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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 67750-NE
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT
IN THE AMOUNT OF
SDR 32.3 MILLION
(US$50 MILLION EQUIVALENT)
TO THE
REPUBLIC OF NIGER
FOR THE
COMPETITIVENESS AND GROWTH SUPPORT PROJECT
June 1, 2012
Financial and Private Sector Development
Western and Central Africa
Africa Region
This document is being made publicly available prior to Board consideration. This does not
imply a presumed outcome. This document may be updated following Board consideration and
the updated document will be made publicly available in accordance with the Bank‘s policy on
Access to Information.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective April 30, 2012)
Currency Unit = CFAF
CFAF 496 = US$1
SDR 0.64493 = US$1
FISCAL YEAR
January 1 – December 31
Regional Vice President: Makhtar Diop
Country Director: Ousmane Diagana
Sector Director:
Sector Manager:
Gaiv Tata
Paul Noumba Um
Task Team Leader: Djibrilla A. Issa/Mamadou Barry
ABBREVIATIONS AND ACRONYMS
AAA Analytic and Advisory Activities
AAP Africa Action Plan
ACBF African Capacity Building Foundation
AFD French Development Agency
AfDB African Development Bank
ANIPEX Agency for Export Promotion
APEIN Agence de Promotion des Entreprises et des Investissements au Niger
(Agency for Enterprise and Investment Promotion)
AQIM Al Qaeda in the Islamic Maghreb
ARMP Public Procurement Regulation Agency
BCEAO Central Bank of the West African States
BDS Business Development Services
CAPED Cellule d’Analyse et de Prospective en Développement (Unit for Analysis on
Development)
CAS Country Assistance Strategy
CEM Country Economic Memorandum
CFE Centre de Formalité des Entreprises (One-stop shop for entreprises
registration)
CNIP National Private Investors Council
CNPC China National Petroleum Company
CNPG National Management Development Center
COMINAK Akouta Mining Company
CPI Investments Promotion Center Consumer Price Index
DA Designated Account
DGB General Directorate of Budget
DGI General Directorate of Taxes
DPO Development Policy Operation
DTIS Diagnostic Trade Integration Study
EAN Entreprendre au Niger (Entrepreneurship in Niger)
ECOWAS Economic Community of West African States
EI Extractive Industries
EITI Extractive Industries Transparency Initiative
ERR Economic Rate of Return
ESIA Environmental and Social Impact Assessment
ESMF Environment and Social Management Framework
EU European Union
FDI Foreign Direct Investment
FIRST Financial Sector Reform and Strengthening Trust Fund
FPD Finance and Private Sector Development
FSAP Financial Sector Assessment Program
GDP Gross Domestic Product
GIE Groupement d’Intérêt Economique (Economic Interest Group)
GIS Geological Information System
GPRC Growth Policy Reform Credit
GPRG Growth Policy Reform Grant
GPRO Growth Policy Reform Operations
HACCP Hazard Analysis and Critical Control Points
ICA Investment Climate Assessment
ICB International Competitive Bidding
IDA International Development Association
IEG Independent Evaluation Group
IFC International Finance Corporation
IMF International Monetary Fund
INS National Institute of Statistics
LIB Limited International Bidding
M&E Monitoring and Evaluation
MCC Millennium Challenge Corporation
MDG Millennium Development Goals
MEF Ministry of Economy and Finance
NCB National Competitive Bidding
NIGELEC Niger‘s Power Company
NPV Net Present Value
OHADA Organization for Harmonization of Business Law
PICAG Programme Intérimaire de Cadrage de I' Action Gouvernementale (Interim
Governmental Strategy)
PIP Private Irrigation Project
PIU Project Implementing Unit
PMP Pest Management Plan
POM Project Operational Manual
PPP Public Private Partnership
PRGF Poverty Reduction and Growth Facility
PRODEX Agricultural Export Project
PRSC Poverty Reduction Support Credit
PRSP Poverty Reduction Strategy Paper
PSC Project Steering Committee
QCBC Quality and Cost Based Selection
SDRs Special Drawing Rights
SESA Strategic Environmental and Social Assessment
SMEs Small and Medium Enterprises
SML Société des Mines du Liptako (Liptako Mining Company)
SOMAIR Aïr Mining Company
SOPAMIN Societé de Patrimoine des Mines (National Mining Company)
SSA Sub-Saharan Africa
TA Technical Assistance
TFP Total Factor Productivity
TSGP Trans-Saharian Gas Pipeline
UNDP United Nations Development Program
USAID United States Agency for International Development
VAT Value Added Tax
WAEMU West African Economic and Monetary Union
REPUBLIC OF NIGER
COMPETITIVENESS AND GROWTH SUPPORT PROJECT
Table of Contents
I. Strategic Context ..................................................................................................................... 1
A. Country and Sector Context ................................................................................................ 1
B. Sector Challenges................................................................................................................ 5
C. Government‘s reform efforts ............................................................................................ 10
D. Rationale for World Bank Group involvement ................................................................. 11
E. Higher Level Objectives to which the Project Contributes .............................................. 13
II. Project Development Objectives........................................................................................... 14
A. PDO................................................................................................................................... 14
B. Project Beneficiaries ......................................................................................................... 14
C. PDO Level Results Indicators ........................................................................................... 15
III. Project Description............................................................................................................ 15
A. Project components ........................................................................................................... 16
B. Project Financing .............................................................................................................. 20
C. Lessons Learned................................................................................................................ 21
D. Alternatives considered ..................................................................................................... 22
IV. Implementation ................................................................................................................. 23
A. Project Institutional and Implementation Arrangements .................................................. 23
B. Results Monitoring and Evaluation .................................................................................. 25
C. Sustainability..................................................................................................................... 26
V. Key Risks and Mitigation Measures ..................................................................................... 27
A. Institutional capacity ......................................................................................................... 27
B. Country Risk ..................................................................................................................... 28
VI. Appraisal Summary .......................................................................................................... 28
A. Economic and Financial Analysis ..................................................................................... 28
B. Technical ........................................................................................................................... 29
C. Financial Management ...................................................................................................... 30
D. Procurement ...................................................................................................................... 33
E. Social (including safeguards) ............................................................................................ 34
F. Environment (including safeguards) ................................................................................. 34
Annex 1: Results Framework and Monitoring.............................................................................. 36
Annex 2: Detailed Project Description ........................................................................................ 39
Annex 3: Implementation Arrangements ..................................................................................... 57
Annex 4: Operational Risk Assessment Framework (ORAF) ...................................................... 70
Annex 5: Implementation Support Plan ........................................................................................ 72
Annex 6: Team Composition ........................................................................................................ 73
Annex 7: Economic and Financial Analysis ................................................................................. 74
Table 1: Niger‘s Doing Business Rankings, 2009, 2011 and 2012 ................................................ 6
Table 2: Current Portfolio of Bank Supported Projects in Niger................................................. 12
Table 3: Donor involvement in the extractive industries .............................................................. 14
Table 3 – Project cost and financing ............................................................................................. 21
Table 4 - Risk Ratings Summary Table ........................................................................................ 27
Figure 1: Factors with Largest Negative Impact on Initial Investment Decisions (negative or very
negative as percent of total replies) ................................................................................................ 5
Figure 2: Factors with Largest Negative Impact on Returns on Investment (negative or very
negative as percent of total replies) ................................................................................................ 6
i
PAD DATA SHEET
Republic of Niger
Competitiveness & Growth Support Project (P127204)
PROJECT APPRAISAL DOCUMENT
AFRICA
AFTFW
Basic Information
Date: June 1, 2012 Sectors: General industry and trade sector (50%), Agro-
industry, marketing, and trade (20%), SME Finance
(15%), Central government administration (15%)
Country Director: Ousmane Diagana Themes: Micro, Small and Medium Enterprise support (25%),
Regulation and competition policy (25%), Other
Private Sector Development (25%), Export
development and competitiveness (15%), Legal
institutions for a market economy (10%)
Sector Manager/Director: Paul Noumba
Um/Gaiv M. Tata
Project ID: P127204 EA
Category:
B - Partial Assessment
Lending Instrument: Specific Investment
Loan
Team Leader(s): Djibrilla Adamou
Issa/Mamadou
Barry
Joint IFC: No
Borrower: Republic of Niger
Responsible Agency: Ministère du Plan, de l‘Aménagement du Territoire et du Développement Communautaire
Contact: Issoufou Issa
Title:
Conseiller Technique
Telephone No.: 22720723467
Email:
iissoufou.issa@gmail.com
Project Implementation Period: Start
Date:
28-Jun-
2012
End
Date:
31-Mar- 2019
Expected Effectiveness Date: 22-Oct-2012
Expected Closing Date: 31-Mar- 2019
Project Financing Data(US$ million)
[ ] Loan [ ] Grant [ ] Other
[ X ] Credit [ ] Guarantee
ii
For Loans/Credits/Others
Total Project Cost (US$M): 65.24
Total Bank Financing (US$M): 50.00
Financing Source Amount (US$ million)
BORROWER/RECIPIENT 6.03
International Development Association (IDA) 50.00
LOCAL BENEFICIARIES 9.21
Total 65.24
Expected Disbursements (in USD Million)
Fiscal Year 2013 2014 2015 2016 2017 2018 2019
Annual 5.50 4.50 16.00 18.00 4.00 2.00 0.00
Cumulative 5.50 10.00 26.00 44.00 48.00 50.00 50.00
Project Development Objective(s)
The Project Development Objective (PDO) is to improve selected aspects of Niger's business environment, to support the
development of the meat industry and to increase local business participation in the extractive industry sector.
Components
Component Name Cost (USD Millions)
Investment Climate, Investment Promotion and SME Support for identified value
chains
16.00
Support to selected value chains 20.50
Policy Reforms, Infrastructure and Services to harness the Relationship between
Niger and Nigeria through the Kano, Katsina, Maradi (K2M) corridor
9.10
Project Management 4.40
Compliance
Policy
Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X ]
Does the project require any waivers of Bank policies? Yes [ ] No [ X ]
Have these been approved by Bank management? Yes [ ] No [ ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
Does the project meet the Regional criteria for readiness for implementation? Yes [ X] No [ ]
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
iii
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waterways OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X
Legal Covenants
Name Recurrent Due Date Frequency
Establishment of the Project Implementation Entity for
Component 1.3
Effectiveness + 3 months
Description of Covenant
No later than three (3) months after the Effective Date, the Recipient shall establish and thereafter maintain, for a term
extending at least two years after the implementation of the Project, the Project Implementing Entity with mandate,
composition and resources satisfactory to the Association.
Name Recurrent Due Date Frequency
Independent Auditor - Environmental Audits Effectiveness + 6 months
Description of Covenant
The Recipient shall recruit an independent auditor on the basis of terms of reference, qualifications and experience satisfactory
to the Association for the purpose of carrying out the Environmental Audits.
Name Recurrent Due Date Frequency
Environmental Audits, Strategic Environmental and Social
Assessment
Effectiveness + 12 months
Description of Covenant
The Recipient shall furnish to the Association the Environmental Audits, as well as the Strategic Environmental and Social
Assessment, each in form and substance acceptable to the Association.
Name Recurrent Due Date Frequency
Reporting on Environmental and Social Safeguards X Every 6 months
Description of Covenant
Without limitation upon its other reporting obligations under this Agreement, the Recipient shall regularly collect, compile and
submit to the Association, on a semi-annual basis, reports on the status of compliance with the Safeguard Documents, giving
details of: (a) measures taken in furtherance of the Safeguard Documents; (b) conditions, if any, which interfere or threaten to
interfere with the smooth implementation of the Safeguard Documents; and (c) remedial measures taken or required to be taken
to address such conditions.
Name Recurrent Due Date Frequency
Deposit of Counterpart funds
X
March 31, June 30,
September 30 and
December 31
Quarterly
Description of Covenant
iv
The Recipient shall no later than (i) March 31, (ii) June 30, (iii) September 30 and (iv) December 31 each year, starting on the
first of these dates after three (3) months have passed after the Effective date, deposit into the Project Account the amount
indicated in the Annual Work Plan and Budget to be provided by the Recipient for the financing of the Project Implementing
Entity‘s operation and other Project related activities for the next quarter (―Counterpart Funds‖).
Conditions
Name Type
Project Implementation Manual (PIM) Effectiveness
Description of Condition
The Recipient has adopted the Project Implementation Manual in form and substance acceptable to the Association.
Name Type
Establishment of the Project Implementing Unit (PIU) Effectiveness
Description of Condition
The Recipient has established the PIU with terms of reference, composition and resources acceptable to the Association and has
recruited a coordinator; a procurement specialist; a financial management specialist; an accountant; a monitoring and evaluation
specialist; a meat and butchery specialist; a mining specialist; and an environmental and social safeguard specialist.
Name Type
Project Implementing Entity (PIE) for Project Component 1.3. First disbursement under
Categories 1 and 2
Description of Condition
The Project Implementing Entity for Project Component 1.3. has been established.
Name Type
Project Agreement and Subsidiary Agreement First disbursement under
Categories 1 and 2
Description of Condition
The Project Agreement has been signed by the Project Implementing Entity and the Subsidiary Agreement has been signed by
the Recipient and the Project Implementing Entity and a legal opinion in form and substance satisfactory to the Association,
issued by legal counsel acceptable to the Association for the purpose of issuing legal opinions under the laws of the Recipient,
has confirmed that the Project Agreement and the Subsidiary Agreement are valid, binding and enforceable in accordance with
their terms under the laws of the Recipient.
Name Type
Recruitments by PIE First disbursement under
Categories 1 and 2
Description of Condition
The Project Implementing Entity has recruited the following staff each with terms of reference, qualifications and experience
satisfactory to the Association, for the purpose of working at least part time specifically on the activities carried out by the
Project Implementing Entity, under the Project: (A) a financial management specialist; and (B) a procurement specialist.
Team Composition
Bank Staff
Name Title Specialization Unit
Djibrilla A. Issa Senior Financial Specialist Team Leader MNSF1
Mamadou Barry Sr. Mining Specialist Co-TTL Mining Sector SEGOM
Suhail Kassim Private Sector Specialist PPD, Competitive
Industries
ASSFP
v
Abdoul-Wahab Seyni Senior Social Development Specialist Safeguard AFTCS
Amadou Konare Consultant, Environmental Specialist Safeguard AFTFW
Karima Laouali Ladjo Program Assistant Program Assistant AFMNE
Magueye Dia Financial Sector Specialist Economic and Financial
Analysis
AFTFW
Korotoumou Ouattara Sr. Financial Sector Specialist Investment Climate AFTFW
Ibrah Rahamane Sanoussi Senior Procurement Specialist Procurement AFTPC
Andre Ryba Consultant Financial Sector AFTFW
Gary Fine Sr. Private Sector Development Specialist Meat value chain AFTFW
Helene Bertaud Country Lawyer Country Lawyer LEGAF
Gokhan Akinci Lead Investment Policy Officer Trade Corridor, SEZ IFC
Adja Mansora Dahourou Private Sector Development Specialist Investment Climate AFTFW
Robert Utz Senior Economist Economist, Country
Context
AFTP3
Abdoulahi Garba Economist Economist AFTP3
Ndeye Anna Ba Program Assistant Program Assistant AFTFW
Beth Wanjeri Mwangi Financial Management Specialist Financial Management AFTFM
Alain Traore Sr. Operations Officer Investment Climate IFC
Ernesto Franco Temple Sr. Operations Officer Investment Climate IFC
Jaime Mayaki Operations Officer Operations AFMNE
Non Bank Staff
Name Title Office Phone City
Locations
Country First
Administrative
Division
Location Planned Actual Comments
1
I. Strategic Context
A. Country and Sector Context
1. Niger is a large, landlocked, mostly desertic country with an area of 1.27 million square
kilometers and a population of around 16 million. The population is concentrated in the areas
around the Niger River in the western corner of the country bordered by Mali, Burkina Faso
and Benin, and then stretches through the Sahel region all along the 1500 km long Nigeria‘s
northern border. North of this belt, the land is largely a desert. The population is growing
rapidly (3.3 percent per annum) with 47 percent under the age of 15. At this current growth
rate, the population would reach about 54 million by 2050.
2. Niger is a poor country with a limited natural and human resource base. Niger ranks
186th out of 187 countries on UNDP‘s Human Development Index, with a Gross Domestic
Product (GDP) per capita in Parity Purchasing Power terms of US$720 in 2010, one of the
lowest in the world. The country constantly battles drought although about 80 percent of its
population depends on rain-fed agriculture and livestock and only about 12 percent of all its
land is arable. Nonetheless, the exploitation of Niger‘s significant mineral and oil resources
could provide important economic opportunities if well managed.
3. Inadequate rains in 2009 and 2011 resulted in poor harvests and low GDP growth of -
0.9 and 2.1 percent respectively. A record harvest in 2010 supported a recovery of GDP growth
to eight percent in 2010. The increase in the fiscal deficit to 5.5 percent of GDP in 2009 was
due to a temporary increase in capital expenditures financed with resources from a signing
bonus received in the previous year. In 2010, the fiscal deficit declined to 2.6 percent,
reflecting inter alia a drying up of external concessional credit due to the political crisis. The
current account deficit remains large, reflecting large imports by mining and oil companies.
4. Macro-economic management remains sound in 2012 but severe external shocks have
resulted in unanticipated financing needs. Agriculture and mining sectors performance remain
the main drivers of growth. In 2012, large scale investments in uranium mining and the oil
sector are expected to start production and lead to double digit growth.
5. At present short term economic development efforts might be threatened by three
parallel severe external shocks – the Libyan crisis, insufficient rainfall that holds the threat of
another food crisis, and the European debt crisis. These external shocks are diverting attention
and resources from long term development to crisis management. The Libyan crisis is also
contributing to raising levels of insecurity due to the proliferation of heavy weapons in the sub-
region. This would further augment existing threats from Al Qaeda in the Islamic Maghreb
(AQIM) activities, criminal activities such as an expanding drug trade through the Sahara, and
recurrent insurgencies by rebel groups in the north of the country.
6. International Aid finances about 40 percent of Niger‘s budget while much of the
Government‘s revenues come from trade (especially uranium and starting in 2012 oil),
investment (especially in the mining and petroleum sector), and remittances. With the political
stabilization and a new Government in place, Niger is hoping to mobilize a significant amount
of concessional finance to help fund its ambitious development plans. The European Union
(EU) and France are among Niger‘s principal donors, providing about 33 percent of annual
development assistance. Current events in the developed world and especially in Europe
significantly dampen the outlook for significant aid increases.
2
7. The ongoing expansion of the oil and mining sectors brightens medium-term and long-
term prospects. Mining and oil sectors account for three percent of the GDP and 40 percent of
exports. As a result of recent Foreign Direct Investment (FDI) (see detail in paragraphs 15-16
below), oil and mining exports are projected to triple between 2012 and 2016 and to accelerate
GDP growth from less than four percent in 2011 to about 13.4 percent in 2012.
8. However, given the low labor intensity of mining and the high rate of demographic
growth, Niger needs to diversify its economy to create jobs. With its 3.3 percent population
growth and with employment in the public sector of the same order, the pressure is strong on
the Government for job creation. The Government is eager to diversify the economy to tackle
the looming risk of growing working age population. This arithmetic raises the importance of
the development of the non mineral private sector and its relevance for the Niger economy.
Although the FDI flows are significant and unprecedented for Niger, the opportunity to
leverage the Extractive Industries (EI) investments for large-scale dual use infrastructure
development is limited by the relatively low physical volumes of uranium exports (about
10,000 metric tons of concentrate at the peak production) and the transport of oil through
pipelines. The best opportunity to leverage mining investment is in developing side-stream
linkages (domestic sourcing), which can multiply the employment impact of mining by a factor
of two to ten.
9. The successful transition to democratic rule offers a solid basis for economic
diversification. Large scale mining and petroleum sector investments and the sustained
implementation of reforms offer a real opportunity for private sector led growth in Niger. The
swearing in of President Issoufou in early April 2011 completed Niger‘s successful transition
to democratic rule after the February 2010 military coup. President Issoufou‘s campaign
emphasized increasing spending to accelerate economic development and poverty reduction.
The return to democracy has also translated into increasing donor support.
10. The private sector in Niger remains small and mostly composed of micro and small
enterprises. With an underdeveloped financial sector and approximately 1,400 businesses
registered with the tax authorities and contributing to around 15 percent to the GDP, Niger‘s
formal private sector base is one of the smallest in the region. It is estimated that about 40
percent of Niger‘s economic activity takes place in the informal sector.1 With the exception of
some niche markets, Niger‘s private sector base is poorly connected to the global economy.
Most of the country‘s growth potential is associated with the oil and mining sector, livestock,
and with regional trade mostly with Nigeria (its main economic partner) and with the West
African Economic and Monetary Union (WAEMU) countries.
11. There are sectors/value chains which have strong potential and for which Niger can
develop a comparative advantage. These value chains include onions (le violet de Galmi),
Arabic gum, meat and the butchery industry and the mining sector. The project‘s intervention
could help increase the incentive to invest in these sectors with high potential for growth and
employment by improving the competitiveness of strategic clusters.
12. Of particular importance are the meat and butchery value chain and the mining sector
value chain that have the potential to generate strong economic and social benefits. Both value
chains were identified, based on analytical studies available, and the discussions held during
1 Schneider F., A. Buehn, and C. E. Montenegro. 2010. Shadow Economies All Over the World New Estimates
for 162 Countries from 1999 to 2007. World Bank Policy Research Paper No. 5356. July 2010.
3
project preparation, as (i) having the potential for generating jobs; (ii) having high upside
potential in terms of growth and spillovers effects (cost recovery and economic linkages); and
(iii) offering a platform for successful intervention such as the ability to bridge the
competitiveness gap, the likelihood that policy failures could be addressed with fresh reforms,
and the opportunity to harness private sector to address market failures (in the case of mining,
high ratio of capital to labor, little integration with the rest of the economy and revenue
volatility). Accordingly, these two value chains are strategic priorities for the Government and
the private sector.
13. The Extractive Industries (EI) value chain includes mining and hydrocarbons and
accounts for three percent of the GDP and 40 percent of exports. It has significant potential to
be the country‘s engine for job creation.
14. There are currently two uranium companies (COMINAK and SOMAIR all subsidiaries
of AREVA) producing about 1,800 metric tons of uranium. A third mine has began production
(the Chinese mine company in Azelik), and the commissioning of a fourth mine (Imourarem by
AREVA) will double the current production of 5,000 metric tons by 2016, making Niger the
world‘s second largest producer of uranium. The current directory of exploration permits
includes 121 targets for uranium, 14 for base metals, three for titanium/vanadium, and two for
coal. Estimates of the untapped mineral potential include important resources of gold (about
65 metric tons), phosphate (over 1.2 billion metric tons), iron ore (about 1.2 billion metric
tons), copper (875,000 metric tons), as well as nickel, molybdenum, salt, and vanadium.
15. The mining sector has been the biggest source of FDI in the country. Mining FDI grew
from US$116 million in 2007 to nearly US$700 million in 2009. Between 2010 and 2013,
mining FDI is expected to reach unprecedented levels with the development of the Azelik
uranium deposit (about US$30 million FDI) and the Imouraren uranium mine (about US$1.7
billion FDI). The two mines are expected to bring about US$75 million in fiscal revenues, and
additional revenues from the sales of the Government‘s share of production (33.35 percent for
Imouraren and 25.71 percent for Azelik).
16. As for the petroleum sector, Niger officially became an oil producer in November 2011
with the coming on stream of three oil deposits in the Agadem basin and the commissioning of
the 20, 000 barrels per day (bpd) refinery at Zinder. The estimated FDI inflows associated with
the development of the Agadem oil bloc were US$1.3 billion for the oil field, US$350 million
for an oil pipeline to Chad, and about US$1.2 billion for the Zinder refinery. In addition, the
Trans-Saharian Gas Pipeline (TSGP), of which Niger is expected to share 841 km (out of an
estimated 4,128 km-long pipeline across Nigeria, Niger and Algeria) will bring additional FDI
representing Niger‘s share of the estimated US$13 billion for installing the pipeline and
associated gathering centers.
17. In addition, the country‘s geologic structure offers a potential for new discoveries of
gold and base metals in the precambrian formations and of uranium and oil in the sedimentary
basins. As a result of the FDI in the above projects, oil and mining exports are projected to
triple between 2012 and 2016 and to accelerate GDP growth from less than four percent in
2011 to about 14 percent in 2012. Significant potential for private sector development and
spin-off growth exists through local content development and direct procurement of goods and
services from local suppliers.
