ADF-12 country allocation, by 14.4% and 4.5% in 2012 and 2013

respectively.

2.1.2.11 Public Finance Management. Unsatisfactory implementation of reforms despite

progress in transposing the WAEMU Directives. According to the latest PEFA report in the

process of validation by the Government, the implementation of the public finance Management

Reform Programme (PFMRP 2011-14) is unsatisfactory. Only five out of 31 PEFA

performance indicators were considered satisfactory, while 21 were awarded scores equal to or

lower than their 2008 levels (the year PEMFAR introduction leading of preparation of PFMRP

2011-14). Significant progress was recorded in public procurement and cash-flow

management. In addition, at Community level, all WAEMU Directives were transposed into

the national regulatory framework with the support of technical and financial partners,

including the Bank. The current challenge lies in the enactment of implementing

instruments. Weaknesses were observed, including the lack of commitment and procurement

plans. Significant challenges still have to be overcome in order to: (i) improve internal resource

mobilization to match the national economic potential; (ii) strengthen the national public

financial control and anti-corruption mechanism; and (iii) strengthen the capacity of economic

and financial services with a view to improving the efficiency of public services and better

inclusion of the gender dimension in the national budget.

Sector Governance

2.1.2.12 Energy sector. In the energy sector, the electricity sub-sector is characterized by

limited access to electricity (10%) and an aging transmission and distribution

network. Moreover, Niger imports about 86.6% of its electricity consumption from Nigeria,

under an agreement signed in 1972 and renegotiated in 2010. On-going reforms in the energy

sector in Nigeria could undermine the preferential tariffs on exports to Niger as practised

today. Indeed, the current rates in Niger date from 1994 and have not been substantially

amended since then4. The sector is therefore facing many challenges which, in the electrical

sector, relate in particular to the need to: (i) increase access and reduce disparities between rural

(1% access) and urban areas (50% access); (ii) modernize transport and distribution

infrastructure; (iii) develop appropriate information systems and master plans (National Master

Plan and National Rural Electrification Plan); (iv) provide capacity building for sector

stakeholders and conduct a study on electricity rates that will enable the framing of growth

assumptions; and (v) establish an independent regulatory body for the electricity sector,

considering that independent power producers are gradually moving in.

2.1.2.13 Transport Sector. Transport infrastructure is among PDES priority issues and in

this respect, Niger has opted to open up externally and internally. The Government has

updated the 2004-2010 National Transport Strategy (SNT) which concerned road transport

3 According to the Transparency International 2012 Report, the corruption perception index has improved. Niger ranks 113th in 2012, out

of 176 countries, against the 134th position in the 2011 ranking, that is, an increase of 21 places 4 These rates mask the actual margins realized by the Niger Electricity Company since the import price is about ¼ of the resale price charged

to the final consumer

5

only. It will be extended to other modes of transport (air, rail, sea and inland waterways). The

new 2011-2025 SNT being validated is presented as a set of transport policies for each mode

of transport and a costed action plan spanning 15 years. Beside Ordinance No. 2009-25 of 3

November 2009 setting out the fundamental principles governing the transport system, the

Government has issued the Ministerial Order of 27 February 2013 concerning types of traffic

control, road checkpoints and remedial mechanisms to minimize abuse in freight

transport. Other actions, decisions and instruments being considered include: (i) the imminent

adoption of a new highway code; (ii) the establishment of the Niger Road Safety Agency

(ANISER); (iii) which will be tabled before a parliamentary session in the days ahead. Lastly,

the new strategy being validated includes proposed institutional reforms in the sector such as

the transformation of the Autonomous Road Maintenance Financing Fund (CAFER) into a

second generation Road Maintenance Fund (FER2) and/or a road agency. The challenge is to

work within the framework of the Bank's strategy for these reforms to become effective.

2.1.2.14 ICT Sector. Inadequate infrastructure is an obstacle to the promotion and

development of innovative ICT applications and services. Niger mainly has only one

wireless network interconnecting seven regions, and two fibre optic links connecting the

country to underwater cables via Benin and Burkina Faso (itself landlocked) to ensure regional

and international connectivity. This inadequacy, coupled with the lack of a back-up direct

access to underwater cables (only via Benin for now) is a serious obstacle to the promotion and

development of innovative ICT applications and services requiring high bandwidth5. The

authorities prioritize ICT development as a remedy to this situation. Accordingly, in a bid to

supplement the national fibre optic backbone, the Government of Niger envisages the inclusion

a national and international connectivity component in the Trans-Sahara Highway (TSH)

Project linking Niger, Chad and Algeria. The project is under appraisal6.

2.1.2.15 The Private Sector and Business Climate. The Private Sector is marked by the

predominance of the informal sector. The growth of the formal private sector is limited

by low competitiveness, small size of the domestic market and limited access to

finance. The modern private sector, whose weight in the economy was estimated at 20% of

GDP in the 1990s, has steadily declined and represented less than 5% of GDP in 2012. It is

dominated by the informal sector, which accounts for about 70%. The formal sector consists of

SMEs/SMIs and its growth remains dependent on the improvement of the business

environment, a sound financial system and the removal of institutional and fiscal

constraints. Activities are highly concentrated in trade and services, to the detriment of more

processing-oriented industrial activities.

2.1.2.16 Business Climate. Niger has not undertaken any major reform in recent years to

improve the business climate. The country saw its ranking in the Doing Business Report drop

sharply from 173rd place in 2012 to 176th in 2013. Despite the measures taken and those being

implemented in 2013, there are still many challenges, related to the time it takes to set up a

business, which is still long and calls for the efficient implementation of land, real estate, tax

and legal reforms. Many consultation and reform frameworks overlap and are found to be

redundant in their missions and objectives. Greater synergy is needed in actions, particularly in

the operationalization of the single window and building the capacity of government

services. The legal framework also needs to be improved. Indeed, the country slipped back three

places compared with the 2012 ranking for this indicator in the Doing Business 2013 Report. An

improvement of the legal framework will usher in a climate of trust. Considering the high cost

5 The situation is such that the international cost of the bandwidth exceeds USD 5000 per megabit per month for these landlocked countries

(Chad, Niger, etc.) whereas the equivalent in volume and duration of the same international capacity in countries with access to submarine

cables is much cheaper. For example, one megabit costs USD 500 and USD 40 per month in South Africa and North Africa (especially

Tunisia) respectively. 6 Niger and Chad submitted a joint application for funding for the Trans-Sahara Backbone (DTS) to the Bank at the end of June 2013, as a

complement to the TSH project. It concerns a regional fiber optic interconnection project between Algeria, Niger, Nigeria and Chad. The

feasibility study of the project (separate from the TSH) will be conducted in 2013 in the context of an ICT investment project under ADF-13 and allow Niger to access additional resources through the Bank’s regional allocation.

6

of factors and the security risk in the Sahel strip, investors should be provided legal protection

to better stimulate the investment needed by Niger to bring about the structural transformation

of its economy. This requires the establishment of genuine commercial courts, among other

measures. The Government is already working on this issue, but Bank support could help to

speed up the process.

2.1.2.17 Financial Sector and Microfinance. The financial sector is relatively sound, but

lacks diversification and depth. Niger’s financial system comprises some ten banks and one

financial institution and, like that of WAEMU countries, remains highly concentrated. Four

major commercial banks owned 90% of the total assets amounting to CFAF 712.6 billion in

2011. The financial system remains relatively sound and was left unscathed by the recent

financial crisis, due to its poor integration into the international financial system as well as the

close supervision of the WAEMU Banking Commission. The depth of the financial sector as

measured by the ratio of broad money to GDP (M2/GDP) is also limited. It stood at 20.5% in

2010 and 20.3% in 2011, below the 41% level recorded in sub-Saharan Africa. Banking

facilities are little used in Niger (...); access to financing is very limited, as is the capacity to

mobilize medium- and long-term financing7. The microfinance system is in deep crisis. In spite

of a rehabilitation programme, it is characterized by weaknesses in governance and the

information system, notwithstanding the positive achievements recorded at end-December

2012. The breakdown of credit to the economy by sector shows that much remains to be done

to enhance financial sector support to the agricultural sector, given the importance of agriculture

for food security8.

2.1.2.18 Procurement System and Use of National Procedures. The evaluation carried out

by the Bank in 2010 concluded that Niger’s public procurement system is largely

consistent with international standards and Bank policy and procedures. This evaluation

recommended that national procedures should be applied for national competitive bidding

(NCB) with respect to Bank-financed operations. The next evaluation, taking the current

progress into account, will assess the performance of the national procurement system and its

robustness, with a view to making a recommendation on the use of national procedures for

international competitive bidding (ICB). To this end, urgent reforms should be initiated to align

the national system with Bank procedures and WAEMU standards (see Annex 7).

2.1.2.19 Regional Integration and Trade. Like most African countries, Niger faces a

number of economic and political challenges that transcend the national context and that

one country alone cannot solve (narrow national markets, inadequate functional

infrastructure, non-interconnection with the national infrastructure networks of

neighbouring countries, lack of commercial competitiveness due to a dysfunctional

infrastructure system, absence of policy and regulatory harmonisation, etc.). These problems

are exacerbated on Niger’s territory since the country does not have a seaboard, for which

reason it is largely dependent on other countries for commercial exchanges (import and

export). To remedy this situation, Niger has joined several multinational organisations

working towards trade promotion and economic integration, the free movement of persons

and goods, and trade facilitation. Thus, the country is a founding member of major sub-

regional West African institutions (Conseil de l’Entente, WAEMU, ECOWAS). It is also an

active member of several continental (CEN-SAD, the African Union, ECOWAS) and

international organisations (WTO, UN). Thanks to its geographic location that places it at

the crossroads of three regional economic communities (ECOWAS, ECCAS, AMU) and its

enormous natural resource reserves, especially uranium, gold, iron and crude oil, Niger will

undoubtedly draw enormous benefits from accelerated regional integration in the West

African zone and the interconnection of West Africa with Central and North Africa. Indeed,

7 The Bank Group supports the development of Niger’s financial sector, and recently granted SONIBANK a line of credit, accompanied by

a FAPA grant to strengthen the capacity of the institution. 8 In the light of this situation, the Government recently established an agricultural development bank, "BAGRI" whose objective is to support

the production and processing of agricultural products. The Bank Group could consider supporting these efforts.

7

it is an established fact that regional integration is a catalyst for trade, investments, economic

growth and job creation. However, given that these benefits are underpinned by the existence

of functional infrastructure, Niger should develop its regional infrastructure network if it is

to take advantage of such benefits and develop its trade potential, including the considerable

trade (so far mostly informal) that it currently maintains with its large Nigerian neighbour.

Based on Vision 2020 and the ECOWAS Regional Infrastructure Programme, the Priority

Action Plan under the Programme for Infrastructure Development in Africa (PAP-PIDA),

the AfDB Regional Integration Strategy Paper (RISP) and the Sahel Initiative being

prepared, the Bank plans to contribute to financing the preparation and implementation of

high-impact transport infrastructure for regional integration and trade, thus opening up

Niger and facilitating the country’s access to the region’s sea ports.

2.1.2.20 Environment and Climate Change. Vulnerability exacerbated by climate change

(CC). The most anticipated climate scenario in Niger would be characterized by warmer and

more variable climate, resulting in unpredictability of the rainy season (onset and duration)9.

This single factor could exacerbate all the challenges already affecting the areas of water

resources, agriculture/livestock, fisheries and forestry. These challenges, in particular, urban

demand for firewood and charcoal, shifting cultivation, slash-and-burn cultivation and

overgrazing, all of which contribute to the worsening of desertification. Similarly, the expected

CC would be likely to increase poverty levels among a population segment that is already

vulnerable to the vagaries of climatic conditions, which compromise their food self-sufficiency

and raise their energy dependence, with consequences in terms of land clearing and

deforestation10. Moreover, the priority given to the exploitation of natural resources, especially

mining and hydrocarbons could escalate the related environmental hazards such as the use of

chemicals in mining (cyanides, etc.).

2.1.2.21 However, the natural environment in Niger is an asset for socioeconomic

activities, especially those carried out by the most impoverished rural populations. Niger’s

natural resources (land, water, soil and biomass) are prone to deep degradation, mainly due to

an imbalance between their exploitation and renewal rates11, coupled with marked climate

variability during the last decades. The major challenge faced mainly concerns natural resource

development and sustainable management. Indeed, agro-forestry and pastoral activities are the

main source of income and employment for nearly 80% of the population in rural areas.

Furthermore, these activities contributed to the country’s economy to the tune of between 45%

and 48% of GDP over the period 2010-2012. Optimal management of natural resources

underpinning the development of the rural sector is needed to boost the people’s resilience to

the adverse effects of climate change. This is important leverage for policy efficiency, in terms

inclusiveness. Otherwise, continuous degradation of the environment could lead to a substantial

decline in incomes earned by the poorest population segments from the supply of environmental

goods and services.

2.1.2.22 The government has adopted mitigation measures to address the adverse effects

of climate change. With regard to climate change resilience, Niger has been admitted to a Pilot

Programme for Climate Resilience (PPCR). This first programme of the Strategic Climate Fund

(SCF) is an instrument designed to reorient development towards low-density forms of carbon

that can withstand the effects of climate change12. To complement these resources, the

Government has established its own fund lodged with the BCEAO, which will be replenished

by proceeds from extractive industries and used to manage climate change-related crises such

as recurrent floods and droughts. This is a good example that should be emulated by other

countries.

9 Second National Communication for Sustainable Development (NCA), 2009 10 National Action Plan for Adaptation to Climate Change (NAPA). NCA, GEF, UNDP, 2006 11 Environmental Profile of Niger - Final Report, AGRIFOR Consult, April 2006. 12 Pilot Programme for Climate Resilience (PPCR - Niger), Joint Mission Fact Sheet, Niamey (28 June - 7 July 2010), IFC, World Bank and

African Development Bank.

8

2.1.3 Social Context

2.1.3.1 Demography. Niger’s rapid population growth is certainly one of the major

challenges that the country must overcome. The provisional findings of the general

population and housing census conducted in 2012 show that Niger has an annual

population growth rate of 3.9%, which is one of the highest in the continent, and comes

with many challenges. This very fast population growth is mainly due to a high fertility rate

of about 7.6 children per woman, resulting from very limited use of contraception methods. The

demographic expansion has been characterized by the rejuvenation of the population. Thus, two

Nigeriens out of three (66%) are less than 25 years old, making Niger one of the countries with

the highest proportion of young people in the world. This is equally true for the dependency

ratio. The job market integration remains a problem, in rural communities as well as in urban

areas where urban drift has become a constant phenomenon. This population dynamic poses

significant challenges in the areas of agriculture, environment, drinking water, health,

education, employment, housing, etc. There is an urgent need to address these challenges

proactively. Indeed, unemployed young people in this part of the Sahel may constitute a

breeding ground for religious or identity threats.

