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IMF Executive Board Concludes 2013 Article IV Consultation with Seychelles

Posted on 15 May 2013 by Africa Business

VICTORIA, Mahé, May 15, 2013/African Press Organization (APO)/ On May 8, 2013, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Seychelles. 1


In the few years since the 2008 debt crisis, Seychelles has made remarkable strides, quickly restoring macroeconomic stability and creating room for private-sector activity. Macroeconomic developments in the tourism-based island economy have been favorable, despite the challenging global environment. Notably, growth held up as the tourism industry successfully attracted arrivals from non-traditional markets as European arrivals slumped, while a surge in foreign direct investment (FDI) supported construction in recent years. For the most part, inflation remained contained, and the external position improved markedly following liberalization of the exchange rate in 2008 and debt restructuring started in 2009.

In 2012, despite robust tourist arrivals, growth moderated to 2.9 percent as large investment projects were completed. Inflation spiked in July 2012 to 8.9 percent fueled by global as well as domestic developments, but has since abated as a result of successful monetary tightening. The external position continued to improve, albeit modestly. In particular, the current account deficit declined slightly, but remained high at around 22 percent of gross domestic product (GDP), but was fully financed by FDI and external borrowing, leading to a modest rise in reserves. Debt restructuring is nearly complete, with only one loan agreement awaiting signature.

Fiscal policy in 2012 continued to support debt sustainability. The primary surplus is projected to have risen to 6.2 percent of GDP, in part due to sizable windfall revenues which were partly saved. Buoyant revenue and grants paved the way for needed capital expenditure. Notwithstanding, public debt increased by over 3 percentage points of GDP due mostly to currency depreciation and the government assuming liabilities of Air Seychelles.

Monetary policy was tightened sharply in 2012 in response to rising inflation and an unhinging of the exchange rate, and has since been relaxed. Starting in late-2011, rising global food and fuel prices coupled with adjustments in administered prices pushed prices higher. This was reinforced by current account pressures resulting from lower exports of transportation services in the wake of the restructuring of Air Seychelles. The looming inflation-depreciation spiral was broken in mid-2012 by two small foreign exchange market interventions by the Central Bank of Seychelles and a tightening of monetary policy. By end-2012, inflation had fallen to 5.8 percent and the exchange rate had strengthened beyond its end-2011 level.

Broad-based structural reform over the past five years has worked to improve financial performance of the public sector and increase private sector participation in economic activity. Statistical capacity continues to be strengthened. Seychelles subscribes to the IMF’s General Data Dissemination Standard (GDDS) and is making progress at compiling higher frequency economic data which will support strengthened macroeconomic oversight and analysis.

Executive Board Assessment

Executive Directors commended the authorities for their strong policy implementation. Macroeconomic stability has been restored and growth has remained resilient. While the outlook is favorable, the economy is vulnerable to an uncertain global environment and domestic risks. Directors called for continued commitment to sound policies and structural reforms to preserve macroeconomic and financial stability, build policy buffers, and foster strong and inclusive growth.

Directors welcomed the steps to improve financial discipline at the central government level and the recent introduction of the VAT. They agreed that strengthening the oversight and financial position of parastatals, including through adequate price mechanisms, and further progress in public financial management will be key to ensuring fiscal sustainability. For the medium term, Directors supported the authorities’ fiscal policy stance which aims at targeting a primary fiscal surplus and reducing public debt to 50 percent of GDP. They welcomed that the debt restructuring is nearly complete and encouraged the authorities to exercise caution when contracting new external debt.

Directors called for continued efforts to improve the monetary framework in order to stabilize inflation expectations and policy interest rates. Absorbing excess liquidity over time will be important to strengthen the monetary anchor and monetary transmission mechanism. Directors considered that a further increase in international reserves, as market conditions permit, would provide a stronger buffer against shocks. Directors noted that the financial system is sound and welcomed the steps being taken to improve the functioning of the credit market.

Directors commended the efforts towards improving the business and investment climate, which is key to avoid a potential middle-income trap and to support broad-based growth. They encouraged the authorities to foster private sector-led growth by addressing infrastructure gaps, engendering lower cost and improved access to credit, correcting data weaknesses, and moving ahead with plans for greater workforce education and capacity building.


Seychelles: Selected Economic and Financial Indicators, 2010–14


2010    2011    2012    2013    2014

Actual    Actual    Est.    Proj.    Proj.


(Percentage change, unless otherwise indicated)

National income and prices


Nominal GDP (millions of Seychelles rupees)

11,746    13,119    14,145    15,292    16,461

Real GDP

5.6    5.0    2.9    3.3    3.9

CPI (annual average)

-2.4    2.6    7.1    4.5    3.4

CPI (end-of-period)

0.4    5.5    5.8    4.3    3.1

GDP deflator average

-3.6    6.4    4.8    4.6    3.6

(Percentage change, unless otherwise indicated)

Money and credit


Credit to the economy

21.4    6.2    2.5    13.0    …

Broad money

13.5    4.5    -2.3    0.1    …

Reserve money

34.7    -2.7    6.9    12.3    …

Velocity (GDP/broad money)

1.6    1.7    1.9    2.1    …

Money multiplier (broad money/reserve money)

4.2    4.5    4.1    3.6    …

(Percent of GDP)

Savings-Investment balance


External savings

23.0    22.7    21.7    23.2    18.4

Gross national savings

13.6    12.4    17.3    15.1    15.5

Of which: government savings

7.8    10.6    14.3    12.1    11.0

Gross investment

36.6    35.1    39.0    38.2    33.8

Of which: government investment

8.6    8.1    12.0    9.2    7.8

Government budget

Total revenue, excluding grants

34.1    35.8    37.6    36.4    35.6

Expenditure and net lending

32.5    35.7    40.2    38.5    36.0

Current expenditure

27.2    27.6    28.8    28.8    27.3

Capital expenditure and net lending

5.3    8.1    11.4    9.8    8.7

Overall balance, including grants

2.5    2.5    2.4    1.8    2.0

Primary balance

8.6    5.4    6.2    5.1    4.4

Total public debt

81.6    74.3    77.3    72.0    65.3


32.5    28.0    27.7    25.7    18.6


49.1    46.2    49.6    46.3    46.7

(Percent of GDP, unless otherwise indicated)

External sector


Current account balance including official transfers

-23.0    -22.7    -21.7    -23.2    -18.4

Total stock of arrears (millions of U.S. dollars)

30.3    9.0    2.7    …    …

Total public external debt outstanding (millions of U.S. dollars)

478    490    512    558    597

(percent of GDP)

49.1    46.2    49.6    46.3    46.7

Terms of trade (= – deterioration)

-6.7    -6.4    -0.4    0.6    1.2

Real effective exchange rate (average, percent change)

4.4    -7.4    …    …    …

Gross official reserves (end of year, millions of U.S. dollars)

254    277    305    317    326

Months of imports, c.i.f.