4
18. Meat and butchery value chains. Livestock is one of the main foundations of Niger‘s
economy, accounting for 15 percent of Niger‘s GDP. Animal husbandry is practiced by over
87 percent of the workforce. According to the 2010 census statistics, Niger had 10.9 million
sheep, 13.7 million goats, 9.8 million cattle, 1.7 million dromedaries and camels, 1.6 million
donkeys and 242,000 horses. Maradi has 15.4 percent of Niger‘s total cattle, 16.5 percent
sheep, and 17.7 percent goats. Breeding in Maradi represents 18 percent of the wealth of the
local population. Retail prices of fresh meat: €3.40 / kg for meat from sheep or goat, € 4.20/ kg
for cattle meat and €3.50 / kg for offal (lungs, heart, liver, intestine and tripe). The heads and
feet are usually sold cooked. 2
19. Export of live cattle and meat represents nearly 12 percent of Niger total exports (90
percent of which goes to Nigeria and the remaining to Cote d‘Ivoire and Gabon). Besides the
export of live animals mostly to Nigeria, meat production is also growing in Niger. The total
production of meat has grown from 54,860 tons (valued at CFAF65.8 billion) in 2002 to
72,400 tons (valued at CFAF86.8 billion) in 2005 and about 95,000 tons in 2006.
20. There is significant potential in the formalization of the butchery industry and for the
development of a formal private sector in meat production given the large number of small and
informal butchers and the abundant availability of livestock. Butchers are organized into seven
associations/Groupement d’Intérêt Economique (GIE) in Niamey and Maradi representing both
individuals and enterprises and their associations.
21. Nevertheless, the ability of the meat and butchery sector in Niger to serve even the
domestic market has been constrained due to a lack of capacity of the Niamey slaughterhouse
and an inability to operate at capacity at the Maradi slaughterhouse. This has resulted from
population growth, a lack of spare parts and capital investment, including the lack of a cold
chain, and the need for upgrading of skills. In turn, it has also led to operational inefficiencies
and an inability to develop value-added products, further compounded by weaknesses in
industry associations and a dearth of working capital among industry participants.
22. Niger can take advantage of the large Nigerian neighboring market, assuming it can
reach an agreement with Nigeria to the exportation of meat as opposed to live animals. Trade
between the two countries has always been significant and Nigeria is Niger‘s largest trade
partner. Nigeria represents 80 percent of Niger non mining trade. Nigeria is not only the main
trading partner, but also the country that offers the greatest potential for export growth because
of its size and diversified economy. According to the 2008 Country Economic Memorandum
(CEM), Nigeria contributes significantly and increasingly to Niger‘s GDP growth; contribution
estimated at 26 percent. Furthermore, the geography (with a 1500 km border) and community
ties are other important factors which facilitate trade with Nigeria. Accelerating regional
integration and reinforcing Niger‘s trade relations with Nigeria is a key priority given the
offered opportunities. Also, Nigerian firms could benefit from better security and availability
of public utilities in northern Niger and access to the WAEMU market of 85 million people. In
view of the large trade potential, the Government of Niger has made it a strategic priority to
strengthen regional integration with Nigeria.
2 Meat prices have increased sharply in Nigeria the main market Niger targets: between, 2003 and 2005, the price
of beef increased by 30%. Prices of most types of meat are 2-3 times international levels according to Nigeria,
Product Value Chain Analysis, DfID, Consilium International, 2008
5
B. Sector Challenges
Investment climate challenges
23. Niger‘s main challenges in the years to come are to leverage the expected scaling-up of
natural resources production and diversify its economy by developing selected value chains to
accelerate growth. In particular, the challenges facing the Government are to (i) improve the
investment climate to create the incentive for the private sector to invest in the high value
clusters/value chains; (ii) make strategic choices and the required investment to tap into the
potential offered by the Nigerian market and the Economic Community of West African States
(ECOWAS) market for the selected value chains and export products; (iii) maximize the
contribution of the oil and mining projects to the Niger‘s economy; and (iv) design a medium-
term strategy to manage the revenue windfall and maintaining a prudent policy stance in the
short-term.
24. Private sector development in Niger is hampered by a poor investment climate and
infrastructure. The most recent investment climate survey3
25. Figure 1) identifies slow government procedures, corruption, poor infrastructure,
limited access to credit, taxation, and low labor productivity as factors that have a negative
impact on initial investment decisions. The 2006 Investment Climate Assessment (ICA) has
already highlighted serious challenges in Niger‘s business environment. Tax and tax
administration, access to finance, informal sector practices, and corruption were identified as
the main impediments to business activity.
Figure 1: Factors with Largest Negative Impact on Initial Investment Decisions (negative or very negative
as percent of total replies)
Source: BCEAO/DFI/BEAC/GoN(MEF). 2010.
3 BCEAO/DFI/BEAC/GoN(MEF). 2010. Rapport des enquêtes sur la perception du climat des affaires et les actifs
et passives étrangers au Niger. Novembre 2010.
0% 10% 20% 30% 40% 50% 60% 70%
Access to short term credit
Access to long term credit
Customs incentives
Corruption
Tax incentives
Labor productivity
Quality of infrastructure
Efficency of government
6
Figure 2: Factors with Largest Negative Impact on Returns on Investment (negative or very negative as
percent of total replies)
Source: BCEAO/DFI/BEAC/GoN(MEF). 2010
26. The 2012 Doing Business report ranks Niger as one of the countries in which it is most
difficult to engage in private sector activities – 173th
out of 183 countries. Table 1. shows that
there has been little improvement in Niger‘s rankings over the last two years. However, the
newly introduced measure of cumulative change, which illustrates how the business regulatory
environment has changed from Doing Business 2009 to Doing Business in 2012, indicates an
overall improvement for Niger. When ranked on this scale, Niger ranks 53rd
among 173
countries in terms of cumulative change over the five year period.
Table 1: Niger’s Doing Business Rankings, 2009, 2011 and 2012
DB 2009 ranking (181
countries ranked)
DB 2011 ranking
(183 countries
ranked)
DB 2012 ranking
(183 countries
ranked)
Ease of Doing Business 172 173 173
Starting a Business 159 159 163
Dealing with Construction Permits 157 162 158
Registering Property 75 84 86
Getting Credit 145 152 126
Protecting Investors 150 154 156
Paying Taxes 120 144 142
Trading Across Borders 169 173 173
Enforcing Contracts 134 139 139
Resolving Insolvency 138 142 123
Source: Doing Business 2011
27. Given this environment, most enterprises operate and remain in the informal sector.
This has kept down productivity, and competitiveness. Both labor productivity and Total
0% 10% 20% 30% 40% 50% 60% 70%
Cost of postal services
Corruption
Cost of road transport
Efficiency of postal services
Efficiency of health services
Access to long term foreign credit
Cost of water
Efficiency of road transport
Cost of electricity
Adequacy of human resources
Cost of internet access
Cost of telecommunication
Taxation
Efficiency of internet access
7
Factor Productivity (TFP) are lower than in other Franc Zone countries such as Senegal,
Burkina, Mali or Cameroon.
28. The cost and time for starting a business in Niger remain high, compared to similar
countries despite some progress since 2010. The 2010 budget introduced measures to reduce
the cost of starting a business, including the reduction of stamp duties for obtaining a tax
identification number, and for registering with the Commerce Registry. These measures have
reduced the fiscal cost for the creation of an enterprise. In addition, the chamber of commerce
has also suspended membership fees for businesses during their first year of existence. With
respect to the time required to establish a business, Government and the Chamber of
Commerce have established a one-stop shop for dealing with all the formalities related to
creating a business. According to the Doing Business indicators, between 2009 and 2012, the
time for starting a business in Niger has dropped from 19 to 17 days and the cost from 170 to
114 percent of income per capita. While the time for starting a business compares favorably to
the average for Sub-Saharan Africa (SSA) of 37 days, the cost of starting a business is still
above the average for Sub-Saharan Africa of 81 percent of per capita income.
29. High tax rates and cumbersome tax regulations and administration were identified as
key constraints in the 2012 and 2006 ICAs. Doing Business 2012 shows that the number of tax
payments per year (41) is higher than the average for Sub-Saharan Africa. In addition, Niger‘s
tax base is narrow. About 92 percent of the corporate tax is generated by less than 20 percent
of registered firms, mostly in the mining, oil and financial sectors. The burden of direct and
indirect taxes still acts as a disincentive for private firms to enter the formal sector. Also, at
27.4 percent, the marginal effective tax rate is also much higher than the SSA average of 21.7
percent. Furthermore, firms are subject to about 15 different non sector specific taxes. As
evidenced in the sub region and beyond, tax reform targeting both the level of taxation
(including exemption regimes), as well as the tax administration, help reduce the tax burden on
firms while helping increase the tax revenues for the state.
30. Limited access to finance. The Financial Sector Assessment Program (FSAP) and the
rural finance study that underpinned the Government financial sector development strategy
revealed that private enterprises, particularly Small and Medium Enterprises (SME) in Niger
have limited access to financial services. Findings from these studies pointed out the following
obstacles, to further expansion of financial services to SMEs and rural areas: (i) inappropriate
regulatory framework to develop product for the needs of selected sectors/value chains; (ii)
lack of adequate services and skills in the financial industry to serve the SME segment and key
and promising value chains in Niger; (iii) lack of proper and sufficient collateral and (iv) lack
of adequate and reliable financial information.
Constraints related to the selected value chains
31. Despite the many competitive advantages, the selected value chains face several
challenges, in addition to the poor investment climate mentioned above.
Meat and butchery value chain
32. Poor quality of slaughterhouses infrastructure. Niger has four refrigerated
slaughterhouses, located in Niamey, Maradi, Zinder and Tahoua. All slaughterhouses and
sacrifice areas are characterized by a lack of basic hygiene and poor organization. Moreover,
the lack of maintenance of infrastructure and equipment has caused a progressive deterioration
8
of the slaughterhouses, resulting in previously automated work now being replaced by manual
labor. With the tight fiscal situation of the Government over the years, the provision of
infrastructure and services was limited. This has led to rationing of investment and declining
quality of services in the slaughterhouses. Consumption data reveal that there is a need for an
expanded slaughterhouse in Niamey and another in Maradi. Currently, the slaughterhouses of
Niamey and Maradi are in a borderline situation, generated by three fundamental problems: (i)
badly deteriorated facilities, infrastructure and equipment; (ii) poor operational management
and hygienic practices; and (iii) capacity deficiencies of officials and workers.
33. Meat production in the slaughterhouse in Maradi is below the productive capacity of
seven tons per day for which it was designed. In 2010, the estimated population of Maradi was
530,000, and volume of meat produced in the slaughterhouse was four tons per day, with
approximately an equal amount coming from informal slaughtering of animals in the
surrounding towns and villages. By 2020, the estimated population of Maradi will be 590,0004,
necessitating an increase in current productive capacity. Further, eventual export of meat to
Nigeria would come from Maradi. In Niamey, the above factors combined with high demand
have caused production to overflow into the informal sector and neighboring villages,
approximately doubling production compared to the initial intended capacity of the
slaughterhouse of 20 tons per day when it was built. The population of Niamey in 2010 was
1.30 million which is projected to increase to 1.35 million by 20205. The slaughterhouse was
originally designed in 1967 for a population of 400,000, implying that current total production
would need to grow more than threefold just to cope with local population and demand.
34. Poor management of existing slaughterhouses. The most important management issues
facing slaughterhouses in Niger include asset ownership, operation and maintenance, capital
investment and commercial risk. The project will incorporate a system for upgrading the
management structure and practices, and will explore private sector participation options
possibly through a Public Private Partnership (PPP) arrangement or in other ways supporting
strategic investment in the future, but with a focus on developing small and medium enterprises
active in the meat value chain. Of the various options (complete or partial divestiture to the
private sector, concession, service contract, management contract or lease), consideration will
be given to various prerequisites for successful implementation of these options, including
stakeholder support and political commitment, outlet markets (export and local), profitability
and cost-recovery tariffs, and a developed regulatory framework. In addition, health and
environmental issues will be taken into consideration as they raise the question of public good
content in slaughtering activities which could be relevant to define the respective roles of the
private and public sectors in management.
35. Low capacity of private sector involved in the meat industry. Niger has many centuries
of knowhow in butchery as well as a domestic concentration of small private butcheries
organized into seven associations (Groupement d’Intérêt Economique) in Niamey and Maradi
representing individuals and around 800 enterprises and their respective associations.
However, many of these butcheries are in the informal sector and have limited managerial
capacities. Among the informal entrepreneurs in the industry, most do not maintain any sort of
4 Source: Government projections.
5 Source: Government projections.
9
books or written accounts. These are clear indicators of weak entrepreneurial capacity which
have, as consequence, led to a low level of productivity.
36. Bottlenecks to export. The fact that existing expertise and activities in butchery and
meat production have not translated into higher volumes of export of value-added products
(e.g. meat rather than live animals; prime cuts of meat rather than basic raw meat) results from
(i) low quality or lack of accreditation services to enable the industry to implement food safety
systems such as Hazard Analysis and Critical Control Points (HACCP) which are needed to
meet international food safety standards (ISO 22000); (ii) unofficial barriers to export meat to
Nigeria despite the ECOWAS agreement and the existence of a bilateral treaty between the two
countries through their Joint Commission.
Extractive Industries Value chain
37. Although extractive industries are important for the economy of Niger, the growth of
mining activities has not spurred the development of other economic sectors. The extractive
industries have evolved as enclave projects, and their impact on broad-based growth has been
constrained by the low level of private sector development and weak forward, backward and
sideways linkages with the non-extractive economic sectors. In order to develop these linkages,
there is a need to address the specific sector challenges discussed below.
38. Inadequate policy, legal and regulatory framework. The current mineral policy dates
back to 2001 and has been overtaken by a number of independent policy initiatives, such as the
Mining Code of 2006 and Niger‘s acceptance of the Extractive Industries Transparency
Initiative (EITI) as the standard for transparency of mining sector revenues. In addition, the
national mining law needs to be harmonized with regional and sub-regional policies, such as
the ECOWAS Mining Directives and the WAEMU Mining Code.
39. Inefficient fiscal regime. The fiscal regime has not succeeded in the objectives of
maximizing the Government‘s revenue and stimulating new investments in exploration and
mining development. The fiscal regime is geared toward uranium mining, and the Government
relies heavily on non-neutral taxes (royalties) and equity participation to capture its share of the
mining rent. Despite the size and potential of mining, the sector currently contributes only
about six percent to total fiscal revenues. Uranium mining royalty rates start at 5.5 percent, but
can reach the prohibitive rate of 12 percent when the ratio of operating income to export value
exceeds 50 percent. A flexible and reasonable taxation regime, featuring an optimal mix of
direct and indirect taxes coupled with effective tax administration (to conduct tax audits and
minimize transfer pricing) could remove inefficiencies and encourage further investment.
Weaknesses in the petroleum code include the reliance on negotiated deals rather than
competitive rounds to allocate available blocks.
40. Weak institutional capacity. The Ministry of Mines and Energy has just been
restructured into two ministries: Ministry of Mining and Industrial Development and Ministry
of Energy and Hydrocarbons. As the new structure takes hold, the main administration still
remains inefficient with some 20 technical, central and regional divisions with varying degrees
of functionality. Responsibilities are spread across several units and are sometimes conflicting.
Weak capacity for negotiation and monitoring compliance significantly constrains the
Government‘s ability to get the most out of the extractive sector. In the petroleum sector, the
technical complexity of the sector combined with the weak capacity for regulation and tax
10
administration constrains the Government‘s ability to capture all the fiscal benefits of oil and
gas development activities.
41. State involvement in mining operations. Through the parastatal Societé de Patrimoine
des Mines (SOPAMIN), the Government has an active involvement in the mining sector,
particularly in marketing its share of production. The Government shares are 36.6 percent in
SOMAIR, 31 percent in COMINAK, 33.35 percent in the Imourarem Project and 33 percent in
the Azelik Project. The Government also holds a significant equity interest in gold mining (20
percent in Société des Mines du Liptako (SML), coal and cement. State involvement in the
mining sector has encouraged inefficiency, poor management and possibly poor governance.
SOPAMIN lacks specialist skills and networks to intervene efficiently in the uranium trade and
does not have the management independence to operate as a commercial entity. In the oil
sector, the Government is already seeking to establish a National Oil Company and is
exploring how to finance its share capital from annual budget allocations.
42. Poor investment climate and capacity of local services providers. The industry has
limited linkages with the rest of the economy and continues to rely on foreign sources of
finance and inputs. Initiatives to redress this situation have made limited inroads and the
industry continues to buy only low value items locally, such as food and clothing. This reflects,
in large part, the poor business environment and the fact that the Niger manufacturing and
service sectors lack the capacity to supply competitively a substantial proportion of the
procurement needs of the extractive industries.
43. Unregulated artisanal mining. An estimated 400,000 people depend on artisanal
mining for their livelihood. This activity has economic potential (particularly for gold,
cassiterite, salt and construction materials), but it is often conducted outside formal channels
and is associated with significant social and environmental issues. Government‘s efforts to
impose a 2.5 percent sales tax on gold without adequate effort toward formalization were not
successful. Creating the conditions for formalization of artisanal mining could improve the
safety and environmental performance of artisanal mining and generate additional tax revenues
for the Government.
44. Governance and conflict dynamics. Through the 1990s, Niger has experienced political
instability and conflict arising from disagreements over the control and distribution of resource
wealth. The risk of political capture of extractive industries is also high. Enhancing governance
and transparency of revenue flows related to oil and uranium will be key to preventing
resource-based conflicts in Niger.
C. Government’s reform efforts
45. The Government under former President Tandja had launched an ambitious program of
reforms. They aimed to foster private sector growth and diversify the economy, and had been
pursued by the transition Government in 2010 and 2011. The transition Government
particularly focused on establishing appropriate frameworks for private sector development
and initiated reforms that had stalled since 2007/08. This includes the adoption of an action
plan for reforms for enhanced trade integration in May 2010, based on the World Bank‘s
Diagnostic Trade Integration Study (DTIS), the initiation of the preparation of a new
Investment Code and a new Charter for SMEs. The project will help complete and implement
these major reforms.
11
46. This strategic approach remains the priority for the new Government as it seeks to
accelerate employment generation. Diversification of the economy would help mitigate the
volatility inherent in the mining and agriculture sectors and provide employment and income
opportunities to the population. The Government is seeking to improve the investment climate,
with Doing Business indicators providing an entry point, while addressing and taking on other
reforms such as judicial effectiveness through the Organization for the Harmonization of
Business Law in Africa (OHADA). In addition, recognizing that private sector growth in Niger
is likely to be based on the development of economic niches, the Government is taking specific
actions to facilitate value chain approaches, with the private sector playing a leading role.
47. Investment climate reforms are supported by several groups. The National Private
Investors Council (CNIP) was established in 2004. Chaired by the Prime Minister, the CNIP
seeks to foster better synergy between the private sector and the Government. While the CNIP
is considered by private sector representatives as an effective tool for fostering public private
dialogue and resolving business constraints, it has not been convened since 2007. It has been
repealed in its current structure and a new one set up by the new Government in October 2011.
The implementation of a national private sector promotion policy has led to the creation of
several support and supervisory structures, in particular, the Chamber of Commerce, the
Investments Promotion Center (CPI), the Centre de Formatlité des Entreprises (CFE), the
Niger Exports Promotion Agency (ANIPEX), the National Management Development Center
(CNPG), and Entreprendre au Niger (EAN). Low capacity of these various institutions and
lack of coordination of their activities remain a challenge. The project will provide institutional
support to carry out studies and formulate investment climate reforms, conduct public/private
dialogue, provide business development services, investment and export promotion.
D. Rationale for World Bank Group involvement
48. The project is aligned with the 2009-2011 Country Assistance Strategy (CAS). The
CAS, presented to the Board on May 29, 2008, is built around two pillars: (i) accelerating
sustained growth that is equitably shared; and (ii) increasing access to basic services and
developing human capital; as well as two cross cutting issues covering demographics and good
governance. The project would make substantial contributions to the first pillar.
49. To achieve the first CAS strategic objective of accelerating sustainable and shared
growth, the World Bank seeks to promote the key sectors that drive growth and have the
greatest potential for creating jobs -- such as the agro-pastoral and mining sectors - while also
supporting efforts to strengthen the private sector, improve the business climate and access to
regional and global commercial opportunities, investment instruments, technical assistance and
non-financial services. This is also in line with the Poverty Reduction Strategy Paper (PRSP)‘s
first pillar (achieving strong, diversified and sustainable growth that creates jobs).
50. Recognizing the crucial importance of the mining sector for Niger‘s development, the
transition Government started to implement measures to strengthen the development of the
mining sector and the use of mining resources. The new constitution contains important
provisions for increased accountability and transparency in the mining sector, and the
Government has sought the assistance of the World Bank and other development partners to
support reforms in the sector.
12
51. The preparation of a new CAS has been launched in FY12. It will ensure alignment
with the new PRSP and deepening of harmonization and division of labor among development
partners.
52. This project will contribute to the first pillar of the Africa Region Strategy –
competitiveness and employment -- as well as to the strategy‘s foundation issues of governance
and public sector capacity. Reforms aimed at reducing barriers to economic growth through an
improved investment climate and improved infrastructure will contribute to both objectives of
the strategy by supporting the attainment of higher growth and the diversification of the
economy. Diversification of the economy is expected to reduce the economy‘s vulnerability
and enhance its resilience to external shocks by broadening the economic base and reducing
dependence on undiversified mineral exports and drought prone agriculture. The measures
aimed at strengthening the capacity of the Government to manage the mining sector will
directly support improved economic governance.
53. The project is informed by analytic work prepared by the Government, the Bank, other
development partners and local and international research institutes. Much of this work also
helped to inform the preparation of the PRSP and includes (i) the CEM prepared in 2007,
which identifies priorities for accelerating growth and achieving the Millennium Development
Goals (MDG); (ii) the 2010 DTIS, which reviewed sectors and values chains with high
potential as well needed reforms for their development; (iii) the ICA prepared in 2006 that
further deepens the understanding of the drivers of and key constraints to growth; (iv) studies
on value chains prepared under the Bank supported Agriculture Export Project (études sur la
compétitivité des filières bétail, cuir et peaux, oignon etc.) and the study on the
Competitiveness of the Agriculture and Livestock value chains conducted by the Cellule
d’Analyse et de Prospective en Développement (CAPED) funded by the African Capacity
Building Foundation (ACBF), which identified key markets and needed support to the actors to
further improve their competitiveness and capacity; and (v) reforms of the financial sector,
which draw on the 2008 FSAP and the follow-up financial sector strategy prepared with
technical assistance from the multidonor Financial Sector Reform and Strengthening Trust
Fund (First Initiative).
54. The project is an integral part of the World Bank‘s Niger portfolio. It seeks to generate
synergies with ongoing operations on infrastructure, agriculture, demographic development
and public financial management. It is also linked to the Development Policy Operation (DPO)
series related to growth and that supports key policy reforms critical for the success of
investment operations. The Niger Shared Growth DPO also targets the business environment.
Table 2: Current Portfolio of Bank Supported Projects in Niger
Projects related to growth and private sector development
Financial Sector Technical Assistance Project. Closed in December 2010
Projects related to Infrastructure
Transport Sector Program Support Project
Local Urban Infrastructure Development Project
Projects related to Agriculture and Rural Development
Niger Agro-Pastoral Export and Market Development Project
Strengthening Results-Based M&E for the Rural Development Strategy
Emergency Food and Rural Development Project (under preparation)
Projects related to Public Financial Management
13
Niger Reform Management and TA
Niger: Extractive Industries Transparency Initiative Implementation
Other Projects
Niger - Niger EFA-FTI Basic Education Project
Institutional Strengthening & Health Sector Support Program (ISHSSP)
Multi-Sector Demographic Project
Integrated Ecosystems Management in Niger (APL phase 2)
Community Action Program (PAC2)
Niger Basin Water Resources Development and Sustainable Ecosystems Management Project
Water Sector Project (under preparation)
Community Action Project for Climate Resilience (under preparation)
E. Higher Level Objectives to which the Project Contributes
55. The project would contribute to the achievement of the Government‘s goals as spelled
out in the PRSP and the recent Government Programme Interimaire de Cadrage de I'Action
Gouvernementale (PICAG). These goals include:
(a) Accelerating growth: Support to the development of two value chains will aim to
encourage increasing private investments, thus supporting sources of growth that will translate
into job creation opportunities;
(b) Reducing unemployment and poverty: Support to enterprises and increasing skills of
workers in Niger will promote enterprises, which in turn is expected to increase formal
employment and encourage better working conditions. In addition, the project will help
improve the investment climate in Niger so that the SMEs sector can better contribute to
growth and employment creation; and
(c) Finally, the project will help prepare policy reforms that will be pursued in the context
of the Government‘s broad poverty alleviation program.
56. Linkages will be made with current interventions and donor coordination. In the past,
up to 2009, assistance to promote private sector development and value chains in Niger have
been supported and financed by several development organizations, notably the World Bank,
the Arab Funds and the African Development Bank (AfDB). More recently, the U.S.
Millennium Challenge Corporation (MCC) is helping Niger improve its infrastructure and
identify sources of growth. The World Bank is also supporting an ongoing Agricultural Export
Project (PRODEX) focusing on five high-value products.