2.1.3.2 Given the link between the high birth rate and the status of women in Niger, there

is no denying the fact that population control – a key Government objective re-stated in the

PDES – will also demand efforts aimed at promoting gender parity. By contributing to

women’s economic advancement, the Bank strategy will also indirectly help Niger to attain

its population-related objectives.

2.1.3.3 Poverty situation and achievement of the MDGs. Progress towards improving the

living conditions of the populations has not yet resulted in a significant reduction in

poverty, and it is unlikely that Niger will achieve the MDGs by 2015. The gross enrolment

ratio (GER) increased from 57.8% to 66.3% between 2008 and 2010 and from 50.6% to 59.7%

for girls. The mortality rate of under-5 children remains high, despite a decline from 156 to 143

deaths per 1000 live births over the same period. Although Niger witnessed an improvement in

its Human Development Index (HDI) over the period 2009-2011, it is lagging, ranking 186th

out of 187 countries in 2011, with an HDI of 0.266. The household electrification rate at end-

2011 was approximately 10%, with a disparity between urban (50%) and rural (1%) areas. In

2013, two years before the expiry of the MDGs deadline, the poverty rate is estimated at 55%,

far from the target of 31.5% by 2015. In light of the poverty threshold of one dollar per day set

by the United Nations, an estimated 60% of Niger's population would be affected. The incidence

of poverty will be 85% if a threshold of two dollars per day is considered.

2.1.3.4 Gender Disparities. Gender disparities persist in education and the labour

market. However, women’s representation in politics is improving. Girls' enrolment in

primary education has doubled since 2000, but the absolute gap between girls and boys is

widening. The disparities are becoming more pronounced in secondary education, where girls

account for only 20% of total enrolment, compared with 50% at the primary level, due to socio-

cultural or religious factors that lead to their early withdrawal from the education system.

On the economic front, women are more active in the agricultural sector, especially in the

production and marketing of agricultural products. Yet, their full participation in these

productive activities is hampered by their limited access to fertile land, several land-tenure

difficulties and access to credit. Consequently, women are the most vulnerable to food

insecurity, especially in the rural area. Contribution to development is uneven between men

and women on the labour market. Women make up 50.1% of the population but only 26% and

21.7%13 of employees in the public and private sectors respectively.

13 Given the Law on Quotas that sets the minimum threshold of 25% for women in public sector senior jobs, the representation of women

will improve.

9

2.1.3.5 To overcome these constraints, the authorities hope that, during implementation of

the 3N Initiative, which the Bank could support within the framework of this strategy, part

of the irrigation schemes should be solely assigned to women’s agricultural cooperatives.

Furthermore, to promote access by agricultural entrepreneurs (including women) to credit,

the Bank could consider the possibility of extending a state-guaranteed line of credit to

Banque Agricole du Niger [Niger Agriculture Bank] (BAGRI). However, it is worth noting

that despite several economic challenges, women’s representation on the political scene has

improved 14.

2.1.4 Medium-Term Prospects

2.1.4.1 The macroeconomic prospects are bright, although subject to various risks.

Investments in the oil and mining sectors, as well as consolidation of the macroeconomic

framework are good omens for robust growth. After a meteoric rise to 13.1 % in 2012,

economic growth is expected to continue on a 5.5% trend from 2013. Exports of crude oil and

refined products will be on the increase. In addition, the new uranium mining project financed

by the French AREVA group would double uranium production between 2012 and 2016,

making Niger the world's second largest producer. Inflation is expected to remain low in 2013.

However, the fragile regional security situation and natural disasters (floods and droughts) are

significant risks that may influence these prospects. The challenge is to translate the growth

into effective poverty reduction.

2.2 Strategic Options

2.2.1 Country Strategic

Framework

2.2.1.1 The 2012-15 PDES is the

only Government reference

framework on development policies

and strategies. Founded on results-

based management principles, the

PDES is centred on five strategic

pillars (see Chart 3 opposite).

2.2.2 Weaknesses and Challenges

2.2.2.1 Reducing the vulnerability

of the economy to climate change

and enhancing food security:

Improving resilience to the impacts of

recurrent climatic shocks remains a

major challenge. In its structure,

Niger’s economy is still dominated by

the primary sector. This sector, which

accounted for over 45% of GDP between 2010 and 2012, determines both the performance and

stability of the macroeconomic framework and thus the populations’ well-being. However, the

primary sector, which employs the vast majority of rural inhabitants, remains heavily subject

to climate change and external shocks. The heavy dependence on rain-fed agriculture leaves

the country vulnerable to recurrent food crises. This vulnerability has increased since 2011,

14 In Government, it rose from 8.7% in 1999-2002 to 14.3% between 2002 and 2004 and more than 20% since then. In Parliament, women’s

representation increased from 1.2% in 1999 to 2004 to 12.4% from 2004 to 2009 and has been rising since then.

Graph 3: Country's Strategic Options

- Strong economic growth in 2012 and

favorable medium-term prospects,

driven by mining and hydrocarbons;

- Macroeconomic management deemed satisfactory by the IMF, but insignificant progress in terms of financial management, according to the 2012 PEFA study;

- Progress still necessary to align the

fiduciary framework with community

provisions;

- Deterioration of debt sustainability

indicators;

- Private sector dominated by informal

activities, a financial sector devoid of

diversification and depth, and an

agricultural sector that is under-

funded despite its weight in the

economy;

- - High population growth with

pressure on the labour market and

social infrastructure, but

characterized by lack of skilled

labour;

- Persistence of gender disparities in education and the labour market, but an improvement in women's representation in politics; and

- Recurrent extreme weather conditions.

- High vulnerability of the

economy to climate

change:

- Lack of basic

infrastructure (transport,

energy, ICT);

- Poor diversification of

the productive system;

- Poor mobilization of

domestic resources;

- A mining sector that

could become the

neucleus of industrial

activities:

- A hydrocarbon potential

(oil and gas); and

- An gro-forestry-pastoral

sector with growth

potential that could be

source of an agro-food

industry.

PDES 2012-15:

Pillar 1: Consolidation of the

credibility and efficiency of

public institutions;

Pillar 2: Creation of

sustainability conditions for

balanced and inclusive growth;

Pillar 3: Food security and

sustainable agricultural

development;

Axe 4 : Promotion of a

competitive and diversified

economy for accelerated and

inclusive growth; and

Axe 5 : Promotion of social

development .

Economic and Social Context Weaknesses and Challenges

Strengths and Opportunities

Country's Strategic Framework

10

following the crises that hit this region, also affecting budget allocations for a number of sectors

as well as migrant remittances15.

2.2.2.2 Inadequate infrastructure is an obstacle to the structural transformation of the

economy. Growth-supporting mainstay infrastructure (energy, transport, communication and

irrigation) is inadequate. This aggravates the country’s isolation, increases the cost of factors

of production, limits trade within the country and regional integration, and thus impedes the

development of a modern, diversified and competitive economy (see Box 2). In the area of

energy, needs are not met16, and this affects industrial activity. Analysis of transport

infrastructure shows: (i) a rapid deterioration of the road network17; (ii) the gradual silting up

of the Niger River, which greatly reduces its navigability; (iii) the dilapidated and poorly

equipped state of the three airports of Niamey, Zinder and Agadez; and (iv) lack of a rail

network.

2.2.2.3 Improving public finances governance and optimizing the mobilization of public

and private resources to finance growth. It appears, from the last PEMFAR for the period

2004-09, that there are still weaknesses in public finance management. These include: (i)

inadequate domestic resource mobilization18; (ii) poor management of public resources and

investment; and (iii) inadequate transparency in budget

execution.

2.2.3 Strengths and Opportunities

2.2.3.1 A mining sector which could become the

nucleus of industrial activities. The Bank will need to

provide assistance through its various financial

instruments and in terms of legal support and/or

financial and environmental governance tools. The

opening of the new mine at Imouraren by 2015 or 2016

will be a major turning point in uranium production in

Niger. This mine will reach its maximum capacity of

5,000 tonnes of uranates annually in 2017 for a 35-year

operating period. The country should thus rank among the

top three uranium producers, second after Kazakhstan. Gold mining, like other mining sectors,

should experience a period of expansion. In addition to uranium and gold, the country should

exploit its coal reserves that are estimated to exceed 80 million tonnes19. Niger also has more

than one billion tonnes of iron ore reserves. Its huge limestone reserves may also lead to the

development of new cement factories. Judicious tapping of the above resources, with various

forms of Bank support, may offer the opportunity to lay the groundwork for a diversified local

industry, create jobs and thus kick-start the structural transformation of Niger’s economy.

2.2.3.2 The same applies to the hydrocarbons sector. Niger’s oil and gas potential relates

to the two major sedimentary basins covering 90% of the territory. This potential is yet to be

confirmed through prospecting works, but available knowledge of Niger’s geological features

shows an array of positive elements. The petroleum cadaster currently consists of 34 blocks,

only four of which are under exploration or exploitation licenses. Of these four, three are held

by CNPC of China and one by SONATRACH of Algeria, and the remaining 30 blocks are open

to investors.

15 According to BCEAO, migrant remittances averaged 0.9% of GDP over the period 2000-2011, with a peak of 1.5% in 2004, 2005 and

2010. 16 In 2011, 3.4% of the estimated power consumption of 701.6 GWh was produced in Niger and the rest (86.6%) imported from Nigeria. 17 The road network is faced with a maintenance problem mainly because of the inadequacy of the resources allocated to the road fund

through the Autonomous Road Maintenance Financing Fund (CAFER). 18 At a level ranging between 13 and 14% of GDP, Niger's tax pressure rate is below the 17% threshold set by the WAEMU) 19 Demand is increasing due to Chinese and Indian energy needs. This is an indirect outcome of the moratorium on nuclear energy decided

in several Western States following the Fukushima disaster.

Box 2: The high factor, costs an impediment to the expansion of the mining sector.

The high cost of factors (energy and transport), the weak managerial capacity of the private sector and the country's landlocked position are major constraints that may impact the conveyance of not only the inputs and equipment, but the production as well.

To remedy this, the Government plans to develop an industrial policy and action plan, including the revision of the Investment Code, the rehabilitation of existing industrial areas and/or the creation of new ones, as well as and the establishment of a fund for the restructuring

and upgrading of enterprises

11

2.2.3.3 The food industry has potential that is yet to be fully tapped. It can become a

lever for growth and a source of economic diversification. The non-extractive industry

remains extremely marginal in Niger’s economy. Focused on food processing, its contribution

to GDP is less than 2%. The high cost of inputs such as electricity severely limits the

competitiveness of industrial products processed in Niger. The inappropriate legal and fiscal

framework contributes to the predominance of the informal sector. If the aforementioned

constraints were removed, the growth-enhancing agro-pastoral sectors identified in the Bank-

funded study of 2004 and in the export support project funded by the World Bank would offer

genuine opportunities for economic diversification.20

2.3 Aid Coordination/Harmonisation and Bank Positioning

2.3.1 Aid Coordination/Harmonisation

2.3.1.1 Official development assistance (ODA) is

coordinated by the Government. To that end, a

Permanent (Interministerial) Secretariat responsible for

implementing the Economic and Social Development

Plan (PDES) has been established. The Secretariat is also

responsible for mobilizing and monitoring resources for

the financing of DPES. To enhance the effectiveness of

the ODA, the authorities intend to continue the efforts

initiated under the Paris Declaration and the Accra

Agenda for Action. As part of the preparation and

monitoring of resource mobilization to finance the

PDES, a State/TFP Committee (OECD/DAC) has been

established. The Secretariat of the Committee, which

brings together all TFP present in Niger, is provided

jointly by UNDP and the World Bank.

2.3.1.2 Although the Bank currently has no field

office in Niger, it spares no effort in coordinating its assistance to the country. There are

regular contacts with all stakeholders. Thus, the Bank effectively plays its lead partner role

in implementing the first phase of the major Kandadji structuring programme. These

coordination efforts were intensified within the context of this strategy. The establishment of

the Bank’s presence in Niger will further contribute to the coordination effort and enhance

dialogue with stakeholders. Complementarity and synergy with other TFPs will also be

consolidated in areas of common interest (see Annex 9).

2.3.2 Bank Positioning

Cooperation between Niger and the Bank is dynamic and the Bank remains a leading

strategic partner (see Box 3). This cooperation will intensify over the next five years in

strategic and structural sectors of the economy (energy, agriculture, infrastructure and economic

governance). In this regard, Bank presence in Niger will be most useful in boosting the

institution's visibility. As part of the implementation of the CSP 2013-17, and to enhance

strategic dialogue with the Government and other donors, as well as ensure better monitoring

of its country portfolio, the Bank is exploring options for greater presence in Niger, within the

framework of its overall presence.

20 Indeed, better structuring of agro-pastoral sectors and valorization of their by-products (milk, meat, hides and skins for handicrafts), as

recommended by the study, may provide economic diversification and job creation opportunities.

Box 3: Cooperation between the Bank and Niger

The African Development Bank Group has been involved in Niger since 1970. To date, the Bank has allocated USD 861.5 million to the country. The Bank portfolio consists of 18 operations (grants and loans), totaling about USD 348.47 million.

The Bank will contribute to the financing of the

PDES and food security programme dubbed “3N

Initiative” to the tune of USD 530 million, thus

becoming the third largest contributor to Niger’s

development.

However, due to the absence of a Bank Office in

Niger, the Bank’s visibility remains very low. A

form of presence should be considered in the

near future, given the major structuring projects

planned for the period 2013-2017, with view to

making the Bank a genuine strategic partner of

Niger.

12

III. COUNTRY PORTFOLIO REVIEW

3.1 Overview of Portfolio

Performance

3.1.1 Portfolio Composition

3.1.1.1 The Bank’s active portfolio in

Niger at end-September 2013

comprised 18 public sector operations

and one private sector operation,

totalling about UA 230.04 million. The

focus areas of public sector operations

(see Chart 4 opposite) are agriculture for

106.5 million (48.7%), water and

sanitation - 33.3 million (15.2 %),

governance - 31.5 million (14.4%),

social sector - 22.5 million (11.6%) and

infrastructure - 22 million (10.1%). The

only private window operation concerns the line of credit of EUR 13 million granted to

SONIBANK, approved in January 2013.