2.3    2.5    2.6    2.7    2.7

Exchange rate

Seychelles rupees per US$1 (end-of-period)

12.1    13.7    13.0    …    …

Seychelles rupees per US$1 (period average)

12.1    12.4    13.7    …    …


Sources: Central Bank of Seychelles; Ministry of Finance; and IMF staff estimates and projections.

1 Excludes debt issued in 2012 for monetary purposes (5.4 percent of GDP), as proceeds are kept in a blocked account with the Central Bank.

1 Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here:



International Monetary Fund (IMF)

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The AfDB supports economic recovery in Mali with a loan of more than 30 billion CFA francs

Posted on 08 May 2013 by Africa Business

TUNIS, Tunisia, May 8, 2013/African Press Organization (APO)/ The African Development Bank Group (AfDB) ( approved on Wednesday, May 8 in Tunis, a loan of 30 billion CFA francs to the Republic of Mali. This amount will be drawn from the resources of the African Development Fund (ADF), the Bank’s concessional window, to finance an Emergency Economic Recovery Support Programme (EERSP).

The EERSP is an emergency budget support operation and part of a concerted effort by the international community to help Mali out of its successive crises (security, political, institutional) that have affected the country, by providing support to the reestablishment of public services and fostering economic recovery. The operation will contribute to the consolidation of peace initiatives and social cohesion undertaken under the ongoing transition. It will help to enhance the reconstruction of the country including the rebuilding of the capacities of the State. The program will equally improve macroeconomic and budgetary framework and create the conditions required for economic recovery. The program’s specific economic outcomes are, among others, restoration of functioning and rebuilding of the capacities of the public administration, restoration of access to basic social services, especially health and education services and support to economic growth expected to increase from 1.2% in 2012 to an average of 5% between 2013 and 2014.

The Transition Government in Mali has prepared an Emergency Priority Action Plan (PAPU) the objectives of which are the restoration of the functioning of public services, re-establishing access of the populations to basic social services and resumption of economic activity. The EERSP will help the State respond to urgent social and economic needs in the wake of the successive crises and its implementation. Furthermore, this operation, in line with the Bank’s intervention in Mali, is found on the Transition Support Strategy (2013-2014) hinged on a dual objective, to mitigate the impact of the crisis and strengthen the population’s resilience, and to consolidate the Government’s stability and the foundations for economic recovery.

The program beneficiaries will be the Malian population as a whole, i.e. about 15.4 million inhabitants, and, in particular, those living in the northern part of the country, especially those displaced as a result of the conflict. More specifically, these are people living under difficult conditions due to the absence of basic public services in the areas affected and the congestion of basic public services in the areas that accepted the displaced persons. The main beneficiary structures comprise the school network, public health services, and in general, the public administration which must return to a normal working order. The Government will then be able to consolidate its legitimacy and restore its sovereignty in the whole of Mali.

To date, funding approved by the African Development Bank Group in Mali is about 140 billion CFA francs.

The aim of the AfDB is to enhance and strengthen its support to Fragile States and those affected by conflict.



African Development Bank (AfDB)

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IFC Support for Country Bird’s Expansion Encourages Agribusiness, Employment in Southern Africa

Posted on 03 May 2013 by Africa Business

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit


WASHINGTON, May 3, 2013/African Press Organization (APO)/ IFC, a member of the World Bank Group, today announced a convertible loan of $25 million to support poultry producer Country Bird’s expansion in Africa. IFC’s investment will allow Country Bird to increase production and operations; encouraging a thriving agribusiness enterprise and creating employment opportunities in Southern Africa and beyond.


With operations including South Africa, Botswana, Namibia and Zambia, Country Bird’s business comprises poultry breeding, broiler production, stock feed, and processing. IFC funding will support Country Bird increase chick production over the next three years in Zambia and Botswana, expand feed mill capacity in Zambia, and add poultry processing facilities and two soybean plants in South Africa.


Country Bird’s expansion will provide more affordable proteins in Southern Africa, create jobs in the rural areas where the company operates, and increase revenues for its 21,500 maize farmers and 112,000 workers employed through the company’s supply chain.


Kevin James, Founder of Country Bird, said “In just a decade since we started operations, Country Bird has become the third largest integrated poultry producer in South Africa. We are seeking to expand our production, so we can meet increasing consumer demand in the region. IFC’s investment supports Country Bird’s growth and our goal to provide more affordable proteins in Southern Africa.”


With increasing urbanization and disposable incomes, per capita meat consumption is expected to double in Africa by 2030, particularly that of poultry, which is cheaper relative to other meats.


Saleem Karimjee, IFC Senior Country Manager for Southern Africa, said, “IFC is committed to investing in companies like Country Bird that catalyze growth in this important sector. Africa needs dynamic regional agribusiness companies that help encourage competitiveness and can expand successful models outside their home markets.”



Agriculture accounts for one third to one half of GDP in most African countries, and 80 percent of the poor in Africa live in rural areas.

Promoting agribusiness in Africa is a key priority for IFC as is food security, given that the sector employs a large percentage of Africa’s labor force, and has a strong impact on micro, small and medium-sized enterprises.




International Finance Corporation (IFC) – The World Bank

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Posted on 03 May 2013 by Africa Business


About Asante Gold Corporation

Asante Gold Corporation (TSX.V:ASE/FRANKFURT:1A9) is a Vancouver based gold exploration and royalty focused company, exploring the Fahiakoba Concession located in the centre of Ghana’s Golden Triangle between Perseus Mining’s 250,000 oz Au per year Edikan mine, and AngloGold Ashanti’s 315,000 oz Au per year Obuasi mine.