57. In the Mining sector, a number of donors are supporting the Government to address
these challenges, but their activities are not well-coordinated. In 2000, the European Union
amended its program in the mining sector to extend funding until 2013 and injected about 14
million Euros to support extractive sector activities, including geological mapping and
institutional capacity building. The AfDB has also approved the PAMOGEF project, which
allocates CFAF2.9 billion (about US$5.8 million) to strengthen internal resource mobilization
of fiscal revenues from the extractive sector and improve EI sector governance, including
establishment of the Observatory of Mining and Petroleum Resources. EI governance and
transparency initiatives are also being supported by the Embassy of France, the United States
Agency for International Development (USAID), and the World Bank‘s EITI Multi-donor
Trust Fund. The United Union Development Programme (UNDP) is supporting a resident
expert to assist the Government in policy and negotiations, while the International Monetary
14
Fund (IMF) is considering support to improve the fiscal regime under its topical trust fund. The
table below shows the range of activities being supported by various donors. Table 3 below
provides a synopsis of donor involvement in support of the extractive industries. This project
builds on the activities currently being supported to fill policy and regulatory gaps and focus on
developing linkages between the extractive industries and the domestic private sector.
Table 3: Donor involvement in the extractive industries
Activity EU UNDP IMF AfDB WB
Private sector linkages X
Institutional capacity building (mining) X X X X
Geologic database and mapping X
Promotion of mineral potential X X
Institutional capacity building (petroleum) X
Negotiation of mineral agreements X X
Mining code and regulations X X X X
Petroleum code and regulations X X
Fiscal regime X
Mineral wealth management X
Governance X X
II. Project Development Objectives
A. PDO
58. The Project Development Objective (PDO) is to improve selected aspects of Niger's
business environment, to support the development of the meat industry and to increase local
business participation in the extractive industry sector.
B. Project Beneficiaries
59. The Project‘s direct beneficiaries are estimated at 5,000 enterprises, of which 20
percent are led by women.
60. The project will benefit two main groups of stakeholders. The two main groups of
beneficiaries are firstly all various private sector stakeholders (primarily private enterprises and
investors mainly in the two supported value chains) and, secondly, government and private
sector agencies playing a key role in the interaction between government and private sector
(Chamber of Commerce, ANIPEX, APEIN, CNIP, mining directorate, tax administration).
61. Meat processors, butchers and enterprises procuring goods and services to main
mining companies: In addition to benefiting from the overall improvement in the business
environment, they will directly benefit from the technical assistance provided through the
project, the financing of infrastructure and services to increase the production capacity of the
slaughterhouses of Niamey and Maradi and to improve trade with Nigeria through the Kano,
Kastina, Maradi (K2M) corridor, and the matching grants component, which should improve
the skills of workers.
15
62. Entrepreneurs, SMEs and investors: Entrepreneurs and investors will benefit from the
improvement of the business environment. The increase in transparency and predictability will
benefit SMEs, which normally tend to have limited bargaining power, as well as foreign
investors by reducing uncertainty and transaction costs. Additionally, SMEs will directly
benefit through the Matching Grants Program which is expected to increase their performance
and managerial capacities.
63. Workers: The project will help create jobs by promoting investments and facilitating
entreprise creation through improvements in the business environment and support to SMEs
with the maching grants. Also, jobs will be generated in the two value chains supported by the
project either with the development of butcheries or the development of enterprises which will
be services providers to the main mining companies. Additionally, workers in various
enterprises will directly benefit from training through the matching grants program, which is
expected to improve their productivity, which is a fundamental determinant of their salaries.
64. Government and private sector agencies: The project will directly support various
Government entities and private sector agencies with technical assistance and training. The
public/private sector agencies that will specifically benefit from this direct support are the
ANIPEX, APEIN, CNIP and the Mining Directorate. In addition to the direct capacity
development for these specific agencies, the Government will also benefit by way of
improvement of its capacity to collect taxes through the General Directorate of Taxes (DGI),
which in turn is expected to generate higher tax revenues. Furthermore, improved transparency
and efficiency of the key agencies supported by the project are expected to increase public
confidence in the public institutions.
C. PDO Level Results Indicators
65. The PDO‘s related performance indicators are (i) the reduction of time to trade across
borders; (ii) the reduction of time to create a business; (iii) the improvement of turnover of
SME supported by the Matching Grant; (iv) the increase in volume of meat processed and sold
in slaughterhouses; (v) the proportion of local procurement achieved with Extractives
Industries; and (iv) the number of direct beneficiaries (of which 20% female). The result
framework for the PDO indicators and intermediate key performance indicators is in Annex 1.
III. Project Description
66. Overall approach: It appears from the various policy and strategy documents
mentioned above that to support private sector-led growth, actions need to be taken in a
number of mutually-supportive areas to create conditions for private sector development. This
involves a combination of elements including (i) providing policy, regulatory, and institutional
support to key government institutions involved in private sector development; (ii) supporting
for technical and business management skills to improve productivity at the firm level; (iii)
developing linkages with the regional/global economy; (iv) promoting a conducive business
environment, including in particular, financial services; (v) trade and investment facilitation
regulations and institutions; and (vi) facilitating increased availability of critical infrastructure
and services.
67. However, given the low capacity and while promoting such an integrated approach,
prioritization and sequencing of the reforms are vital for a successful implementation.
16
68. These priority reforms to be supported by the project would aim to develop conditions
conducive for the private sector to invest, and for Niger to attract more private investment in
the two selected high potential value chains and make necessary investment and policy reforms
to increase trade with the large neighboring Nigerian market.
A. Project components
The project would have the following components and activities:
Component I: Investment Climate, Investment Promotion and SME Support for
identified value chains (US$16 million)
69. The objective of this component is to help (i) improve the business environment; (ii)
provide Business Development Services (BDS) to support enterprise development primarily in
the identified value chains supported by the project (mining and meat) through a matching
grants program; and (iii) support the Government effort for investment and export promotion.
The project would finance the following activities through its sub components:
Sub-component 1.1: Public Private Dialogue Working Groups for Doing Business
(DB) and investment climate reforms (US$2.5 million)
70. This sub-component will focus on financing the efforts of Conseil National des
Investisseurs Privés (CNIP) and the Government for reforms to improve Niger business
environment in the following four key areas (starting a business, protecting investors, paying
taxes and trading across border) by providing the necessary support to carry out diagnostic
studies for the Council‘s meetings and technical assistance to implement the reforms.
71. In particular, the project will finance the following: (i) technical assistance to the CNIP
and the authorities to revamp the investment legislation (in particular, the provisions on capital
transfers, investor-state dispute settlement and guarantees against and compensations in case of
expropriation, reforming the ex ante investment authorization regime; and the minimum capital
requirement for foreign investment etc.); (ii) technical assistance to the authorities to revise the
mining and petroleum codes; (iii) technical assistance to streamline tax and customs regimes to
reduce the frequency of tax payments and create transparency and predictability of the tax
system; and transpose to national legislation and enforce WAEMU directives, particularly with
regard to competition policy and law, tax policy.
Sub-component 1.2: Implementation of institutional reforms aimed at promoting
exports (US$2.5 million)
72. This will be done by providing support to the Agence Nigérienne de Promotion des
Exportations (Niger Exports Promotion Agency, or ANIPEX) through the Chamber of
Commerce.
73. Specific activities to be supported by the project will include: (i) technical assistance to
ANIPEX for export promotion; (ii) operational budget support to ANIPEX; (iii) financing of
equipment; and (iv) support the implementation of ANIPEX action plan to promote exports.
Sub-component 1.3: Enterprise development and investment promotion in
identified value chains and other priority sectors (US$11 million)
Support to APEIN
17
74. Based on the feasibility study funded by the UNDP, an Agence de Promotion des
Entreprises et des Investissements au Niger (Agency for Enterprise and Investment Promotion
(APEIN)) will be created. Its mandate is to provide nonfinancial services and act as a one-stop
shop for businesses to access various services necessary for their establishment, including via a
matching grants scheme. The project will support the establishment of the Agency and the
provision of BDS.
75. Assistance under the project includes: (i) Institutional support for the implementation of
a business plan that spells out the technical assistance and training requirements for the
Agency; (ii) Equipment necessary for the establishment and operation of APEIN to make it
capable to provide requested services to local and foreign companies operating or wishing to
settle in Niger; (iii) Finance Technical Assistance (TA) and transaction advisors to assist the
Government in developing investment opportunities, in attracting private investors and
structuring PPP transactions; and (iv) Support to the development of APEIN‘s business
management function of providing non-financial business development services to businesses
primarily involved in the selected value chains through hiring a private company that will help
build its capacity and implement the matching grants scheme.
76. To ensure sustainability of APEIN, project assistance will progressively be replaced by
Government‘s contribution and APEIN‘s own contributions. The Government 2012 budget
includes US$0.4 million for APEIN activities. The contributions by APEIN are expected to be
generated by revenues for services rendered to businesses and membership fees.
Matching Grants Program
77. The objectives of the matching grants are (i) to help firms increase labor productivity
and enhance competitiveness; and (ii) support local SME‘s to improve their capacity to be
service providers to large mining companies, to take advantage of local procurement and
business partnership opportunities with large EI. To this end, the matching grants component
comprises a two-window program:
78. Matching grants to SMEs and smallholders and their associations. The matching grants
will finance the following types of activities: (i) Annual Business Plan Competition: Finance an
annual business competition to help identify and support new businesses with a high potential
for innovation in identified value chains and other priority sectors; (ii) Operational assistance
to SMEs: Provision of consultancy services to SMEs operating in identified value chains and
other priority sectors to support improvements in productivity, production processes,
processing and / or marketing; (iii) Access to finance (A2F) assistance to SMEs: Provision of
training and business development services to SMEs in identified value chains and other
priority sectors to improve their creditworthiness. Eligible activities could include preparation
of quality business plans, financial statements and applications that meet the criteria of
Nigerien commercial banks and other financial institutions; and (iv) Training to SME training
institutions, trade groups and producer organizations: Development and delivery of training
courses to SME training institutions, registered trade groups and producer organizations
through qualified trainers and training institutions.
79. Matching grants to SMEs for developing local procurement with large companies in
the extractive industries sector: This matching grants program of about US$3 million will be
linked to the local content development initiatives of extractive industries. Specifically, it will
seek a linkage with AREVA‘s local content initiative during the construction phase of the
18
Imouraren Project. The EI matching grants will leverage and extend the scope of corporate
local content initiatives by: (i) providing training to pre-qualified suppliers to upgrade their
skills and capacity through standardized training modules (for instance, the SME Toolkit
developed by the International Finance Corporation (IFC)) and the Business Edge training
modules; (ii) developing the technical and managerial capacity of the local suppliers to enable
them to meet the standards of product quality and performance, warranty, and health, safety
and environmental practices required by mining and petroleum companies; (iii) facilitating
links with local suppliers to existing international suppliers, through twining arrangements,
joint ventures, and participation at international mining trade shows; (iv) supporting supplier
certification initiative, including health, safety and environment; and (v) working with local
banks and large EI companies to develop partnership to help SME suppliers have access to
working capital fund with withdrawals and receivable monitoring mechanism.
80. Project funds will be made available to businesses (through APEIN) via a cost-share
mechanism. The matching grants will finance 50 percent of the cost of subprojects carried out
by SMEs. This ratio has been accepted based on international impact evaluations that show that
a higher grant contribution is often less successful for the reason of moral hazard. The
maximum matching grant amount to a single firm or consortium would be US$50,000
equivalent. While the matching grant would encourage firms from the meat/butchery and
mining value chains to apply, it would not be limited to these two value chains.
81. The Matching Grants operating manual is being developed (as part in the Project
Implementation Manual) to highlight the operating principles and procedures of the fund, as
well as the governance and internal control mechanisms. See Annex 2 for further details.
Component II: Support to selected value chains (US$20.5 million)
82. The Project will support the following sub components:
Sub-component 2.1: Support to the extractive industries value chain (US$11.90
million)6
83. This subcomponent aims to (i) improve the policy and regulatory framework to support
diversification of mineral production; (ii) strengthen the institutional capacity for efficient
management of the extractive industries and (iii) integrate EI project into local and regional
development and increase the industry‘s local supply base, spurring the growth of other
services and industries and creating more employment in those sectors. To this end, the project
will finance the following activities:
84. Providing TA and capacity building to the Government to help improve the policy and
regulatory framework to support diversification of mineral production by (i) updating mining
and petroleum laws and regulations; (ii) optimizing the fiscal regime for mining and petroleum
development; (iii) preparing specific environmental, health and safety regulations for mining
and petroleum operations (iv) designing an environmental management framework for mining
and petroleum development; and (v) reforming the policy and regulatory framework for
artisanal and small-scale mining.
6 An additional US$3 million is provided for the matching grant to support local content development initiatives
of extractive industries.
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85. Strengthening the Government institutional capacity for efficient management of the
mining sector by (i) building institutional capacity for policy management of the sector; (ii)
provide capacity building to Government for contracts negotiations, including financial and
economic modeling, review of technical and feasibility reports, updating model agreements for
specific commodities, and developing negotiations strategies; sector monitoring (including
inspections, technical, environmental and financial audits, petroleum and oil accounting and
finance, forensic accounting, market trend monitoring); (iii) revamping Government technical
capacity for inspection, audits, monitoring, and modeling (iv) improving mineral cadastre
management; (v) rehabilitating sample preparation and analysis labs at CRGM; (vi) upgrading
the GIS; (vii) organizing and formalizing artisanal and small-scale mining; and (viii)
promoting investment in new mineral targets.
86. Preparing the country for the challenges of oil and gas development by supporting: (i)
a multi-stakeholder consultative process to formulate a strategy for sustainable development of
the oil and gas sector, including the appropriate role of the State, mineral wealth management,
and social and environmental safeguards; (ii) institutional capacity needs assessment for the
efficient management of the nascent hydrocarbon sector; (iii) capacity building on oil sector
policies and negotiations; (iv) professional training of core staff for the regulation and
monitoring functions of the Ministry of Energy and Hydrocarbons; (v) an expert advisor for
two years to provide hands-on training to the Ministry of Energy and Hydrocarbons on core
functions relating to oil block licensing and exploration, drilling and seismic permits,
reviewing and approving annual work programs and budgets, enforcing lease rentals and
relinquishments, monitoring drilling operations, and environmental compliance; (vi) purchases
of software licenses and hardware for the storage and assessment of geologic and geophysics
and data; (vii) rehabilitation of the petroleum data center.
87. Integrating EI project into local and regional development by (i) developing a supplier
database (through a local content development report pre-financed under the project) and
identifying high-potential local supply opportunities; (ii) developing value chains around EI
projects by assessing the sources of broad-based growth around planned EI projects and the
potential synergies and complementarities between EI activities and non-EI sectors; (iii)
matching local industries with EI industries and building strategic partnerships between
selected small businesses and extractive industries to implement local content initiatives. n
local procurement (iv) designing and implementing the capacity building, financial support,
advisory and business incubation needed to prepare local SMEs to take advantage of local
procurement and business partnership opportunities.
Sub-component 2.2: Support to the meat and butchery value chain (US$8.60
million)
88. The project will work to strengthen the domestic market meat market and butchery
industry. To this end, the project will finance (i) investment in the Niamey and Maradi
abattoirs for the specific purpose of increasing their production capacity and efficiency; (ii) the
provision of a cold chain system including a refrigerated warehouse and transportation
equipment; (iii) the installation of waste water treatment systems (for the separation of animal
waste at slaughterhouses and meat processing plants which reduces the amount of materials
20
and other pollutants released into the watercourses); and (iv) capacity building for industry
associations to enable them to better represent, and provide needed services to, their members.
89. In order to enhance the Niger meat ―brand‖ by building on the perceived excellence of
meat from Niger, the project will provide equipment and technical assistance to enable the
Niamey and Maradi abattoirs to attain certification of regionally accepted quality and hygiene
standards. This will include training of abattoir management and staff to improve hygiene and
sanitation practices, as well as in improved management and worker skills, and assistance to
the Ministry of Livestock for developing related regulation and enforcement capacity.
90. The project will also finance technical assistance to help the Ministry of Livestock
explore ways to improve the management of the slaughterhouses, including through a lease
contract or ultimately spin off the commercial functions (such as the transport of meat to
retailers) to private sector and to the GIEs being supported through the project.
Component III: Policy Reforms, Infrastructure and Services to harness the Relationship
between Niger and Nigeria through the Kano, Katsina, Maradi (K2M) corridor (US$9.1
million)
91. The objective of this component is to help foster trade and regional integration with
Nigeria and to attract private investment in the Kano, Katsina and Maradi (K2M) corridor. The
project will help develop the K2M corridor by financing required institutional reforms;
infrastructure and services in the corridor in Maradi close to the Nigeria border.
92. The project will provide support for the following activities: (i) support the Niger-
Nigeria Joint Commission for cooperation to implement the action plan approved by the Joint
Commission ministers in January and September 2011 to develop the K2M) corridor including
the implementation of bilateral free trade agreements, support to the thematic subgroups of the
joint commission for the facilitation of policy dialogue and the organization of exchange for
products and programs supported by the project etc.; (ii) finance a study for the development
of a master plan and engineering designs for updating the existing trade corridor in Maradi (30
km for Nigeria border) and identifying the exact location of the required access roads and
infrastructure that will financed by the project; (iii) in connection with the plan, provide TA to
the local community in Maradi to better take advantage of the corridor, participate in the
design of the plan and the development of the corridor; (iv) finance the rehabilitation of access
roads; and (v) provide equipment for upgrading border markets in the corridor.
Component IV: Project Management (US$4.4 million)
93. This component will provide support for project implementation. The project will be
managed on day-to-day basis through a Project Implementing Unit (PIU) within the Ministry
of Planning (see details in the institutional arrangements section) and APEIN (supported under
the enterprise development and investment promotion sub component). A steering committee
will provide oversight to the project implementation. Financing to be provided for the PIU may
include: equipment, consultant compensation, operating costs, organizational and systems
development, training, capacity building and technical assistance.
B. Project Financing
94. The lending instrument is a Specific Investment Loan (SIL). An International
Development Association (IDA) Credit of SDR 32.30 million (US$50 million equivalent) is
21
proposed. The Government‘s and beneficiaries‘ contribution is US$15.34 million equivalent
(of which US$9.31 million is the matching grants beneficiary counterpart funding, US$4
million is the Government‘s contribution to APEIN operating costs, US$1.96 million is the
Government‘s contribution to safeguard related expenses including compensation and required
social infrastructure and US$0.08 million is the Government compensation to the focal points).
Table 3 – Project cost and financing
IDA Borrower Beneficiaries Local Foreign Total
Component I. Investment Climate, Investment Promotion and SME Support for identified value chains
Component 1.1. Support to Public Private Dialogue 2.50 0.00 0.00 2.25 0.25 2.50
Component 1.2. Export Promotion 2.50 0.00 0.31 2.25 0.25 2.81
Component 1.3. Enterprise Development and
Investment Promotion 11.00 4.00 9.00 9.90 1.10 24.00
Total Component I. 16.00 4.00 9.31 14.40 1.60 29.31
Component II. Support to selected value chains
Component 2.1. Extractive Industries value chain 11.90 0.00 0.00 10.71 1.19 11.90
Component 2.2. Meat and butchery industry 8.60 0.96 0.00 7.74 0.86 9.56
Total Component II 20.50 0.96 0.00 18.45 2.05 21.46
Component III. Policy Reforms, Infrastructure and Services to harness the relationship between Niger and Nigeria
through the Kano, Katsina, Maradi (K2M) corridor
Component 3.1. Support to develop the K2M corridor 1.10 0.00 0.00 0.99 0.11 1.10
Component 3.2. Rehabilitation of secondary access
roads and border markets along the corridor 8.00 1.00 0.00 7.20 0.80 9.00
Total Component III 9.10 1.00 0.00 8.19 0.91 10.10
Component IV. Project Implementation
Component 4.1. Project Coordination 3.20 0.08 0.00 2.88 0.32 3.28
Component 4.2. Refinancing of PPA 1.20 0.00 0.00 1.08 0.12 1.20
Total Component IV 4.40 0.08 0.00 3.96 0.44 4.48
TOTAL 50.00 6.03 9.31 45.00 5.00 65.34
Does not include US$3.0 million included in component 1 for EI matching grants
C. Lessons Learned
95. Public (IDA) funding leveraged by private sector investments. With private investments
representing only around 10 percent of official development aid, the Niger economy seems to
be over dependent on public funding. While proposing an additional public investment, this
project is designed to leverage private sector investments and to create a context for public
private partnerships. Investments in infrastructure and business environment should allow the
development of larger private sector operations in the supported value chains. Technical
assistance to SMEs will help trigger investment.
96. Reform momentum. Broad-ranging improvements in the investment climate and in
infrastructure provisions through regulatory and institutional reforms and sector investment are
typically done with national coverage. However, experience shows that such a strategy does
not bring results in the short term, and, more important, does not necessarily allow the
emergence of a better business environment to foster private sector investment. Given the
importance of a reliable business environment for the success of this Project, a combination of
22
targeted investments and regulatory reforms will be financed by the Project. These focus on
investment and policy reforms toward supporting the two selected value chains. The Project
will focus on quick wins in order to generate sustained support for the broader reform program.
97. Selectivity and sequencing. There are clear reform lessons emerging from several
developing countries concerning the prioritization of investment climate improvements. The
2008 CEM (Accelerating Growth and Achieving the MDGs) highlighted the ―binding
constraints‖ to growth in Niger. It looked at systematically identifying key growth drivers,
income-enhancing diversification, critical constraints, and the cost-benefit factors that could
help to determine the best sequencing of reform actions. The 2012 DPO series identified
binding constraints to private sector development. The project will focus on selected ones, with
other bank operations help the Government with additional reforms.
98. Matching grants. The design of the Project‘s proposed matching grants scheme also
draws lessons from past experiences on World Bank support to SMEs and the March 2011
Independent Evaluation Group (IEG) assessment of World Bank intervention on growth and
productivity in agriculture and agribusiness. Since the first such support to SMEs was
developed in 1993 with successful results, more than a dozen matching grants funds or similar
approaches have been funded by the World Bank in sub-Saharan countries. The matching
grants mechanism integrates the following: (i) building capacity building to ensure that that the
implementation agency is capable; (ii) incorporating good governance practices in the
procedures manual; (iii) maintaining a demand-driven approach, while at the same time
stimulating demand through targeted hand-holding; (iv) from the outset, building strong
monitoring and evaluation (M&E) systems that measure outcomes; (v) keeping the scheme
simple; and for the extractive industries, tying the grant to corporate initiatives on local
content.
D. Alternatives considered
99. Choosing an instrument. The lending instrument is a Specific Investment Loan (SIL).
A SIL is preferred (instead of the Technical Assistance Loan) as it is a flexible instrument that
can finance the diverse activities which are needed to support the private sector, such as
technical assistance, equipment and minor civil works, and provision of non financial services
to SMEs. This SIL complements the recent budget support operation, the Growth Policy
Reform Credit (GPRC1) and the GPRC2 (FY120) under preparation.
100. The GPRC series support the investment climate and financial sector reform program
of the Government and include triggers on taxation reform, DB reforms. The SIL brings the
technical assistance to the Government needed to implement its reform program, while
supporting private sector-led growth through support to the two selected value chains and
enterprises development.
101. Coordinating with other projects. Although the PRODEX, which supports five value
chains in Niger, is tackling similar issues with a value chain approach, it was considered
appropriate to separate the proposed Project from the PRODEX given that the Project also
focuses on non agriculture issues. In particular, the option to finance the slaughterhouses as an
additional financing in PRODEX was considered and not retained. The project is
complementary to PRODEX in supporting downstream activities (enterprise development in
the meat and butchery industry) while PRODEX support upstream activities (provision of
support to improve animal production and health). However, the task team worked closely with
23
the PRODEX team during the preparation, particularly on the value meat/butchery industry and
the proposed project builds on PRODEX support to livestock production.
102. Choosing the number of value chains. The Government identified a list of value chains
including handicraft, tourism, Arabic gum, construction and real estate, onion etc. as other
sources of growth to be supported by the project. It was determined that incorporation of more
than two value chains in Niger would be too taxing in terms of management oversight and
might spread the project resources too thinly. In addition, the two selected value chains,
although very distinct in nature, are linked in the project through components 1 and 3 that are
shared by them (e.g. matching grants and support to K2M corridor are examples of project sub-
components that would benefit both value chains). The Government intends to use the project
resource to help design a broader private sector development strategy and growth agenda.
