Niger - Accelerating Growth and Achieving the Millennium Development Goals : Diagnosis and the Policy Agenda
2007
World Bank
This report has the following objectives: (i) identify the underlying constraints to strong and sustained growth, in particular, the dynamic circles that lock Niger in a low-growth/high poverty equilibrium; (ii) understand the key determinants of growth and poverty traps and the role increased foreign aid could play to promote growth and help achieve the MillenniumDevelopment Goals (MDGs); and (iii) help the Government of Niger design a strategy to accelerating growth and human development: Strategy Paper for Human Development (SPAHD). This report is organized as follows: Chapter 1 describes the main features of Niger's economy from a Social Accounting Matrix perspective. It aims to analyze the potential linkages between sectors and the impact a policy shock of an increased public investment could have on Niger's economy. Chapter 2 reviews Niger's growth performance over the past three decades. It draws some policy lessons critical to the design of a growth strategy for Niger. Chapter 3 provides a snapshot of where Niger stands in achieving the MDGs with less than a decade remaining. It examines the reasons why Niger is falling short of the goals, describes the recent progress, and highlights the challenges ahead. Chapter 4 analyzes the constraints to strong and sustained growth with particular focus on poverty traps. Chapter 5 discusses the macro and micro foundations for strong growth and achieving the MDGs. It examines the post stabilization macroeconomic policy required to enhance the macroeconomic foundations of growth. It also identifies the engines of growth and highlights the cross-cutting issues for improving the business environment. In addition, the chapter discusses the role the private sector can play in Niger's quest to achieve the MDGs. Chapter 6 analyzes the potential impact that increased foreign aid would have on growth, poverty, and other MDGs using Niger's macroeconomic model. It focuses mainly on the links between foreign aid, the level and composition of public investment - which is disaggregated into education, infrastructure, and health -- the supply-side effects of public capital, growth, poverty, and other MDGs. Furthermore, it discusses the impact of three policy experiments on growth and the MDGs, including an increase in foreign aid (namely grants), debt relief, and a combined increase in foreign aid and tax reforms. Finally, it highlights the importance of improving governance to maximize the impact of domestic reforms and increased foreign aid on growth and the MDGs. Chapter 7 concludes the report and draws up policy recommendations, highlighting the policy priorities needed to accelerate growth and achieve the MDGs.
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