Vancouver, British Columbia – May 3, 2013 – Asante Gold Corporation (TSX.V:ASE/ FRANKFURT:1A9) (the “Company”) announces the approval and adoption by its Board of Directors of an Advance Notice Policy (the “Policy”). The purpose of the Policy is to provide shareholders, Directors and management of the Company with a clear framework for nominating directors of the Company. The Company is committed to: (i) facilitating an orderly and efficient annual general or, where the need arises, special meeting, process; (ii) ensuring that all shareholders receive adequate notice and information of the Director nominees; and (iii) allowing shareholders to register an informed vote after having been afforded reasonable time for appropriate deliberation. The Policy is intended to further these objectives.

The Policy includes a provision that requires advance notice to the Company in certain circumstances where nominations of persons for election to the Board of Directors are made by shareholders of the Company. The Policy fixes a deadline by which Director nominations must be submitted to the Company prior to any annual or special meeting of shareholders and sets forth the information that must be included in the notice to the Company. No person will be eligible for election as a Director of the Company unless nominated in accordance with the Policy.

In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 days and not more than 65 days prior to the date of the annual meeting; provided, however, that, in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement.

In the case of a special meeting of shareholders called for the purpose of electing Directors (whether or not called for other purposes), notice to the Company must be made not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made.

The full text of the Policy is available under the Company’s profile at and on the Company’s website ( or upon request by contacting the Company’s Corporate Secretary, Janet Horbulyk, at (604)-558-1134.

The Policy is in effect as at the date of this news release. Pursuant to the terms of the Policy, the Company will seek shareholder ratification of the Policy at its next annual general meeting of shareholders (the “Meeting”). If the Policy is not confirmed at the Meeting, the Policy will terminate and be of no further force and effect following the termination of the Meeting.

The Company also announces that it has entered into a loan agreement with Goknet Mining Company Limited (“Goknet”) of Accra, Ghana. Pursuant to the terms of the agreement, Goknet will loan the Company CDN$200,000 for working capital purposes, payable within 60 days of demand, with interest payable on the unpaid principal at the rate of 5% per annum, calculated yearly. The loan is not convertible into securities of the Company. Goknet is a related party, as Douglas R. MacQuarrie is the CEO of the Company and the Managing Director of Goknet.

Goknet has also informed the Company that its arbitration with PMI Gold Corporation, with respect to PMI’s consent to the assignment of a 1% NSR royalty interest on the Obotan Gold Mine project in Ghana held by Goknet to the Company, is progressing with the full panel of arbitrators now selected. The Goknet/PMI agreement calls for a decision of the majority of the arbitrators to be made within 30 days. Further updates will be issued when and as received.

On behalf of the Board,

“Douglas R. MacQuarrie”

President & CEO


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Stanbic IBTC declares N12bn profit on gross earnings of N92bn

Posted on 25 April 2013 by Africa Business

Stanbic IBTC Holdings, a member of Standard Bank Group, has declared a profit before tax of N11.7 billion for 2012, an increase of 16 percent above the N10.1 billion recorded in the corresponding period of 2011, according to its audited results for the financial year ended December 31, 2012. Similarly, profit after tax rose to N10.2 billion, translating to an increase of 53 percent over the prior year’s N6.6 billion.

The Stanbic IBTC group also made significant gains in other parameters during the period, as indicated in the results made available at The Nigerian Stock Exchange on Friday, April 19, 2013. Gross earnings, which stood at N63.4 billion in December 2011, increased to N91.9 billion in 2012, signifying a gain of 45 percent. The total assets increased to N676.8 billion last year, a 22 percent increase compared to the N554.5 billion recorded in December 2011.

The strong performance, despite the challenging operating conditions, is indicative of the soundness of the group’s decision to adopt a holding company structure, in line with its strategy to provide end-to-end financial services and build a franchise capable of generating sustainable and respectable returns to its stakeholders.

“This performance is a testament of the credibility of our strategy to realise our objective of being the leading end-to-end financial solutions provider in Nigeria. We continue to assess our risk assets through our robust and systematic risk management practices, whilst ensuring that adequate provisions are made for unforeseen shocks in line with the operating environment,” stated Mrs. Sola David-Borha, Chief Executive Officer, Stanbic IBTC Holdings PLC.

She said the group continued to expand its business on the back of growth in transactional volumes and activities, money and capital market activities and loan book. “Deposits from customers increased by 24 percent, while our loan book grew by 5 percent despite the sell down of existing large performing exposures to enable us comply with the post restructuring single obligor limit.”

During the period under review, total operating income increased by 22 percent to N67.4 billion, from N55.2 billion in December 2011. Gross loans and advances to customers went up 5 percent to N279.5 billion, compared to N266.6 billion in December 2011. Customer deposits went up 24 percent to N355.4 billion from N287.2 billion in the corresponding period of 2011, while non-performing loans at N14.3 billion decreased by 13 percent from N16.5 billion in December 2011.

The group will continue to seek opportunities in strategic sectors of the economy in order to grow its business in line with its future growth strategy, said David-Borha. “Our expanded branch network, excellent customer service, diversified business model and access to an extensive pool of experience within the group have put us in a desirable position to generate growing value for shareholders in 2013.”

Following its adoption of the holding company structure, the operating subsidiaries of Stanbic IBTC Holdings PLC are Stanbic IBTC Bank (including Stanbic Nominees Nigeria Limited), Stanbic IBTC Pension Managers Limited, Stanbic IBTC Asset Management Limited, Stanbic IBTC Stockbrokers Limited, Stanbic IBTC Trustees Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited. Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited are newly incorporated companies.

Some of the recent milestones recorded by the group include surpassing the 800,000 clients mark in the first year of the launch of the Stanbic IBTC Bank’s *909# mobile money solution and attainment of over one million retirement saving accounts by its pension business, Stanbic IBTC Pension Managers Limited.


Source: Standard Bank

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IMF Executive Board Concludes 2012 Article IV Consultation with Cape Verde

Posted on 24 April 2013 by Africa Business

PRAIA, Cape Verde, April 24, 2013/African Press Organization (APO)/ On March 8, 2013, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Cape Verde.1


After recovering in 2010, Cape Verde’s growth slowed in 2011 and 2012, reflecting the difficult external environment and weak domestic demand. Growth is estimated at 4.3 percent in 2012, with foreign direct investment (FDI) having fallen significantly and confidence indicators across several sectors waning. However, tourism has remained resilient and remittances have held up well. The overall balance of payments is expected to move into surplus in 2012, aided by a significant narrowing of the current account deficit owing to strong tourism receipts and weaker imports. Accordingly, reserves are estimated to have stabilized at an estimated 3.8 months of current year imports (staff estimate 3.3 months of prospective imports). This outturn was aided by an adjustment of fiscal policy in 2012, particularly capital spending, in support of the monetary policy tightening that began in late 2011. Average inflation was well contained in 2012 at 2½ percent. Fiscal deficits have increased over recent years as the authorities have ramped up public investment on infrastructure, partly as a countercyclical policy response to the global crisis. Debt service indicators remain sustainable, although public debt levels have continued to increase, reaching elevated levels.