IV. Implementation
A. Project Institutional and Implementation Arrangements
103. Implementation arrangements feature several players whose roles will be further
detailed in the Project Implementation Manual, the finalization and approval of which will be a
condition of effectiveness. These arrangements take into consideration capacity limitations in
Government and build on similar successful projects in Niger. The Government authorities
have proposed, and the World Bank has agreed, that the Ministry of Planning should take the
lead in the oversight of the project. Project implementation arrangements include the following
structures:
104. Executing Agency. The implementation arrangements were selected based on the need
to ensure effective execution of the core project management functions balanced with ensuring
ownership by and capacity building for the beneficiaries of the various project components. By
having implementation responsibility in the hands of designated persons in the beneficiary
agencies, it is expected that this will result in more ownership of the project at the local level
and sustainable results at the end of the project. These arrangements take into consideration
capacity limitations in Government and build on similar successful projects in Niger. The
Ministry of Planning has been designated as executing agency by the Government responsible
for the overall project implementation and will be supported by a steering committee, a Project
Implementation Unit and designated focal points in each of beneficiary ministries and
institutions. Project implementation arrangements include the following structures (See Figure
in Annex 3).
105. Project Steering Committee. The project will be overseen by a Steering Committee
(PSC) chaired by the Minister of Planning and comprising of high level representatives of the
various institutions and will have a strategic function role. Membership of the PSC will include
one representative of all the project beneficiary institutions, namely the Ministry of Commerce,
the Ministry of Industry and Mining, the Ministry of Energy and Hydrocarbons, the Ministry of
Livestock, the Ministry of Foreign Affairs, the Ministry of Finance, the Niger Nigeria Joint
Commission, the Chamber of Commerce, the Niamey Slaughterhouse and the butchers
associations. It will also include members from private sector and NGOs. The PSC will meet
on a quarterly basis and its responsibilities include providing strategic guidance and oversight
for the project, and proactively address any major problems affecting project implementation.
The PIU within the Ministry of Planning will act as the Secretariat of the Project Steering
24
Committee (including preparing the meetings, elaborating the documents for the meeting,
recording the minutes of the meeting, etc.)
106. A PIU within the ministry of Planning will be responsible for project coordination and
implementation. The PIU staff competitively recruited and dedicated will be responsible for all
procurement, disbursement, accounting, financial reporting and monitoring and evaluation of
the project, and for ensuring the auditing of project accounts. The PIU would be composed of
the following staff: (i) a Coordinator; (ii) a procurement specialist; (iii) a financial management
specialist; (iv) an accountant; (v) a monitoring and evaluation specialist; (vi) a meat and
butchery specialist; (vii) a mining specialist; and (viii) an Environmental and Social safeguard
Specialist. The PIU will prepare quarterly and annual reports recording the progress of the
project. Project supervision will be carried out twice a year and a mid-term review will take
place in 2015 with the objective of assessing progress to date and if necessary to re-direct the
project by integrating additional lessons learned and realities on the ground. All project
accounts will be audited annually by independent auditors acceptable to IDA and will be
submitted to IDA no later than six months after the closing of the fiscal year in Niger.
Implementation of project components.
107. Management and implementation of individual project components/project
subcomponents will be mainstreamed to the ministries involved in the project as well as private
sector representative bodies and other stakeholders (through designated focal points who will
work closely with the PIU).
108. The Chamber of Commerce and Industry. The Chamber of Commerce will be
responsible for the export promotion component to support ANIPEX.
109. The Agency of Enterprise and Investment Promotion of Niger (APEIN). The Agency of
Enterprise and Investment Promotion will be responsible for the implementation of the
enterprise development component. The project will support its creation, operational costs and
capacity strengthening through the recruitment of a private company that will assist in
implementing the Matching Grants Component.
110. Focal Points. To ensure coordination between the PIU and beneficiary institutions,
each will designate a focal point. These institutions are the Ministry of Commerce, the
Ministry of Industry and Mining, the Ministry of Energy and Hydrocarbons, the Ministry of
Livestock, the Ministry of Foreign Affairs, the Ministry of Finance, the Niger Nigeria joint
commission and the Niamey and Maradi slaughterhouses.
111. The role and responsibility of the focal point will be clearly detailed in the Manual of
Implementation and their terms of references. They will work in close collaboration with the
PIU, APEIN and the Chamber of Commerce. The project will strengthen the capacity of the
focal point through technical assistance and equipment. Civil servant focal points would be
compensated on the Government counterpart fund as set out in the current government
compensation legal framework.
112. A Project Operational Manual (POM) including a Project Implementation Plan and
Procurement Plan will be finalized by project effectiveness. The POM will include all periodic
reporting, monitoring and evaluation arrangements throughout the life of the project and will
also include independent annual audits.
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113. Agreements. For the purposes of the project, the International Development Association
(IDA) will enter into Project Agreement with APEIN, and the Government will on-grant to
APEIN the financing proceeds allocated to the components under its responsibility, under
subsidiary agreement with it.
114. The role of APEIN as the executing agency for the matching grants sub-component will
be spelled out in the Subsidiary Agreement to be signed between the Government and APEIN.
The signed Subsidiary Agreement acceptable to IDA, will be a condition of disbursement of
the corresponding funds of the credit.
B. Results Monitoring and Evaluation
115. Institutional framework. The M&E system will be based on the agreed Results
Framework (Annex 1) and implementation arrangements. The PIU within the Ministry of
Planning will be responsible for conducting M&E activities. Data collection for the agreed
indicators and component under their responsibility will be initiated by APEIN and the
Chamber of Commerce. The beneficiaries‘ associations will participate in data collection at
their point of operation in collaboration with APEIN, the Chamber of Commerce and ANIPEX.
Overall, the Chamber of Commerce, ANIPEX and APEIN (for their respective components)
will be responsible for consolidating and preparing all periodic fiduciary and M&E reporting,
including impact and output indicators as well as the annual audit of their financial statements
(including of the Project). In addition, APEIN will be required to provide to the Government
for forwarding to the Association a quarterly Implementation Progress Status Report.
116. Capacity building for data collection, management and reporting. The capacity of the
implementing agencies will be enhanced through the provision of information management
systems and online services delivery through a one-stop shop for the investment climate
component. For the mining component, the project will strengthen the Government
institutional capacity to efficiently manage the mining sector by upgrading the Geological
Information System (GIS), the mining cadastre system and provision of software and hardware
for the storage and assessment of geologic and geophysics data and rehabilitation of the
petroleum data center. Resources are allocated under Component 4 to finance these activities.
117. The design of the systems will be based on a participatory approach using up-to-date
and user-friendly application technology (a web site) allowing each technical implementing
agency as well the PIU to participate interactively in the production, analysis and exchange of
data and information both generated within the project cycle and the day-to-day operation of
the executing agencies. This will foster a greater ownership and accountability for the project
implementation results and outcomes.
118. The system will improve data harmonization and minimize duplication as well as
strengthen particularly the capacity of implementing agencies to respond to the Government‘s
need for information and data to improve management of these agencies, compare its business
environment with international standards and attract potential investors.
119. The capacity of the implementing agencies will be strengthened with technology
equipment, training on data collection, content management, information updates and basic
system troubleshooting and maintenance. The M&E specialist within the PIU will provide
technical support to implementing agencies designated focal points as well as coaching and
mentoring on data collection, management and reporting.
26
C. Sustainability
120. The sustainability of the project‘s impact will depend on several institutional,
economic, and environmental requirements.
121. Strength of the policy and institutional framework for project implementation. Given
the lack of capacity and track record of the new Government, the project includes an
institutional arrangement that will help build the Government capacity, and ensures
coordination between the various ministries involved in the project. The PIU will be housed
within the Ministry of Planning but will be staffed with dedicated personnel recruited
competitively to ensure adequate project implementation. A broad-based buy-in through
public/private dialogue is also being supported by the project by the setting up of a joint
public-private task force and working groups, and stakeholder consultations.
122. Ownership and beneficiaries’ commitment. The project has been tailored to national
development needs as expressed in the Government development strategy. The Government of
Niger has stressed its commitment to significantly improve the business environment as shown
by the recently developed action plan to improve the investment climate, and the creation of
the National Private Investors Council (CNIP), chaired by the Prime Minister considered by
private sector representatives as an effective tool for fostering public private dialogue and
resolving business constraints. The creation and existence of support and supervisory structures
(Chamber of Commerce, Investment Promotion Center, ANIPEX, CFE etc.) to lead the
implementation of a national private sector promotion policy and the recent improvements in
the area of business creation demonstrated the Government‘s willingness and ability to
undertake the required reforms despite the opposition of specific constituencies and vested
interests. These institutions will be supported by the project for better efficiency, and synergy
will continue operating after the project closure.
123. Financial sustainability of subprojects funded by matching grants. The project will help
improve the capacity of local enterprises in meat processing and working to deliver goods and
services to mining companies through provision of the necessary incentives and TA. Lessons
of experience demonstrate that the combination of technology adoption and advisory services,
market facilitation, capacity building, and capital underpin financially and economically
sustainable subprojects.
124. Capacity of beneficiary associations. The sustainability of the project‘s benefits
depends on the strength of the beneficiary associations especially the eight associations
involved in the meat and butchery industry in Niger, as well as the capacity of their leaders and
members to manage the proposed project investments and future improvements and reforms.
The project‘s matching grants program will provide capacity-building efforts to build technical
expertise and social capital and expand the knowledge frontier. In particular, the project will
help improve the management of the slaughterhouses and collective equipment it will finance.
125. Environmental and social sustainability. Safeguards assessments and frameworks have
been prepared and disclosed. The project will finance the installation of wastewater treatment
(for the separation of animal waste at slaughterhouses and meat processing plants which
reduces the amount of materials and other pollutants released into the watercourses) to improve
the environmental sustainability of the meat value chain. In addition, the Government will also
prepare during project implementation, a Strategic Environmental and Social Assessment
(SESA) to identify and address the project‘s potential positive and negative environmental and
27
social impacts along the entire mining value chain. The SESA will provide strategic guidance
for enhancing environmental sustainability and social equity of the sector as a whole and
specific recommendations to be incorporated into national policies and programs.
V. Key Risks and Mitigation Measures
126. The risks to the Project are Substantial. Preliminary risks and mitigation measures that
have been identified are presented in the attached ―Risk Identification Worksheet‖.
Table 4 - Risk Ratings Summary Table
Stakeholder Risk Substantial
Implementing Agency Risk
- Capacity High
- Governance Substantial
Project Risk
- Design Substantial
- Social and Environmental Moderate
- Program and Donor Moderate
- Delivery Monitoring and Sustainability Substantial
Overall Implementation Risk Substantial
127. The Project‘s complexity coupled with weak implementation capacity mean that the
development, safeguard, financial, and fiduciary risks are substantial. Therefore, the
Association will work closely with the Government and other partners to ensure that the risks
are identified and mitigated appropriately.
A. Institutional capacity
128. A new Government with an emerging policy agenda and lack of track record. The new
Government, which has been in power since April 2011, has in its strategy, priority action
supported by this operation. But as the new Government starts to refine and implement its
policy agenda, the priority of the reforms implemented by this operation could change.
Furthermore, the new Government has yet to develop a track record for consistent policy
implementation. One mitigation measure is that as the Bank has reengaged in Niger, the
country team is engaging proactively with the authorities to support them in the design and
implementation of their emerging reform program and provide necessary facts and policy
analysis.
129. Institutional Capacity. While Niger has made significant improvements in its capacity
to carry out its reform program, there are many weaknesses. These weaknesses can be found
across a wide range of areas: in the building of a more conducive business regulatory
environment, in the quality and efficiency of its public administration, and in the transparency
and accountability across the public sector. As most World Bank financed projects and
programs, this proposed project has a capacity building component (under Component 1 and
component 4) to provide support to key ministries involved in its implementation.
28
130. Given the lack of capacity and track record of the new Government, the project will
include an institutional arrangement to help build the Government capacity and ensures
coordination between the various ministries involved in the project. A dedicated PIU will be
housed within the Ministry of Planning and will be staffed with dedicated personnel recruited
competitively to ensure adequate project implementation. A broad-based public/private
dialogue is also being supported by the project through assistance to the joint public-private
task force and working groups (Conseil National des Investisseurs Privés- CNIP) chaired by
the Prime Minister.
B. Country Risk
131. The major risks are related to exogenous shocks. Niger is prone to drought and more
than 80 percent of its population depends on income from agriculture. Niger is also subject to
strong terms of trade swings in commodities that are important on either the export or the
import side. A deeper and/or longer than anticipated macroeconomic downturn in the current
global context could affect negatively the macroeconomic stability and jeopardize the expected
economic outcomes.
132. Security risk. Also, uncertainty about the future worldwide development of nuclear
energy sources and the sharp decline in uranium prices observed since the catastrophic events
in Japan add further uncertainty to Niger‘s prospects, given the large role the uranium industry
plays in its economy. If activities by AQIM continue, this could also potentially exert a
negative impact on FDI flows to Niger especially in the EI sector.
VI. Appraisal Summary
A. Economic and Financial Analysis
133. This project aims to contribute to the development of two new sources of growth
through industry based investment climate reforms and improved enterprises competiveness.
134. Significant economic benefit is expected to be derived from this Project. Broadly, the
project will create a business environment conducive to private investment, enterprise creation
and growth. It will enhance competitiveness of firms operating in the mining and meat and
butchery value chains. Increased competitively in these two sectors will generate value-added
and create more jobs. The project will contribute to increase Niger export potential in mineral
and meat products. It will improve cross border trading through better road connections and
reduced administrative barriers and procedures. It is expected that project intervention will
ultimately contribute to attract potential investment in the K2M corridor. Ultimately, through
its economy wide demonstration effect, the project is likely to generate benefits for a much
larger number of SMEs, with wider implications for private sector growth job creation and
poverty reduction.
135. The main beneficiaries of the project will be (i) a minimum of 200 firms and
associations with access to non-financial business development services and access to financial
services; (ii) the meat and mining sectors; (iii) the business consulting sector with an
improvement of availability and efficiency of business services; and (iv) the private sector
which will benefit from an improved investment climate. The project will also provide
economic and social welfare to the beneficiaries in the Maradi region and the mining regions
and to the national economy.
29
136. The economic analysis of sub component 1.1. Business Environment, Investment
Promotion and enterprise development presents a special challenge due to the indirect
relationship between the reforms supported under the Project and the stream of benefits that
these reforms are expected to trigger. In light of this, a literature review has been provided on
the positive effects of business environment reform on business creation, SME development
and growth. An attempt has been made to quantify the costs and benefits that are expected to
accrue from sub components 1.2, 1.3, 2.1 and 2.2. The Net Present Value (NPV) and the
Economic Rate of Return (ERR) for the investments in these components have been calculated
(see detail in annex 7). The total investment under components 1.2, 1.3, 2.1 and 2.2 are
estimated to result in NPV of US$49,981,469 and an ERR of 28 percent. The results are
summarized in table below.
Project ERR 28%
Project NPV (12% Discount Rate) $49,981,469
Project NPV (5% Discount Rate) $79,963,378
B. Technical
137. Choice of Competitive Industries. The process of identifying the value chains and the
design of the component was supported by the World Bank Group‘s Competitive Industries
Practice. Niger has few ―competitive industries‖, i.e. value chains or sectors which have strong
potential and for which the country has a proven comparative advantage and track record.
During project preparation, an exhaustive long-list of such value chains was identified in
discussions with the Government and private sector. These value chains included: mining and
services providers to major mining companies, onion, meats and the butchery industry, sesame,
cowpeas, souchet, Arabic gum, handicraft, construction and real estate industry and small
and/or large scale irrigation for fruit and vegetable related to the Kandadji barrage.
138. It was decided that the project will identify and support two value chains that offer high
potential for growth and employment. The project will aim to increase the incentive to invest in
these identified value chains by improving their competitiveness and make required needed
public investment.
139. Based on analytical studies available, and the discussions held during project
preparation, two value chains (i.e. extractive industries and service providers to major
extractive industry companies; and the meat and butchery value chain) have emerged as
Government priorities based on the following two criteria. These value chains (i) have high
potential to offer strong upside in terms of growth, employment and spillovers effects (cost
recovery and economic linkages); and (ii) they offer opportunities for successful reform aimed
at bridging the competitiveness gap and addressing market failures, including high ratio of
capital to labor, little integration with the rest of the economy, revenue volatility. The project
will support the enhancement of private investment in these two value chains by helping (i)
improve the organizations of the identified value chains; (ii) support the establishment of
quality standards for key products; (iii) support enterprise development in these value chains;
and (iv) finance needed public investment to attract private investment.
140. Improving the business environment. This component was designed in coordination
with the Investment Climate Department and the Niger private sector. Following a review of
30
existing diagnostics,7 discussions with Government counterparts and private sector
representatives, four areas were selected: starting a business; protecting investors; paying
taxes; and trading across borders. The main reasons behind this selection include (i) being a
key priority for the private sector; (ii) relevant to the two value chains supported under the
project and (iii) existing opportunities for further reforms. In addition, reducing discretion and
increasing transparency in the areas of business creation, paying taxes and import/export can
contribute to reduce opportunities for corruption. According to the Investment Climate Policy
Note (2009), paying taxes, importing, and obtaining business licenses are among the areas
where entrepreneurs have the highest probability of being asked for a bribe.8
141. The recent creation of the CNIP offers a good platform for dialog between Government
and private sector to improve the investment climate. The support to the creation of a one-stop
shop for enterprises creation provides incentives for further simplification of the business
registration procedures and is based on successful examples in similar countries.
142. Simplifying tax administration and making it more efficient through computerization
are two interlinked activities. Administrative simplification generally benefits taxpayers, as it
reduces compliance costs, but it also constitutes a necessary pre-requisite to computerization,
to avoid the crystallization of inefficient processes.
143. Trade facilitation, improvement of transparency and efficiency for import/export
transactions emerged as a key priority given the importance that trade has for the economy of
landlocked Niger. Due to the small size of its economy and the potential is has with Nigeria as
a trade partner, integrating regionally and globally through trade is a priority for Niger. The
cumbersome and costly process to import and export may be limiting trade. The time—64 days
for import and 59 days for export—is well above other countries in the region such as Burkina,
or Mali.
144. Support to improve entrepreneurial capacities. The entrepreneurial capacities of
existing companies in the two value chains are low. In the EI sector, Niger local private sector
cannot benefit from the 10 percent minimum local procurement that large mining companies
have to contract with them. In the meat value chain, Niger has many small private butcheries.
However, many of the entities are in the informal sector and have limited managerial
capacities. Among the informal entrepreneurs in the industry, the key areas of capacities gap
are: (i) record keeping; (ii) calculation of costs; (iii) fixing prices; (iv) marketing; (v) business
planning; and (vi) approaching a financial institution. These weaknesses are clearly reflected in
a very low productivity among companies and prevent them from participating in local
procurement from large EI companies. Accordingly, this component has been designed to
provide the most beneficial package of interventions to improve the performance SMEs in the
supported value chain.
C. Financial Management
145. Capacity assessment. As indicated above, a PIU will be established within the Ministry
of Planning specifically for the purpose of managing the Niger Competitiveness and Growth
7 Diagnostic Trade Integrated Study for the Enhanced Integrated Framework (2007), Country Economic
Memorandum (2008), Doing Business 2012 8 World Bank. 2009. Investment Climate Policy Note. Washington, D.C.
31
Support Project. APEIN will be responsible for the implementation of Component 1.3 of the
project. As these institutions do not exist yet, their capacity cannot be assessed.
146. In order to anticipate possible capacity constraints, the following measures will be
adopted: (i) a detailed responsibilities of the PIU and APEIN will be described in the project
Manual of Procedures. All key staff will be recruited according to the Guidelines for the
Selection and Employment of Consultants by World Bank Borrowers, published by the Bank
in January 2011; (ii) a Project Implementation Manual will be developed before effectiveness
of the Project. It will clearly describe the project implementation aspects throughout the project
implementation cycle. The manual will also clearly detail the role of each actor/stakeholder
involved in the project; and (iii) an administrative, financial and accounting procedures manual
will be developed and will clearly describe the procedures to be used to successfully manage
the project.
147. Overall assessment: Overall, the residual financial management risk of the project is
rated as High. The PIU and APEIN yet to be set up will oversee financial management of the
Project. The arrangements will be set up to ensure that minimum fiduciary requirements under
OP/BP10.00 are in place for the proposed project. A financial management specialist will be
recruited competitively and based in the PIU. S/he will be supported by an accountant. The
project will recruit and finance a second FM specialist under component 1.3 implemented by
APEIN. Other FM staff at each ministry and agency involved will be designated for the
implementation of the project‘s activity. All operational procedures will be documented in the
administrative, financial and accounting manuals and the project implementation manual.
32
148. The chart below describes the flow of funds arrangement from the Designated
Accounts.
IDA CREDIT
PIU Designated Account A in Commercial Bank
Payment of Contractors and Service Providers
APEIN Designated Account B in Commercial Bank
Application for withdrawal SOEs
IDA transfer to DAs
PIU payment to Providers
Providers Request for Payment
Legends:
33
D. Procurement
149. Procurement activities will be managed by the Project Coordinator who will be
competitively recruited and housed within the Ministry of Planning. He will have overall
responsibility in carrying the following activities: (i) managing the overall procurement
activities, and ensuring compliance with the procurement process described in the relevant
manuals; (ii) preparing and updating procurement plan annually; (iii) preparing bidding
documents, draft RFPs, evaluation reports, and contracts in compliance with WB procedures;
and (iv) seeking and obtaining approval of national entities and of IDA on procurement
documents as required.
150. Procurement of goods and consultants‘ services will be carried out in accordance with
the ‗Guidelines On Preventing and Combating Fraud and Corruption in Projects Financed by
IBRD Loans and IDA Credits and Grants‘ dated October 15, 2006 and updated January 2011,
and the ‗Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD
Loans and IDA Credits‘ published by the Bank in January 2011 and the ‗Guidelines: Selection
and Employment of Consultants by World Bank Borrowers,‘ dated January 2011, the
Financing Agreement and the Procurement Plan approved by the Bank. Operating Costs
include, inter alia, non civil servant support staff salaries, office space, utilities and office
supplies, bank charges, communications, vehicle operation, maintenance and insurance,
building and equipment maintenance costs, travel costs. These will be procured in accordance
with administrative procedures, acceptable to the Bank and detailed in the relevant manual.
151. Assessment of the agencies’ capacity to implement procurement. The overall Project
Risk for procurement is rated High based on the assessment of the proposed institutional
arrangements and the nature of interaction between the different ministries and agencies that
will be involved in project implementation.
152. The key risk identified is that staff involved in the project that may not have experience
with Bank procedures will be responsible for process control and approval. This could cause
misprocurement and/or rigidity in the interpretation of Bank procedures, leading to slowness in
procurement decisions, reputational risks to the Bank and the project, and delays towards
attaining the PDO.
153. The residual project risk for procurement is Substantial after adoption of the following
mitigation measures: (i) a qualified procurement specialist will be recruited before
effectiveness to ensure compliance with World Bank procurement procedures; S/he will be
based within the PIU at the Ministry of Planning; (ii) the Project will recruit and finance a
second procurement specialist under component 1.3 implemented by APEIN; (iii) a manual of
administrative, financial and accounting procedures will be prepared as a condition of
effectiveness to clarify the role of each team member involved in the procurement process,
specifically with regards to the review and approval system ; (iv) a workshop will be organized
at the beginning of the project to train all key stakeholders involved in procurement on World
Bank procurement procedures and policies; (v) non-application of the notified list of clauses of
the National Procurement Code which are not partially or entirely consistent with the World
Bank‘s procurement guidelines. This list is attached to the Procurement plan; and (vi) an
adequate filing system would be centralized and set up for the project records at the PIU. The
project will finance appropriate equipment, and the procurement specialists will be trained to
34
ensure compliance with the Bank procurement filing manual. More details on the fiduciary
arrangements are provided in Annex 3.
E. Social (including safeguards)
154. The project, by the nature of its development objective, brings together a diverse group
of stakeholders and beneficiaries, consisting of investors, SMEs, business owners, livestock
wholesalers, intermediaries, meat and livestock exporters (organized through seven
associations/Groupement d’Intérêt Economique in Niamey and Maradi) with diverse and
sometime conflicting interests. It will also bring together large mining companies, local
(mostly SMEs) and international suppliers etc. As the project is primarily offering technical
assistance and capacity building, with limited infrastructure rehabilitation, its social impacts
are largely expected to be positive. Under Component 1, the project will help improve the
business environment of the country and develop skills for beneficiaries to enter and exploit
private sector opportunities. Component 2 which will support the development of the value
chains will encourage job creation, especially for the butchery industry as well SMEs providers
of goods and services to main mining conglomerates (AREVA, China‘s CNPC etc.) thus
improving social inclusion in the mining zones.
155. Involuntary resettlement. Although the project will not involve any land acquisition, the
involuntary resettlement safeguard (OP/BP 4.12) is triggered on a precautionary basis, as there
may be temporary relocation and/or restrictions of access to livelihoods during the
rehabilitation of existing structures. The Borrower has prepared a Resettlement Policy
Framework for review and disclosure. It has been cleared by the Bank on March 26, 2012 and
disclosed in country on March 27, 2012 and in the Infoshop on March 28, 2012.
F. Environment (including safeguards)
156. The project is considered to be a Category B as it will primarily finance technical
assistance and capacity building activities, and physical infrastructure rehabilitation and
upgrading.
