IMF agrees $123 million credit facility for Niger

Fri Dec 23, 2011 6:16am GMT
 

NIAMEY (Reuters) - The International Monetary Fund has reached a preliminary agreement with Niger on a $123 million extended credit facility program, IMF chief Christine Lagarde said on Thursday at the end of her first trip to Africa as head of the world lender.

Lagarde said the deal was meant to help Niger, one of the world's poorest countries, buffer its economy from a slide in worker remittances due to turmoil in neighbouring Libya, as well as the fallout of a poor harvest.

"The challenges are serious, as the country is facing pressures posed by the impact of the crisis in Libya, and the decline in agricultural production and rising food shortages in parts of the country," she said in the capital Niamey.

"In this context, we agreed that external support will be key for Niger's ability to weather the impact of these external shocks and to protect the poorest within its population," she said of the $123 million deal covering 2012-14.

She said the deal had yet to be approved by IMF management and its Executive Board.

Lagarde's December 18-22 trip to Africa, which also included a visit to OPEC-member Nigeria, comes as concerns grow over the impact on developing countries of Europe's sovereign debt crisis through a possible drop in global trade and investment.

The former French finance minister said many African countries are less prepared now to deal with an economic shock than they were during the 2008 food and fuel crisis and the global financial turmoil that followed, and urged them to build up economic defences.

Lagarde, who met with Niger President Mahamadou Issoufou during her trip, praised Niger's development goals and said the recent onset of oil production could help it ease poverty if resource revenues are well managed.

"The international community must be prepared to do more. Niger is at a critical juncture," Lagarde said. "The road ahead is not an easy one. The stakes are high, only heightened by today's global risks."

Niger started oil output on a low scale earlier this year, making it Africa's newest producer. It is also a top supplier of uranium to France, its former colonial ruler.

Niger is near the bottom of the U.N.'s human development index, a measure of wealth, education, and life expectancy and suffers perennial food shortages due to failed rains.

International Monetary Fund's Managing Director Christine Lagarde addresses a roundtable discussion in Lagos, December 20, 2011. Lagarde is on her first trip to Africa as the Managing Director of the IMF.  REUTERS/Stephen Jaffe-IMF/Handout

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