Cape Verde is likely to face a more difficult external environment in 2013, especially with near zero growth forecast in the euro area. Growth is expected to slow to 4.1 percent. Competition in tourism is intensifying as North African markets recover. The growth of private remittances is slowing, driven by economic stagnation in euro area countries. The prospects for higher private capital flows, including FDI, are dimmed by weaknesses in Europe. Likewise, concessional assistance flows are also under stress with the fiscal adjustment underway in Europe.

On the structural front, government’s reforms focus on rebuilding the tax administration and reforming tax policy, improving oversight over the financial system, strengthening monetary operations, and enhancing the governance of state owned enterprises to reduce fiscal risks and improve their service delivery to help boost competitiveness of the economy.

Executive Board Assessment

Executive Directors commended the authorities’ strong track record of prudent macroeconomic management, which has increased the economy’s resilience to shocks, supported economic growth, and advanced progress toward the Millennium Development Goals. They stressed that the difficult external outlook and fiscal and external vulnerabilities call for continued efforts to strengthen macroeconomic buffers, and to foster inclusive growth while preserving external sustainability.

Directors commended the authorities’ efforts to upgrade the infrastructure, using concessional assistance, but noted that the rising public debt could pose risks to debt sustainability. They therefore welcomed the authorities’ intention to undertake medium-term fiscal consolidation beginning in 2013, and advised that it be implemented in a growth-friendly manner. Directors looked forward to the planned reform of tax policy and tax administration to reverse the recent decline in tax revenue relative to GDP. They encouraged restraint on capital spending and more focus on improving the quality of public investment. They also pressed for rationalization of current spending and reforms to improve the operational efficiency and financial position of loss-making state-owned enterprises.

Directors agreed that the current tight monetary stance is appropriate, given the need to further increase reserves to a more comfortable level. They encouraged measures to strengthen the monetary transmission mechanism, including more active liquidity management, better liquidity forecasting, and reforms to increase the efficiency of the interbank market and develop the government securities market.

Directors noted staff’s assessment that the real effective exchange rate is broadly aligned with economic fundamentals. While higher reserve coverage would support the peg, Directors also called for steadfast pursuit of structural reforms to improve the business environment and boost productivity and competiveness. They welcomed in this regard the Third Growth and Poverty Reduction Strategy, which provides a sound basis for higher and more inclusive growth.

Directors welcomed the recent measures taken to safeguard financial stability, including the drafting of new banking legislation, improvements to the regulatory and supervisory framework, and the establishment of a Financial Stability Committee. In light of rising non-performing loan ratios, they encouraged the authorities to continue to strengthen supervisory capacity and to accelerate implementation of the FSAP recommendations.


Cape Verde: Selected Economic and Financial Indicators, 2011–16


2011    2012    2013    2014    2015    2016


Est.    Projections


National accounts and prices

Real GDP

5.0    4.3    4.1    4.5    4.7    5.0

Real GDP per capita

3.6    2.9    2.7    3.1    3.3    3.6

GDP deflator

3.9    3.5    3.5    3.1    3.1    3.0

Consumer price index (annual average)

4.5    2.5    4.0    3.3    2.8    2.5

Consumer price index (end of period)

3.6    4.1    3.5    3.1    2.5    2.5

External sector

Exports of goods and services

17.3    10.7    9.0    7.6    7.9    7.3

Of which: tourism

26.5    10.6    6.5    9.2    9.1    9.0

Imports of goods and services

17.9    0.1    10.4    0.5    0.1    2.3

Money and credit 1

Net foreign assets

-4.2    0.9    1.4    0.3    2.1    1.1

Net domestic assets

6.5    3.8    5.1    5.5    5.3    6.1

Net claims on the central government

3.0    1.2    0.8    0.5    0.2    0.2

Credit to the economy

6.3    1.7    4.3    5.8    5.8    6.9

Broad money (M2)

2.2    4.6    6.5    5.8    7.5    7.1

Reserve money (M0)

-1.3    4.3    1.6    1.4    1.8    1.7

Savings and investment

Domestic savings

20.5    21.8    21.9    23.2    24.6    25.9


2.8    0.1    2.3    -3.1    -2.2    1.4


17.7    21.7    19.6    26.3    26.8    24.5

National investment

36.5    32.9    35.2    34.5    33.0    32.0


9.9    7.6    9.9    8.4    5.8    4.0


26.6    25.3    25.3    26.1    27.2    28.0

Savings-investment balance

-16.0    -11.1    -13.2    -11.4    -8.3    -6.1


-7.1    -7.5    -7.5    -11.5    -8.0    -2.5


-8.9    -3.6    -5.7    0.2    -0.3    -3.5

External sector

External current account (excluding official transfers)

-19.6    -13.5    -15.2    -11.4    -8.3    -6.1

External current account (including official transfers)

-16.0    -11.1    -13.2    -11.4    -8.3    -6.1

Overall balance of payments

-2.3    1.5    1.1    0.3    1.9    1.3

Gross international reserves (months of prospective imports of goods and services)

3.2    3.3    3.3    3.4    3.6    3.8

Gross international reserves (months of current year imports of goods and services)

3.2    3.8    3.3    3.4    3.7    3.9

Government finance


25.0    21.8    24.9    25.6    25.5    24.3

Tax and nontax revenue

22.2    19.4    22.1    21.9    22.4    22.4


2.8    2.4    2.8    3.6    3.1    1.9


32.3    29.3    32.5    31.5    27.6    24.1

Overall balance (excl. grants)

-10.1    -9.9    -10.4    -9.6    -5.2    -1.7

Overall balance (incl. grants)

-7.3    -7.5    -7.6    -5.8    -2.2    0.2

External financing

9.4    9.1    11.8    8.2    5.3    1.0

Domestic financing (incl. onlending)

-0.7    -1.6    -4.2    -2.4    -3.1    -1.2

Errors and omissions

-1.4    0.0    0.0    0.0    0.0    0.0

Public debt stock and service

Total nominal government debt

77.3    81.0    88.6    92.2    92.1    85.6

External government debt

56.1    59.8    67.4    71.4    72.0    68.2

Domestic government debt

21.2    21.2    21.2    20.8    20.0    17.4

External debt service (percent of exports of goods and services)

4.2    4.6    4.6    4.8    4.6    4.3

Memorandum items:

Nominal GDP (billions of Cape Verde escudos)

150.8    162.8    175.4    189.1    204.2    220.8

Gross international reserves (€ millions, end of period)

263.3    300.0    302.7    308.3    342.6    369.5


Sources: Cape Verdean authorities; and IMF staff estimates and projections.