157. The project aims to stimulate private sector investment, particularly in the meat
industry by helping the Government implement policy reforms and buy proving funding for the
rehabilitation and upgrading of physical infrastructure. This includes (i) the upgrading and
rehabilitation of the slaughterhouses in Niamey and Maradi to improve their production
capacity and quality; (ii) the construction and/or rehabilitation of feeder roads in the K2M trade
corridor. The EI sub component will finance only TA activities to help the Government
provide better oversight the mining sector and to local firms to improve their capacity to
become service providers (catering, transport, internet etc) to main mining companies. The
Government has prepared the following documents:
158. Environmental Assessment (OP 4.01). Although the project is not expected to engender
significant negative environmental impact, the Environmental Assessment safeguard (OP 4.01)
has been triggered. It will help determine possible negative environment impact of project
activities, particularly of the slaughterhouses. The Government has prepared an Environment
and Social Management Framework (ESMF). It has been cleared by the Bank on March 26,
2012 and disclosed in country on March 27, 2012 and in the Infoshop on March 28, 2012.
159. Environmental Audits. The Government will prepare Environmental Audits to assess
the environmental, social and health impacts/liabilities of the current production and
35
processing systems of the existing slaughterhouses in Niamey and Maradi and an ESMP as it
relates to the rehabilitation activities of the slaughterhouse in Niamey during the first year
project implementation.
160. Environmental and Social Impact assessment of two slaughterhouses. The Government
has prepared an Environmental and Social Impact Assessment (ESIA) of the Niamey
slaughterhouse. It has been cleared by the Bank on March 18, 2012 and disclosed in country on
March 27, 2012 and at the Infoshop on March 28, 2012. The Government has already prepared
under a Bank funded project (the Niger Agro-Pastoral Export and Market Development
Project), an ESIA for three slaughterhouses including in the one in Maradi (which will benefit
from funding by this Project). It has been reviewed and cleared by the Bank on March 26,
2012. It has been disclosed in country on March 27, 2012 and in the Infoshop on March 28,
2012.
161. Strategic Environmental and Social Assessment (SESA). The Government will also
prepare during project implementation, a Strategic Environmental and Social Assessment
(SESA) to identify and address the project‘s potential positive and negative environmental and
social impacts along the entire mining value chain. The SESA will provide strategic guidance
for enhancing environmental sustainability and social equity of the sector as a whole and
specific recommendations to be incorporated into national policies and programs. Terms of
Reference for the SESA have been prepared and cleared by the Bank and disclosed on April
11, 2012.
162. Pest Management Plan (PMP). The project, as it supports the meat industry and
increases meat production and exports of meat may trigger increased upstream production of
livestock and the use of agricultural chemical, such as fertilizers and pesticides (i.e., herbicides
and other chemical products designed to reduce the proliferation of disease vectors). Further,
improvement in livestock production and productivity may imply improved veterinary
treatments for diseases prevention and care of the livestock population. The project will not
undertake any activity to increase the livestock production itself. The activities to support the
upstream production of livestock are being funded by PRODEX. Niger has already prepared a
Pest Management Plan (PMP) which was cleared and disclosed in the Infoshop on January 30,
2009. The PMP is considered acceptable for this project. However, the current project will
provide training to its implementation staff in the area of pest and pesticide management.
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment (OP/BP 4.01) [X] [ ]
Natural Habitats (OP/BP 4.04) [] [ X]
Pest Management (OP 4.09) [X] [ ]
Indigenous Peoples (OP/BP 4.10) [ ] [X]
Physical Cultural Resources (OP/BP 4.11) [] [X ]
Involuntary Resettlement (OP/BP 4.12) [X] [ ]
Forests (OP/BP 4.36) [ ] [X]
Safety of Dams (OP/BP 4.37) [] [X]
Projects on International Waterways (OP/BP 7.50) [] [X ]
Projects in Disputed Areas (OP/BP 7.60) * [ ] [X]
36
Annex 1: Results Framework and Monitoring
Project Development Objective: is to improve selected aspects of Niger's business environment, to support the development of the meat industry and to increase local business participation in
the extractive industry sector.
PDO Level Results
Indicators* Co
re
Unit of
Measure Baseline
Cumulative Target Values**
Frequency Data Source/
Methodology
Responsibility for Data
Collection
Descrip
tion
(indicat
or
definiti
on etc.)
YR 1 YR 2 YR3 YR 4 YR5
YR6
Indicator One: Reduced time
to trade across borders
1.1 Reduced time to clear
imported goods
days 64 64 60 50 45 40
38 Annual
Doing Business
report
Project Coordination
1.2 Reduced time to clear
exported goods
days 59 59 54 44 40 37
35 Annual
Doing Business
report
Project Coordination
Indicator two: Reduction of
time to create a business
days 17 17 12 7 5 4
4 Annual Doing Business
report Project Coordination
Indicator Three:
Improvement of turnover of
SME supported by the
Matching Granta
% 0b 0 0 0 4 7
12 Annual APEIN Project Coordination
Indicator Four: Increased
volume of meat processed and
sold in slaughterhouses.
Tons/day 44 44 44 44 64 64
84 Annual
Slaughterhouses/
Ministry of
livestock
Project Coordination
/Ministry of
Livestock/Slaughterhouses
Indicator Five: Proportion of
local procurement achieved
with Extractives Industriesc
% 0
(2012) 0 2 4 6 10
10 Annual
Survey
Project Coordination
/Ministry of
Mining/Ministry of
Energy and Hydrocarbons
Indicator six: Number of
direct Beneficiaries (of which
20% female)
Number 0 0 25 600 2100 4000
5000 Annual
APEIN/Ministries
/ANIPEX/Joint
Commission
Project Coordination
/APEIN/Ministries/ANIPE
X/Joint Commission
a Based on projected results from matching grant applications
b Survey will be conducted during the first year of the project implementation to provide the baseline data c Proportion of Goods and Services purchased by mining companies from local private enterprises
37
Intermediate Results Indicators: (Component 1 : Investment Climate, Investment Promotion and SME support for identified value chains)
Intermediate Level Results
Indicators* Co
re
Unit of
Measure Baseline YR 1 YR 2 YR3 YR 4 YR5
YR6
Frequency Data Source/
Methodology
Responsibility for Data
Collection
Descrip
tion
(indicat
or
definiti
on etc.)
1.1: Investment in newly
established firms.
US$
million 0 2 20 30 35 40
40
Annual APEIN Project Coordination
/APEIN
1.2 Number of enterprises
registered per year
of which 20% are led by
women
Number 0 500 1500 3000 3000 4000
4400 Annual APEIN
Project Coordination
/APEIN
1.3 Number of firms in the
meat and mining value chains
supported through the
matching grant of which 20%
are led by women
Number 0
(2012) 0 50 200 300 500
600 Annual APEIN
Project Coordination
/APEIN
Intermediate Results Indicators: (Component 2: Support to Selected value chains)
2.1 Proportion of known
artisanal mining sites
registered and organized into
formal groups
percent
0
(2012) 5 15 30 50 70
75 Annual
Reports from
Ministry of Mining
Tax
Administration
Ministry of Mining/
Project Coordination
2.2 Increase in mining exports
other than uraniumd tons
M0
(2012) M1 M2 M3 M4 M5
M6 Annual
Ministry of
Mining/Ministry of
Energy and
Hydrocarbons/INS
Ministry of
Mining/Ministry of
Energy and Hydrocarbons/
Project Coordination
2.3 Percent of Waste water
recycled percent 0 0 0 0 0 100
100 Annual
Slaughterhouses/
Ministry of
Environment/Mini
stry of Livestock
Ministry of
Livestock/Slaughterhouses
/ Project Coordination
2.4 Percent of production in
Niamey and Maradi
slaughterhouses in conformity
with regional standards.
percent 0 0 0 0 100 100
100
Annual
Ministry of
livestock/Slaughter
houses
Ministry of
livestock/Slaughterhouses/
Project Coordination
Intermediate Results Indicators: (Component 3: Reforms, Infrastructures and Services to harness trade between Niger and Nigeria through the (K2M) corridor)
3.1 Kilometers of access roads
connecting production areas
to potential markets
Km 0 0 0 20 50 70
80
Ministry of
infrastructures/
Joint Commission
Joint Commission /
Ministry of
infrastructures /Project
d Survey to be conducted during the first year of Implementation will provide the baseline data
38
constructed Coordination
3.2 Number of new
investments in the K2M
corridor
Number 0
(2012) 0 5 10 15 20
25 Annual
APEIN/
Chamber of
Commerce/ Joint
Commission
APEIN/ Project
Coordination /Joint
Commission
39
Annex 2: Detailed Project Description
I. Project Development Objectives
PDO
1. The Project Development Objective (PDO) is to improve selected aspects of Niger's
business environment, to support the development of the meat industry and to increase local
business participation in the extractive industry sector.
Project Beneficiaries
2. The project direct beneficiaries are estimated at 5,000 enterprises, of which 20 percent
are led by women.
3. The project will benefit the two following main groups of stakeholders: (i) the various
private sector stakeholders (primarily private enterprises and investors mainly in the two
supported value chains); and (ii) Government and private sector agencies playing a key role in
the interaction between Government and private sector (the Chamber of Commerce, ANIPEX,
APEIN, CNIP, mining department, tax administration).
4. Meat processors, butchers and enterprises procuring goods and services to the main
mining companies. In addition to benefiting from the overall improvement in the business
environment, these entities will directly benefit from the technical assistance provided through
the project, the financing of infrastructure and services to increase the production capacity of the
slaughterhouses of Niamey and Maradi and to improve trade with Nigeria through the Kano,
Kastina, Maradi (K2M) corridor. They will also benefit from the matching grants component
which should help improve the skills of workers.
5. Entrepreneurs, SMEs and investors. Entrepreneurs, SMEs and investors will benefit from
the improvement of the business environment. The increase in transparency and predictability
will benefit SMEs, which normally tend to have limited bargaining power, as well as foreign
investors, by reducing uncertainty and transaction costs. Additionally, SMEs will directly benefit
through the entrepreneurial development program which is expected to increase their
performance and managerial capacity.
6. Workers: A key objective of the project is to create jobs through various channels by
promoting investments and creation of companies through improvements in the business
environment, through supporting the expansion of SMEs supported by the project as a
consequence of the improvement in managerial capacity, and through the development of
existing companies or the setting up of new butcheries or enterprises benefiting from local
procurement from the main mining companies. Additionally, workers in various enterprises will
directly benefit from training through the matching grants program, which is expected to
improve their productivity, which is a fundamental determinant of their salaries.
7. Government and private sector agencies. The project will directly support various
Government entities and private sector agencies with technical assistance and training. The
public/private sector agencies that will specifically benefit from this direct support are the
ANIPEX, APEIN, CNIP and the Mining Directorate. In addition to the direct capacity
development for these specific agencies, the Government will also benefit by the improvement in
40
its capacity to collect taxes through DGI, which in turn is expected to generate higher tax
revenues. Furthermore, improved transparency and efficiency of the key agencies supported by
the project are expected to increase public confidence in the public institutions.
PDO Level Results Indicators
8. The PDO‘s related performance indicators are (i) the reduction of time to trade across
borders; (ii) the reduction of time to create a business; (iii) the improvement of turnover of SME
supported by the Matching Grant; (iv) the increase in volume of meat processed and sold in
slaughterhouses; (v) the proportion of local procurement achieved with Extractives Industries;
and (iv) the number of direct beneficiaries (of which 20% female).
II. Project Description
9. Overall approach: It appears from the various policy and strategy documents mentioned
above that to support private sector-led growth, actions need to be taken in a number of
mutually-supportive areas to create a minimum platform for private sector development. This
platform involves a combination of elements including: (i) providing policy, regulatory, and
institutional support to key government institutions involved in private sector development; (ii)
support for technical and business management skills to improve productivity at the firm level;
(ii) developing linkages with the regional/global economy; (iii) promoting a conducive business
environment, including in particular, financial services; (iv) trade and investment facilitation
regulations and institutions; and (iv) facilitating increased availability of critical infrastructure
and services.
10. However, given the low capacity and while promoting such an integrated approach,
prioritization and sequencing of the reforms are vital for a successful implementation.
11. These priority reforms to be supported by the project would aim to develop conditions
conducive for the private sector to invest in the two selected high potential value chains and
make necessary policy reforms to increase trade with the large neighboring Nigerian market.
Project components
The project would have the following components and activities:
Component I. Investment Climate, Investment Promotion and SME Support for identified
value chains (US$16.0 million)
12. As indicated above, the Investment Climate Assessment highlighted the following areas
of weakness in Niger‘s current investment climate: starting a business, protecting investors,
paying taxes, trading across border, access to finance, cost of energy and transport. With
infrastructure and energy addressed by other operations, this component of the project would
focus on improving the business environment.
13. The objective of this component is to help improve the business climate, promote
investment and exports and develop businesses primarily in the identified value chains supported
by the project (mining and meat) as well as in other priority sectors. Therefore, activities under
this component will support the implementation of reforms which have an impact on the business
environment and thus assist the Government in meeting its objective of promoting
competitiveness and encouraging private investment. The project would finance the following
activities through its three sub components:
41
Sub-component 1.1: Public Private Dialogue Working Groups for Doing Business (DB) and
investment climate reforms (US$2.5 million)
14. This will be done through the provision of technical assistance to the Chamber of
Commerce and the Conseil National des Investisseurs Privés (CNIP) (created by decree 2007-
388/PM dated September 14, 2007 modified by decree 2011-681/PM/MC/PSP dated December
26, 2011) for the formulation and implementation of policies and reforms needed to improve the
business climate. It will focus on financing the efforts of CNIP and the Government for reforms
to improve the ranking of Niger in the following key Doing Business indicators (starting a
business, protecting investors, paying taxes, trading across border) by providing the necessary
support to carry out diagnostic studies for the Council‘s meetings and TA to implement the
reforms.
15. In particular, the project will finance the following: (i) TA to the CNIP and the authorities
to revamp the investment legislation by reforming the Investment Code (in particular, the
provisions on capital transfers, investor-state dispute settlement and guarantees against and
compensations in case of expropriation, reforming the ex ante investment authorization regime,
and the minimum capital requirement for foreign investment etc.); (ii) TA to the authorities to
revise the mining and petroleum codes; (iii) TA to streamline tax and customs regimes to reduce
the frequency of tax payments and create transparency and predictability of the tax system; and
to transpose to national legislation and enforce West African Economic and Monetary Union
(WAEMU) directives, particularly with regard to competition policy and law, tax policy etc.
Sub-component 1.2: Implementation of institutional reforms aimed at promoting exports
(US$2.5 million)
16. This will be done by supporting the Agence Nigérienne de Promotion des Exportations
(Niger Exports Promotion Agency, or ANIPEX) through the Chamber of Commerce. Project
funds will be channeled to ANIPEX through the Chamber of Commerce.
17. Specific activities to be supported by the project will include: (i) technical assistance to
ANIPEX for export promotion; (ii) operational budget support to ANIPEX in its initial years;
(iii) financing of equipment in its initial years; and (iv) support the implementation of ANIPEX
action plan to promote exports.
Sub-component 1.3: Enterprise development and investment promotion in identified value
chains and other priority sectors (US$11.00 million).
18. Based on the feasibility study funded by the Government, an Agence de Promotion des
Entreprises et des Investissements du Niger (Agency for Enterprise and Investment Promotion
(APEIN)) will be created. Its mandate is to provide nonfinancial services and act as a one-stop
shop for businesses to access various services necessary for their establishment, including via a
matching grants scheme. The project will support the establishment of the Agency and the
provision of BDS by the Agency. Assistance under the project includes: (i) institutional support
for the implementation of a business plan that spells out the technical assistance and training
requirements for the Agency; (ii) equipment necessary for the establishment and operation of
APEIN to make it capable to provide requested services to local and foreign companies operating
or wishing to settle in Niger; (iii) finance TA and transaction advisors to assist the Government
and APEIN in developing investment opportunities, in attracting private investors and structuring
PPP transactions; and (iv) support to the development of APEIN‘s business management
42
function of providing non-financial business development services to businesses primarily
involved in the selected value chains through a matching grants scheme.
19. To ensure sustainability of APEIN, project assistance will progressively be replaced by
Government contribution and APEIN‘s own contributions. The Government 2012 budget
includes US$0.4 million for APEIN activities. The contributions by APEIN are expected to be
generated by revenues for services rendered to businesses and membership fees.
Matching Grants Scheme
20. The objectives of the matching grants are (i) to help firms increase labor productivity and
enhance competitiveness; and (ii) support local SME‘s to improve their capacity to become
service providers to large mining companies, to take advantage of local procurement and
business partnership opportunities with large EI. To this end, the matching grants component
comprises a two-window program:
21. Matching grants to SMEs and smallholders and their associations. The matching grants
will finance the following types of activities: (i) Annual Business Plan Competition: Finance an
annual business plan competition to help identify and support new businesses with a high
potential for innovation in identified value chains and other priority sectors; (ii) Operational
assistance to SMEs: Provision of consultancy services to SMEs operating in identified value
chains and other priority sectors to support improvements in productivity, production processes,
processing and / or marketing; (iii) Access to finance (A2F) assistance to SMEs: Provision of
training and business development services to SMEs in identified value chains and other priority
sectors to improve their creditworthiness. Eligible activities could include preparation of quality
business plans, financial statements and applications that meet the criteria of Nigerien
commercial banks and other financial institutions; and (iv) Training to SME training institutions,
trade groups and producer organizations: Development and delivery of training courses to SME
training institutions, registered trade groups and producer organizations through qualified
trainers and training institutions.
22. Matching grants to SMEs for developing local procurement with large companies in the
extractive industries sector. The matching will leverage corporate local content initiatives by
mining and petroleum companies. The grant will provide support by (i) providing training to pre-
qualified suppliers to upgrade their skills and capacity through standardized training modules
(for instance the SME Toolkit developed by IFC and the Business Edge training modules; (ii)
developing the technical and managerial capacity of the local suppliers to enable them to meet
the standards of product quality and performance, warranty, and health, safety and environmental
practices required by mining and petroleum companies; (iii) facilitating links with local suppliers
to existing international suppliers, through twining arrangements, joint ventures, and
participation at international mining trade shows; (iv) supporting supplier certification initiative,
including health, safety and environment; and (v) working with local banks and large EI
companies to develop partnership to help SME suppliers have access to working capital fund
with withdrawals and receivable monitoring mechanism.
23. Project funds will be made available to businesses (through APEIN) via a matching
grants mechanism. The matching grants will finance 50 percent of the cost of subprojects carried
out by SMEs. This ratio has been defined based on international impact evaluations that show
43
that a higher grant contributions are often less successful for the reason of moral hazard. The
maximum matching grant amount to a single firm or consortium would be US$50,000
equivalent. While the matching grant would encourage firms belonging to the meat/butchery and
mining value chains to apply, it would not be limited to these two value chains.
44
Component I. Investment Climate, Investment Promotion and Enterprise Development for identified value chains
By Sub Components 2012 2013 2014 2015 2016 2017 2018 Total IDA Borrower Beneficiaries Local Foreign Total
Component 1.1. Support to Public Private
Dialogue 0.00 0.13 0.30 0.83 0.95 0.20 0.10 2.50 0.00 0.00 2.25 0.25 2.50
TA for Public Private Dialogue Working
Groups for Doing Business reforms through
CNIP and Chamber of Commerce 0.00 0.13 0.30 0.83 0.95 0.20 0.10 2.50 0.00 0.00 2.25 0.25 2.50
Sub Total 1.1. 0.00 0.13 0.30 0.83 0.95 0.20 0.10 2.50 0.00 0.00 2.25 0.25 2.50
Component 1.2. Export Promotion 0.00 0.13 0.30 0.83 0.95 0.20 0.10 2.50 0.00 0.31 2.25 0.25 2.81
Support to Chamber of Commerce/ANIPEX 0.00 0.13 0.30 0.83 0.95 0.20 0.10 2.50 0.00 0.31 2.25 0.25 2.81
Technical assistance 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.00 0.06 0.45 0.05 0.56
Operational budget support in initial years 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.00 0.06 0.45 0.05 0.56
Equipment in initial years 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.00 0.06 0.45 0.05 0.56
Transaction Advisors to Government and
ANIPEX to structure PPP transactions 0.00 0.05 0.12 0.33 0.38 0.08 0.04 1.00 0.00 0.13 0.90 0.10 1.13
Sub Total 1.2. 0.00 0.13 0.30 0.83 0.95 0.20 0.10 2.50 0.00 0.31 2.25 0.25 2.81
Component 1.3. Enterprise Development and
Investment Promotion 0.00 0.55 1.32 3.63 4.18 0.88 0.44 11.00 4.00 9.00 9.90 1.10 24.00
Support to Agency for Promotion of Enterprises
and Investment (APEIN) 0.00 0.10 0.24 0.66 0.76 0.16 0.08 2.00 4.00 0.00 1.80 0.20 6.00
TA for One Stop Shop 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.00 0.00 0.45 0.05 0.50
Operational budget support in initial years 0.00 0.05 0.12 0.33 0.38 0.08 0.04 1.00 4.00 0.00 0.90 0.10 5.00
Equipment in initial years 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.00 0.00 0.45 0.05 0.50
Matching Grant 0.00 0.45 1.08 2.97 3.42 0.72 0.36 9.00 0.00 6.00 8.10 0.90 15.00
Window 1: Sector agnostic
Annual Business Plan Competition 0.00 0.05 0.12 0.33 0.38 0.08 0.04 1.00 0.00 1.00 0.90 0.10 2.00
TA to SMEs (including for strengthening
access to commercial bank loans) 0.00 0.15 0.36 0.99 1.14 0.24 0.12 3.00 0.00 3.00 2.70 0.30 6.00
Training to SME training institutions 0.00 0.05 0.12 0.33 0.38 0.08 0.04 1.00 0.00 1.00 0.90 0.10 2.00
Matching Grant to trade groups and producer
organizations 0.00 0.05 0.12 0.33 0.38 0.08 0.04 1.00 0.00 1.00 0.90 0.10 2.00
Window 2: IE Sector focused
Supporting SMEs for local procurement to EI
projects 0.00 0.15 0.36 0.99 1.14 0.24 0.12 3.00 0.00 3.00 2.70 0.30 6.00
Sub Total 1.3. 0.00 0.55 1.32 3.63 4.18 0.88 0.44 11.00 4.00 9.00 9.90 1.10 24.00
TOTAL 0.00 0.80 1.92 5.28 6.08 1.28 0.64 16.00 4.00 9.31 14.40 1.60 29.31
45
Component II. Support to selected value chains (US$20.5 million)
24. Niger has few ―competitive industries‖, i.e. value chains or sectors which have strong
potential and for which Niger has a proven comparative advantage and a proven track record.
During project preparation, an exhaustive long-list of such value chains was identified in
discussions with the Government and private sector. These value chains included: mining and
enterprises/SMEs and services providers to major mining companies, onion, meats and the
butchery industry, sesame, cowpeas, souchet, Arabic gum, handicraft, construction and real
estate industry and small and/or large scale irrigation for fruit and vegetable related to the
Kandadji barrage.
25. It was decided that the project will identify and support two value chains that would offer
high growth potential. The project will aim to increase the incentive to invest in these identified
value chains by improving their competitiveness. The process of identifying these value chains
was supported by the World Bank Group‘s Competitive Industries Practice.
26. Based on analytical studies available, and the discussions held during project preparation,
two value chains (i.e. extractive industries and service providers to major extractive industry
companies; and the meat and butchery value chain) have emerged as project priorities.
27. Extractive industries (EI) value chain. It includes mining and oil accounts for three
percent of the GDP and 40 percent of exports. As a result of recent FDI, oil and mining exports
are projected to triple between 2012 and 2016 and to accelerate GDP growth from less than four
percent in 2011 to about 14 percent in 2012. Further, based on discussions with the authorities, it
was evident that the EI value chain: (i) has high potential to offer strong upside in terms of
growth, employment and spillovers effects (cost recovery and economic linkages); and (iii)
offers opportunities for successful reform aimed at bridging the competitiveness gap and
addressing market failures (high ratio of capital to labor, little integration with the rest of the
economy, revenue volatility). Acknowledging the criticality of EI for Niger, the project will
focus on strengthening the oversight of oil and mining projects to maximize their contribution to
Niger‘s economy. Given the low labor intensity of EI and the high rate of demographic growth,
the project aims to support the Government‘s efforts to use the extractive sector as an engine for
industrialization and job creation in related or complementary sectors.
28. Meat and butchery value chain. Of all the potential ―competitive industries‖, it was
indicated during discussions with the authorities that the meat and butchery value chain (i) is
directly linked to bottom-of-pyramid; (ii) has high potential to offer strong upside in terms of
growth and spillovers effects (cost recovery and economic linkages); and (iii) offers the
feasibility of successful intervention in terms of ability to bridge the competitiveness gap,
likelihood that policy failures could be addressed and the presence of a private sector able to
address market failures. Accordingly, meat and butchery value chain is a strategic priority for the
Government and private sector.