3.1.1.2 This situation reflects the Government's priorities and the Bank's strategic

choices laid out in its country strategy for the period 2005-09 and extended to 2012, whose

two pillars were: (i) Support the development of rural areas through mobilization of water; and

(ii) Promote the reinforcement of infrastructure, including social infrastructure. In terms of

achievements, the Bank's interventions under Pillar 1 have improved agricultural infrastructure

and facilitated access to drinking water and sanitation, while its Pillar 2 initiatives have

contributed to the enhancement of transport infrastructure on the Mali-Chad backbone link, thus

facilitating the conveyance of agricultural produce from irrigated areas to the market.

Concerning the Dori-Tera Project, in addition to the spin-off benefits of the road, local residents

have been provided with health and education infrastructure.

3.1.2 Analysis of portfolio performance indicators

3.1.2.1 Absorption Level. Analysis of Bank portfolio performance during the review

period (April 2013) showed a disbursement rate of about 24%, for an overall average age

of approximately 3 years. The overall disbursement rate stood as follows: infrastructure

(68%), water and sanitation (28.68%), agriculture (13%), social (1%) and governance (0%).

The low rate of disbursement is partly due to the fact that seven operations approved less than

a year ago were still to be implemented (four in agriculture, two in governance and one in the

social sector). The recent establishment of the portfolio only partly explains the

underperformance observed. Indeed, there are also operations aged above two years for which

there has been no disbursement (water and sanitation and social sectors), and other operations

aged about five years with disbursement rates of around 15%. At end-September 2013, the

overall disbursement level stood at 27.46%, with the levels for the various sectors as follows:

infrastructure (77%), water and sanitation (29.46%), agriculture (18.58%), social (6.47%) and

governance (37%). As of end November 2013, the disbursement rate improved slightly to 31%,

compared with 24% in April of the same year during the portfolio review.

3.1.2.2 The low rate of disbursement for Bank projects in Niger is mainly due to the

following two factors: (i) long implementation periods (10 months on average); and (ii) long

periods taken in setting up project Management teams (about 1 year after approval). These two

factors combined inevitably delay the actual start-up of the project by a minimum period of

about two years.

Infrastructure

10,1%

Agriculture

48,7%

Water and

Sanitation

15.2%

Social 11,6%

Governance

14.4%

Graph 4: Distribution of AfDB Portfolio in Niger by

Sector

13

3.1.2.3 Project Age. The active portfolio currently contains no project aged more than

8 years. However, only one project (the Tibiri-Dakoro-Madaoua-Tahoua Road) will be eight

years old in December 201321. After three extensions, totalling 32 additional months, from a

normal project implementation period of 30 months, the project, which should have been

completed in September 2013, has a disbursement rate of 68%.

3.1.2.4 Projects at risk. At the time of the review, the portfolio had only three projects

at risk, or 27% overall, representing virtual stagnation, compared with 2010 when the

percentage of projects at risk stood at 26%, but an improvement over the 40% rate for 2008.

The review noted, however, that two of the three projects considered at risk could become

problem projects, given the obstacles hindering their implementation. These projects were the

Kandadji Programme and the Tibiri-Dakoro-Madaoua-Tahoua Road Project. In July 2013, the

Kandadji Programme did become a problem project (see Annex 10) following the suspension

of implementation. The Tibiri-Dakoro-Madaoua-Tahoua road was also closed end

September. This brings the number of risk projects to 2 (i.e. 18%).

3.1.2.5 Delays in fulfilling the effectiveness and start-up conditions. The 2013

review noted that the average project effectiveness timeframe (grants and loans) in Niger

is about 10 months, compared with the standard three months. Currently, four operations

approved over seven months ago are still not yet effective (two operations under the Water

Resource Mobilization and Development Project - PROMOVARE - and two under the Pilot

Programme for Climate Resilience - PPRC). Moreover, for projects in Niger, it takes one year

on average to put together a full implementation team, which delays the actual start-up of

project activities by an average of one and a half years to two years.

3.1.2.6 Cancellable Operations. At the time of the review, four projects were about to

be cancelled. These cancellations were due to two reasons: prolonged non-disbursement

periods and project completion. The first case concerns the resources of the loan component for

the Vocational and Technical Education Development Support Project approved in 2011,

amounting to UA 7.87 million, from which no disbursements have been made, and the Rural

Water Supply and Sanitation Project - Phase II, for which an RWSSI grant amounting to UA

3,300,956.45 was approved in 2011. The Bank will cancel the balances of two completed

operations (Tibiri - Dakoro Road, Invasive Aquatic Weeds) by end December 2013.

3.1.2.7 Audits and financial managements/disbursements . Audit report preparation

delays. It is worth noting that only two projects out of eight, or 25%, submitted timely audit

reports that were validated. The rest of the projects (75%), including one on-going project22 and

five projects23 completed several years ago are not up to date with audit report submission. This

situation could adversely impact the country portfolio performance. The authorities are

committed to taking appropriate remedial action. The audit report production status has

improved since the review and the establishment of a monitoring mechanism at the Ministry

of Planning. Out of 9 reports due, 7 have been produced, of which 4 validated, 3 not yet

validated and 2 not yet submitted. These efforts must be pursued.

3.1.2.8 Delays in justification of special accounts advances. Regarding disbursements, in

addition to the slow pace of replenishment of the revolving fund, there is an irregularity in the

justification of special account advances.

21 21 It should be noted that this project has faced obstacles; firstly during the first year from 2010 to 2011, in the Tibiri-Dakoro section. Then from January 2013,

along the Madaoua-Tahoua sections due to endorsements by the control mission exceeding the required threshold. 22 This refers to the RWSS project in three regions. 23 This refers to the Zinder Agricultural Development Project (2009 and 2010 reports), the Tahoua and Tillabéry Health Care Improvement Project (2009 and

2010 reports), the Gender Equity Strengthening Project (2010 report), the Decentralization Support Project (2010 report) and Emergency Humanitarian

Assistance to Drought Victims (2011 report).

14

3.2 Key Lessons from the Portfolio Review

3.2.1 Reminder concerning the 2010 Review and implementation of

recommendations. The 2010 review identified problems affecting portfolio performance

and adopted an improvement action plan. The problems identified in 2010 included: (i) delay

in putting together the project teams; (ii) inadequacy or poor quality of project baseline studies;

(iii) delay in the payment of counterpart funds; (iv) lapses in state structures' support to

programme; and (v) poor management of project extensions and completion. The portfolio

review noted the inadequate implementation of the 2010 Action Plan, partly for lack of an

effective portfolio performance monitoring mechanism (fulfilment of effectiveness conditions,

timely setting up of management teams, close monitoring of projects in difficulty, control of

the submission and quality of audit reports, urgent measures to be implemented in respect of

projects at risk, formal framework for the holding of periodic meetings to monitor the

implementation of review recommendations, etc.). However, the lessons from problems

encountered in the implementation of previous support programmes led to an improvement in

design support programmes, particularly in terms of institutional arrangement and human

resources.

3.2.2 Outcomes of the 2013 Review and analysis of the challenges and

constraints. The Action Plan of the 2010 Review was poorly implemented. The problems

identified remain and are negatively affecting the performance of projects in Niger. The

problems may be summed up as follows: (i) delay in putting together the project management

teams; (ii) poor quality of baseline studies; (iii) late payment of counterpart funds; (iv) non-

compliance with the established audit reporting timeframe and poor quality of reports; and (v)

lack of a portfolio monitoring mechanism. Recommendations to address these weaknesses were

agreed on with the authorities and are included in the portfolio improvement action plan set out

in Annex 5.

3.2.3 Projects requiring special monitoring. Two projects in the portfolio require

special attention because of the delays they have experienced and their importance in the

PDES implementation and the achievement of the Programme's objectives. These are, firstly,

the Kandadji Programme - Phase I (construction of the dam and development of irrigated areas),

along with Phase II of the Programme (establishment of the hydroelectric plant). Secondly, the

Tibiri-Dakoro Road Project, which has already received three extensions and was supposed to

have ended in September 2013, whereas three major structures (bridges) are still uncompleted.

The Bank decided end November 2013 to close the project. However, the Government

obtained West African Development Bank financing to complete the remaining works.

3.2.4 Next stages and monitoring mechanisms. Strengthening portfolio monitoring

and management mechanisms. Despite the overall portfolio performance score of 2.36 in

2013 (based on highly optimistic scores awarded sometimes by project officers), compared

with 2.25 in 2010, which is deemed satisfactory, it is noted that project implementation in Niger

continues to pose enormous challenges. The observations made jointly with Niger’s authorities

during the review highlighted the need for the Government to give greater attention to portfolio

issues. In this context it was agreed that the authorities establish a portfolio management

monitoring mechanism as soon as possible.

3.2.5 In line with the portfolio review recommendations, the Government appointed a

focal point in the Ministry of Planning in May 2013. The focal point is charged with: (i)

monitoring the coordination of Bank projects; (ii) monitoring the implementation of

recommendations and fulfilment of project conditions, the preparation of audit reports and

the justification of rolling funds; (iii) ensuring the mobilisation of the counterpart

contribution for project implementation; and (iv) holding periodic meetings (quarterly) to

assess the status of implementation of review recommendations. For its part, the Bank will,

during the first quarter of 2014, engage discussions with the Nigerien party to explore the

15

possibility of restructuring the portfolio, with a view to refocusing it on fewer operations,

taking into consideration the country’s capacity, realities and current priorities. The Bank’s

presence in Niger is the subject of a study within the overall presence framework. Such

presence would help to facilitate portfolio monitoring, while also giving more visibility to the

Bank’s action and facilitating coordination with the significant partner in the country.

IV. 2005-09 STRATEGY AND KEY LESSONS

4.1 Implementation of the 2005-09 Country Strategy, extended to 2012. The

preparation of this strategy was preceded by an evaluation of the previous one (2005-2009,

extended to 2012). Instead of issuing a separate report, the outcomes of that evaluation are

presented in this report.

4.1.1 Expected Outcomes. The 2005-09 RBCSP, extended to 2012, had two pillars: (i)

Rural development through water resource mobilization; and (ii) Infrastructure

development, including social infrastructure. Using a cross-cutting approach, the focus

has been on strengthening governance. Five outcomes were expected under the two major

pillars. Those envisaged under Pillar 1 are threefold: (i) increase agricultural production by

expanding irrigated areas; (ii) introduce decentralization; and (iii) improve the drinking water

supply of rural households. Under the second pillar, two outcomes were targeted: (i) strengthen

road infrastructure to aid the evacuation of agricultural and pastoral surpluses; and (ii)

increase access to quality technical education and vocational training. Under the governance

theme, there were three objectives: (i) finance budget deficits; (ii) consolidate the economic

and sector reform programme; and (iii) strengthen institutional capacity.

4.1.2 Outcomes obtained. Discussions with the Government and other stakeholders

(private sector and civil society) indicate that, at the strategic level, the two pillars of the 2005-

09 RBCSP extended to 2012 and the governance strengthening programme were well aligned

with the country's priorities. The consensus is that Bank strategy in Niger has effectively

responded to the Government’s concerns and efforts towards achieving some MDGs. The

implementation of the two pillars and the interventions of the State and other technical and

financial partners have helped to improve the living conditions of households in some parts of

the country.

4.1.3 Under the first pillar, the support provided by the Bank, in collaboration with other

development partners, has improved agricultural infrastructure, strengthened the

decentralization process and facilitated access to drinking water and sanitation. Under the

second pillar, the Bank’s intervention has strengthened transport infrastructure on the (Mali-

Chad) backbone road link, thereby also improving market access for agricultural products from

irrigated areas. In this regard, the road linking Dori to Tera on the Burkina Faso border is a

flagship project that has benefited all residents of the area, especially in terms of related

improved health infrastructure. The Bank also contributed to the improvement of health and

education facilities with positive impacts on human resource capacity building. Bank-funded

budget support (SAP-V) has helped to strengthen macroeconomic stability and speed up the

pace of economic reforms. The on-going implementation of PAMOGEF and PACIRSA,

respectively institutional support and budget support programmes adopted in 2012, will

enhance the capacity of government services and consolidate financial and sector-based reforms

related to the 3N Initiative.

16

4.2 Key Lessons

4.2.1 The completion report of CSP 2005-09, extended to 2012, the main conclusions and

recommendations of which were validated with the government and other stakeholders,

highlights the following recommendations aimed at improving future Bank operations in Niger

at both operational and strategic levels:

To the Bank Group

Strengthen strategic and operational dialogue with the Government, private

sector, civil society and technical and financial partners. Bank representation in

Niger, at least by a Country Economist or even a Programme Officer, is

necessary to ensure the quality of the country dialogue. In addition, the Bank's

strategic support for sector-based reforms, economic and financial governance,

and for the implementation of major projects in the areas of infrastructure, food

security and resilience to climate change is important for the structural

transformation of Niger’s economy. The effectiveness of this support is requires

constant and close interaction with stakeholders.

Conduct quality preliminary studies to ensure proper project design and

implementation. The implementation of both projects suffered from weaknesses

in the study phase, which resulted in the proposal of questionable or even

controversial project sites (Kandadji population displacement site).

Underestimation of the costs of certain project components and the

implementation of activities deemed irrelevant (decentralization support) were

also noted.

Develop major multi-phased structuring programmes/projects and support

efforts to foster resilience to the recurrent impacts of climate change.

Better appreciate the capacity building needs of entities selected to implement

projects/programmes at the preparatory stage and during the project cycle.

Programme support by State entities was the cause of delays in project

implementation in certain cases (DWSS, decentralization, equity and gender

support) due to the unavailability in these entities, in sufficient numbers and

quality, of key qualified staff required for implementing programmes in

accordance with Bank rules and procedures.

To the Government

Use of national procedures. It is recommended and agreed that national

procedures be applied to national competitive bidding (NCB) for Bank-financed

operations. Moreover, in preparation for a future appraisal of the national

procurement system to determine whether its robustness is such as to warrant the

use of national procedures for international competitive bidding, it is

recommended that the agreed reforms be implemented expeditiously.

Strengthen the process of ownership and internalization of projects by including

them in the national development process. Accordingly, it would be advisable,

in formulating the institutional and technical framework of projects, to pay

special attention to recurrent costs coverage and the financing of equipment

likely to impact on the viability and continuity of the service provided by the

project.

Pay greater attention to the selection of contractors for the implementation of

major structuring projects.

17

V. 2013-17 BANK COUNTRY STRATEGY IN NIGER

5.1 Rationale for Bank Involvement and Pillars

5.1.1 Rationale for Bank involvement: As indicated earlier in this strategy, Niger is part of

the Sahel region where efforts to promote inclusive and green growth are facing specific

structural challenges which are more daunting here than elsewhere, stemming from a

combination of factors related to the environment, climate change, lack of human capital, and

high levels of poverty. These factors highlight the extreme vulnerability to food insecurity,

which therefore makes resilience to this vulnerability a specific objective of Niger’s

stakeholders. The PDES has sized up this challenge and made it its third strategic pillar.