1 Adjusted for data inconsistency in December 2011.

1 Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here:



International Monetary Fund (IMF)

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Sustainable Energy for All: Sector Results Profile

Posted on 11 April 2013 by Africa Business

World Bank Group financing for power generation, transmission and distribution, and energy policy and regulatory reform has helped expand access to millions of households in over 60 countries. Bank Group financing, combined with advisory and analytical services, knowledge products, as well as policy support, has also helped launch and scale up renewable energy generation and energy efficiency at national, sub-national and municipal levels. During 2002-11, the Bank supported projects for the construction and rehabilitation of about 115,000 kilometers of transmission and distribution lines and about 19,000 megawatts of generation capacity to improve access to reliable energy.

Off-grid solar power is lighting up gers and herders' lives across the vast steppes of Mongolia. Seventy percent of Mongolia’s herders now have access to electricity.


More than 1.2 billion people—about 17 percent of the world’s population—are without access to electricity, most of them concentrated in about a dozen countries in Africa and Asia. Another 2.8 billion rely on wood, charcoal, dung and coal for cooking and heating, which results in over four million premature deaths a year due to indoor air pollution. Shortages in power supplies, and their unreliable and poor quality, due to underinvestment, are also major challenges facing developing countries.

Electricity access must be reliable as well as environmentally and socially sustainable. Ensuring these depends on business models robust enough to mobilize financing, as well as policy and institutional frameworks that ensure that electricity access projects are both economically viable and sustainable from a climate perspective.


The Bank Group supports development of energy systems based on least-cost options with an emphasis on renewable sources, such as hydropower, wind, solar and geothermal, while also promoting energy efficiency. Projects support achievement of universal access to electricity and modern household fuels, as well as improved utility performance and sector governance. The Bank Group also provides financing and advice to countries on oil and natural gas extraction, production, processing, transmission and distribution.

Representative projects include support for grid expansion in India, rural electrification in Ethiopia, hydropower projects in Senegal and Cameroon, increased geothermal capacity in Kenya and Indonesia, off-grid solar home systems in Bangladesh and Mongolia, and support for off-grid lighting solutions in Africa through the Bank-International Finance Corporation (IFC) partnership, Lighting Africa.


During 2002-11, the Bank supported projects for the construction and rehabilitation of about 115,000 kilometers of transmission and distribution lines and about 19,000 megawatts of generation capacity to improve access to reliable energy.

Some examples of results achieved with IBRD-financed projects include:

India: To extend power to India’s nearly 400 million people currently without electricity requires a massive expansion of transmission capacity. World Bank financing has helped India expand transmission across the country’s regions by 52 billion kilowatt-hours. It has also supported a five-year program from 2008-12, led by India’s Power Grid Corporation to increase its circuit by 40,000 km to reach 100,000 km, raising inter-regional electric power transfer capacity from 21 to 37 gigawatts. A $1.0 billion IBRD-financed project has supported expansion of five regional transmission systems, to enable transfer of power from energy-surplus regions to towns and villages in under-served regions. This expansion has helped to integrate the national grid, resulting in a more reliable system and reduced transmission losses.

Mexico: Mexico has achieved an energy efficiency milestone by distributing almost 23 million energy-saving light bulbs for free. The national program, partially financed by $185 million from the Global Environment Fund, established over 1,100 exchange points in 2011-12 at which customers replaced their incandescent bulbs with compact fluorescent lamps (CFLs).  In total, more than 5.5 million Mexican families now use energy-saving lamps that consume only 20 percent of the energy and last 10 times longer than a traditional light bulb. The first stage of the program, partially financed by the World Bank, resulted in savings of 1,400 gigawatt hours (Gwh). The program also enables families to save up to 18 percent of their electric bill.  When the second stage ends in 2014, it is estimated that the saving will be of 2,800 Gwh per year, preventing about 1.4 million tons of CO2 emissions.

The government of Bangladesh envisions a country with electricity for all. The World Bank has supported this vision of Bangladesh for 40 years.

Some highlights of results achieved in IDA-supported projects include:

Bangladesh: In 2002, only 7,000 Bangladeshi households were using solar panels. Today, more than 1.4 million low-income rural households in Bangladesh have electricity—delivered by solar photovoltaic (PV) panels. Installations of the panels under the IDA-supported Rural Electrification and Renewable Energy Development Project have doubled since 2010 to 40,000 a month. A $130 million IDA credit in 2009 and another for $172 million in 2011 followed earlier IDA financing that launched the project in 2002.

Competitively priced solar PV panels and a well-designed financing scheme have combined to deliver life-changing—and zero-carbon—electricity to bottom-of-the-pyramid families on a scale that was inconceivable only a few years ago. Under the program, non-governmental (NGO) partner organizations install the systems in households following standards, with the households paying 10-15 percent down with the rest financed by a microcredit loan. Funds from IDA, among others, re-finance part of the microcredit extended to the households. In addition to IDA support, the solar home systems program in Bangladesh has received financing from the World Bank-managed Carbon Finance Unit, the Global Partnership on Output-Based Aid, and several other donors including the Asian Development Bank, and the German agencies KfW and GIZ.

The program aims to deliver off-grid solar power to 2.5 million households by 2014, while also promoting mini-grids for rural consumers. In addition to delivering power to un-served communities, it is helping to reduce carbon emissions from avoided use of kerosene and diesel for lighting. The solar electrification industry and its supply chain in Bangladesh has also helped create, directly and indirectly, about 50,000 jobs.