29. The project will support the development of these two value chains as well as private
investment by helping (i) improve their organization; (ii) enhance the functioning of input
markets; (iii) support the establishment of quality standards for key products; and (iv) finance
needed public investment to attract private investment especially the main trade corridor between
Niger and Nigeria (the main export market for meat in Niger).
46
30. Activities financed under this component will complement and leverage achievements
made under other existing operations including the PRODEX and the PIP. For example, the
project will leverage PRODEX work in export promotion of high value commodities and in
working with producers of good quality livestock as well as producer‘s associations. They will
also complement the matching grants mechanism under component 1 and the support to the K2M
corridor under Component 3.
The project will support the following sub components:
Sub-component 2.1: Support to the extractive industries value chain (US$11.90 million)
31. The ongoing expansion of the oil and mining sectors brightens medium-term prospects.
The mining sector has been the biggest source of FDI in the country. Mining FDI grew from
US$116 million in 2007 to nearly US$700 million in 2009. Between 2010 and 2013, mining FDI
is expected to reach unprecedented levels with the development of the Azelik deposit (about
US$30 million FDI) and the Imouraren mine (about US$1.7 billion FDI, including 10 percent
local procurement). The two mines are expected to bring about US$75 million in fiscal revenues,
and additional revenues from the marketing of the Government‘s share of production (33.35
percent for Imouraren and 25.71 percent for Azelik). Niger officially became an oil producer
this year with the coming on stream of three oil deposits in the Agadem basin and the 20 000 bpd
refinery at Zinder that has entered into production since November 2011. The estimated FDI
inflows associated with the development of the Agadem oil bloc were US$1.3 billion for the oil
field, US$350 million for the pipeline, and about US$1.2 billion for the Zinder refinery. In
addition, the Trans-Saharian Gas Pipeline, of which Niger is expected to share 841 km (out of an
estimated 4,128 km-long pipeline across Nigeria, Niger and Algeria) will bring additional FDI
representing Niger‘s share of the estimated US$13 billion for installing the pipeline and
associated gathering centers.
32. The growth of the extractive industries is constrained by a number of challenges,
including: outdated policy, legal and regulatory framework, inadequate fiscal regime, weak
institutional capacity, unclear role of the State, unregulated artisanal mining, and weak
integration of extractive industries with the rest of the economy.
33. The objective of this subcomponent is to help (i) improve the policy and regulatory
framework to support diversification of mineral production; (ii) strengthen the institutional
capacity for efficient management of the extractive industries and (iii) integrate EI project into
local and regional development.
The project will finance the following activities:
34. Provide TA and capacity building to the Government to help improve the policy and
regulatory framework to support diversification of mineral production by (i) updating mining and
petroleum laws and regulations; (ii) optimizing the fiscal regime for mining and petroleum
development; (iii) preparing specific environmental, health and safety regulations for mining and
petroleum; (iv) designing an environmental management framework for mining and petroleum;
(iv) proposing an optimal revenue management mechanism and drafting the related legal and
regulatory framework, fiduciary arrangements, governance structure and bylaws; and (v)
reforming the policy and regulatory framework for artisanal and small-scale mining.
35. Strengthening the Government institutional capacity for efficient management of the
extractive industries by (i) building institutional capacity for policy management of the EI sector;
47
(ii) providing capacity building to Government for contracts negotiations, including financial and
economic modeling, review of technical and feasibility reports, updating model agreements for
specific commodities, and developing negotiations strategies; sector monitoring (including
inspections, technical, environmental and financial audits, petroleum and oil accounting and
finance, forensic accounting, market trend monitoring); (iii) revamping Government technical
capacity for inspection, audits, monitoring, and modeling; (iv) improving mineral cadastre
management; (v) purchasing of software licenses (including annual support and maintenance
fees) and hardware (laptops, servers, plotters, etc.) to allow the oil regulatory agency or Ministry
of Energy and Hydrocarbons and Mining to store and analyze geological and geophysical data;
(vi) financing an advisor to deliver hands-on training to oil regulatory agency or Ministry of
Energy and Hydrocarbons, establish capacity to perform core functions relating to licensing and
exploration, and advise the government and other officials on policy decisions as needed; (vii)
rehabilitating sample preparation and analysis labs at CRGM; (viii) upgrading the GIS and
petroleum data centers; (viii) organizing and formalizing artisanal and small-scale mining; and
(ix) promoting investment in new mineral targets.
36. Integrating EI project into local and regional development by (i) developing a supplier
database (through a local content development report pre-financed under the project) and
identifying high-potential local supply opportunities; (ii) developing value chains around EI
projects by helping the Government assess the sources of broad-based growth around planned EI
projects and the potential synergies and complementarities between EI activities and non-EI
sectors; (iii) matching local industries with EI industries and building partnerships between small
businesses and large companies in local economic integration and value chain management by
the development of upstream linkages with producers of local goods and services to EI firms,
sideways linkages among related non-EI industries or downstream linkages (further refining for
oil, processing or value-added products for minerals); (iv) designing and implementing the
capacity building, financial support, advisory and business incubation needed to prepare local
SMEs to take advantage of local procurement and business partnership opportunities.
Sub-component 2.2: Support to the meat and butchery value chain (US$8.60 million)
37. Livestock is one of the main foundations of Niger‘s economy, accounting for 15 percent
of Niger‘s GDP. Animal husbandry is practiced by over 87 percent of the workforce. This
includes sheep and goat (20 million animals), cattle (7.4 million animals); dromedaries and
camels (1.5 million), donkeys (1.5 million) and horses (230,000). According to 2008 census
statistics, Maradi has 15 percent of Niger‘s total cattle, 16.5 percent sheep, and 17.7 percent
goats. Breeding in Maradi represents 18 percent of the wealth of the local population. Retail
prices of fresh meat: €3.40 / kg for meat from sheep or goat, € 4.20/ kg for cattle meat and €3.50
/ kg for offal (lungs, heart, liver, intestine and tripe). The heads and feet are usually sold cooked. 13
Export of live cattle and meat represents nearly 12 percent of Niger total exports (90 percent of
which goes to Nigeria and the remaining to Cote d‘Ivoire and Gabon). Besides the export of live
animals mostly to Nigeria, meat production is also growing in Niger. The total production of
meat produced has grown from 54,860 tons (valued at CFAF65,8 billion) in 2002 to 72,400 tons
(valued at CFAF86,8 billion) in 2005 and about 95,000 tons in 2006. There is significant
potential in the formalization of the butchery industry and for development of a formal private
13
Meat prices have increased sharply in Nigeria the main market Niger targets: between, 2003 and 2005, the price of
beef increased by 30. Prices of most types of meat are 2-3 times international levels according to Nigeria, Product
Value Chain Analysis, Consilium International, 2008
48
sector in meat production given the large number of small and informal butchers and the
abundant availability of livestock. Butchers are organized into seven associations/Groupement
d’Intérêt Economique (GIE) in Niamey and Maradi representing individuals and enterprises and
their associations.
38. The Government wants to reduce the flow of live cattle vis-à-vis meat and meat by-
products, so as to increase the value added of livestock. Further, the potential for development of
a formal private sector in meat production and the formalization of butchery industry in Niger is
immense given the abundant availability of livestock, higher meat yield per animal in Niger
compared to other meat producing countries in the region and the large number of small and
informal butcheries. They are into seven associations/Groupement d’Intérêt Economique (GIE)
in Niamey and Maradi representing around 800 people and their associations (livestock
wholesalers, intermediaries/brokers, meat and livestock exporters etc.). The competitive
advantages and opportunities in Niger‘s meat and butchery industry include:
(i) the high quality of Niger meat which is very appreciated by consumers in regional
markets;
(ii) the existence of possibilities of fattening of livestock along the Niger river and the
urban centers;
(iii) the high and growing demand from Nigeria (meat consumption in Nigeria is growing
at 6-7 percent annually and would grow faster as meat consumption per capita is
lower than neighboring countries and only 61 percent of the local consumption in
covered by local production) ; and
(iv) the existence of centuries old knowhow in butchery that is well recognized in regional
markets as well as a domestic concentration of many small informal private entities.
39. Despite the many competitive advantages, the selected value chains face several
challenges in addition to a poor investment climate. The ability of the butchery sector in Niger to
serve even the domestic market has been constrained due to a lack of capacity of the Niamey
slaughterhouse and an inability to operate at capacity at the Maradi slaughterhouse. This has
resulted from population growth, a lack of spare parts and capital investment, including the lack
of a cold chain, and the need for upgrading of skills. This, in turn, has led to operational
inefficiencies and an inability to develop value-added products, further compounded by
weaknesses in industry associations and a dearth of working capital among industry participants.
Challenges include:
40. Poor quality of slaughterhouses infrastructure: Niger has four refrigerated
slaughterhouses located in Niamey, Maradi, Zinder and Tahoua. Consumption data reveals that
there is a need for both an expanded slaughterhouse in Niamey as well as another in Maradi. All
slaughterhouses and sacrifice areas are characterized by lack of basic hygiene and poor
organization. Moreover, lack of maintenance of infrastructure and equipment has caused a
progressive deterioration of the slaughterhouses, resulting in previously automated work now
being replaced by manual labor. The breeding and its associated industrial activity has great
potential for development of the economy of Niger, a leading meat producer in the area.
41. Thousands of cattle, goat and sheep are transported from the Niger mostly to Nigeria live
each month, or sold though border markets. The practice is costly in terms of loss of weight and
condition for animals and transport. It has long been recognized that slaughtering animals in the
49
Niger and transporting meat would be more efficient. Further, slaughtering practices, whether
traditional open air or in state owned slaughterhouses, are inefficient and represent a potential
health hazard.
42. In this context, the rehabilitation of slaughterhouses is a priority for the Government and
stands as an important activity within the Poverty Reduction Strategy. Currently, the
slaughterhouses of Niamey and Maradi are in a borderline situation, generated by three
fundamental problems: (i) badly deteriorated facilities, infrastructure and equipment; (ii) poor
operational management and hygienic practices; and (iii) capacity deficiencies of officials and
workers.
43. Meat production in the slaughterhouse in Maradi is below the productive capacity of
seven tons per day for which it was designed. During 2010, the estimated population of Maradi
was 530,000, and volume of meat produced in the slaughterhouse was 4.0 tons per day, with
approximately an equal amount coming from informal slaughtering of animals in the towns and
villages. By 2020, the estimated population of Maradi will be 590,000, necessitating an increase
in current productive capacity. In Niamey, the above factors combined with high demand have
caused production to overflow into the surrounding outside areas, approximately doubling
production compared to the initial intended capacity of the slaughterhouse of 20 kg per when it
was built. The population of Niamey in 2010 was 1.30 million which is projected to increase to
1.35 million by 202014
. The slaughterhouse was originally designed for a population of 400,000,
implying that current total production would need to grow more than threefold just to cope with
local population and demand.
44. Low capacity of private sector involved in the meat industry: As indicated above, Niger
has many centuries old knowhow in butchery as well as a domestic concentration of many small
private butcheries. However, many of the entities are in the informal sector and have limited
managerial capacities. Among the informal entrepreneurs in the industry, most do not maintain
any sort of books or written accounts. These are clear indicators of weak entrepreneurial
capacities and have as consequence very low level of productivity. Based on analytical data, the
key areas of capacities gap in SMEs are: (i) record keeping; (ii) calculation of costs; (iii) fixing
prices; (iv) managing stocks; (v) marketing; (vi) business planning and approaching a financial
institution.
45. Bottlenecks to export: Existing expertise and activities has not translated into export sales
of value add products (e.g. meat rather live animal; prime cuts of meat rather than basic raw
meat) due to: (i) low quality and lack to accreditation services to enable the industry to
implement food safety systems such as hazard analysis and critical control points (HACCP)
which are needed to meet international food safety standards (ISO 22000); (ii) unofficial barriers
to export meat to Nigeria despite the ECOWAS agreement and the existence of bilateral treaty
between the two countries through their Joint Commission.
46. The project will work to strengthen the domestic market meat market and butchery
industry. To this end, the project will finance (i) investment in the Niamey and Maradi abattoirs
for the specific purpose of increasing their production capacity and efficiency; (ii) the provision
of a cold chain system including a refrigerated warehouse and transportation equipment; (iii) the
installation of waste water treatment systems (for the separation of animal waste at
14
Source: Government projections.
50
slaughterhouses and meat processing plants which reduces the amount of materials and other
pollutants released into the watercourses); and (iv) capacity building for industry associations to
enable them to better represent, and provide needed services to, their members. In order to
enhance the Niger meat ―brand‖ by building on the perceived excellence of meat from Niger, the
project will provide equipment and technical assistance to enable the Niamey and Maradi
abattoirs to attain certification of regionally accepted quality and hygiene standards. This will
include training of abattoir management and staff to improve hygiene and sanitation practices, as
well as in improved management and worker skills, and assistance to the Ministry of Livestock
for developing related regulation and enforcement capacity.
47. The project will also finance TA to help the Ministry of Livestock explore ways to
improve the management of the slaughterhouses, including through a lease contract or ultimately
spin off the commercial functions (such as the transport of meat to retailers) to private sector and
the GIE being supported through the project.
48. The project will also provide assistance directly to the major Groupements d’Intérêt
Economiques (GIE) to build its capacity to represent its members and to provide services, and
will establish a steering committee for the component which will include representatives of the
government and the GIE in order to ensure transparency, public/private dialogue and joint
decision making.
51
Component II. Support to selected value chains
By Sub Components 2012 2013 2014 2015 2016 2017 2018 IDA Borrower Beneficiaries/ Local Foreign Total
other Donors
Component 2.1. Extractive Industries value chain 0.00 0.60 1.43 3.93 4.52 0.95 0.48 11.90 0.00 0.00 10.71 1.19 11.90
Improving the policy and regulatory framework for EI diversification 0.00 0.10 0.24 0.66 0.76 0.16 0.08 2.00 0.00 0.00 1.80 0.20 2.00
Strengthening institutional capacity for mineral sector
management 0.00 0.28 0.67 1.85 2.13 0.45 0.22 5.60 0.00 0.00 5.04 0.56 5.60
Preparing for oil development 0.00 0.18 0.42 1.16 1.33 0.28 0.14 3.50 0.00 0.00 3.15 0.35 3.50
Integrating EI projects into local and regional development 0.00 0.04 0.10 0.26 0.30 0.06 0.03 0.80 0.00 0.00 0.72 0.08 0.80
Sub Total 2.1. 0.00 0.60 1.43 3.93 4.52 0.95 0.48 11.90 0.00 0.00 10.71 1.19 11.90
Component 2.2. Meat and butchery industry 0.00 0.43 1.03 2.84 3.27 0.69 0.34 8.60 0.96 0.00 7.74 0.86 9.56
Strengthening domestic market 0.00 0.17 0.40 1.09 1.25 0.26 0.13 3.30 0.37 0.00 2.97 0.33 3.67
Study to identify equipment and civil works needs in
Niamey slaughterhouse 0.00 0.02 0.04 0.10 0.11 0.02 0.01 0.30 0.03 0.00 0.27 0.03 0.33
Equipment for upgrade and cold chain in Niamey slaughterhouse 0.00 0.08 0.18 0.50 0.57 0.12 0.06 1.50 0.17 0.00 1.35 0.15 1.67
Civil work for construction, upgrade and cold chain in
Niamey slaughterhouse 0.00 0.08 0.18 0.50 0.57 0.12 0.06 1.50 0.17 0.00 1.35 0.15 1.67
Strengthening export market 0.00 0.27 0.64 1.75 2.01 0.42 0.21 5.30 0.59 0.00 4.77 0.53 5.89
Study for upgrade of Maradi slaughterhouse 0.00 0.02 0.04 0.10 0.11 0.02 0.01 0.30 0.03 0.00 0.27 0.03 0.33
Equipment for upgrade and cold chain in Maradi
slaughterhouse 0.00 0.08 0.18 0.50 0.57 0.12 0.06 1.50 0.17 0.00 1.35 0.15 1.67
Civil work for construction, upgrade and cold chain in Maradi slaughterhouse 0.00 0.08 0.18 0.50 0.57 0.12 0.06 1.50 0.17 0.00 1.35 0.15 1.67
TA for improvement of slaughterhouse governance and
operations 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.06 0.00 0.45 0.05 0.56
TA for attaining certification of internationally accepted
quality and hygiene standards 0.00 0.05 0.12 0.33 0.38 0.08 0.04 1.00 0.11 0.00 0.90 0.10 1.11
Capacity building for butchery associations 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.06 0.00 0.45 0.05 0.56
Sub Total 2.2. 0.00 0.43 1.03 2.84 3.27 0.69 0.34 8.60 0.96 0.00 7.74 0.86 9.56
TOTAL 0.00 1.03 2.46 6.77 7.79 1.64 0.82 20.50 0.96 0.00 18.45 2.05 21.46
52
Component III. Policy Reforms, Infrastructure and Services to harness the Relationship
between Niger and Nigeria through the Kano, Katsina, Maradi (K2M) corridor (US$9.1
million)
49. The objective of this component is to help foster trade and regional integration with
Nigeria and attract private investment in the K2M corridor.
50. The project will help develop the K2M corridor by financing required institutional
reforms, infrastructure and services in the corridor in Maradi close the Nigeria border to target
firms that will export to the Nigerian market and attract Nigerian industries offering them the
potential of the WAEMU market and better security and services and utilities. The investments
and reform will be designed to primarily serve the supply chains supported by the project.
51. The project would provide support for the following activities:
(i) Support the Niger-Nigeria Joint Commission for cooperation to implement the
action plan approved by the Joint Commission ministers in January and
September 2011 to develop the Kano, Katsina and Maradi (K2M). This includes
(i) implementation of bilateral free trade agreements between the two countries;
and (ii) support to the thematic subgroups of the joint commission for the
facilitation of policy dialogue and the organization of exchange for products and
programs supported by the project;
(ii) Finance a study for the development of a master plan and engineering designs for
updating the existing trade corridor in Maradi (30 km for Nigeria border) and
identifying the exact location of the required access roads that will financed by
the project;
(iii)In connection with the plan, provide TA to the local community in Maradi to
better take advantage of the corridor, participate in the design of the plan and the
development of the corridor;
(iv) Finance the rehabilitation of access roads;
(v) Provide equipment for upgrading the slaughterhouse and cattle markets in the
corridor.
52. Some of the investment could be done with private sector participation though a PPP
arrangement. The sites of the infrastructures (access road) will be defined by the master plan
which will be developed during the first year of project implementation.
53
Component III. Policy Reforms, Infrastructure and Services to harness the Relationship between Niger and Nigeria through the Kano, Katsina, Maradi (K2M) corridor
By Sub Components 2012 2013 2014 2015 2016 2017 2018 IDA Borrower Beneficiaries Local Foreign Total
Component 3.1. Support to develop the K2M
corridor 0.00 0.06 0.13 0.36 0.42 0.09 0.04 1.10 0.00 0.00 0.99 0.11 1.10
Consultancy for a master plan and support to
develop K2M corridor including to the Maradi
local Community 0.00 0.03 0.06 0.17 0.19 0.04 0.02 0.50 0.00 0.00 0.45 0.05 0.50
Support to Joint Commission to remove barriers
to trade with Nigeria (TA, communication etc.) 0.00 0.03 0.07 0.20 0.23 0.05 0.02 0.60 0.00 0.00 0.54 0.06 0.60
Sub Total 3.1. 0.00 0.06 0.13 0.36 0.42 0.09 0.04 1.10 0.00 0.00 0.99 0.11 1.10
Component 3.2. Rehabilitation of secondary
access roads and border markets along the
corridor 0.00 0.40 0.96 2.64 3.04 0.64 0.32 8.00 1.00 0.00 7.20 0.80 9.00
Equipment and materials for upgrading selected
border markets along the corridor 0.00 0.10 0.24 0.66 0.76 0.16 0.08 2.00 0.25 0.00 1.80 0.20 2.25
Civil work for the rehabilitation/construction of
secondary access roads to Nigeria 0.00 0.30 0.72 1.98 2.28 0.48 0.24 6.00 0.75 0.00 5.40 0.60 6.75
Sub Total 3.2. 0.00 0.40 0.96 2.64 3.04 0.64 0.32 8.00 1.00 0.00 7.20 0.80 9.00
TOTAL 0.00 0.46 1.09 3.00 3.46 0.73 0.36 9.10 1.00 0.00 8.19 0.91 10.10
54
Component IV. Project Management (US$4.4million)
53. This component will provide support for project implementation. The project will be
managed on day-to-day basis through a Project Implementing Unit (PIU) within the Ministry of
Planning (see details in the institutional arrangements section). A steering committee will
provide oversight to the project implementation. Components 1.2 and 1.3 will be implemented
by the Chamber of Commerce and APEIN. Financing to be provided for the PIU may include:
equipment; consultant compensation; operating costs; organizational and systems development;
training, capacity building; and technical assistance.
55
Component IV. Project Implementation
By Sub Components 2012 2013 2014 2015 2016 2017 2018 IDA Borrower Beneficiaries Total
Component 4.1. Project Coordination 0.00 0.53 0.53 0.53 0.53 0.53 0.53 3.20 0.08 0.00 3.28
Operational expenses for PIU 0.00 0.10 0.10 0.10 0.10 0.10 0.10 0.60 0.08 0.00 0.68
Equipments (computer, copiers, printers, vehicles) 0.00 0.03 0.03 0.03 0.03 0.03 0.03 0.20 0.00 0.00 0.20
Compensation PIU staff 0.00 0.23 0.23 0.23 0.23 0.23 0.23 1.40 0.00 0.00 1.40
Training/Study Tours 0.00 0.02 0.02 0.02 0.02 0.02 0.02 0.10 0.00 0.00 0.10
Communications campaign (internal and external) 0.00 0.02 0.02 0.02 0.02 0.02 0.02 0.10 0.00 0.00 0.10
Steering Committee Meetings 0.00 0.03 0.03 0.03 0.03 0.03 0.03 0.20 0.00 0.00 0.20
Audit and other studies (including annual surveys for M&E) 0.00 0.03 0.03 0.03 0.03 0.03 0.03 0.20 0.00 0.00 0.20
Midterm review 0.00 0.03 0.03 0.03 0.03 0.03 0.03 0.15 0.00 0.00 0.15
Gov. ICR 0.00 0.02 0.02 0.02 0.02 0.02 0.02 0.10 0.00 0.00 0.10
Communications campaign (internal and external) 0.00 0.03 0.03 0.03 0.03 0.03 0.03 0.15 0.00 0.00 0.15
Sub Total 4.1. 0.00 0.53 0.53 0.53 0.53 0.53 0.53 3.20 0.08 0.00 3.28
Component 4.2. Refinancing of PPA 1.20 0.00 0.00 0.00 0.00 0.00 0.00 1.20 0.00 0.00 1.20
Refinancing of PPA 1.20 0.00 0.00 0.00 0.00 0.00 0.00 1.20 0.00 0.00 1.20
Sub Total 4.2. 1.20 0.00 0.00 0.00 0.00 0.00 0.00 1.20 0.00 0.00 1.20
TOTAL 1.20 0.53 0.53 0.53 0.53 0.53 0.53 4.40 0.08 0.00 4.48
56
Project Financing
54. Financing Instrument. The lending instrument is a Specific Investment Loan (SIL). A
SIL (instead of the Technical Assistance Loan) is proposed as it is a flexible instrument that can
finance the diverse activities which are needed to support the private sector, such as technical
assistance, equipment and civil work, and provision of financial and non-financial services to
SMEs.
55. Project cost and financing. An International Development Association (IDA) Credit of
SDR32.3 million (US$50.00 million equivalent) is proposed. The Government‘s and
beneficiaries‘ contribution is US$15.34 million equivalent (of which US$9.31 million is the
matching grant beneficiary counterpart funding, US$4.00 million is the Government‘s
contribution to APEIN operating costs, US$1.96 million is the Government‘s contribution to
safeguard related expenses including compensation and required social infrastructure and
US$0.08 million is the Government compensation to the focal points to ensure timely
availability for counterpart funds, the Government will be required to deposit into a separate
counterpart funds account on a quarterly basis the amount of counterpart funds needed for the
following quarter.