Moreover, while the recent and future context marked by a larger-scale exploitation of mineral

and oil resources affords the country access to the resources required to finance economic

growth, the situation will also call for greater focus on governance to ensure that the country

participates fully in the exploitation of these underground resources and that the national

income derived from these resources actually contributes to the financing of priority

development projects.

5.1.2 Strategic Pillars. The landscape of international aid to Niger, characterized by the

effective involvement of the United Nations, regional actors and the international community

in the quest for greater regional stability, offers the Bank an opportunity to focus on such

structural issues as agricultural development and food security, resilience to climate change and

governance. Therefore, the Bank's strategy for promoting inclusive and green growth in Niger

over the period 2013-2017 will be based on two pillars: (i) strengthening resilience to food

insecurity and (ii) strengthening governance, particularly of natural resources. Besides

contributing to PDES objectives, these strategic choices also take into account the Bank’s

experience in the countries where it is already involved in these issues, opportunities for

synergies with other stakeholders, the Bank’s Ten-Year Strategy for 2013-2022, and the

regional integration strategy.

Pillar 1: Strengthening resilience to food insecurity

5.1.3 To enhance resilience to food insecurity, efforts will need to be made, not only to

create and develop productive capacities in the agricultural field, but also to increase market

access capacities. Achieving these two objectives calls, above all, for the continuation of efforts

to develop basic infrastructure capable of contributing to their furtherance, especially in the

areas of water harnessing and management, transport (to facilitate access to national and

regional markets), and energy. The Bank’s experience in Niger shows that it can remain fully

engaged in these strategic infrastructure sectors, given its ability to mobilize other players,

especially for the implementation of major projects. As a matter of fact, the Bank is, for

instance, the leader of a group of donors supporting the implementation of the first phase - or

the agricultural component - of the major Kandadji Programme. In addition, the Government

of Niger and the Heads of State of member countries of the Rail Loop Project (Projet de la

Boucle ferroviaire) - Côte d'Ivoire, Burkina Faso, Niger and Benin requested the Bank to

assume a leadership role in that project involving other technical and financial partners, as well

as partners from the private sector.

5.1.4 Furthermore, since Nigerien women are the lead actors in the agricultural chain

(albeit constituting the most vulnerable segment of the population in terms of food

insecurity), the Bank’s support under this pillar will contribute directly to improving their

status and promoting gender.

18

Pillar 2: Strengthening governance, particularly of natural resources

5.1.5 Niger needs to strengthen its governance frameworks in order to derive full benefit

from its natural resources, ensure sustainable exploitation of these resources, promote and

maintain macroeconomic stability and create a favourable climate for private investment. These

factors are indispensable for the robust, inclusive and green growth for which the country is

striving. The Bank will therefore continue its support, through various instruments, including

the faster-disbursing operations, institutional support, the African Legal Support Facility, and

knowledge products, to enable Niger to make progress in these areas.

Cross-cutting issues: strengthen resilience to climatic hazards, ensure the

transition to a green economy and contribute to the Knowledge Bank

5.1.6 The objective will also be to mainstream into Bank operations measures

contributing to such important cross-cutting themes as environmental resilience to

climate change, promotion of the green economy and youth employment. In these areas,

the Bank will also intervene through capacity building and skill development programmes, as

well as economic and sector-based studies (see Annex 6).

5.1.7 Resources available for strategy implementation

The strategy is financed from ADF-12 resources for 2013 and those of ADF-13 and ADF-

14 for 2017. The allocation available under ADF-12 amounts to UA 54.49 million. Assuming

that the ADF-13 and ADF-14 resources will match those of ADF-12, and that the sustainable

lending level (SLL) will remain the same as for ADF-12, public and private window resources

available for the strategy, excluding regional allocations24, could total UA 247.01 million for

the period 2013-17. In addition, regional allocations and private window resources will serve

as a catalyst for mobilizing additional financing. Public-private partnerships (PPP), co-

financing or guarantee mechanisms and the resources of fiduciary funds or facilities will also

help to fund the strategy.25 Moreover, the NEPAD Infrastructure Project Preparation Facility

(NEPAD-IPPF) has budgeted USD 2 000 000 under its 2013-2015 financing programme for

additional studies and PPP structuring dedicated to the construction of the Côte d’Ivoire-

Burkina-Faso-Niger-Benin rail loop, as well as USD 3 000 000 (through the ECOWAS

Smart Transport Corridor Programme) for studies on the missing links along the Niamey -

Dakar ECOWAS trans-sahelian road corridor and the Niger Border - Lagos link.

5.2 Outcomes and Targets

5.2.1 To achieve the objectives discussed above, the Bank's strategy will aim to deliver

the following outcomes:

Pillar 1 (Outcome 1). Strengthening the basic infrastructure for the development

of agricultural supply: On the strength of its experience in the country, the Bank

will continue its support to the Government for the development of agricultural

and energy potential in the Kandadji region. To that end, it will support the

development of water-harnessing infrastructure as part of the first phase of the

Kandadji Programme. The Bank will also provide specific support towards the

implementation of the 3N Initiative (a national food security initiative in which

the authorities have given an important place to women). Moreover, given the

crucial role of energy in the development of agricultural potential and resilience

to food insecurity, the Bank will participate in the development of the country’s

energy potential under the second phase of the Kandadji Programme (see Annex

6). Despite the challenges facing the first phase of this operation, the Bank and

24 Regional budget resources are allocated in accordance with the regional operations selection and prioritization framework. 25 The Green Fund, the Migration and Development Fund, the African Water Facility (AWF), the Legal Support Facility (LSF), the Sahel

Resilience Programme (SRP).

19

stakeholders remain committed to this important programme and will draw

lessons from the experience to move the programme forward.

Pillar 1 (Outcome 2). Increasing market access to boost resilience to food

insecurity. The Bank will also contribute to the development of infrastructure to

improve market access. Indeed, such infrastructure will not only promote access

to food, but also stimulate agricultural supply by creating sustainable demand.

In this context, the Bank will support the infrastructure connecting regions with

high economic potential in Niger with markets within the country, and with the

sub-regional economic area, such as the Trans-Sahara Highway (TSH) linking

Chad, Niger and Algeria, and the development of the related regional optical

fibre network as part of the trans-Saharan backbone to contribute to

improving the market information system. The Bank’s action will also focus

on: (i) implementation of the above-mentioned Rail Loop; (ii) facilitation of

intercommunity exchange (integrated management of border control posts);

and (iii) development of the missing links along the West African trans-

Sahelian road (Niamey – Dakar and Niger Border – Lagos links).

Pillar 2 (Outcome 1). Strengthening economic and financial governance:

Through this support, the Bank will assist the implementation of the Public

Financial Management Reform Programme (PRGFP 2011-14). The focus will

primarily be on supporting Niger in the process of implementing WAEMU

guidelines. Indeed, beyond the gains of transposing community instruments into

Niger’s legislation, the establishment of an effective operating system

compatible with those instruments remains a fundamental challenge. The Bank’s

support will also be aimed at assisting Niger in its efforts to improve domestic

resource mobilization by supporting the tax and customs reforms necessary for

this purpose. In an effort to enhance transparency in public resource

management, the Bank will support capacity building for entities in charge of

procurement and assist in the decentralization of DGPCOR. Special attention

will be given to the reforms envisaged by Niger for streamlining the existing

oversight and anti-corruption framework, as well as the strengthening of the

analysis and advocacy capacities of Parliament and civil society. The Bank will

also support reforms aimed at improving the business climate and putting in

place an investment-friendly institutional and legal framework, including an

enabling framework for public-private partnerships (PPP). Furthermore, to

reduce persisting gender disparities, the Bank will support Niger in preparing

and implementing a national gender promotion strategy. In this regard, the

integration of the gender dimension during the preparation of sector MTEFs

must be systematized with a view to the gradual introduction of gender-

sensitive budgeting.

Pillar 2 (Outcome 2). Strengthening sector governance and supporting

economic diversification: Bank support will contribute to the development and

implementation of sector-based plans for improving governance and

strengthening technical and human capacities both at the central and

decentralized levels. In view of the rural sector development challenges facing

Niger and the importance of the extractive sector in the economy, special

emphasis will be placed on actions aimed at building capacity and improving

governance in the agro-sylvo-pastoral sector with a view to supporting the

implementation of the 3N Initiative, on the one hand, and on strengthening

transparency in the extractive industries by supporting the Extractive Industries

Transparency Initiative (EITI), on the other hand. The Bank will also support

studies for the establishment of a national capacity building programme in Niger

20

and the introduction of new training courses tailored to the needs of the economy

in general and the 3N Initiative, in particular. To support the diversification of

the economy, the Bank will back Government effort to introduce reforms aimed

at boosting revenue mobilization in extractive sectors and ensuring the optimal

use of such revenue in structuring investments, particularly in the energy and

transport sectors. The Bank will support Niger’s private sector by making lines

of credit available to banks

5.3 Strategy Implementation Instruments

The Bank will use its sovereign and non-sovereign operational tools to support the CSP

implementation. General budget, or even sector-based, support will be used to underpin the

economic and financial sector reforms. Special emphasis will be placed on mobilizing co-

financing and other non-sovereign instruments. The Partial Credit Guarantee (PCG)26,

which will be provided under ADF-13, will also play a central role in mobilizing private

investment flows into the country and the sectors deemed very risky. To contribute more to

the objectives of this strategy while supporting private sector development, the Bank will

consider the possibility of granting a line of credit to Banque Agricole du Niger [Niger

Agriculture Bank] (BAGRI).

5.4 Monitoring/Evaluation

Monitoring and evaluation of the implementation of the strategy will be based on a system that

operates at three levels: first, at the level of the PDES. Since the objectives, projects and programmes

supported by the strategy are aligned with the PDES, the reports prepared by PDES monitoring

mechanisms, which consist of (i) the PDES Guidance Board; (ii) the PDES National Strategic Planning

Commission (CNPS/PDES); (iii) the of PDES Implementation Standing Secretariat (SP/PDES); (iv) the

National Technical Committee (CTN); (v) Sector Committees (CS), and (vi) the OECD/DAC

Committee, will provide the basic material that the Bank will use to monitor the PDES and CSP

implementation. Secondly, a matrix of strategy outcomes, attached in Annex 11, will also enable the

Bank to monitor and evaluate the implementation of this strategy. Lastly, each project will also include

a logical framework aimed at achieving the objectives of this strategy. These project logical

frameworks will also include indicators to measure progress on gender issues. To implement

this monitoring mechanism, the Bank plans to strengthen its presence in Niger, as part of the

comprehensive approach, in order to better monitor the CSP implementation. A mid-term review of the

strategy will be conducted in 2015. The half-yearly portfolio reviews will contribute to the operational

monitoring of the strategy implementation.

5.5 Issues Covered by Country Dialogue

Dialogue with the country for CSP implementation will focus on five themes: (i)

mobilization of water resources for irrigated agriculture and food security; (ii) economic

diversification and youth employment through increased value chains of the agro-forestry-

pastoral sector; (iii) governance of extractive resources, public finance and improvement of

the business climate; (iv) country portfolio management; and (v) gender promotion.

5.6 Potential Risks and Mitigation Measures

5.6.1 There are four major internal and external risks associated with the Bank’s strategy.

Internally, these comprise: (i) a breakdown in political consensus within the ruling coalition and,

consequently, failure to stay the course of political and institutional reforms; and (ii) weak project

implementation capacity. Externally, the risks relate to: (i) the collateral effects of regional political

and security crises; and (ii) exogenous shocks affecting the economic, climate or food sectors. These

risks will be mitigated by Government efforts and support from partners.

26 The GPC will be used to partially guarantee the debt service of the country and eligible public enterprises and help to extend debt maturities,

improve access to capital markets for public sector investment projects, particularly in the area of infrastructure, as well as to effectively reduce borrowing costs, and mobilize resources to support long-term international and domestic capital markets.

21

5.6.2 To cope with these internal and external risks, mitigation measures have been

taken. Internally, the ruling coalition is working to strengthen political consensus through

closer dialogue with the opposition on major decisions. The democratic institutions provided

for by the Constitution are being gradually established. Externally, it is worth noting that the

authorities are involved in the ECOWAS efforts to find a lasting solution to the crisis in Mali.

Strengthening the management of public finances, the natural resource management

framework, and the decision adopted under the PDES to plough back revenue from extractive

sectors into mainstay infrastructure, especially in agricultural irrigation and social sectors, will

help mitigate the aforementioned risks. The same is true of investments under the 3N Initiative

which should ensure food and nutrition security and limit the adverse impacts of climate change

which may exacerbate the populations.

VI. CONCLUSION AND RECOMMENDATION

6.1 Conclusion

6.1.1 Since the return to constitutional order in 2011, the socio-political situation has

improved substantially despite the political crisis in some neighbouring countries and regional

security threats, particularly in the Sahel strip. The medium-term prospects are promising,

driven by the rebound in extractive activities (mining and oil) with a growth path of 5.5% from

2013. The adoption of the 2012-15 PDES marks a return to a medium- and long-term planning

system. The strategy proposed by the Bank for the period 2013-17 is consistent with the PDES

and the guidelines of the Bank’s Ten-Year Strategy for the period 2013-22. The strategy takes

into account the major needs of the country in terms of resilience to food insecurity, in view of

climate change, and the need to open up the country both internally and externally. It also takes

account of the reforms that should be initiated concerning the business environment, as well as

economic, financial, sector-based and institutional governance. It highlights the need to

enhance natural resource governance as a stepping stone to achieve a more inclusive growth for

a nation whose population growth rate is one of the highest of the African continent. The

strategy focuses on a selective approach, based on national and regional operations that could

leverage funding by other partners and maximize the impacts.

6.2 Recommendation

6.2.1 The Boards of Directors are requested to consider and approve the Bank’s

Country Strategy in Niger for the period 2013-17, proposed in this paper.

Annex 1 Page 1/1

Map of Niger

Annex 2 Page 1/1

Indicators Unit 2000 2008 2009 2010 2011 2012 2013 (e)

National Accounts

GNI at Current Prices Million US $ 1 966 4 769 5 091 5 584 5 785 ... ...

GNI per Capita US$ 180 330 340 360 360 ... ...