Ethiopia: In Ethiopia three IDA credits totaling $440 million helped expand electricity to community services in about 4,300 towns and villages, benefiting over 30 million people by powering streetlights, local flour mills, water pumping and irrigation installations, telecommunications, businesses, schools and clinics in five years.  The Electricity Network Reinforcement and Expansion Project, approved by the World Bank in May 2012, extends this work by upgrading and extending the grid in order to improve the overall service delivery of the Ethiopian electricity network. The last project is expected to benefit 385,000 people.

Mongolia: About 500,000 people in Mongolia have gained access to solar power through a program launched in 2006 by the Mongolian government with support from the World Bank and the Government of the Netherlands. Thanks to the National 100,000 Solar Ger (Yurt) Electrification Program, 70 percent of Mongolia’s herders now have access to modern electricity.

In most of the vast landscape of Mongolia, nomadic herders used to have no access to electricity. Take a look at how a project helped bring changes.

Bank Group Contribution

Since 2008, the Bank Group has provided $45.3 billion for energy projects, with $21.9 billion from IBRD, and $8.5 billion from IDA. Of the total Bank Group financing, $11.6 billion—25.7 percent—was for renewable energy projects and programs, reflecting the determination of many countries to seek lower-carbon energy solutions. Energy efficiency, and transmission and distribution accounted for nearly one-third of energy financing. About 25 percent of the portfolio since 2008 is devoted to fossil fuel projects.


The Energy Sector Management Assistance Program (ESMAP) is a global knowledge and technical assistance program administered by the World Bank. ESMAP provides analytical and advisory services to low- and middle-income countries to increase their know-how and institutional capacity to achieve environmentally sustainable energy solutions for poverty reduction and economic growth. ESMAP is funded by Australia, Austria, Denmark, Finland, France, Germany, Iceland, Lithuania, the Netherlands, Norway, Sweden, and the United Kingdom, as well as the World Bank.

The World Bank-led Global Gas Flaring Reduction (GGFR) initiative is a public-private partnership that brings together representatives from major oil-producing countries and companies. The GGFR aims to minimize the flaring of natural gas associated with oil production by fostering critical collaboration between governments and industry so together they can address policy challenges and specific project implementation.  These efforts are starting to pay off. Since 2005, flaring of gas has dropped worldwide by almost 20 percent, preventing over 270 million tons of CO2 emissions, equivalent roughly to taking some 52 million cars off the road.

Lighting Africa is a joint IFC and World Bank program that works towards improving access to better lighting in areas not yet connected to the electricity grid. Lighting Africa catalyzes and accelerates the development of sustainable markets for affordable, modern off-grid lighting solutions for low-income households and micro-enterprises across the continent.

Moving Forward

The Bank Group’s strategic priorities in the energy sector are anchored around the goal of improving electricity access in an environmentally and socially sustainable manner. As energy security is essential for sustainable growth, the Bank will continue to work with other development partners to assist countries in achieving it, including through regional energy integration.

The Bank pursues a portfolio approach, including support for investments in power generation that are least cost and sustainable; strengthening and expanding transmission and distribution power networks; improving efficiency through technical assistance, and advisory services. The latter helps countries improve the performance of their electricity utilities, brings greater rigor to their governance, and offers guidance on policy and regulatory frameworks to attract and increase the impact of public and private sector investments. Some developing countries, especially those emerging from conflict, have weaknesses in capacity to implement projects. The Bank provides support to strengthen their capacity.

The World Bank is also sharing leadership with the UN of the Sustainable Energy for All initiative, which has three global energy objectives to be achieved by 2030: universal access to electricity and clean cooking fuels doubling the share of the world’s energy supplied by renewable sources from 18 to 36 percent; and doubling the rate of improvement in energy efficiency from 1.2 to 2.4 percent annually.

To date, about 70 countries have opted in to Sustainable Energy for All, while many public, private and nongovernmental actors have made commitments to support its implementation. The Bank committed to doubling the leverage of its energy financing, providing technical assistance to several opt-in countries and supporting initiatives in partnership with the Energy Sector Management Assistance Program (ESMAP). These initiatives include the Global Geothermal Development Plan, Lighting Africa and Lighting Asia, the Global Alliance for Clean Cook Stoves, the Global Gas Flaring Reduction Partnership (Phase Four) and mapping of renewable energy resources.


One beneficiary of the Bangladesh rural electrification project is Mussarat Begum, who runs a small teahouse in Garjon Bunia Bazaar, a rural community. She bought a solar home system for $457, initially paying $57, and borrowing the rest. She repays the loan in weekly installments with money she earns by keeping her now-lighted chai-shop open after dark.  At the same time, her children are able to study at night.

“My business is booming and my family lives much more comfortably with our increased income,” she said. “But most importantly, I now have electricity at home and my children can study at night. They are doing much better at school.”

Source: World Bank

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Standard Bank Group wins EMEA Finance awards in 2013 for landmark deals

Posted on 05 April 2013 by Africa Business

Standard Bank Group has walked away with 11 acccolades at the 2013 EMEA Finance Achievements Awards, including being named best merger and acquisition house, best securitisation house and best syndicated loan house in Africa.

This is the sixth consecutive year that Standard Bank Group has received multiple awards from EMEA Finance, which continue to recognise the group’s leading position in the African capital markets. EMEA Finance is a leading bimonthly global industry publication that reports on the major financial events and happenings initiated and influenced by the international financial industry active in Europe, Middle East, and Africa (the EMEA region).

Some of the notable transactions for which EMEA Finance recognized Standard Bank in 2013 were the group’s work on Tiger Brands’ acquisition of 63.35% of Nigeria’s Dangote Flour Mills and China’s Jinchuan Group’s US$1.3-billion acquisition of JSE listed copper miner Metorex in 2012. Standard Bank was recognized for being the best syndicated loan house in Africa largely because of facilitating the raising of a US$600-million two-year term loan on behalf of the Kenyan government.

The group was also recognised in the following categories:

  • Best sovereign syndicated loan for taking part in Kenya’s US$600-million capital raising
  • Best supranational syndicated loan for its part in Afreximbank’s US$500-millon, five-year Eurobond issuance
  • Best M&A deal in Africa for Tiger Brands’ acquisition of Dangote Flour Mills
  • Best corporate bond in Africa for facilitating JD Group’s issue
  • Best IPO in Africa for the listing of Ugandan power distributor Umeme Limited’s shares on the Nairobi Securities Exchange
  • Best follow-on funding in Africa for Dangote Flour Mills of Nigeria
  • Best securitisation deal in the EMEA region for South Africa home loans’ recapitalisation.