Table 1 – Project cost and financing (US$ million)
IDA Borrower Beneficiaries Local Foreign Total
Component I. Investment Climate, Investment Promotion and Enterprise Development for identified value chains
Component 1.1. Support to Public Private
Dialogue 2.50 0.00 0.00 2.25 0.25 2.50
Component 1.2. Export Promotion 2.50 0.00 0.31 2.25 0.25 2.81
Component 1.3. Enterprise Development and
Investment Promotion 11.00 4.00 9.00 9.90 1.10 24.00
Total Component I. 16.00 4.00 9.31 14.40 1.60 29.31
Component II. Support to selected value
chains
Component 2.1. Extractive Industries value chain 11.90 0.00 0.00 10.71 1.19 11.90
Component 2.2. Meat and butchery industry 8.60 0.96 0.00 7.74 0.86 9.56
Total Component II 20.50 0.96 0.00 18.45 2.05 21.46
Component III. Policy Reforms, Infrastructure and Services to harness the Relationship between Niger and Nigeria
through the Kano, Katsina, Maradi (K2M) corridor
Component 3.1. Support to develop the K2M
corridor 1.10 0.00 0.00 0.99 0.11 1.10
Component 3.2. Rehabilitation of secondary
access roads and border markets along the
corridor 8.00 1.00 0.00 7.20 0.80 9.00
Total Component III 9.10 1.00 0.00 8.19 0.91 10.10
Component IV. Project Implementation
Component 4.1. Project Coordination 3.40 0.08 0.00 3.06 0.34 3.48
Component 4.2. Refinancing of PPA 1.00 0.00 0.00 0.90 0.10 1.00
Total Component IV 4.40 0.08 0.00 3.96 0.44 4.48
Total 50.00 6.03 9.31 45.00 5.00 65.34
57
Annex 3: Implementation Arrangements
A. Project administration mechanisms
1. Project Institutional and Implementation Arrangements
1. Implementation arrangements feature several players whose roles will be further detailed
in the Project Implementation Manual, the finalization and approval of which will be a condition
of effectiveness. These arrangements take into consideration capacity limitations in Government
and build on similar successful projects in Niger. The Government authorities have proposed,
and the World Bank has agreed, that the Ministry of Planning should take the lead in the
oversight of the Project. The Project will be implemented by a Project Implementation Unit,
designated focal points in each of beneficiary ministries and institutions under the supervision of
a steering committee.
2. By having implementation responsibility in the hands of designated persons in the
beneficiary agencies, it is expected that this will result in more ownership of the project at the
local level and sustainable results at the end of the project.
2. Implementation Arrangements Structure
3. Project implementation arrangements include the following structures:
58
4. Project Steering Committee. The project will be overseen by a Steering Committee (PSC)
comprising of high level representatives of the various institutions and will have a strategic
function role. The Steering Committee will be chaired by the Minister of Planning. Membership
of the PSC will include one representative of all Project beneficiary institutions, namely the
Ministry of Commerce, the Ministry of Industry and Mining, the Ministry of Energy and
Hydrocarbons, the Ministry of Livestock, the Ministry of Foreign Affairs, the Niger NGA joint
commission, the Chamber of Commerce, and the butchers associations. It will also include
members from private sector and NGOs. The PSC will meet on a quarterly basis and its
responsibilities include providing strategic guidance and oversight for the project, and
proactively address any major problems affecting project implementation. The PIU within the
Ministry of Planning will act as the Secretariat of the Project Steering Committee (including
preparing the meetings, elaborating the documents for the meeting, recording the minutes of the
meeting, etc.).
5. A PIU within the ministry of Planning will be responsible for project coordination and
implementation. The PIU staff will be competitively recruited. They will be responsible for all
procurement, disbursement, accounting, financial reporting and monitoring and evaluation of the
project. The PIU would be composed of the following staff: (i) a Coordinator; (ii) a procurement
specialist; (iii) a financial management specialist; (iv) an accountant; (v) a monitoring and
evaluation specialist; (vi) a meat and butchery specialist, (vii) a mining specialist; and (viii) an
Environmental and Social safeguard Specialist. The PIU will prepare quarterly and annual
reports recording the progress of the project. Project supervision will be carried out twice a year
and a mid-term review will take place in 2015 with the objective of assessing progress to date
and if necessary to re-direct the project by integrating additional lessons learned and realities on
the ground. All project accounts will be audited annually by independent auditors acceptable to
IDA and will be submitted to IDA no later than six months after the closing of the fiscal year in
Niger.
3. Implementation of project components
6. Management and implementation of individual project components/project
subcomponents will be mainstreamed to the ministries involved in the project as well as private
sector representative bodies and other stakeholders (through designated focal points who will
work closely with the PIU.
7. The Chamber of Commerce and Industry/ANIPEX. The Chamber of Commerce will be
responsible for the export promotion component to support ANIPEX.
8. The Agency of Enterprise and Investment Promotion of Niger (APEIN): On the basis of
feasibility study on enterprise development financed by the Government, it was decided to create
an autonomous agency for the promotion of enterprise and investment in the country. This
agency would provide non financial services and play the role of One-Stop-Shop to facilitate
enterprise creation. The Agency of Enterprise and Investment Promotion will be responsible for
the implementation of the enterprise development component. The project will support its
creation, operational costs and capacity strengthening and operational costs through the
recruitment of a private company that will assist in implementing the Matching Grants
component.
9. Focal Points. To ensure coordination between the PIU and beneficiary institutions, each
will designate a focal point. These institutions are the Ministry of Commerce, the Ministry of
59
Industry and Mining, the Ministry of Energy and Hydrocarbons, the Ministry of Livestock, the
Ministry of Foreign Affairs, the Niger Nigeria joint commission and the Niamey and Maradi
Slaughterhouses.
10. The role and responsibility of the focal point will be clearly detailed in the Manual of
Implementation and their terms of references. They will work in close collaboration with the
PIU, APEIN and the Chamber of Commerce. The project will strengthen the capacity of the
focal point through technical assistance and equipment. Civil servant focal points will be
compensated by the Government through its counterpart fund as set out in its current
compensation legal framework.
11. A Project Operational Manual (POM) including a Project Implementation Plan and
Procurement Plan will be finalized by project effectiveness. The POM will include all periodic
reporting, monitoring and evaluation arrangements throughout the life of the project and will also
include independent annual audits.
12. Agreements. For the purposes of the Project, the International Development Association
(IDA) will enter into Project Agreement with APEIN and the Government will on-grant to the
APEIN the financing proceeds allocated to the components under its responsibility, under
subsidiary agreement with it.
13. The role of APEIN as the executing agency for the matching grants sub-component will
be spelled out in the Subsidiary Agreement to be signed between the Government and APEIN.
The signed Subsidiary Agreement acceptable to IDA, will be a condition of disbursement of the
corresponding funds of the credit.
B. Financial Management and Disbursement
14. Capacity assessment. A Project Implementation Unit (PIU) will be established within the
Ministry of Planning specifically for the purpose of managing the Niger Competitiveness Growth
Project. The entity – Agence de promotion des Entreprises et des Investissements au Niger
(APEIN) that will manage the Matching Grants component will also be established. This entity
will be autonomous. As both institutions do not exist, their capacity cannot be assessed. In order
to anticipate possible capacity constraints, the following measures will be adopted:
(i) Detailed responsibilities of the organs of the PIU and APEIN as well those of the
staff of the both institutions will be described in the Manual of Procedures. All key staff
will be recruited according to the Guidelines for the Selection and Employment of
Consultants by World Bank Borrowers, edited in May 2004 and revised in October and
May 2010;
(ii) A Project Implementation Manual will be developed by Effectiveness. It will
clearly describe the project implementation aspects throughout the project
implementation cycle. The manual will also clearly detail the role of each
actor/stakeholder involved in the project; and
(iii) An administrative, financial and accounting procedures manual will be developed
by negotiations and will clearly describe the procedures to be used to successfully
manage the PIU.
15. Overall assessment: Overall, the residual financial management risk of the project is
rated as High. The PIU and APEIN, yet to be set up, will oversee financial management of the
60
project. The arrangements will be set up to ensure that minimum fiduciary requirements under
OP/BP10.00 are in place for the proposed project. As a result of the capacity constraint, the
following are included as effectiveness conditions: (i) A financial management specialist will be
recruited competitively and based in the PIU. S/he will be supported by an accountant; (ii) the
project will recruit and finance a second FM specialist under component 1.3 implemented by
APEIN; (iii) a manual of procedures will be developed and will include internal controls, budget
process, assets safeguards, and to clarify roles and responsibilities of all stakeholders. Other FM
staff at each ministry and agency involved will be designated for the implementation of the
project‘s activity. The PIU will purchase and install an appropriated accounting software (ii) and
recruit an external auditor based on terms of reference acceptable to the Bank.
Project financial arrangements will operate as follows:
16. Designated Account: A Designated Account will be opened in a commercial bank in
Niger that is acceptable to the Association and managed by the PIU according to the
disbursement procedures described in the disbursement letter. Documentation for all transactions
shall be retained by the PIU and shall be made available for audit and to the Bank and its
representatives, if requested. Detailed disbursement procedures will also be stipulated in the
administrative, financial and accounting manuals. A second Designated Account for the
management of matching grants funds will be opened and operated by APEIN. The initial
deposit will be based on APEINs approved work plan. Subsequent disbursements into the DA
will be based on SOEs, and accompanied by Withdrawal Applications, reconciled bank
statements and copies of all bank statements submitted for review by the PIU
17. Budgeting and Funds Flow: the budget process will be clearly stipulated in the
administrative, financial and accounting manuals. Annual budgets and work plans will be
coordinated and prepared by the PIU and APEIN. They will be approved by the Steering
Committee with Bank no-objection at the beginning of the year and any changes in the budget
and work plans will also be approved by the Committee with the Bank no-objection. In addition,
the Steering Committee will (i) discuss and review implementation strategies; ii) endorse the list
of beneficiaries as prepared by the PIU and APEIN on the basis of well designed targeting
criteria; and (iii) monitor and assess the implementation and results of the Project.
18. Accounting: Project accounting, policies and procedures will be documented in the
administrative, financial and accounting procedures manual. An accounting software with multi
project and multi site capabilities will be used to process financial information and prepare
interim financial statements as well as annual financial statements. Detailed FM documentation
will be maintained in the Project files.
19. Internal controls: The Steering Committee and the PIU Coordinator and APEIN will
ensure that staffing arrangements in the financial management department are in place and
sufficient to ensure adequate internal controls, preparation, approval and recording of
transactions as well as segregation of duties. The financial management and administrative
procedures will be outlined in the administrative, financial and accounting manual to be updated
when needed with the agreement of the Steering Committee and with Bank no-objection. An
internal audit function will be set up at the PIU and an internal auditor hired.
20. Financial reporting: The PIU Coordinator will be responsible for the overall reporting on
the entity. Through the Financial management specialist in the Project, S/He will ensure that the
quarterly Interim Financial Reports are prepared and transmitted. The reporting format will be
61
documented in the administrative, financial and accounting manual. The quarterly Interim
Financial Reports will be furnished to IDA no later than 45 days after the end of the quarter.
Annual financial statements will be prepared by the PIU and APEIN and approved by the
Steering Committee and will be subject to annual external audits.
21. External audits: The annual financial statements of the Project as well as the system of
internal controls will be subject to an annual audit by a reputable, competent and independent
auditing firm, based on terms of reference satisfactory to the Bank. The auditor will provide an
opinion on the financial statements of the project prepared by the PIU as per auditing standards
acceptable to the Bank. The audit report will be submitted to the Bank not later than six months
after the end of each financial year. In addition to the audit report, the auditor will also provide a
management letter detailing the status of the internal control systems in the PIU and APEIN.
22. Capacity: To carry out its FM obligations, the PIU and APEIN will set up and install an
accounting system that will ensure the production of financial reports, interim financial reports
and annual financial statements to be audited. Newly recruited staff will be trained on Bank
procedures with regards to financial reporting, procurement, disbursements and external auditing
among others.
23. IDA Implementation Support Missions: In addition to the regular internal and external
audits, the World Bank task team will conduct regular supervision missions on a half yearly
basis. During these supervision missions Bank FM Staff will evaluate the FM arrangements to
ensure that they remain adequate for the implementation of the Bank-funded project.
24. Disbursements arrangements: Disbursements from the Credit will follow the transaction-
based method, i.e., traditional Bank procedures: Statements of expenses (SOEs), Direct
Payments, Reimbursement, and Special Commitments. The initial deposit into the Designated
Accounts (one for the PIU and one for APEIN) will be based on a four months forecast prepared
by the PIU and submitted with the Withdrawal Application. Subsequent disbursements into the
DAs will be based on SOEs, and accompanied by Withdrawal Applications, reconciled bank
statements and copies of all bank statements. The supporting documentation for requests for
direct payment should include records which provide evidence of eligible expenditures (copies of
receipt, supplier‘s invoices).
25.
Category Amount of the Credit
Allocated (US$)
Percentage of Expenditures
to be Financed
(inclusive of Taxes)
(1) Goods, works, non-consulting
services, and consultants‘ services
financed with Matching Grants under
Part 1(c)(iv) of the project
9.00 100%
(2) Goods, works, non-consulting
services, and consultants‘ services,
including Training, for Part 1(c)(i), (ii)
and (iii) of the project
2.00 100%
62
(3) Goods, works, non-consulting
services, and consultants‘ services,
including Training and Operating
Costs, for the project, except Part 1(c)
of the project
38.00 100%
(4) Refund of Preparation Advance 1.00 Amount payable pursuant to
Section 2.07 of the General
Conditions
TOTAL AMOUNT 50.00
63
C. Procurement
26. Procurement activities will be supervised by the Project coordinator who will be
competitively recruited and housed within the Ministry of Planning. The Coordinator will be
supported by two procurement specialists based respectively at the PIU and at the level of
APEIN. The procurement specialist will have overall responsibility in carrying the following
activities: (i) managing the overall procurement activities, and ensuring compliance with the
procurement process described in the relevant manuals; (ii) preparing and updating procurement
plan annually; (iii) preparing bidding documents, draft RFPs, evaluation reports, and contracts in
compliance with WB procedures; and (iv) seeking and obtaining approval of national entities and
of IDA on procurement documents as required.
27. Procurement of goods and consultants‘ services will be carried out in accordance with the
‗Guidelines On Preventing and Combating Fraud and Corruption in Projects Financed by IBRD
Loans and IDA Credits and Grants‘ dated October 15, 2006 and updated January 2011, and the
‗Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans
and IDA Credits‘ published by the Bank in January 11 and the ‗Guidelines: Selection and
Employment of Consultants by World Bank Borrowers,‘ dated January 2011, the Financing
Agreement and the Procurement Plan approved by the Bank. Operating Costs include, inter alia,
non civil servant support staff salaries, office space, utilities and office supplies, bank charges,
communications, vehicle operation, maintenance and insurance, building and equipment
maintenance costs, travel costs. These will be procured in accordance with administrative
procedures, acceptable to the Bank and detailed in the relevant manual.
28. Assessment of the agencies’ capacity to implement procurement. The overall Project Risk
for procurement was rated High during pre-appraisal based on the assessment of the proposed
institutional arrangements and the nature of interaction between the different ministries and
agencies that will be involved in project implementation.
29. The key risk identified is that staff involved in the Project who may not have experience
with Bank procedures will be responsible for process control and approval. This could cause
mis-procurement and/or rigidity in the interpretation of Bank procedures, leading to slowness in
procurement decisions, reputational risks to the Bank and the Project, and delays towards
attaining the PDO.
30. The residual project risk for procurement is Substantial after adoption of the following
mitigation measures:
(i) A qualified procurement specialist will be recruited before effectiveness to ensure
compliance with World Bank procurement procedures; S/he will be based within the PIU
at the Ministry of Planning;
(ii) A qualified procurement specialist will be recruited at the level of APEIN to
manage the procurement activities related to the component;
(iii) A manual of administrative, financial and accounting procedures will be prepared
as a condition of effectiveness to clarify the role of each team member involved in the
procurement process, specifically with regards to the review and approval system;
(iv) A workshop will be organized at the beginning of the project to train all key
stakeholders involved in procurement on World Bank procurement procedures and
policies;
64
(v) An adequate filing system would be centralized and set up for the project records
at the PIU (within the Ministry will be developed). The project will finance appropriate
equipment and the Procurement Specialist will be trained to ensure compliance with WB
procurement filing manual.
31. Procurement plan. The Recipient has developed a procurement plan for project
implementation which provides the basis for the procurement methods. This plan has been
agreed upon between the Recipient and IDA during negotiations. Immediately upon approval of
the Credit, and with the Borrower‘s agreement, the plan will be published on the Bank‘s public
website and made available at the Ministry of Planning. The Procurement Plan will be updated in
agreement with the Project Team annually or as required to reflect the actual project
implementation needs and improvements in institutional capacity.
32. Fraud, Coercion and Corruption. All procuring entities, as well as bidders, suppliers and
contractors shall observe the highest standard of ethics during the procurement and execution of
contracts financed under the project in accordance with paragraph 1. 16 of the Procurement
Guidelines and paragraphs 1.23 of the Consultants Guidelines.
33. Frequency of procurement supervision. In addition to the prior review supervision to be
carried out from IDA, the capacity assessment has recommended two supervision missions in the
field and at least one annual post-procurement review. The World Bank Procurement Specialist
based in the Niamey Country Office, will provide continuous support to the Ministry of
Planning, and the implementing agencies. An Independent Procurement review could be carried
out if necessary.
Summarized procurement plan
a. General
(i) Bank‘s approval Date of the procurement Plan: May 3, 2012
(ii) Date of General Procurement Notice: Two weeks after board
(iii)Period covered by this procurement plan: First 18 months of project implementation
b. Goods and Works and non-consulting services
34. Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as
stated in Appendix 1 to the Guidelines for Procurement are listed below.
Procurement Method Prior Review Threshold
US$
Comments
1. ICB and LIB (Goods) 300,000
2. NCB (Goods) packages None except for the first contract procured
respectively by PIU and ANIPEX/APEIN and
selected contracts identified in the Procurement Plan
3. ICB (Works) packages and LIB 3 million
4. NCB (Works) packages None except for the first contract procured by the PIU
and the ANIPEX/APEIN, and selected contracts identified in the Procurement Plan
5. (Non-Consultant Services) packages None
Shopping procedures None
Direct contracting All contracts
65
35. Additional mitigation measures: Since the overall procurement risk is substantial, the
following additional mitigation measures will be adopted:
(i) At least once a year, the Association and the Government will agree on a
procurement plan which will detail the procurement methods to be used and specific
contracts to be reviewed by the Bank;
(ii) The Bank will perform prior review of selected NCB contracts which will be
identified and mentioned in the procurement plan; and
(iii) All amendments of contracts raising the initial contract value by more than 15
percent of original amount or above the prior review thresholds will be subject to
prior review by the Bank as determined mandatory in Paragraphs 2 and 3 of Annex 1
of the Bank Procurement Guidelines.
(iv) Post Review: for each contract for goods and public works not submitted to
prior review, the procurement documents will be submitted to IDA post review in
accordance with the provisions of Paragraph 4 of Annex 1 of the Bank‘s procurement
Guidelines. The post review will be based on a ratio of at least one to five contracts.
36. Summary of the Procurement Packages planned during the first 18 months after project
effectiveness.
a. Works Procurement Packages with Methods and Time Schedule
1 2 3 4 5 6 7 8 9
R
ef
N
o.
Description
Estimate
d
Amount
in US $,
000
Procurement
Method
Pre-
qualification
(yes/no)
Prior or
Post
Review
Bid Closing-
Opening
Date
Contract
Signature
Com
ment
s
1 Rehabilitation of the
petroleum data center 1,000.0 ICB NO Prior 2/19/2013 6/28/2013
2 Upgrading/rehabilitating the
GIS and data centers 900.0 ICB NO Prior 3/12/2013 7/19/2013
3
Rehabilitating CRGM
sample preparation/analysis
labs
700.0 ICB NO Prior 3/24/2013 7/31/2013
4
Construction, upgrade and
cold chain in Niamey and
Maradi Slaughterhouses
3,000.0 ICB NO Prior 4/19/2013 8/28/2013
5
Rehabilitation/construction
of secondary access roads to
Nigeria
6,000.0 ICB NO Prior 3/26/2013 8/2/2013
66
b. Goods Procurement Packages with Methods and Time Schedule
c. Selection of Consultants
37. Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in
Appendix 1 to the Guidelines Selection and Employment of Consultants:
Selection Method Prior Review Threshold Comments
1. Competitive Methods (Firms) 200,000 US$
2. Competitive Methods (individual consultants) 100,000 US$
2. Single Source (Firms and consultants) All single source consultants will be
subject to prior review
38. Short list comprising entirely of national consultants: Short list of consultants for
services, estimated to cost less than $100,000equivalent per contract, may comprise entirely of
national consultants in accordance with the provisions of paragraph 2.7 of the Consultant
Guidelines.
39. Selection of Consultants Arrangements:
(i) All TOR for the selection of consultants shall be subject to IDA‘s prior
review;
(ii) All amendments of contracts raising the initial contract value by more than 15
percent of original amount or above the prior review thresholds will be subject to
prior review by the Bank as specified mandatory in Paragraphs 2 and 3 of Annex 1 of
the Bank‘s consultant Guidelines;
(iii) For each contract for services not submitted to the prior review, the
procurement documents will be submitted to IDA post review in accordance with the
provisions of Paragraph 4 of Annex 1 of the Bank‘s Consultant Guidelines. The post
review will be based on a ratio of at least one to five contracts;
1 2 3 4 5 6 7 8
Ref
No. Description
Estimated
Amount in
US $ 000
Procurement
Method
Prior or
Post
Review
Bid Closing-
Opening
Date
Contract
Signature
Com
ments
1 Equipment for ANIPEX and APEIN
Vehicles 300.0 ICB Prior 3/5/2013 7/12/2013
Office furniture 300.0 ICB Prior 3/5/2013 7/12/2013
Computer equipment 5400 ICB Prior 3/5/2013 7/12/2013
2 Purchase of software licenses for geo
data assessment 350.0 ICB Prior 3/5/2013 7/12/2013
3 Equipment for upgrade and cold chain
in Niamey and Maradi slaughterhouse 3,000.0 ICB Prior 9/24/2013 1/31/2014
4
Equipment and materials for
upgrading selected border markets
along the corridor
2,000.0 ICB Prior 2/19/2013 6/28/2013
67
(iv) Except as otherwise stated in the procurement plan, consultants‘ services shall
be procured under contracts awarded on the basis of Quality and Cost-based
Selection; and
(v) Other Methods of Procurement of Consultants‘ Services may include Least
Cost Selection; Selection based on Consultants‘ Qualifications; Selection under a
Fixed Budget; Quality Based Selection, Individual Consultants. The Procurement
Plan shall specify the circumstances under which such methods may be used.
d. Consultancy Assignments with Selection Methods and Time Schedule
1 2 5 6 7 8 9
Ref
No. Description*
Estimated
Amount in
US$' 000
Selection
Method
Prior/Post
Review
Estimated Bids
opening/closing
Date
Estimated
contract
signing
date
Comments
Component I. Investment Climate, Investment Promotion and Enterprise Development for identified value chains
1
TA for Public Private Dialogue Working
Groups for Doing Business reforms
through CNIP and Chamber of Commerce
500.0 QCBS Prior 6/26/2013 9/27/2013
5 separate
studies by
Selected DB
2
Study to develop a business plan for
ANIPEX) 100.0 QCBS Prior 7/11/2013 10/14/2013
3 TA to implement ANIPEX Business Plan 200.0 QCBS Post 7/11/2013 10/14/2013
3
Five (5) Transaction Advisors to
Government and ANIPEX to structure
PPP transactions
1,000.0 QCBS Post 9/26/2013 12/30/2013
Recruiting a
firm with five
transactions
advisors
4 TA for One Stop Shop 500.0 QCBS Prior 6/21/2013 9/24/2013
Component II. Support to selected value chains 7/25/2013 10/28/2013
Improving the policy and regulatory framework for EI diversification
5
Updating mining and petroleum policies,
laws and regulations 450.00 QCBS Prior 7/16/2013 10/17/2013
2 separate
studies Mining
and Petroleum
6 Strategic environmental & social study 100.00 QCBS Prior 6/21/2013 9/24/2013
6
Upgrading the fiscal regime for mining
and petroleum 200.00 QCBS Prior 8/1/2013 11/4/20137
7
Preparing environmental and social
regulations for mining and petroleum 250.0 QCBS Prior 6/21/2013 9/24/2013
8
Establishing an environmental
management framework for EI projects 150.0 QCBS Prior 8/9/2013 11/12/2013
9 Preparing EI revenue management policy 250.0 QCBS Prior 8/29/2013 12/2/2013
10
Reforming the policy framework for
artisanal and small-scale mining 600.0 QCBS Prior 6/21/2013 9/24/2013
Strengthening institutional capacity for mineral sector management
11
TA to build institutional capacity for
policy and strategy 300.0 QCBS Prior 11/7/2013 2/10/2014
12
TA to build capacity for negotiation of
mineral development agreements
300.0 QCBS Prior 11/14/2013 2/17/2014
A firm
proposing 4
consultants
13
Mining sector monitoring system to
strengthening capacity for inspection,
audit, and monitoring (including
1,000.0 QCBS Prior 8/29/2013 12/2/2013
A firm
proposing
Consultants to
68
1 2 5 6 7 8 9
Ref
No. Description*
Estimated
Amount in
US$' 000
Selection
Method
Prior/Post
Review
Estimated Bids
opening/closing
Date
Estimated
contract
signing
date
Comments
equipment and training assist
government
(TA to supply
equipment and
provide
training)
14 Improving mineral cadastre management 300.0 QCBS Prior 6/21/2013 9/24/2013
15
Implementation of recommendation on
reforming the policy framework for small
scale mining
300.0 QCBS Prior 4/3/2014 7/7/2014
16
Scoping studies and promoting
investment in new mineral targets 600.0 QCBS Prior 6/21/2013 9/24/2013
Preparing for oil development
17 Institutional capacity needs assessment 70.0 QC Post 7/4/2014 10/7/2014
18
Capacity building for oil and gas policies
and negotiations 300.0 QCBS Prior 11/28/2013 3/3/2014
19
Petroleum sector monitoring system
(including training and supply of
equipment)
1,300.0 QCBS Prior 8/15/2013 11/1/2013
TA to supply
equipment and
provide training
20
Resident expert to assist in licensing and
bid evaluations 400.0 QCBS Prior 11/14/2013 2/17/2014 For 2 years
Integrating EI projects into local and regional development
21
Preparing strategy and action plan for EI-
induced development 380.0 QCBS Prior 6/21/2013 9/24/2013
22
Developing linkages and multi-
stakeholder partnerships around EI
projects
400.0 QCBS Prior 9/5/2013 12/29/2013
Meat and butchery industry
24
Study to identify equipment and civil
works needs in Niamey and Maradi
slaughterhouse
300.0 QCBS Prior 6/21/2013 9/24/2013
25
Study for upgrade of Maradi
Slaughterhouse 300.0 QCBS Prior 6/21/2013 9/24/2013
TA for improvement of abattoir
governance and operation 500.0 QCBS Prior 7/19/2013 10/22/2013
TA to for attaining certification of
internally accepted quality and hygiene
standards
1,000.0 QCBS Prior 8/21/2013 1/22/2013
Component III. Policy Reforms, Infrastructure and Services to harness the Relationship between Niger and Nigeria through the Kano,
Katsina, Maradi (K2M) corridor
27
Consultancy for a master plan and support
to develop K2M corridor including to the
Maradi local Community
500.0 QCBS Prior 7/11/2013 10/14/2013
28
Support to Joint Commission to remove
barriers to trade with Nigeria (TA,
communication etc.)
