Niger - Economic Recovery Credit, Public Sector Adjustment Credit, Public Finance Reform Credit, and Public Finance Recovery Credit Projects

Project outcome for the Economic Recovery Credit Project is rated as unsatisfactory; project sustainability is highly unlikely becaue of lack of ownership at the political and administrative levels and very weak resilience to exogenous factors. Bank performance is rated unsatisfactory because the Bank misjudged the depth of the political crisis, wrongly interpreted the Government's declaration for reforms as true commitment, and overlooked the lack of commitment within the administration. Borrower performance is rated highly unsatisfactory. The outcome of the Public Sector Adjustment Credit Project is rated moderately satisfactory and project sustainability is unlikely because there was not enough time before the April 1999 coup to fully internalize improvements in a sustainable manner. Bank and Borrower performance is rated satisfactory. The ratings for the Public Finance Reform Credit are satisfactory outcome, satisfactory Bank performance, and unsatisfactory Borrower performance. Sustainability is highly unlikely because of the objectives that were achieved, in the case of the civil service reform, some positive measures taken under the PSAC were reversed, For the Public Finance Recovery Credit, the original ratings of satisfactory outcome, likely sustainability, and satisfacotry performance for both the Bank and the Borrower are confirmed. The main lessons are: 1) Except for the obvious sine qua non condition of political stability, Government commitment is insufficient to ensure success--support within the administration and better communication between the Government and civil society are also necessary. 2) In countries with a large informal sector and a low tax base, the Bank and the International Monetary Fund should explore ways to adapt taxation to the particularities of the country, for instance through modest taxation of the agricultural sector. 3) Addressing the problem of very weak institutional capacity cannot be limited to a piecemeal approach via different operations but requires a full-fledged medium-term strategy agreed with the authorities, targeted at least at the central ministries, and combined with a monitoring and evaluation system in the country. 4) In countries having very limited resources, devaluation unaccompanied by longer-term investment and institutional support of the few existing productive sectors is unlikely to generate a lasting supply response, even if macroeconomic policies are sound, 5) Adjustment operations must include a domestic monitoring and evaluation mechanism to enable senior officials to assess progress and initiate corrective actions. 6) Single tranche operations justified by the contention that future lending will depend on continued performance do not guarantee good performance.