David Munro, Chief Executive of Standard Bank Group’s corporate and investment banking division, says: “Standard Bank has a clear, strategic focus on Africa and these awards demonstrate our desire to provide excellent service to our clients as we work towards the development of the continent we call home”.

“Our bank’s deal-making teams across the continent have helped to structure and deliver these transactions for African companies and sovereigns. Leveraging our global footprint, expertise, experience and on-the-ground presence enables us to work with our clients to help them deliver their strategic goals.”

Over the years, Standard Bank Group has built strong in-country advisory capabilities in a number of key global markets, including South Africa, Nigeria, Kenya, Ghana, Mozambique, China and London, delivering a full range of corporate and investment banking services to clients across various emerging markets. The bank’s strategy is to remain committed to Africa, with a particular focus on natural resources and infrastructure.

Standard Bank Group operates under the name of Stanbic Bank in some of these countries.

The latest EMEA Finance Achievement awards add to Standard Bank Group’s list of accolades already received so far in 2013. These include winning: the African Deal of the Year award for Konkola Copper Mines financing in recognised in the 2013 Project Finance Deal of the Year Awards; Commercial Deal of the Year in the 2013 Trade & Forfaiting Review Deals of the Year for arranging finance for commodities trader Export Trading Group; and being named Best Trade Finance Bank in Africa by Global Finance.


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IMF Executive Board Concludes 2012 Article IV Consultation with Equatorial Guinea

Posted on 29 March 2013 by Africa Business

MALABO, Equatorial Guinea, March 29, 2013/African Press Organization (APO)/ On January 11, 2013, the Executive Board of the International Monetary Fund (IMF) concluded the 2012 Article IV consultation with Equatorial Guinea.1


Driven by hydrocarbon extraction, which accounts for about three-quarters of estimated gross domestic product (GDP), Equatorial Guinea has the highest level of per capita income in sub-Saharan Africa. Over the last five years, a burst in public investment under the 2008–20 National Development Plan (NDP), largely financed by hydrocarbon revenue, has upgraded transport and power infrastructure and established several national prestige facilities. The resulting stimulus to construction is estimated to have helped raise average growth rates in the non-hydrocarbon sector to about 15 percent.

Reducing poverty and generating sustained productive private sector activity remain urgent challenges. The most recent poverty estimates suggest that three-quarters of the population were living below the national poverty line in 2006. Reflecting high government sector demand and limited production capacity, inflation has remained above the regional convergence criterion (3 percent), eroding external competitiveness.

Higher oil prices restored the overall fiscal balance to a small surplus in 2011 despite government capital spending levels that continued to exceed non-hydrocarbon GDP. The external current account also improved, but remained in deficit because of high imports of capital goods and hydrocarbon earnings to overseas parent companies. The external deficit was largely financed by foreign direct investment. The government deposited CFAF 474 billion at the Bank of Central African States (BEAC) and other government foreign currency deposits, held at commercial banks in contravention of regional surrender requirements, fell sharply.

Perceptions of an unwelcoming business climate continue to deter investment in the non-hydrocarbon sector and broader governance issues remain of considerable concern to the international community. Limitations on civil society participation undermined Equatorial Guinea’s unsuccessful candidacy in the Extractive Industries Transparency Initiative (EITI). Macroeconomic and socio-demographic data are also deficient in quality, timing and coverage, and even the most basic data are very hard for the public to access.

With hydrocarbon production now past its peak, according to official projections, the outlook for GDP is slow or negative growth over the medium term. To address fiscal and external sustainability concerns, fiscal policy will need to target a declining path for the non-resource primary fiscal deficit, which stood at 130 percent of non-hydrocarbon GDP in 2011. There should nevertheless be room for higher pro-poor current spending because government investment is expected to be significantly lower in the next phase of the NDP.

Executive Board Assessment

Executive Directors noted that, despite substantial revenues from oil, natural gas, and derivative production, reducing poverty remains an urgent challenge. Accordingly, Directors encouraged the Equatorial Guinea authorities to improve policy frameworks and undertake further reforms in a variety of areas to promote inclusive growth and bolster the business environment.

Directors considered that the adoption of a transparent medium-term fiscal framework would anchor spending decisions in the face of oil price volatility and the expected decline in hydrocarbon production. They recommended targeting a path for the non-resource primary balance that would establish fiscal buffers and reflect financing and absorption constraints. In this context, Directors saw the need to reduce public investment levels, rebalance public spending toward social programs, better target subsidies, broaden the revenue base, and enhance tax collection. More broadly, they encouraged the authorities to strengthen public financial management.

Directors agreed that scaling down public works after the recent surge would safeguard external stability. They observed that infrastructure-related imports are a major factor in the high deficit in the external current account. At the same time, the pressure on domestic demand has kept inflation rates above those in other Central African Economic and Monetary Community (CEMAC) member countries, leading to a substantial appreciation of the real effective exchange rate and a loss of external competitiveness.

Directors welcomed Equatorial Guinea’s recent contributions to the regional pool of official foreign exchange reserves, but noted that the bulk of the government’s foreign currency deposits remains outside the BEAC. They urged the authorities to hold these deposits at the BEAC to comply with the monetary union’s surrender obligations.

Directors underscored that improving the business climate is critical to fostering private sector participation in the economy and broad-based growth. They called for stepped up efforts to strengthen governance and improve workers’ skills and health. Promoting greater access to credit for small- and medium-sized enterprises should also be a priority. Directors looked forward to Equatorial Guinea’s reinvigorated efforts to participate in the Extractive Industries Transparency Initiative.

Noting the persistent inadequacy of economic statistics, Directors encouraged the authorities to participate in the General Data Dissemination System and establish a publication timetable for macroeconomic data.


Equatorial Guinea: Selected Economic and Financial Indicators, 2009–13


2009    2010    2011    2012    2013

Est.    Est.    Est.    Proj.    Proj.