GDP at Current Prices Million US $ 1 672 5 397 5 373 5 665 6 355 6 661 7 466

GDP at 2000 Constant prices Million US $ 1 672 2 582 2 564 2 774 2 832 3 203 3 379

Real GDP Growth Rate % -2,6 9,6 -0,7 8,2 2,1 13,1 5,5

Real per Capita GDP Growth Rate % -5,8 5,8 -4,1 4,5 -1,4 9,2 1,9

Gross Domestic Investment % GDP 13,9 32,1 33,2 35,9 32,1 33,3 33,9

Public Investment % GDP 4,3 6,7 5,1 -0,4 2,4 3,8 4,3

Private Investment % GDP 9,6 25,4 28,1 36,3 29,7 29,5 29,6

Gross National Savings % GDP 5,7 19,3 7,9 17,7 10,9 15,1 14,7

Prices and Money

Inflation (CPI) % 2,9 11,3 1,1 0,9 2,9 3,9 1,8

Exchange Rate (Annual Average) local currency/US$ 712,0 447,8 472,2 495,3 471,9 510,5 ...

Monetary Growth (M2) % 12,4 11,9 18,7 21,6 6,0 ... ...

Money and Quasi Money as % of GDP % 8,7 16,5 18,6 20,5 20,3 ... ...

Government Finance

Total Revenue and Grants % GDP 14,2 25,0 18,7 18,4 18,8 21,4 21,9

Total Expenditure and Net Lending % GDP 18,0 23,6 24,1 20,8 25,6 24,1 23,9

Overall Deficit (-) / Surplus (+) % GDP -3,8 1,4 -5,3 -2,4 -6,8 -2,8 -2,0

External Sector

Exports Volume Growth (Goods) % 27,4 6,3 13,6 0,0 9,6 29,0 13,7

Imports Volume Growth (Goods) % 6,7 40,2 35,3 -10,5 12,6 25,0 -5,0

Terms of Trade Growth % -17,7 22,5 -1,8 -5,6 0,2 4,6 -15,4

Current Account Balance Million US $ -111 -699 -1 080 -1 133 -1 445 -1 509 -1 607

Current Account Balance % GDP -6,7 -13,0 -20,1 -20,0 -22,7 -22,7 -21,5

External Reserves months of imports 2,1 4,3 3,1 3,0 2,5 3,0 ...

Debt and Financial Flows

Debt Service % exports 73,4 1,8 1,7 1,3 3,5 1,4 2,2

External Debt % GDP 88,8 14,0 19,7 16,8 15,8 20,1 22,0

Net Total Financial Flows Million US $ 184 581 473 680 600 ... ...

Net Official Development Assistance Million US $ 209 612 469 745 649 ... ...

Net Foreign Direct Investment Million US $ 8 340 791 940 1 014 ... ...

Source : AfDB Statistics Department; IMF: World Economic Outlook, October 2012 and International Financial Statistics, October 2012;

AfDB Statistics Department: Development Data Portal Database, March 2013. United Nations: OECD, Reporting System Division.

Notes: … Data Not Available ( e ) Estimations Last Update: May 2013

NigerSelected Macroeconomic Indicators

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

%

Real GDP Growth Rate, 2000-2013

-4

-2

0

2

4

6

8

10

12

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Inflation (CPI),

2000-2013

-25,0

-20,0

-15,0

-10,0

-5,0

0,0

2 000

2 001

2 002

2 003

2 004

2 005

2 006

2 007

2 008

2 009

2 010

2 011

2 012

2 013

Current Account Balance as % of GDP,

2000-2013

Annex 3 Page 1/1

Year Niger Africa

Develo-

ping

Countries

Develo-

ped

Countries

Basic Indicators

Area ( '000 Km²) 2011 1 267 30 323 98 458 35 811Total Population (millions) 2012 16,6 1 070,1 5 807,6 1 244,6Urban Population (% of Total) 2012 17,4 40,8 46,0 75,7Population Density (per Km²) 2012 12,7 34,5 70,0 23,4GNI per Capita (US $) 2011 360 1 609 3 304 38 657Labor Force Participation - Total (%) 2012 32,0 37,8 68,7 71,7Labor Force Participation - Female (%) 2012 31,2 42,5 39,1 43,9Gender -Related Dev elopment Index Value 2007-2011 0,308 0,502 0,694 0,911Human Dev elop. Index (Rank among 186 countries) 2012 186 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2008-2011 43,6 40,0 22,4 ...

Demographic Indicators

Population Grow th Rate - Total (%) 2012 3,5 2,3 1,3 0,3Population Grow th Rate - Urban (%) 2012 4,4 3,4 2,3 0,7Population < 15 y ears (%) 2012 48,9 40,0 28,5 16,6Population >= 65 y ears (%) 2012 2,3 3,6 6,0 16,5Dependency Ratio (%) 2012 104,8 77,3 52,5 49,3Sex Ratio (per 100 female) 2012 101,3 100,0 103,4 94,7Female Population 15-49 y ears (% of total population) 2012 21,6 49,8 53,2 45,5Life Ex pectancy at Birth - Total (y ears) 2012 55,1 58,1 67,3 77,9Life Ex pectancy at Birth - Female (y ears) 2012 55,6 59,1 69,2 81,2Crude Birth Rate (per 1,000) 2012 47,9 33,3 20,9 11,4Crude Death Rate (per 1,000) 2012 12,3 10,9 7,8 10,1Infant Mortality Rate (per 1,000) 2012 86,5 71,4 46,4 6,0Child Mortality Rate (per 1,000) 2012 145,1 111,3 66,7 7,8Total Fertility Rate (per w oman) 2012 7,0 4,2 2,6 1,7Maternal Mortality Rate (per 100,000) 2010 590,0 417,8 230,0 13,7Women Using Contraception (%) 2012 13,7 31,6 62,4 71,4

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2004-2010 1,9 49,2 112,2 276,2Nurses (per 100,000 people)* 2004-2009 13,7 134,7 187,6 730,7Births attended by Trained Health Personnel (%) 2006-2010 17,7 53,7 65,4 ...Access to Safe Water (% of Population) 2010 49,0 67,3 86,4 99,5Access to Health Serv ices (% of Population) 2000 30,0 65,2 80,0 100,0Access to Sanitation (% of Population) 2010 9,0 39,8 56,2 99,9Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2011 0,8 4,6 0,9 0,4Incidence of Tuberculosis (per 100,000) 2011 108,0 234,6 146,0 14,0Child Immunization Against Tuberculosis (%) 2011 61,0 81,6 83,9 95,4Child Immunization Against Measles (%) 2011 76,0 76,5 83,7 93,0Underw eight Children (% of children under 5 y ears) 2006-2011 39,9 19,8 17,4 1,7Daily Calorie Supply per Capita 2009 2 489 2 481 2 675 3 285Public Ex penditure on Health (as % of GDP) 2010 5,2 5,9 2,9 8,2

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2010-2012 70,8 101,9 103,1 106,6 Primary School - Female 2010-2012 64,3 98,4 105,1 102,8 Secondary School - Total 2010-2012 14,4 42,3 66,3 101,5 Secondary School - Female 2010-2012 11,3 38,5 65,0 101,4Primary School Female Teaching Staff (% of Total) 2011 45,2 43,2 58,6 80,0Adult literacy Rate - Total (%) 2005-2010 28,7 67,0 80,8 98,3Adult literacy Rate - Male (%) 2005-2010 42,9 75,8 86,4 98,7Adult literacy Rate - Female (%) 2005-2010 15,1 58,4 75,5 97,9Percentage of GDP Spent on Education 2008-2011 4,5 5,3 3,9 5,2

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2011 11,8 7,6 10,7 10,8Annual Rate of Deforestation (%) 2000-2009 3,7 0,6 0,4 -0,2Forest (As % of Land Area) 2011 0,9 23,0 28,7 40,4Per Capita CO2 Emissions (metric tons) 2009 0,1 1,2 3,1 11,4

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :

UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.

Note : n.a. : Not Applicable ; … : Data Not Available.

COMPARATIVE SOCIO-ECONOMIC INDICATORS

May 2013

0

20

40

60

80

100

120

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Infant Mortality Rate( Per 1000 )

Niger Africa

0

200

400

600

800

1000

1200

1400

1600

1800

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

GNI Per Capita US $

Niger Africa

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Population Growth Rate (%)

Niger Africa

1

11

21

31

41

51

61

71

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Life Expectancy at Birth (years)

Niger Africa

Annex 4 Page 1/1

Bank Portfolio in Niger at end-September 2013 (Amount in UA)

Project Approval

Date

Completion

Date

Loan/Grant

Amount

Disburse

ment

Rate

Implemen

tation

Progress

Develop

ment

Objectiv

e

Risk Status

Tibiri-Dakoro and Madaoua

Bouza Roads Project

19/12/2005 30/09/2013 22,000,000.00 77.00 2.14 2.75 NON PP/PPP

Sub-Total Infrastructure - OITC

(10.1%)

22,000,000.00 77.00

Niger- PPCR Pilot Programme 24/09/2012 01/06/2014 6,170,353.72 0.00 0,00 0.00 NO

SUPERVISION

Niger- PPCR Pilot Programme 24/09/2012 01/06/2014 2,272,288,21 0.00 0.00 0.00 NO

SUPERVISION

PPCR-Niger PROMOVARE

Project

25/09/2012 31/12/2018 8,118,886.48 0.00 0.00 0.00 NO

SUPERVISION

PPCR-Niger PROMOVARE

Project

25/09/2012 31/12/2018 6,170,353.72 0.00 0.00 0.00 NO

SUPERVISION

Mobilization Project in Maradi,

Tahoua and Zinder

20/09/2011 31/12/2016 9,340,000.00 6.66 2.86 3.00 NON PP/PPP

Mobilization Project in Maradi,

Tahoua and Zinder

20/09/2011 31/12/2016 21,433,860.30 0.68 2.86 3.00 NON PP/PPP

Water Mobilization Project in the

Tillabéry, Diffa regions

05/10/2006 30/11/2013 13,000,000.00 95.59 2.36 2.76 NON PP/NON

PPP

KANDADJI Programme Phase I 29/10/2008 31/12/2015 20,000,000.00 15.84 1.57 2.00 NON PP/PPP

KANDADJI Programme Phase I 29/10/2008 31/12/2015 20,000,000.00 17.13 1.57 2.00 NON PP/PPP

Sub-Total Agriculture - OSAN

(48.7%)

106,506,742.4

3

18.58

DWSS Project in 3 regions 21/02/2007 31/12/2013 10,351,947.98 68.51 1.93 2 NON PP/PPP

DWSS Project in 3 regions 21/02/2007 31/12/2013 3,000,000.00 82.24 1.93 2 NON PP/PPP

RWSS Project Phase II 20/09/2011 31/12/2015 16 000, 000.00 1.61 2.23 3 NO

SUPERVISION RWSS Project Phase II 20/09/2011 31/12/2015 3,300,956.45 0 2.23 3 NO

SUPERVISION Sub-Total Water and Sanitation –

OWAS (15.2%)

33,320,617.69 29.46

Support for the Development of

Education and Vocational

Training – PADEFPT

15/12/2012 31/12/2016 17,630,000.00 9.32 2.43 3 NON PP/NON

PPP

Support for the Development of

Education and Vocational

Training - PADEFPT

15/12/2012 31/12/2016 7,870,000.00 0 NON PP/NON

PPP

Sub-Total Social - OSHD

(11.6%)

25,500,000.00 6.44

PAMOGEF- Domestic Resource

Mobilization Support Project

26/01/2012 31/12/2016 10,000, 000 1.24 NON PP/NON

PPP

PACIRSA – Project to Support

Inclusive Growth and Food

Security Enhancement

14/11/2012 31/12/2014 21,560,000.00 53.62 NON PP/NON

PPP

Sub-Total Governance (14.4%) 31,560, 000 37.0

Total (18) operations

representing 11 projects)

% PPP = 27%

% PP = 0%

218,000,000 27.46 2.18 2.55

PP = Problem Project

Non PP = Non Problem Project

PPP = Potential Problem Project

Non PPP = Non Potential Problem Project

Annex 5 Page 1/1

Portfolio Performance Improvement Action Plan Problems Identified Actions Required /Recommendations Responsibility Schedule Output Monitoring Indicators

I. Problems at entry

1.1 Delay in the establishment of project

teams Include, in the project appraisal documents, the list, profile of vacancies and

precise and detailed Terms of Reference of staff to be recruited;

Absolutely select the coordinator and at least one other key person at the latest

during the negotiation phase of the project (condition precedent to

negotiations) so that the key project management staff are involved in the

negotiations;

Submit the appraisal report at least two weeks prior to negotiations;

Establish the full project team prior to effectiveness (condition precedent to

effectiveness).

AfDB Project

Officers/MP/MF/

Sector Ministries

Starting from

new ADF

operations

- The ToR of project management

staff are included in appraisal reports;

-Project coordinators are designated

prior to negotiations;

- Appraisal reports are transmitted no

later than 2 weeks prior to

negotiations;

- The entire project team is recruited

prior to effectiveness.

1.2 Inadequacy or poor quality of

baseline studies of projects Take the required time and provide the necessary resources (financial and

human) for the conduct of comprehensive and quality studies prior to

finalizing project appraisal reports.

Ensure broad-based consensus on the outcomes of studies and validate them

in conjunction with all relevant authorities and supervisory authorities of

projects and possibly with the affected populations or beneficiaries.

ADB Project

Officers/MP/MF/

Sector Ministries

Starting from

new ADF

operations

- Exhaustive and comprehensive

baseline studies are conducted prior

to project appraisal;

- The outcomes of studies are

validated by the relevant structures.

II. Problems at implementation

2.1 Limited knowledge of Bank rules Ensure, on a periodic basis (every year), the training of project staff on Bank

procedures (procurements, financial management and disbursements);

FFCO.3 and

ORPF- AfDB

End-2013 Training courses are organized every

year;

2.2 Very frequent change of project staff Work out a mechanism for avoiding frequent changes of coordinators for

programme support.

Line ministries of

projects

End-2013 - Project staff maintain their positions

throughout project implementation

except in cases of proven poor

performance.

III. Problems at closing 3.1 Failure to submit audit reports The funding mechanism of the previous audit should be clarified by the Bank

and preferably specified in the Loan Agreement (Bank or Government

counterpart contribution).

AfDB (FFCO,

ORPF).

ADB Project

Officers/MP/MF

/Sector

Ministries

End-2013

The previous audits are fully

funded and produced at most six

months after closure and in all

cases prior to the production of

the completion report.

3.2 Failure to justify the use of the last

working capital Make arrangements to justify all working capital received at project

completion.

Management

organs and

supervisory

ministries of

closed

projects/Ministrie

s of Plan and

Finance and

/FFCO at AfDB.

