|The Courier N° 143 - Jan - Feb 1994 Dossier: Fighting Poverty - Country Report : Niger (EC Courier, 1994, 96 p.)|
|Niger: Winning the economic battle - a very long shot|
by Henry Sprietsma
Niger was one of the EEC's first partners. It became independent in 1960, immediately joined the Yaoundnd then the Lomonventions and has received more than ECU 800 million (about CFAF 300 billion) in aid from the Community since then. This is broken down by sector and by instrument in the table (totals to September 1993).
In the early days, the financial resources put at Niger's disposal were invested in rural development and in a road network to open up the most heavily populated areas. Alongside these, the Commission stepped up its support for health and education; since the country's natural resources are fairly limited, the long-term growth potential depends to a very large extent on making the most of its human resources. Primary school attendance is an estimated 27% and adult literacy 13% (18% for men and 7% for women), giving Niger one of the lowest social indicators on the continent. So there is every reason for the gradual shift in Community support towards an increase in assistance for the social sectors and a decrease in the amounts so far earmarked (particularly) for road and agricultural infrastructure.
The economic and social crisis facing Niger today has dictated a complete overhaul of its policy, starting with a commitment to a process of democracy and the adoption of a proper multi-party system. Shortly after the new Constitution was passed, by referendum, and the new Third Republic institutions were set up following the - irreproachably conducted elections in late 1992 early 1993, a mission headed by the Deputy Director-General for Development at the European Commission went out to take stock of the situation with the new authorities. It made it clear that the Community and its Member States welcomed the successful completion of the democratic process and announced that the Community was willing both to continue and to step up its cooperation with Niger. The LomV national indicative programme, concluded in January 1991, reflected the country's political changes by focusing Community aid on rural and social development and the private sector. The amount provided for the 7th EDF national indicative programme comprises ECU 124.5 million in Commission-managed grants and ECU 15.5 million in ElB-managed risk capital. The number of schemes it involves should mean that cooperation can achieve the critical mass required for these sectors to take off. A brief description of Community support to these sectors follows.
A financing agreement was signed in May 1993 as part of the national indicative programme, for a sectoral import programme (ECU 15 million, in foreign exchange) to finance imports of vital medicines and inputs for the private sector Some of the counterpart funds accruing from the balance of payments support programme are to be used for a reform programme in the health sector. This focuses on the adoption of a programme budget for that sector as such and programme contracts with the biggest health establishments (national hospitals, the ONPPC, the health schools and the Directorates of the Departments of Health - DDS). The Community will contribute CFAF 3.4 billion to help pay the operating (but not wage) costs of these establishments, help the authorities purchase essential medicines for the public hospitals and pay off some of the Health Ministry's arrears. The conditions of use of these funds were met in September 1993. In essence, the Community support is designed to help restructure the public health service and restore it to normal operation, to achieve the proper implementation of a basic medicines policy aimed at ensuring a supply of low-cost pharmaceuticals and to spread health spending more widely.
The remaining counterpart funds, amounting to some CFAF 1.5 billion, are to be used to support job promotion via a labour-intensive programme to be run by NIGETIP, the Niger public works agency.
The schemes discussed here are sited in regions where other Community-financed programmes are currently being or are to be run, thereby helping to achieve the desired critical mass mentioned earlier.
The Commission has also decided to provide cofinancing (with the World Bank and the Federal Republic of Germany, for example) for the start of the 1993-94 school year. Problems were expected in this area, the previous two school years having been wasted. About CFAF 250 million has been allocated for the purchase of textbooks and for their distribution to the country's various inspectorates.
With the assistance of CARE, the British NGO, the Community is helping the AIDS control campaign with financing of about CFAF 250 million for an information programme to make migrant workers and public transport drivers aware of the situation.
The 7th EDF has seen an ECU 16 million extension to the Tarka Valley development scheme, which covers the Tarka Valley proper plus the catchment basins of its tributaries, a total area of 2800 km² in the Madaoua and Bouza districts.
The idea here is to improve food security by irrigating to make part of the production independent of variations in the weather. A second aim is to raise the income and investment potential of the producers by improving the organisation of their marketing and supplies. Environmental protection schemes are also to implemented to combat desertification.
Practically speaking, pump irrigation is to be provided for more than 500 hectares of cropland. This will benefit 4 000 farmers and should result in an extra 40 000 tonnes of off-season products (particularly onions), and significant improvements in cash income and employment in the region. The project, which will also help the people take a proper part in identifying and carrying out soil conservation and environmental protection schemes, will be of direct benefit to 60 000 villagers in the project area and of more indirect benefit to the 12 000 inhabitants of the town of Madaoua, the commercial hub of the region.
Also in the rural sector, the EC has helped settle returnees from Algeria (this programme came to an end in December 1992) and it is now ready to support a large-scale regional development operation for the departments of Tahoua, Agadez and North Dakoro.
