Tuesday, December 13, 2011

Niger.First Shared Growth Credit Project

Niger is one of the world’s poorest countries. About 80 percent of the population derives their livelihoods from agriculture and livestock. A harsh climate, frequent droughts, and poor soils, but also poorly performing agricultural institutions contribute to the low productivity of these activities in Niger.The other important economic activity is mining, primarily focused on exploiting rich uranium deposits. With large investments in further development of the uranium sector as well as other natural resources such as gold and oil underway, the importance of natural resource extraction for the economy and its contribution to government revenue is set to increase substantially in the coming years. Unfortunately, the contribution of the mining and petrol sector to employment generation is likely to remain modest, although certainly not insignificant.

The formal sector is small and much of Niger’s economic activity takes place in the informal sector. Niger’s business environment is one of the most difficult worldwide, reflecting both Niger’s geographic situation, but also a weak regulatory regime, a poorly developed financial sector, and very limited infrastructure services. Niger’s dependence on agriculture and mining make it highly vulnerable to climatic shocks and changes in international demand for Niger’s natural resources. To reduce this vulnerability and to accelerate growth, strengthening the agriculture sector, private sector led diversification of the economy beyond agriculture and mining is critical. With the likely increase in government revenue from the mining sector, strengthened public expenditure and financial management are also key to ensure that public resources are used efficiently and effectively in pursuit of the implementation of Niger’s Second Poverty Reduction Strategy (PRSP-II)...

IDA has a long standing involvement in Niger, providing assistance to government in implementing IDA has been providing budget support to Niger since the early 2000’s, supporting key policy reforms and providing resources for the implementation of Niger’s PRSP. The proposed new series of DPOs continues the focus of the preceeding series of two development policy operations (DPOs) on the above areas.

The overall development objective is to support policy reforms that would help to achieve an increase in per capita incomes, increased resilience to external shocks, and increased improvements in access to social services and income earning opportunities for the poor.

World Bank.Document Date: 2011/11/14.Document Type:  Program Information Document.Report Number:AB6870.Volume No: 1 of 1