End-2013 All working capital is justified by

project completion at the latest

Small teams are maintained after

closing to ensure proper closure

of the project.

Annex 6 Page 1/1

Indicative Grant/Loan Programme for the Period 2013-17

(Amount in UA million)

Sectors/Projects Approval Date Indicative

Amount

Financing

Pillar 1 – Strengthening Resilience to Food Insecurity

National Public Projects – ADF Window

RURAL DEVELOPMENT

(in close coordination with the World Bank)

3N Initiative Support Project 2014 40 ADF 13

Climate Resilience Programme Support Project 2014-2017 To be

determined

ADF 14

ENERGY

(in close coordination with the World Bank, AFD and other co-financiers of the Kandadji Project – Phase

II)

Kandadji Project Phase II – Hydroelectricity Component 2014 40 ADF 13

National Private Sector Projects – Private Sector Window (PSW)

PRIVATE SECTOR

Project to Grant a Line of Credit to BAGRI 2014-17 To be

determined

ADB/

PSW*

Project to Build a 20 MW Solar Power Plant 2014-17 To be

determined

ADB/

PSW*

Multinational Projects – Regional Envelop (RE)

TRANSPORT

(in close coordination with the World Bank, WAEMU, BOAD (WADB), EU, AFD and private partners)

Multinational Trans-Saharan Road Project (TSR)

Niger – Chad Corridor

2013

22.50 ADF 12/ RE

56.57 ADF 12

Côte d’Ivoire-Burkina Faso-Niger-Benin Rail Loop

Project

2014-17 USD 2 000 000 NEPAD-

IPPF

Trans-Sahelian Corridor (Niamey – Dakar and Niger

Border - Lagos)

2014-2017 USD 3 000 000 NEPAD-

IPPF

ICT

Regional Trans-Saharan Backbone Project (TSB) 2014-17 26.6 To be

determined

Pillar 2 – Strengthening Governance, Particularly of Natural Resources

REFORM SUPPORT AND INSTITUTIONAL DEVELOPMENT

(in close coordination with the IMF, World Bank, EU, AFD, UNDP and French Cooperation)

General Budget Support Programme 2014-17 20 ADF 13

Institutional Support Project for Building State Capacity

and Effectiveness

2015-17 10 ADF 13

Economic and Sector Work

(in close collaboration with other technical and financial partners)

1. Preparation of a Transport Sector Policy Action Plan

2. Energy Sector Policy and Strategy

3. Study on the Status of Women and Child Trafficking in Niger

4.

________________________ (*) PSW = Private Sector Window

RA = Regional Allocation

Annex 7

Page 1/3

Bank’s Fiduciary Strategy in Niger A- BANK’S PROCUREMENT STRATEGY

1. Niger’s procurement system was established in 2002. It was amended in 2008 by Decree No. 2008-

120/PRN/ME/F of 9 May 2008 on the organization and duties of the General Directorate for Public

Procurement Control (DGPCOR) to ensure compliance with WAEMU directives. The procurement code was

amended by Law No. 2011-37 of 28 October 2011 on the general principles, control and regulation of public

procurement and public service delegations in Niger. The current public procurement regulation is governed

by Decree No. 2011-686/PRN/PM of 29 December 2011 on Public Procurement Code and public service

delegations, by Decree No. 2011-687 PRN/PM of 29 December 2011 on the duties, composition, organization

and operating procedures of the Public Procurement Regulatory Agency and by Decree No. 2011-688 PRN/PM

of 29 December 2011 on the code of ethics for public procurement and public service delegations.

2. The Bank’s appraisal of 2010 concluded that Niger’s public procurement system is for the most part

consistent with international standards and Bank procedures and policy. Accordingly, it is recommended at

this stage that national procedures be applicable to national competitive bidding (NCB) in respect of Bank-

financed operations. The next appraisal, which will take account of current progress, will assess the

performance of the national procurement system and its robustness with a view to making a recommendation

on the use of national procedures for International Competitive Bidding (ICB).

3. In this regard, as part of the implementation of the CSP 2013-2017, particularly its Pillar 2, aimed at

“strengthening governance and developing the private and financial sector” of the Bank's intervention strategy

in Niger, urgent reform actions should be undertaken by the Government to enhance the national system’s

compliance with Bank procedures and community standards. These actions include: (i) developing a

programme of gradual decentralization with the establishment of DGPCOR branches in the regions and

districts of the country; (ii) establishing a procurement capacity building strategy; (iii) establishing the

Integrated Public Procurement Management System (SIGMAP) which should allow DGPCOR, in the short

term, to develop reliable statistical data on public procurement, including the share of contracts awarded by

direct negotiation; (iv) continuing the measures taken by the DGPCOR to process only the procurement

documents of structures whose Procurement Plan has been approved and published in the Public Procurement

Journal; (v) establishing a physical and/or electronic filing system for documents with the allocation of

appropriate premises and equipment; (vi) conducting procurement audits for 2011 and 2012, under year 2013,

and regular annual audits starting 2013 to allow a complete and comprehensive assessment of public

procurement in Niger; (vii) taking a decision on the full collection of regulatory fees; (viii) operationalizing

the special line established for the reporting of procurement fraud; and (ix) improving access to public

procurement in the private sector, especially SMEs which should be the subject of dialogue with the

Government for actions to be undertaken under the Bank's strategy

B- BANK'S FINANCIAL MANAGEMENT STRATEGY

4. The successful implementation of the Bank's strategy for the period 2013-2017 in Niger will depend,

to a large extent, on the capacity of its administration to implement the operations that will be retained for

financing by the Bank, and to manage the public funds and resources to be allocated on the basis of its own

systems and institutions.

Annex 7 Page 2/3

5. Hence, in accordance with the provisions of the Paris Declaration and the Accra Forum on Aid

Effectiveness, the Bank will continue to support the Public Finance Management Reform Programme (PRGFP)

and reforms aimed at strengthening the public financial management, procurement and audit systems.

6. However, while it is acknowledged that the use of national systems contributes to their improvement,

it will not be possible, during the period 2013-2017, to use their components, given the outcomes of the

assessment of systems, processes and public finance management institutions in 2012 in accordance with

PEFA methodology. Overall, these results confirm that the expected progress of the Public Finance

Management Reform Programme (PRGFP) covering the period 2011-2014 were not significant and highlight

the persistent weaknesses of the PFM system in Niger described in the table of risks in the annex.

7. Therefore, the Bank will, as part of its operations for the current CSP period of 2013-2017, ensure

the use, as much as possible, of components of the public finance management system that are of satisfactory

or proven quality.

8. To boost the strengthening and improvement of other components and hence the use of national

systems over the period 2013-2017, the Bank’s fiduciary strategy will be based on the following three pillars:

First: The use of country systems (public finance management systems and national

implementation structures: ministries, agencies or services) will be the default option for all

activity programmes or public investment projects to be implemented under the current CSP;

Second: The use of parallel project implementation units will be the exception and should be

systematically justified. When it is established that the use of country systems is not feasible,

safeguard mechanisms should be designed for the ultimate purpose of consolidating weak

national systems and procedures; and

Third: budget support programmes will use national systems in their entirety. They will need

to have objectives and conditionalities focused on the Public Finance Management Reform

Programme (PRGFP) emanating from the conclusions of PEFA 2012 and other diagnostics of

the public finance system that may be conducted in the course of this CSP period.

A. Fiduciary Risk Assessment based on the 2012 PEFA

PFM System

Component Fiduciary Risk Rating

1- Budget

Process

Resource projections are still of limited quality, mainly based on rudimentary methods.

Information on international aid is inadequate. The strategic allocation of resources by

ministry is still not clearly justified. The timely release, to directors, of appropriations

necessary for the implementation of their programmes is still a challenge. The use of the

payment procedure without prior authorization persists. The distribution of funds

determined by the initial finance law continues to be greatly modified by the Government

during budget implementation.

Risk relating to the credibility of project/programme resource allocations.

High

Annex 7

Page 3/3

2-Cash

flow

manage

ment

The cash plan continues to be developed without any real consultation with the Directorate

General of the Budget and sector ministries. Hence, its relevance and robustness are

limited. With respect to the expenditure component, the cash-flow plan is not yet

adequately based on 'the overall commitment plan. The value of the plan itself is

undermined by the lack of robustness of procurement and commitment plans and sector

ministries’ sector expenditure commitment plans. The use of such tools for programming

the pace of expenditure is still very haphazard in most sector ministries.

Risk of uncertainty as to the availability of financial resources allocated to projects/

programmes and their use for the intended purposes, and the Treasury's capacity to

perform complex financial transactions.

Substantial

3-

Accounti

ng and

financial

reports.

Recent progress has been achieved in the production of annual financial statements (2007,

2008 and 2009). The draft 2010 Budget Review Law and the 2010 management accounts

are being prepared. However, there are still major weaknesses. Periodic accounting

statements are not produced during the year. Accounting data are available only after the

preparation of management accounts. Some accounts show balances carried over for

several years, especially for expenses paid in advance without available credit. The data

presented in reports available on the execution of budget expenditures are neither

comprehensive nor totally reliable. These data do not include the status of ministries’

expenditure or that of external financing. The quality levels and timeliness of annual

financial statements are below expectation. The information systems do not cover the full

range of public finance items and are not adequately integrated and accessible to all users.

Regional entities have only very little access to existing information systems and do not

have direct access to central databases enabling real-time information sharing. Such

information sharing is conducted periodically through magnetic media.

Risks of lengthy production timeframes and unreliability of financial and accounting

reports.

Substantial

4- Internal

controls

and

internal

audit

Internal control, which should be based on the principle that the authorizing officer and

the accounting officer should be separate, is still heavily flawed and contributes very little

to the anti-corruption effort. Its alignment with international standards and its

administrative control or efficiency audit activity are still very unsatisfactory.

Risks of weak internal control

Substantial

4.1-

Procure

ment

System.

5-

External

audit

The Court of Auditors has been established and its resources increased. However, external

control still covers a limited part of its scope as defined. Given that the Ministry of Finance

belatedly forwards to the Court accounts to be audited and the draft Budget Review Law

on which it is required to report, the said Court is not able to audit the financial statements

within the required timeframes.

Risk of failure to prepare timely audit reports for public entities.

Moderate

Opportun

ities

Existence of a new reform plan: the Public Finance Management Reform Programme

(PRGFP3) whose overall objective is to introduce an effective, efficient and transparent

public finance management system enabling the entity to consolidate its core functions

and improve the credibility of the PDES (National Economic and Social Development

Plan) in Niger.

Overall fiduciary risk assessment Substantial

Annex 8

Page 1/2

Challenges Related to the Environment, Climate Change and Green Growth 1- An environment affected by to natural resource degradation: Niger's natural resources (land,

water, soil and biomass) are exposed to profound degradation, mainly due to an imbalance between the rate of

their use and their rate of replacement, aggravated by h pronounced climate variability in recent decades. This

situation is compounded by rapid population growth which translates, in rural areas, into a precarious

equilibrium between energy and food needs and the use of forests. The key environmental issues relate to the: (i) protection of farmland from sand encroachment and loss of fertility; (ii) sustainable water management and

containment of siltation of water bodies; and (iii) improved use of biomass. Hence, the major challenge pertains

mainly to the development and sustainable management of the country's natural resources.

2- Environmental preservation is a source of economic growth: Despite these constraints, the natural

environment remains crucial for all socio-economic activities of the country as well as for the rural populations.

Indeed, the rural sector employs about 80% of the population, while its contribution to Niger’s economy is

estimated at approximately 42% of GDP (2003), of which 28% from agriculture, 10% from livestock

production and 4% from fishing/fish farming. Considering, therefore, the additional cost which environmental

degradation entails for the State budget, environmental protection is a source of economic growth. Given that

the poorest segments of the rural population are the most dependent on environmental goods and services and

are thus extremely vulnerable to climate change (CC), they will be the most affected.

3- A climate scenario characterized by disruption in the rainy season: Over the past decades, the

climate of Niger has become warmer and the rainfall more variable. By 2025 and 2050, it is expected that the

climate scenario in Niger will be a continuation of these trends, with a warmer climate characterized by greater

aridity. This would result in greater variation in rainfall, reflected in the late onset of the rainy season and its

decreasing duration.

4- Prospects of mitigating GHG emissions: Land Use, Land-Use Change and Forestry (UTCATF)

account for about 55.62% of total GHG emissions in Niger, whereas the agricultural/livestock sector accounts

for 34.60%. These activities which are vital to the country's economy are synergistic with issues related to

urban demand for firewood and charcoal, shifting agriculture, slash-and-burn agriculture and overgrazing.

They are all at the same time:

Environmental: reduction in GHG sequestration capacity and increased risk of desertification

in places, especially in the north of the country;

Energy-related: reduced supply of biomass energy; and

Social: risk of increased poverty in rural areas and consequently decreased resilience to

weather conditions for the rural populations most vulnerable to climate change.

Climate change will likely worsen the situation of food security, already compromised in recent decades: The agricultural productivity surplus of the early 1970s gave way, in the 1980s, to a 14% shortfall in food

needs coverage. This is due largely to extreme weather events that occurred in the region, particularly the

drought that afflicted the Sahel in the 1970s. In addition, climate change had visible impacts on grazing lands,

reflected in a sharp drop in livestock numbers, deteriorated animal health and reduced access to fodder. This

decline in agricultural production and livestock numbers, coupled with extreme poverty among the

populations, substantially reduces resilience to climate hazards.

Annex 8 Page 2/2

At the macroeconomic level, CC will likely exacerbate the structural food deficit in Niger, already seriously

undermined by climate hazards in recent decades.

5- Bank assistance to Niger to support these populations with low resilience to climate hazards.

The Bank intervenes in Niger in particular through the Pilot Programme for Climate Resilience (PPCR). It is

a programme which aims to combat climate change by improving the resilience of the most vulnerable

segments of the rural population. It comprises four priority projects, two of which will be implemented by the

Bank, namely:

Water Resource Mobilization and Development Project (PROMARE); and

Climate Information Development and Forecast Project (PDIPC).

6- Integrated approach to cope with CC through the National Environmental Plan for

Sustainable Development (PNEDD): This provides the baseline framework for environmental policy, with

the objective of ensuring energy security and integrated management of various national resources. Moreover,

the PNEDD comprises six programmes affecting the food sector, poverty, mitigation of GHG emissions and

climate variability. The climate change-related programme is based on a national strategy and action plan

whose implementation has resulted in the National Adaptation Programme of Action (NAPA) on Climate

Change, designed in 2006. This programme was launched under the Poverty Reduction Strategy (PRS) for the

socioeconomic development of the country.