Production, prices, and money


Real GDP

0.8    -1.7    4.9    2.5    -1.7

Hydrocarbon sectors

-10.8    -3.9    4.7    -1.8    -4.2

Oil and gas primary production

-18.9    -2.3    2.1    -0.6    -6.1

Hydrocarbon secondary production1

10.8    -6.9    10.0    -4.1    -0.6

Non-hydrocarbon sectors

40.9    3.0    5.5    11.1    2.8

Oil price (U.S. dollars a barrel)2

58.0    75.3    100.3    102.4    101.3

Consumer prices (end of period)

5.0    5.4    4.9    5.9    5.2

Broad money

18.8    48.9    6.1    4.7    7.1

Nominal effective exchange rate (- = depreciation)

-1.3    -4.5    -1.1    n.a.    n.a.

Real effective exchange rate (- = depreciation)

3.1    1.1    4.0    n.a.    n.a.

Production, prices, and money


Real GDP

0.8    -1.7    4.9    2.5    -1.7

Hydrocarbon sectors

-10.8    -3.9    4.7    -1.8    -4.2

Oil and gas primary production

-18.9    -2.3    2.1    -0.6    -6.1

Hydrocarbon secondary production1

10.8    -6.9    10.0    -4.1    -0.6

Non-hydrocarbon sectors

40.9    3.0    5.5    11.1    2.8

Oil price (U.S. dollars a barrel)2

58.0    75.3    100.3    102.4    101.3

Consumer prices (end of period)

5.0    5.4    4.9    5.9    5.2

(Percent of GDP, unless otherwise specified)

Government finance



48.4    35.4    35.9    34.6    35.7

Of which: resource revenue

43.7    31.0    32.6    30.7    31.6


57.8    41.4    34.9    37.1    34.7

Overall fiscal balance after grants

-9.4    -6.0    1.0    -2.5    1.0

Non-resource primary balance (percent of non-hydrocarbon GDP)3

-164.4    -130.9    -128.6    -137.4    -118.5

Gross government deposits (billions of CFAF)

3,367.9    3,261.9    2,961.2    2,833.8    2,730.7

External sector


Current account balance (including official transfers; – = deficit)

-20.9    -22.8    -9.3    -15.0    -10.5

Outstanding medium- and long-term public debt

5.8    5.9    8.8    8.3    8.0

Debt service-to-exports ratio (percent)

0.2    0.3    0.3    1.1    3.3

External debt service/government revenue (percent)4

0.8    1.6    1.4    5.1    14.7


Sources: Data provided by the Equatoguinean authorities; and staff estimates and projections.

1 Including LNG, LPG, butane, propane, and methanol.

2 The price of oil is the average of three spot prices: dated Brent, West Texas Intermediate, and Dubai Fateh; and includes a discount for quality.

3 Excluding oil revenues, oil-related expenditures, and interest earned and paid.

4 The rise in external debt service starting in 2012 reflects the amortization of Chinese loans under a 2006 US$2 billion credit line from the Chinese government. The loans are earmarked for infrastructure, including four projects in electrification and improvements to Bata harbor. Loan terms are non-concessional, carrying an interest rate of 5½ percent, five years maturity with two years grace.

1 Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here:



International Monetary Fund (IMF)

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IMF Executive Board Completes First Review Under ECF Arrangement for Niger and Approves US$16.9 Million Disbursement

Posted on 29 March 2013 by Africa Business

NIAMEY, Niger, March 29, 2013/African Press Organization (APO)/ The Executive Board of the International Monetary Fund (IMF) today completed the first

review of Niger’s economic performance under the program supported by a three-year, SDR 78.96 million (about US$118.3 million) Extended Credit Facility (ECF) arrangement approved by the IMF’s Executive Board on March 16, 2012 (see Press Release No. 12/90). The decision enables an immediate disbursement of an amount equivalent to SDR 11.28 million (about US$16.9 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 22.56 million (US$33.8 million).

In completing the review, the Executive Board approved the request for a waiver for nonobservance of the performance criterion on new non-concessional external debt with maturities of one year or more. The Executive Board’s decision on the first review was taken on a lapse of time basis.1

Economic activity was buoyant in 2012, with economic growth estimated at over 11 percent, thanks to the coming onstream of a new oil project and a rebound in agricultural production. Average inflation is estimated to have remained slightly below 1 percent, as upward pressures on food prices caused by food shortages in the first part of the year were largely offset by lower energy prices. Credit to the private sector expanded significantly, driven by high credit demand from public enterprises and trading firms. The current account deficit is projected to decline, reflecting the coming onstream of petroleum production resulting in net exports of petroleum products.

Fiscal revenues in 2012 increased relative to 2011, but are likely to fall short of program targets for 2012 due to weaknesses in customs and oil revenue. All end-June quantitative performance criteria were met, but at the expense of expenditure constraint. Several end-September fiscal targets were missed as spending increased in order to bring poverty-reducing spending back in line with program targets and due to an increase in military spending following the deterioration in the regional security situation. Additional measures were taken to limit spending during the remaining months of 2012. The continuous performance criterion on non-concessional borrowing was breached because of the contracting of a non-concessional loan with the Republic of Congo, but a waiver was granted by the Executive Board, as the loan was cancelled before disbursing. The majority of the structural reforms under the program were implemented, albeit with delays, and a plan to stem the losses at the oil refinery has been developed for implementation in 2013.

Medium-term prospects remain positive, thanks to ongoing investment in the natural resource sector, with growth projected at 6¼ percent in 2013 and inflation projected to remain moderate. However, risks remain tilted to the downside given the fragile security situation in the region; the frequent climatic shocks, as evidenced by the August 2012 floods; the uncertainty regarding commodity prices; and potential delays in the implementation of natural resource sector projects.

The ECF-supported program for 2013 builds on the government’s medium-term strategy set out in the Memorandum of Economic and Financial Policies of March 2, 2012. It also takes into account the authorities’ newly adopted ambitious poverty reducing strategy paper, the Plan for Economic and Social Development. A key goal of the 2013 program is to tackle the revenue weaknesses by advancing the plan to strengthen the financial position of the oil refinery and the implementation of measures already taken to strengthen customs. Other elements of the program include (i) creating fiscal space for development spending while maintaining debt sustainability; (ii) rebuilding the government deposits at the central bank; (iii) implementing structural reforms to strengthen budget execution, treasury management, and domestic revenue collection; (iv) enhancing the oversight of the natural resource sector; and (v) continuing ongoing reforms aimed at financial development and improving the business environment.

1 The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.



International Monetary Fund (IMF)

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