Aid is also to go to the nomads (Tuareg, Peul and Arab) who have been hard hit by the droughts and the armed rebellion which brought disruption to the area. This is a response to the Government's desire for a gradual transformation of the rural world and its systems of production - which means, in particular, changing the legal set-up of rural society, promoting private production and marketing facilities, improving the management of natural resources and protecting the environment.
The project includes such areas as human and animal health, animal production, and product infrastructure and marketing. It aims, in particular, to develop sheep, goat and camel herding by sinking cemented wells, rehabilitating the traditional water points and trying to strike a better balance between water, cattle and pasture-land.
Completing the picture, as regards Community assistance to the departments of Tahoua, Agadez and Maradi, there are the 7th EDF projects in the Air valley to the east, (currently under appraisal) and the Tarka Valley, to the south. Although the appraisal of the Air project was held up because of insecurity in the region, phase two of the Tarka Valley scheme was improved and the financing agreement signed in March 1993.
Community involvement in the large scale Niger Valley irrigation programme will now be in the form of back up schemes, particularly for health facilities for the people living around the crop areas in the Tillaberi district and part of the Kollo district. The project, which is to cost ECU 6 million and take three years, is to help the DDSs make their health and education development plans and produce their decentralised operating budgets. In the field, the idea is to improve the management potential of the various health establishments, raise the standard of the services and provide support for the safe motherhood programme and the local health supervision programme. One element of the Niger Valley irrigation programme will involve protection of the catchment basins of the River Niger, a scheme which will also help protect the developments from silting.
Development of the private sector
Niger has opted to step up its development of the private sector and the Community has decided to support the country in its endeavour, in line with the provisions of the national indicative programme. A 7th EDF grant of ECU 12 million over five years enabled a new private association providing finance and incentives for private enterprise in Niger (AFELEN) to start operating in early 1993. In the interests of efficiency, the Government has made AFELEN the only body providing this sort of credit.
Not only does the association have its equipment and operation covered for the five-year period. It also has a line of credit of more than CFAF 3 billion to create and re-establish access to private investment financing, which is virtually nonexistent at the moment because of the collapse of the banking system, AFELEN is not itself a bank, but an agency upstream of two local banks (the BIAO and Sonibank), which manage AFELEN-approved loans.
The project is also expected to create a stable environment conducive to private enterprise, develop a healthy private sector and help SMEs, SMls and micro-businesses in the craft sector and other sub-sectors with comparative advantages to take off.
AFELEN is currently concentrating on small businesses involved in first-stage processing of crops and livestock products, cottage industry and construction, although there is no reason why other sectors cannot be covered and there are no geographical restrictions. There will be particular encouragement for businesswomen, for schemes to rehabilitate existing production facilities and for operations likely to have a positive effect on the environment and expand the country's economic base.
The Community, the UNDP and the ILO are cofinancing a training programme for rural craftsmen (PROFORMAR) worth about ECU 0.6 million. This hinges on the installation of 400 modules as a framework which will lead, sooner or later, to the creation and/or consolidation of individual/collective rural micro-units providing direct support for the development of the primary sector.
A third Community scheme for the private sector is a vocational and technical training programme (NIGETECH), currently being appraised, which is to provide about 8 800 workers and businessmen with training and advanced training for various jobs in formal and informal areas of urban activity. The projects involve training 60 instructors to run about 250 modules in 40 areas and to provide a programme of study awards related to various Community projects and programmes.
Community grants outside the focal sectors of the 7th EDF national indicative programme have been provided to develop and surface 56 km of the Niamey-Say road, so as to open up the Say region, an agricultural area whose tourist attractions (W-Park) and leading research centres (Icrisat and the Islamic University) give it high development potential.
Food aid to Niger continues. During 1993, 5 000 tonnes of common wheat, costing CFAF 400 million, have been provided. Local cereals from the buffer stock established using counterpart funds were distributed in June and July to about 100 000 families in northern Niger, where the grain shortfall is severe.
The Sysmin transfer expected for 1993 will also go into road and telecommunications infrastructure to open up Say, T and Arlit, all areas with mining potential.
Niger is actively involved in western Africa's LomV regional indicative programme, including in particular, the environmental training and information programme (PFIE), the regional solar programme (PRS), the permanent diagnosis programme (IDR) and the regional gas programme (PRG). ECU 228 million have been allocated for the LomV regional indicative programme.
Support for structural adjustment
In August 1993, the Niger Government enacted a finance law intended to set the country on the path to adjustment. It then passed an outline document on medium-term economic policy (1994-96) confirming that austerity finance policies were to be maintained to reduce internal and external imbalances The structural reform policies should make it possible to renegotiate new financing with the Bretton Woods institutions under the IMF's enlarged structural adjustment facility (ESAF) and the structural adjustment programme with the IBRD. Niger could, accordingly, also obtain help from the second instalment of the LomV adjustment support programme.