Project/programme Recommendations:

7- Guidelines: On the basis of this analysis and prospects for integrating environmental/CC dimensions

in the CSP for Niger, as well as concerns related to green growth, the following guidelines are proposed:

Pay special attention to the two major ecological issues namely: (i) reversing the current

environmental degradation trend; and (ii) managing biomass energy in synergy with

agroforestry needs as a source of economic growth;

Pay special attention to agriculture, livestock and agro-forestry as sectors that are vulnerable

to CC, while at the same time displaying an interesting potential for mitigating GHG

emissions;

Approach the energy sector with a policy vision that is inclusive of the rural populations, by

showing special interest in the issue of management/substitution of biomass energy (the most

widely used form of energy in Niger); and

Consider an environment/CC capacity building programme aimed at identifying key issues

and better integrating them into sector-based policies and programmes.

Annex 9 Page 1/2

Development Partners’ Areas of Intervention in Niger in 2013

Matrix of Donors in

Niger

2013

1.

Str

ate

gic

D

ev

elo

pm

en

t

Pla

nn

ing

2 R

eg

ion

al.

In

teg

ra

tio

n

3.

Tra

de –

Priv

ate

secto

r

4.

Min

es

5.

Cu

ltu

re

6.

Decen

tra

liza

tio

n

7.

Co

mm

un

ity

Dev

elo

pm

en

t

8. R

ura

l D

ev

elo

pm

en

t /S

DR

9.

Fo

od

Secu

rit

y

10

. F

orest

s/en

vir

on

men

t

11

. W

ate

r

an

d s

an

ita

tio

n

12

. E

nerg

y

13

. T

ra

nsp

ort

14

. E

du

ca

tio

n

15

. V

oca

tio

na

l a

nd

tech

nic

al

tra

inin

g

16

. H

ealt

h

17

. H

IV/A

IDS

18

. G

end

er

19

. P

op

ula

tio

n

20

. M

acro

Sta

bil

iza

tio

n

21

. P

ub

lic F

ina

nce

22

. G

ov

ern

an

ce

23

. J

ust

ice

24

. O

thers

Area

s b

y

acti

ve

pa

rtn

er

European Union

EC ** ** LP ** ** LP LP ** ** LP ** ** LP ** ** 15

Germany ** ** ** ** ** ** ** ** ** 9

Belgium ** ** ** ** ** ** ** ** LP 9

Denmark ** ** ** ** ** ** 6

Spain ** ** ** LP ** 5

France-AFD ** ** ** ** ** ** LP ** ** ** ** ** 12

France-SCAC ** ** ** LP ** ** ** ** ** ** LP 11

Italy ** ** ** ** ** ** ** 7

Luxemburg ** ** ** ** ** ** ** 7

United Kingdom

Other Bilateral

Partners

Canada ** ** ** ** ** 5

United States

Japan ** ** ** ** ** 5

Switzerland ** ** ** ** ** ** ** ** 8

Multilateral

Partners

IAEA ** ** ** ** ** ** ** 7

AfDB ** ** ** ** ** ** ** ** ** ** ** ** ** 13

BADEA ** ** ** ** ** ** 6

** = Active Technical and Financial Partner (TFP) LP = Lead TFP

Annex 9 Page 2/2

Development Partners’ Areas of Intervention in Niger in 2013 (cont’d).

Matrix of Donors in

Niger

2013

1.

Str

ate

gic

D

ev

elo

pm

en

t

Pla

nn

ing

2.

Reg

ion

al.

In

teg

ra

tio

n

3.

Tra

de –

Priv

ate

secto

r

4.

Min

es

5.

Cu

ltu

re

6.

Decen

tra

liza

tio

n

7 C

om

mu

nit

y D

ev

elo

pm

en

t

8 R

ura

l D

ev

elo

pm

en

t /S

DR

9.

Fo

od

Secu

rit

y

10

. F

orest

s/E

nv

iro

nm

en

t

11

. W

ate

r

an

d s

an

ita

tio

n

12

. E

nerg

y

13

. T

ra

nsp

ort

14

. E

du

ca

tio

n

15

. V

oca

tio

na

l a

nd

te

ch

nic

al

tra

inin

g

16

. H

ealt

h

17

. H

IV/A

IDS

18

. G

end

er

19

. P

op

ula

tio

n

20

. M

acro

Sta

bil

iza

tio

n

21

. P

ub

lic F

ina

nce

22

. G

ov

ern

an

ce

23

. J

ust

ice

24

.

Oth

ers

No

. o

f i

nte

rv

en

tio

n a

rea

s p

er

acti

ve

TF

P

World Bank ** ** ** ** ** ** ** ** ** ** LP ** ** ** ** ** ** 17

IDB ** ** ** ** ** ** 6

BOAD ** ** ** ** ** ** 6

ECA ** ** ** ** ** ** ** ** ** ** 10

FAO ** ** ** ** 4

UNCDF ** ** ** ** ** ** ** ** ** 9

IFAD ** ** ** ** ** ** ** ** ** ** 10

KFAED ** ** ** ** ** ** 6

IMF LP ** 2

UNFPA LP ** 2

OCHA/CERF ** ** ** ** 4

OFID ** ** ** ** ** ** 6

WHO ** 1

UNAIDS LP 1

WFP ** 1

UNDP ** ** ** ** ** LP ** ** ** ** ** ** ** ** ** LP 16

UNESCO ** 1

UNICEF ** ** ** ** LP ** ** ** ** ** 10

UNIFEM * ** ** 3

Active TFP 10 9 9 5 2 10 8 24 21 9 18 10 10 14 14 13 7 11 3 6 8 8 3 9

Source: Provisional Mapping Report /Labour Division

** = Active Technical and Financial Partner (TFP) LP = Lead TFP

Annex 10

Page 1/2

Implementation Status of the Kandadji Programme

Phase I – (Agricultural Component)

The “Kandadji” Ecosystem Regeneration and Niger Valley Development Programme (P-KRESMIN)

is a support programme for the Accelerated Development and Poverty Reduction Strategy (DPRS) in

Niger. This program was designed in three phases: i) Phase I- major investment for the construction

of the Kandadji dam and implementation of socio-economic and environmental plans; ii) Phase II-

consolidation of investments through the construction of the hydroelectric plant and power lines; and

iii) Phase III- agriculture and farmland development.

The first phase, for a total amount of UA 186 Million, is funded by the State of Niger and several

other donors (AfDB, IDB, BOAD, BADEA EBID, OPEC, KFAED, SFD, and ABU DHABI F.).

AfDB contributes to the project through two ADF financings, namely a grant of UA 20 million and

a loan of UA 20 million. The project started in 2008 and the last disbursement is scheduled for

December 2015.

The main component of the project, namely the construction of the Kandadji Dam, was entrusted to

the Russian company “Zarubezhvodstroy” for an amount of CFAF 84,791,891,535.10. The contract

was notified on 25 May 2011 for a works implementation lead time of 57 months.

The various progress reports on the programme and aide memoires of supervision missions have

reported significant delays in the works implementation and the poor technical and financial capacity

of the company tasked with the works implementation. Indeed, 26 months after the start-up of works,

the rate of progress is only 6%, compared with a contract forecast of more than 30%, and 35% into

the contract period set.

The Bank, as lead donor of the Kandadji Programme, organized several joint missions with other

donors and a multidisciplinary technical mission with the participation of ORPF, GECL, OSAN and

AFSL experts which enabled an analysis of contract terms and assessment of identified weaknesses.

In the wake of their missions, all donors unanimously expressed concern about the future of the

programme and the risks involved in the use of funds allocated to Niger.

In the face of this extremely negative situation, the project owner wrote the company three letters of

formal notice which met with no response. This prompted the Government of Niger, after

consultation with the donors, to terminate the contract with the Russian company

“ZARUBEZHVODSTROY”, on 18 July 2013, and to initiate the appropriate process, under

the circumstances, to ensure implementation of programme objectives.

Annex 10

Page 2/2

As a practical measure for managing the post-termination phase, all the donors, in coordination with

the Government of Niger, agreed on the need to organize a technical and financial audit to analyze

the current status of the physical and financial performance of the contract, assess the consequences

as well as the social and environmental impacts of the termination, and make fresh proposals on the

general programme organization and allotment.

This audit was conducted last August and the report was forwarded to the donors, in the week of 16

September 2013.

The outcomes of this audit are being considered by the Government of Niger and the donors. At the

Bank, the audit report was sent to the various relevant departments for opinions and remarks, and a

meeting of the country team is planned for the first week of October 2013 to help coordinate the

Bank’s position.

NEXT STAGES:

Based on the findings of this audit, the next steps for the implementation of programme activities are

as follows:

1- Internal coordination at the Bank, to analyse the proposals of the technical and

financial audit and harmonize the Bank's position on the technical, legal and

procurement aspects;

2- Cooperation with the Government of Niger and other donors to agree on the new

general organization of the programme, the preparation of new procurement

documents and support for the ZVS contract termination process (October 2013);

3- Define the potential financing gap and liaise with the Government of Niger to seek the

additional financing required to fill the gap (October/November 2013);

4- Speed up the procedures for initiating a second international competitive bidding

(ICB) process, with the pre-qualification of contractors for the selection of a new

company for the dam construction; and

5- Design an overall plan for the implementation of all phases of the programme.

Annex 11 Page 1/7

CSP 2013-17 Indicative Results Framework

PDES Strategic Objectives

Problems Impeding the

Achievement of PDES

Objectives

Final Outcomes Final Outputs Mid-Term Outcomes Mid-Term Outputs Indicative programme of new

operations during period (2013-17)

of the CSP and on-going projects (expected at the end of the strategy in 2017) (expected for 2015)

CSP 2013-17 Pillar 1 – Strengthening resilience to food insecurity

Thrust 3: Food security

and sustainable

agricultural development.

i) Output 1.1 : Strengthening anchor infrastructure for the development of agricultural supply

- Inadequate national energy production

and transportation

infrastructure ;

- Significant

predominance of thermal

electricity production source;

- Low rate of

household access to electricity;

- 130 MW hydroelectric power plant built in 2017;

- 80 MW thermal power plant

at Gourou Banda;

- 200 MW Coal power plant

at Salkadamna

- 190 km-long 132 kV

transmission line built in

2017; - Two 132/33 kV stations

built in 2017;

- Extension of the distribution

network and household

connections;

- 600 GW/h of hydroelectric power (green energy) produced annually

in the country in 2017;

- 40% of renewable energy in the

energy mix in 2017;

- Reduction of 790 K tons of

greenhouse gas emissions (CO2);

- Rate of access to electricity stands

at 20% in 2017;

- One hydroelectric power plant of an

installed capacity

of 130 MW under

construction;

- 190 km-long 132 kV

transmission line

under construction;

- Two 132/33 kV stations under

construction;

- Extension of the

distribution

network and

household

connections;

Rate of access to electricity stands at 15%;

New projects - Kandadji

Hydroelectric Power Plant

Construction project;

- Recurrent food

crises due to drought

- Degradation of

natural resources in the Niger

River Basin

- Construction of 5 mini-dams

and 20 weirs;

- CES works over 10,000 ha; - Development of 2,000 ha for

small-scale irrigation;

- Development of xxx for

small-scale irrigation;

- Planting of 2,000 ha of trees;

- Development of 5 grazing

areas of an area of 100,000 ha

- 100,000 ml of California

grid are laid;

- 1,000 motor pumps

provided to farmers;

- Construction of

socioeconomic

infrastructure;

- 10,000 sustainable jobs in the

agro-pastoral sector;

- Additional production of 5,000 t/year in the rainy season;

- Additional production of 50,000

t/year in the dry season (Off

season);

- Ensuring food security for an

additional 50,000 Tropical

Livestock Unit (TLU)/year; - Increased income from agro-

sylvo-pastoral activities;

- Construction of 10

sills;

- CES works over 2,500 ha ;

- Development of 1000

ha for irrigation;

- Planting of 500 ha of

trees;

- 50,000 ml of

California grid are laid;

- 50 motor pumps

provided to

farmers;

- Construction of

socio-economic

infrastructure;

- 3,000 sustainable jobs in

the agro-pastoral sector;

- Additional production of 500 t/year in the dry

season;

- Additional production of

15,000 t/year in the dry

season (Off season);

- Increased income from agro-forestry-pastoral

activities;

- Project to Support the

3N Initiative;

- Climate Resilience Programme Support Project in

Niger;

- Integrated

Development and climate change

adaptation Programme PIDACC/BN

(multinational);

ii) Output 1.2: Increase market access to contribute to resilience to food insecurity

Annex 11 Page 2/7

PDES Strategic Objectives

Problems Impeding the

Achievement of PDES

Objectives

Final Outcomes Final Outputs Mid-Term Outcomes Mid-Term Outputs Indicative programme of new

operations during period (2013-17)

of the CSP and on-going projects (expected at the end of the strategy in 2017) (expected for 2015)

- Inadequacy of

Niger's international

access (via Benin

only through direct

access to the

international

underwater

cables);

- Limiting access by the populations,

governments and

businesses to

quality ICT

services;

- ICT service access

rates too high;

- Installation of

1,715 km-long fibre optic connections along the main roads

connecting Niger to its

immediate neighbours (Algeria,

Nigeria and Chad);

- Extension of the

National Backbone throughout

the communities crossed by the

DTS;

- Two additional links for

direct access to the international underwater cables (via Algeria and

Nigeria);

- Indirect access through

Chad to underwater cables with cable-

landing points in Cameroon;

- 50% combined

penetration rate for fixed and mobile

cables in 2017;

- On-going

installation of DTS fibre optic

connections;

- Connection of

certain secondary

cities of the country

to broadband

Internet;

- At least one additional

international access; - 35% combined penetration

rate for mobile and fixed

cables;

- Algeria/Niger/Nigeria/Chad

Trans-Saharan Regional Backbone Project;

- The performance of the major

international road

corridors

(Ouagadougou-

Dori-Tera-Niamey

and Trans-Sahara

Highway) is

reduced by the persistence of

physical and non-

physical barriers

and the costs

involved are high;

- The exploitation of

mineral deposits in

the region in general and Niger

in particular, is

subject to the

completion of the

Niger’s section of

the Abidjan-

Ouagadougou-Cotonou-Niamey

rail loop;

- Cross-border trade

with Nigeria is

hampered by the

- 223 km-long road between Arlit and Assamaka on the

Trans-Sahara Highway will

be built by 2018;

- 2 Juxtaposed Checkpoints

(JCPs) constructed,

equipped and commissioned

at the Algeria/Niger and

Niger/Chad borders; - 543 metre-long bridge with

3 km-long access roads will

be built at Farié on the

Ouagadougou-Dori-Tera-

Niamey corridor by 2015;

- At least 100 km of railway

track on the Nigerien section

of the Abidjan-Ouagadougou- Niamey-

Cotonou rail loop will be

built by 2017;

- 200 km of cross-border

roads with Nigeria will be

built by 2017;

- The total traffic at the Niger/Algeria land border will

increase from 62 vehicles/day in

2013 to 116 vehicles/day in 2018;

- The total traffic at the Niger/Chad

land border will increase from 18

vehicles/day in 2013 to 76

vehicles/day in 2018;

- The travel time of a heavy truck (HV) on the Arlit-Assamaka

section which is currently 2 days

(2013) will be reduced to 3.5

hours in 2018;

- The average vehicle operating cost

(VOC) for heavy vehicles in Niger

will be reduced from CFAF

945/km (in 2013) to CFAF 494 / km (in 2018;

- The average time for the

conveyance of goods from

Southern European ports will be

reduced by 40 days (in 2013) to 18

days (2018);

- Length of daily uptime for facilities for crossing the River

Niger at Farié between Dori and

Tera will be reduced by 50% (from 24 hours in 2013 to 12 hours

in 2018);

- - - Niger-Chad Corridor Trans-Sahara Highway (TSH)

Multinational Project;

- Cross-border roads Project

with Nigeria;

- Abidjan-Ouagadougou-

Niamey-Cotonou Rail Loop

Multinational Project;

Annex 11 Page 3/7

PDES Strategic Objectives

Problems Impeding the

Achievement of PDES

Objectives

Final Outcomes Final Outputs Mid-Term Outcomes Mid-Term Outputs Indicative programme of new

operations during period (2013-17)

of the CSP and on-going projects (expected at the end of the strategy in 2017) (expected for 2015)

poor state of trans-

border roads;

- Freight traffic between Niger and

Nigeria will increase;

CSP 2013-17 Pillar 2 – Strengthening governance, particularly of natural resources

Thrust 1: Strengthening

the credibility and

effectiveness of public

institutions

i) Output 2.1: Strengthening economic and financial governance

Implementation of WAEMU

directives is not effective;

Poor mobilization of internal

resources;

Inadequate alignment of the

budget with the PDES;

Low efficiency of budget

execution internal oversight ;

- Delay in the

adoption of final

audited accounts.

- Weak human and

technical capacity

of the government

services;

- Effective implementation

of the 6 directives of the

harmonized public

finance framework within

WAEMU;

- The tax revenue

optimization action plan

is implemented;

- Taxpayer education on

the new General Tax Code is effective and

sustained;

- Review and adoption of a

customs code consistent

with Community

provisions and taking into

account the provisions of the Kyoto Convention;

- All ministries have a

MTEF and programme

budgets aligned with the

PDES;

- The decentralization of

financial controllers and

DGCMP services realized

for eight regions;

- PEFA PI-19 indicator is

rated "A" in 2015;

- The public finance management

system is consistent with

WAEMU directives, results-based

and efficient;

- At least 10 PEFA indicators are rated "B" as compared to the

current 5;

- PI-13, PI-14 and PI-15 are rated at

least "B";

Tax burden (tax revenue as% of GDP) is at least 19%;

- The credibility and relevance of

the budget is strengthened. PEFA

PI-1, PI-2, PI-3 and PI-4 are rated

at least "B" PI-11 is rated at least

"B" and PI-12 rated "A";

- Annual rate of execution of the investment budget is at least 80%

- Internal budget oversight is more

effective;

- Competitive bidding, optimal use

of resources and public

procurement control are effective;

- Budget execution transparency

and monitoring are strengthened. -

PI-28 is at least "B";

- At least 3 of the 6

WAEMU directives

are effectively

implemented in

public finance management;

- The tax revenue

optimization plan is

adopted;

- The new General Tax Code is

published and

widely

disseminated;

- 50% of ministries

have MTEF and

budget

programmes consistent with the

objectives of the

national

development

strategy;

- The

decentralization of

financial controllers

and DGCMP

services is effective

- The public finance

management system

is at least 50%

compliant with

WAEMU directives;

- Rate of tax burden

(tax revenue as% of

GDP) is at least 17%;

- The credibility and

relevance of the

budget are gradually

improved;

- Annual rate of

execution of the

investment budget has gradually

improved;

- The internal budget

control system is

strengthened;

- Competitive bidding,

optimal use of

resources and public procurement control

- Support Project for the

Mobilization of Domestic

Resources and the

Improvement of Economic

and Financial Governance (PAMOGEF) – on-going

project; - Support Programme for

Inclusive Growth and the

Strengthening of Food

Security (PACIRSA) – on-

going budget support

programme; - Economic and Financial

Reform Support Programme

- new budget support

operation to be approved

between 2014 and 2015; - Institutional Capacity

Building and Reform Programme - new

institutional support to be

approved between 2014

and 2015;

- Support Project for the

Mobilization of Domestic

Annex 11 Page 4/7

PDES Strategic Objectives

Problems Impeding the

Achievement of PDES

Objectives

Final Outcomes Final Outputs Mid-Term Outcomes Mid-Term Outputs Indicative programme of new

operations during period (2013-17)

of the CSP and on-going projects (expected at the end of the strategy in 2017) (expected for 2015)

- Lack of

appropriate policies and

sector strategies that are

consistent with the PDES;

- Final audited accounts

are prepared and adopted

in a timely manner;

- The national strategy for

building the capacity of

government services and

modernizing the State and

its action plan are

implemented; - Public officials are trained

under relevant and

harmonized training plans;

- Sector strategies consistent

with the 3N Initiative of all

sub-sectors of the rural sector are adopted and

implemented;

- The mining sector has a

sector policy and regulatory

framework aligned with

PDES objectives. Action

plans are implemented;

- The energy sector has a sector policy and framework

aligned with PDES

objectives. Action plans are

implemented;

- The transport sector has a

sector policy and regulatory

framework in line with PDES objectives. Action

plans are implemented;

- A programme for

strengthening the human,

technical and material

capacity of the rural, energy,

mining and transport sectors

is implemented;

- Public service performances have

improved. CPIA rating: Quality

of Government Services is at least

“5”;

- The implementation of the 3N

Programme is satisfactory;

- CPIA indicators related to

structural policies and social

inclusion and equity policies are

rated at least "4";

for at least 5

regions;

- PEFA PI-19

indicator is rated

"A" in 2015;

- Delays encountered

are gradually

resolved;

- The national

strategy to build the

capacity of

institutions and the

Public Service as well as its Action

Plan, are adopted by

the Government;

- Public officials are

trained under

relevant, consistent

and harmonized

training plans;

- Sector strategies

consistent with the

3NI of all sub-

sectors of the rural

sector are adopted;

- The mining sector

has a sector policy and regulatory

framework aligned

with PDES

objectives;

- The energy sector

has a sector policy

and regulatory framework aligned

with PDES

objectives.

- The transport

sector has a sector

policy and

regulatory

framework aligned

are gradually

improved;

- Transparency and

budget execution

monitoring are

gradually improved;

- Public service

performances have

improved. CPIA

rating: Quality of

Government Services

is at least “5”;

- Technical capacity

building programmes;

- The implementation

of the 3N Programme is satisfactory;

- CPIA indicators

related to structural

policies and social

inclusion and equity

policies are rated at least “4”;

Resources and the

Improvement of Economic

and Financial Governance

(PAMOGEF) -on-going

project;

- Programme to Support Inclusive Growth and Food

Security Enhancement

(PACIRSA) – on-going

budget support Programme;

- Programme to support

economic, financial and

institutional reforms - new budget support operation to

be approved between 2014

and 2017.

Annex 11 Page 5/7

PDES Strategic Objectives

Problems Impeding the

Achievement of PDES

Objectives

Final Outcomes Final Outputs Mid-Term Outcomes Mid-Term Outputs Indicative programme of new

operations during period (2013-17)

of the CSP and on-going projects (expected at the end of the strategy in 2017) (expected for 2015)

with PDES

objectives.

- A programme for

strengthening the

human, technical

and material capacity of the rural,

energy, mining and

transport sectors

was adopted by the

Government.

Thrust 4: Promoting a

competitive and diversified

economy for accelerated

and inclusive growth.

ii) Output 2.2: Strengthening sector-based governance and supporting economic diversification

- Business

climate not conducive to the

promotion of investment,

employment, youth entrepreneurship and creation

of value added;

- Lack of transport and communication

infrastructure;

- Lack of non-

agriculture production sectors such as manufacturing,

construction and mining;

- Support the

programme to promote and secure

private investment;

- Support the

programme for the development of road and railway infrastructure,

digital applications and content of

communication;

- Support the

National Industrial Development Strategy (SNDI) and improved

productivity in the mining sector;

- The Investment Code was

revised and adopted;

- The procedures for starting or

establishing a business are streamlined and consistent with

OHADA;

- The Mining Code is revised;

- The Labour Code is revised;

- The Public-Private Partnership

Framework for the regulation of

transport, energy and water resources is operational;

- International roads to

neighbouring countries are

developed and paved;

- The road maintenance system is

strengthened and CAFER is

transformed into a second-

generation road fund; - The national transport strategy is

finalized and updated and axle-

load regulations are

implemented;

- Digital content and applications

are developed and digital

terrestrial television

infrastructure is deployed; - The legal and institutional

framework is appropriate and

The programme to promote

and secure private

investment is

adopted and implemented;

- The programme for the development of

road and railway

infrastructure,

digital applications

and content of

communication is

adopted and

implemented;

Improved business climate and

Niger's improved score in the

World Bank's “Doing Business”

report, compared with2012;

- The quality of

international roads to

neighbouring countries has improved

significantly, compared

with previous years;

- Road maintenance is

enhanced and the national

transport strategy is known

and implemented;

- Communication infrastructure has

improved, the legal and

institutional framework is

appropriate and the quality

of human resources in the

sector has increased

substantially;

Annex 11 Page 6/7

PDES Strategic Objectives

Problems Impeding the

Achievement of PDES

Objectives

Final Outcomes Final Outputs Mid-Term Outcomes Mid-Term Outputs Indicative programme of new

operations during period (2013-17)

of the CSP and on-going projects (expected at the end of the strategy in 2017) (expected for 2015)

- Poor financial

intermediation to support Niger's economy;

- Support the

Development Programme for the banking and financial and

insurance sector.

universal access to ICT services

is ensured;

- The human and institutional

capacity of the sector is

strengthened;

- A coherent and appropriate

industrial policy is developed and

adopted; - A national innovation, industrial

property and quality policy is

implemented;

- New industrial zones are created

and energy production and

produce delivery infrastructure

are built;

- Production costs are reduced and local products are more

competitive;

- Industrial processing units for

agro- pastoral produce are

operational;

- Mining activities are better known and diversified;

- The mining code is drawn up;

- The Fund for artisanal mining

companies is established and

operational;

- The institutional framework is

improved and the mining sector

better managed; - The share capital of all banks is

increased to a minimum of CFAF

5 billion and that of financial

institutions to CFAF 1 billion by

the end of PDES;

- All banks and financial

institutions comply with prudential management ratios;

- The implementation of the new

legal framework for

decentralized financial systems is

effective;

- Studies and operational

recommendations on the

- The National

Industrial Development

Strategy (NSDI) and

mining policy are

adopted and

implemented;

- The Development

Programme for the

banking and financial and

insurance

institutions sector is adopted and

implemented.

- An industrial policy is

formulated and known; - Niger’s industrial sector is

significantly improved,

compared with previous

years;

- Production costs in

industrial units are

significantly reduced,

compared with previous years;

- Local produce processing

units exist and are

operational;

- The Fund for artisanal

mining companies is

established;

- The mining code exists;

- The share of mining

activities in Niger's

economic growth has

increased significantly,

compared with previous

years. - Most banks and financial

institutions comply with

the decided share capital

level;

- All banks and financial

institutions comply with

the prudential

management ratios of the WAEMU region;

- A new legal framework for

decentralized financial

systems is implemented;

- The conclusions and

recommendations of

studies on the financing of SMEs and the agricultural

sector are available;

- The volume of medium-

and long-term credit

granted to SMEs/SMIs has

increased by 30%;

- At least 10% of public

procurement and 20% of

- Line of Credit at

SONIBANK to finance SMEs/SMIs.

Annex 11 Page 7/7

PDES Strategic Objectives

Problems Impeding the

Achievement of PDES

Objectives

Final Outcomes Final Outputs Mid-Term Outcomes Mid-Term Outputs Indicative programme of new

operations during period (2013-17)

of the CSP and on-going projects (expected at the end of the strategy in 2017) (expected for 2015)

financing of SMEs and the

agricultural sector are made; - Financing for SMEs/SMIs with

long-term resources is

established and the ability of

SMEs/SMIs to meet their

medium- and long-term credit

needs has improved;

- The volume of contracts won and

executed by SMEs/SMIs has increased significantly.

private procurement

contracts are outsourced to SMEs/SMIs.

CSP 2013-17 Cross-cutting issues – Development of indigenous knowledge and capacity building for climate resilience and green economy

i) Output 1: Strengthening indigenous knowledge for better implementation of the Bank's strategy

- Inadequate

knowledge

- Economic and

sector studies: Formulation of the

sector policy and the transport

sector action plan (gender will be

mainstreamed in this study) - Economic and

sector studies: Formulation of the

sector policy and action plan of

the Energy sector (gender will be

mainstreamed in this study)

- Economic and

Sector Studies: Study on the

status of women and child

trafficking in Niger

- Improved performance of the

transport sector

- Improved performance of the

energy sector

- Better targeting by the poverty reduction and women

empowerment strategy

the

ii) Output 2: Capacity building in the area of green economy and climate change

- Inadequate

integration of climate

information into the

management of agro-sylvo-

pastoral activities.

- Dissemination of

climate information to 150,000

farmers in the 235 communes of

Niger;

- Dissemination

multi-risk information from the

Early Warning System (EWS) in the 235 communes.

- At least 120 communes in Niger

have incorporated climate

information in their commune

development plans (PDC);

- 200,000 Nigerien farmers

routinely use climate

information in the management of their activities;

- Flood, drought, sandstorm, and

extreme temperature alerts are

disseminated in the communes.

- Dissemination of

climate

information to

150,000 farmers in

the 235 communes

of Niger;

- Dissemination of information from

the EWS multi-risk

early warning

system in the 235

communes.

- At least 60 communes in

Niger have incorporated

climate information in

their PDC;

- 50,000 farmers in Niger

routinely use climate information in the

management of their

activities;

- Floods, droughts,

sandstorms, and extreme

temperature are covered by the EWS.

- Climate Resilience

Programme Support Project in Niger