600.0 QCBS post 6/21/2013 9/24/2013
Component IV. Project Implementation
29 Audit of project accounts 30.0 LCS Prior 2/1/2013 3/15/2013
30 Midterm evaluation 50.0 IC Post 11/10/2014 12/18/2014
31 Implementation Completion Report 80.0 IC Post 11/14/2017 12/18/2017
69
e. Training, Workshop, Study Tours
40. At the beginning of each year, each beneficiary will submit their proposed staff
development plans in the form of an annual training plan for the coming year, to be reviewed by
IDA. The plan would indicate the persons or groups to be trained, the type of training to be
provided, indicative learning outcomes, the provider or location of the training, and its estimated
cost. Selection of training institutions for workshops/training should be based on a competitive
process, using the consultant‘s qualification method of selection.
f. Non Consultant Services
Revision of Procurement prior review thresholds
41. The prior review thresholds and other measures to be taken to mitigate the procurement
risk should be re-evaluated once a year with a view of adjusting them to reflect changes in the
procurement risk that may have taken place in the meantime and to adapt them to specific
situations. In case of failure to comply with the agreed mitigation measures or Bank guidelines, a
re-evaluation measure of both types of thresholds, ICB and prior review, may be required by
IDA.
70
Annex 4: Operational Risk Assessment Framework (ORAF)
Negotiations and Board Package Version15
1. Project Stakeholder Risks Rating: Substantial
Description:
Risk that stakeholders will not reach a consensus on project
design. The risk that Government Ministries (particularly the
new ministry for development, the ministry of finance, the
ministry of mining) will compete with the Ministry of
Commerce and PSD to claim the project is high. Private
investors and financial institutions may find that incentives are
not enough for their involvement in the project.
Risk Management:
Project preparation to include wide stakeholders‘ consultations, and design of incentives to be
informed by preliminary studies.
Resp: Client & Bank Stage: Preparation Due Date : 03/01/12 Status: In
progress
Resp: Bank Stage: Implementation Due Date : N/A Status: NYD
2. Implementing Agency Risks (including fiduciary)
3.1. Capacity Rating: High
Description:
There is a weak overall internal capacity to implement the
project. The Implementing Agency (IA) will be confronted with
complex procurement and contract management activities which
it is not familiar with.
Risk Management :
Independent project implementation unit with qualified technical staff to be set up and made
responsible for day-to-day management of project. Given the lack of capacity and track record of
the new Government, the project will include an institutional arrangement to help build the
Government capacity and ensure coordination between the various ministries involved in the
project. A dedicated PIU will be housed within the Ministry of Planning and will be adequately
staffed to ensure appropriate project implementation. A broad-based public/private dialogue will
also be supported by the project through assistance to the joint public-private task force and
working groups (Conseil National des Investisseurs Privés CNIP).
Resp: Client Stage: Preparation Due Date : by
effectiveness Status:
3.2. Governance Rating: Substantial
Description:
Ownership, accountability and oversight:
Weak and fragile institutions may lead to inefficiencies, lack of
required quality control and proper oversight of project. For
example, lack of transparency in selection of consultants may
result in poor selection and hence poor outputs.
Risk Management :
The Bank procurement staff will be involved from the beginning and will meticulously review the
procurement processes and actions undertaken. A procurement plan will be drawn and cleared by
the Bank, identifying among other things, the procurement methods to be adopted, and limiting the
potential for sole sourcing. Also, capacity building measures are an integral part of the Bank‘s
portfolio in Niger. A dedicated capacity building program for the Ministries of Finance and
Planning became effective in 2010. The creation of an Anti-Corruption body (Haute Autorité de
15
This is the version that should be used for Negotiations and submission for Board Approval.
71
Lutte contre la Corruption et les Infractions Assimilés), and the setting up of a hotline in the
Ministry of Justice to report corruption cases might help alleviate the overall corruption risk.
Resp: Client Stage: Implementation Due Date :N/A Status: N/A
4. Project Risks
4.1. Design Rating: Substantial
Description:
A complex project design encompassing diverse sectors may be
difficult to implement successfully. The project design can be
rendered technically complex as it intends to deal with DB
reforms and with several value chains and sectors (agriculture,
miming.).
Risk Management :
Since PCN, the project has been simplified to keep it mostly a TA operation in nature (learning
from similar successful operations in the region to help countries improve their investment climate,
support private enterprises in selected value chains). The value chains to be supported by the
project have been reduced from 5 to only 2. In addition, the project will no longer undertake the
creation of a special economic zone at the Niger/Nigeria border. It will focus on providing TA to
the Niger and Nigeria joint commission to have existing free trade agreements implemented
between the two countries. The project investment in infrastructure will be limited to the upgrade
of two existing slaughterhouses and feeder roads.
Resp: Client Stage: Prep Due Date : 03/01/2012 Status: In
progress
4.2. Social & Environmental Rating: Moderate
Description:
The proposed project may entail major safeguard issues.
Negative environment impact may result from some project
activities involving farming and industry. Relocation of
populations may be necessary in certain areas.
Risk Management :
The project has prepared an ESMF, RPF,PMP, ESIAs for slaughterhouses in Niamey, Maradi,
Zinder, and Tahoua, and the ToRs for a SESA. The Government will also undertake environmental
audits of the slaughterhouses in Niamey and Maradi. Other risk management measures include:
selecting growth sources/value chains with low and environmental and social disruptions; making
use of latest technology and products to mitigate pollution and health hazards and applying Bank
safeguard procedures during implementation.
Resp: Client Stage: Prep. Due Date : 02/24/2012 Status: NYD
4.3. Program & Donor Rating: Moderate
Description :
Impact and efficiency of project may be undermined by non-
collaboration of other donors undertaking similar activities and
unwilling to collaborate.
Risk Management :
World Bank team is actively engaged with donor community.
Resp: Bank Stage: Prep. Due Date : 03/01/2012 Status: In
progress
4.4. Delivery Monitoring & Sustainability Rating: Moderate
Description :
A newly created PIU may not be capable of handing a multi-
sector project. Delivery quality may be affected by weak
monitoring and evaluation capacity of PIU.
Risk Management :
Put in place a rigorous M&E system to track identified measurable indicators.
Resp: Client Stage: Impl. Due Date : 09/01/2013 Status: NYD
5. Overall Implementation Risk
Substantial
72
Annex 5: Implementation Support Plan
Table 1: Readiness Checklist
Readiness Checklist Comments
Project management The project will be managed by a PIU. TORs for the key staff of the PUI will
be included in the Project Implementation Manual (PIM) under preparation.
ORAF finalized ORAF risk matrix has been finalized and included in the package
Safeguard policy issues
addressed and documents
disclosed
This is a category B project. The following documents (ESMF, RPF, ESIA,
ESMF and PMP) have been disclosed in Country and InfoShop.
M&E system in place Government project preparation team has prepared a draft M&E plan to be
included in the PIM.
Full baseline data will be collected through pre-feasibility studies.
Fiduciary (Financial
management and procurement
arrangements are in place)
Financial Management:
PIM consultants will prepare draft Financial Management module.
Procurement:
The Government project preparation team has prepared a Project
Procurement plan for the first 18-month in consultation with the project team
Project Implementation Support
Plan (ISP)
See Table 2 below
Policy exceptions N/A
Counterpart Funding The Government‘s and beneficiaries‘ contribution is US$15.34 million
equivalent (of which US$9.31 million is the matching grant beneficiary
counterpart funding, US$4.00 million is the Government‘s contribution to
APEIN operating costs, US$1.96 million is the Government‘s contribution to
safeguard related expenses including compensation and required social
infrastructure and US$0.08 million is the Government compensation to the
focal points. At the matching grant level counterpart funding for subprojects
from beneficiaries (will be monitored at the point of awarding and signing of
subproject grant signing)
The following table indicates the main focus of support to implementation during the
project‘s lifetime, skill mix requirements, and involvement of other partners.
Table 2: Project Implementation Support Plan (ISP)
Skills Needed Number of Staff Weeks Number of
Trips Comments
Task Team Leader 10 SWs annually 2 Based in DC
Co-Task Team
Leader/Mining Specialist 8 SWs annually 2 Based in DC
Investment climate
reforms specialist 4 SWs annually 2 Based in the region
Entrepreneurship
specialist 3 SWs annually 2 Based in DC
Meat/butchery specialist 4 SWs annually 1 STC
Financial management
specialist 3 SWs annually 0 Based in Niger/or in the region
Procurement specialist 4 SWs annually 0 Based in Niger/or in the region
Social specialist 2 SWs annually 2 Based in Niger/or in the region
Environment specialist 2 SWs annually 2 STC
Operations officer 2 SWs annually 2 Based in Niger/or in the region
Communications
Specialist 2 SWs annually 2 Based in Niger/or in the region
73
Annex 6: Team Composition
World Bank staff and consultants who worked on the project
Djibrilla A. Issa Sr. Financial Sector Specialist, TTL
Mamadou Barry Sr. Mining Specialist, Co-TTL
Magueye Dia Financial Sector Specialist
Korotoumou Ouattara Sr. Financial Sector Specialist
Suhail Kassim Private Sector Specialist
Gary Fine Sr. Private Sector Specialist
Adja Dahourou Private Sector Specialist
Ibrah Sanoussi Procurement Specialist
Andre Ryba Consultant, Financial Sector Specialist
Helene Bertaud Sr. Counsel
Gokhan Akinci Lead Investment Policy Officer
Amadou Konare Sr. Environmental Safeguards Specialist
Alain Traore (IFC) Sr. Operations Officer
Ernesto Franco Temple (IFC) Operations Officer
Abdoul Wahab Seyni Sr. Social Specialist
Beth Mwangi Financial Management Specialist
Abdoulahi Garba Economist
Karima Lawali Ladjo Program Assistant
Ndeye Anna Ba Program Assistant
Jaime Mayaki Operations Officer
74
Annex 7: Economic and Financial Analysis
1. The Niger Source of Growth project aims to contribute to the development of two
values chains through industry based investment climate reforms and improved enterprises
competiveness. The project will be implemented through three components, namely, (a)
Investment Climate, Investment Promotion and SME Support for identified value chains; (b)
Support to two selected value chains; and (c) Support to foster trade relations with Nigeria in
along the Kano Katsina Maradi corridor.
2. The economic analysis of component 1.1. Investment Climate, Investment Promotion
and enterprise development for identified value chains presents a special challenge due to the
indirect relationship between the reforms supported under the project and the stream of
benefits that these reforms are expected to trigger. In light of this a literature review has been
provided on the positive effects of business environment reform on business creation, SME
development and growth. An attempt has been made to quantify the costs and benefits that are
expected to accrue from components 1.2, 1.3 and components 2 and the Net Present Value
(NPV) and the Economic Rate of Return (ERR) for the investments in these components have
been calculated.
3. The total investment under components 1.2, 1.3, 2.1 and 2.2 are estimated to result in
NPV of US$ 49,981,469 and an ERR of 28 percent. The results are summarized in table
below.
PROJECT ERR 28%
PROJECT NPV (12% Discount Rate) $49,981,469
PROJECT NPV (5% Discount Rate) $79,963,378
Methodology
4. The economic analysis of this type of private sector development project faces some
difficulties particularly where there is indirect relationship between the technical assistance
provided under the project on its stream of benefits. Therefore in keeping with common
practices in the appraisal of project of this type, a mix of quantitative and qualitative
techniques has been used to analyze the economic benefits and costs of the project.
5. Main beneficiaries: The main beneficiaries of the project would be: (i) a minimum of
200 firms and associations with access non-financial business development services and
access to financial services; (ii) the meat and mining sectors, iii) the business consulting
sector with an improvement of availability and efficiency of business services; (iv) the private
sector which will benefit from an improved investment climate. The project will also provide
economic and social welfare to the beneficiaries in the Maradi region and the mining regions
and to the national economy.
Component 1: Investment Climate, Investment Promotion and SME Support for identified
value chains
6. Subcomponent 1.1 aims at improving the public private dialog in Niger. The objective
of this assistance is to allow consensus between private sector organizations and unified
approach on reform pertaining to business environment. The experiences and lessons learned
from public-private dialogue across different countries and sections have shown that not only
significant reforms can be associated to these dialogues but also these dialogues demonstrate
a strong measurable economic impact.
75
7. Sub-component 1.2 will support the establishment of one-stop shop for business
registration and licensing. The relationship between the characteristics of the business
regulatory environment and the performance of firms has been well documented (Djankov et.
a1 2002, Botero et. a1 2004, Acemoglu and Johnson 2005, Mastruzzi 2006, and Kaufmann et.
a1 2006). Also documented is the effect on business environment of the specific indicators
that will be affected by the establishment of the one stop shop.
8. A recent study finds that barriers to starting a business are negatively and significantly
correlated with business density and entry rate. Fewer procedures are associated with greater
number of registered firms and higher entry rates (Klapper, 2006). A similar relationship can
also be found with the cost of starting a business. It is estimated that for every 10 percent
decrease in entry costs, density and the entry rate increase by about 1 percent (Klapper, 2006).
Simpler entry encourages the creation of new companies. Easier start-up is also correlated
with higher productivity among existing firms. A study which analyzes data in 157 countries,
finds that there is a reduction in entry costs raises output per worker by an estimated 29
percent (Barseghyan, L ―Entry Costs and Cross-Country Differences in Productivity and
Output.‖ Journal of Economic Growth 13, 2008).
9. The 2008 World Bank Group Entrepreneurship Survey (WBGES 2008) includes new
data on the impact of modernization of business registries on business creation. It gathers
extensive data on the functioning and structure of business registries in 71 countries from the
registrar of companies, as well as complementing data on the number of total and newly
registered businesses in over 100 countries. This empirical evidence suggests that greater ease
in starting a business and better governance are associated with increased entrepreneurial
activity. After controlling for economic development (GDP per capita), higher entrepreneurial
activity is significantly associated with cheaper, more efficient business registration
procedures (as measured by the Doing Business 2009 ―Starting a Business‖ indicators) and
better governance (as measured by Kaufmann and others, 2008).
10. Subcomponent 1.3 supports the provision of Business Development Services to SMEs
especially those operating in the two selected value chains through a matching grants
program.
11. This sub-component will set-up a Matching grants program with a special window
focusing on support to the development of local procurement with Extractive Industries. The
total investment under this component is estimated to result in an NPV of US$ 51,584, 615 at
the discount rate of 12 percent and an ERR of 88 percent. The results are presented in the
Table below.
ERR for component 1 40%
PROJECT NPV (5% Discount Rate) US$ 82,399, 843
PROJECT NPV (10% Discount Rate) US$ 51,584, 615
Window 1: support provision of Business development services to SMEs
12. The provision of financial and non-financial Services through this project has been
designed in a manner that on one hand it would result in tangible economic benefits such as
improved sales and growth of SMEs. And on the other hand, this component would yield
intangible benefits such as enhancing the ability of SMEs to develop specialized and
innovative skills in different segments of the selected value chains, creating a sustainable
market for providers of business development services. Owing to these benefits, this
76
component would also help in achieving increased employment and income generation in the
local economy.
13. In order to get a quantitative sense, a conventional methodology is used to carry out
the economic analysis of the matching grants by estimating future stream of costs and benefits
and deriving net benefits to calculate the net present value (NPV) and economic rate of return
(ERR) in a ―with‖ and ―without‖ project framework based on 10-year time horizon. To
address the limitations of this approach, a conservative set of assumptions is used and
sensitivity analysis has also been conducted to assess the robustness of results. In addition, for
a project of this type the focus of analysis is on estimating the economic benefits and costs
rather than financial analysis.
Assumptions
14. Based on the information on experience from similar projects in other African
countries, the following assumptions were made:
The discount rate used for the economic analysis is 12 percent. Given the global
financial crisis and the economic environment in Niger, this is slightly more
conservative than the standard assumption in most of World Bank Projects, which is
that the opportunity cost of capital is 10 percent.16
The project impact is expected to start materializing during project implementation.
The maximum impact of the project will be reached once the relevant capacity and
institutions are strengthened.
Under the Matching Grants component it is assumed that a minimum of 200 MSMEs
would be supported by the project based on an average grant funding of US$25000 per
firm or US$50,000 for associations.
15. The project is expected to have direct impact on SME sales. Further it is assumed that
as a result of increased efficiency and capacity utilization, the supported firms would yield an
increase in output at a multiple of 10 times the support provided with a lag of two years. This
is based on experience in other countries such as Burkina Faso in which a multiple of 10
times the grant was used. In addition, support to these enterprises would also result in direct
and indirect job creation, however due to difficulty in accurately estimating this variable, the
secondary impacts in terms of increased employment income have not been included in the
calculation of NPV and ERR.
Results
16. In the economic analysis of this subcomponent, the NPV for the matching grants
program is estimated at US$19,890,221 for a 12 percent discount rate, and the ERR is
estimated at 50 percent, much higher than the discount rate (see Table below).
Economic analysis of enterprise support Matching Grant
Component ERR (10 years) 50%
NPV (discount rate 12%) US$ 19,890,221
NPV (discount rate 8%) US$27,124,701
17. A sensitivity test was carried out by assuming a lower increase in output for each firm
from 10 to 5. The model proved to be robust as the ERR remained to a high 37 percent.
16 Handbook on Economic Analysis of Investment Operations, OPR, May 2006
77
Window 2: Supporting SMEs for local procurement to EI projects
18. The project will match local industries with EI industries and build partnerships
between small businesses and large companies in local economic integration and value chain
management by the development of upstream linkages with producers of local goods and
services to EI firms. The project will build capacity of local SMEs, though training, coaching,
to prepare them to take advantage of local procurement and business partnership
opportunities.
19. The project will invest a total of US$3.68 million matched with contribution by the
Extractive Industries and the EU. Beneficiaries are expected to contribute 10 percent of the
total grant provided to them. Overall resources for this component amounts to US$3 million
and are mainly expected to disburse in the first three years of the project.
Assumptions
20. A conservative estimate of the projected investments from Extractive Industries in the
next four years is US$41.3 billion.
21. It is assumed that following project support, local SMEs will secure 10 percent of
procurement from extractive industries amounting to US$10 million. The project impact is
expected to start materializing during project implementation. The maximum impact of the
support provided to SMEs will be reached once their capacity is strengthened.
Results
22. In the economic analysis of this component the ERR is expected to be 111 percent and
the NPV is expected to be closed to US$35 million with a discount rate of 12 percent. The
results of this component and main assumptions are reported in the Table below.
Economic analysis of enterprise support Matching Grant
Component ERR (5 years) 42%
NPV (discount rate 12%) US$ 36,026,872
NPV (discount rate 8%) US$ 44,856,044
Supporting local procurement by mining companies can bring about significant benefits to a
wide range of stakeholders. Mining companies can minimize their logistics and stock holding
costs, reduce their lead times, increase security of supply as well as enhance their reputations
and obtain a ‗social license‘ to operate. Local businesses, entrepreneurs and communities can
benefit from increased access to business growth opportunities, increased stability and
diversity of markets, as well as improvement of business capabilities, including access to
capital, productivity, technology, and HSE practices. Wider benefits include increased
employment and skills, increased domestic and foreign investment, technology and
knowledge transfer from international companies, exports and foreign exchange and increased
government tax revenues.
78
23. The results of the sensitivity analysis include:
Component 2: Support to selected value chains
24. Sub-component 2.1 aims to provide support to improve the regulatory framework to
promote diversification in the mining sector; strengthen the institutional capacity for efficient
management of the mining sector and enhance integration of EI projects into local and
regional development.
25. Enhancing Government‗s ability to efficiently manage the country‗s mineral resources
will increase the contribution of the mining sector to sustainable development. Thanks to this
assistance, Niger can be expected to both expand mineral investment flows and optimize their
contribution to sustainable development, including improving revenue collection. In the long
term, this should strengthen fiscal sustainability of the Project. The project support will
contribute to development of economic linkages between EI projects and local SMEs.
Economic analysis of this activity is conducted under component 1.3.
26. Subcomponent 2.2 aims to provide support to the meat value chain through the
provision of TA and funding for the construction/rehabilitation of slaughterhouses to increase
meat processing capacities in Maradi and Niamey and improve the quality of meat products.
The objective is to bring capacity from four tons/day to 16 tons/days for Maradi
slaughterhouse and from 20 tons/day to 84 tons/ day respectively for Niamey slaughterhouse.
27. As project support is similar for both Niamey and Maradi slaughterhouses, the
economic analysis will be conducted only for the Maradi slaughterhouse.
28. This subcomponent will lead to increased benefits and reduced costs as followed. The
slaughterhouse facilities will increase the meat processing capacities in Niger, enhance the
quality of meat products, the reduction in waste products, the development and of by-products
(skin, hides, casings etc.), and unlock the export potential especially towards Nigeria and the
regional market.
29. A quantified analysis has been conducted to determine the net present value and the
economic rate of return for a discount rate of 12 percent and over a 15-years time horizon.
The resulting ERR has been estimated at 29 percent for Niamey and 19 percent for Maradi.
Niamey Maradi
Component ERR (15 years)
29% 19%
NPV (discount rate 12%)
US$ 3,056, 793 US$ 578,419
NPV (discount rate 8%)
US$ 6,350,511 US$ 604,711
Sensitivity Analysis with Different Scenarios
1. 7 percent of procurement going to local SMEs with project support affects the overall economic return
significantly, revising it downwards to 44 percent; while 13% share of mining companies‘ procurement
going to SMEs, instead of the assumed 10 percent, increase the ERR to 175 percent.
2. Increasing the overall estimate investments for mining companies from US$ 1,3 billion to 1.6 US$
billion increases the ERR to 161 percent. Reducing the estimated overall investments for mining
companies to 1,0 billion reduces the ERR to 60 percent.
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30. A sensitivity test conducted showed the ERR falls below 12 percent with 15 percent
change in the proposed slaughter fees for Maradi Slaughterhouse. In Niamey, it would take a
30 percent downward revision of slaughter fees to bring the ERR below 12 percent. This
reveals a vulnerability of the slaughterhouse model to change in proposed fees, it is much
more pronounced for the Maradi Slaughterhouse.
Component 3: Support to foster trade relations with Nigeria in identified value chains
31. Subcomponent 3.1 aims at enhancing regional integration with Nigeria through the
provision of TA to remove administrative barriers to trade and the construction of secondary
access roads to Nigeria. Due to the nature of the TA, it is difficult to measure its impact
although it will contribute to develop quality production in the Maradi area and exports to
Nigeria. Construction of access roads will contribute to income generation by facilitating
linkage between production areas and potential markets.
Conclusion
32. In summary, significant economic benefit is expected to be derived from this project.
Broadly, the project will create a business environment conducive to private investment,
enterprise creation and growth. It will enhance competitiveness of firms operating in the
mining and meat and butchery value chains. Increased competitiveness in these two sectors
will generate value-added and create more jobs. The project will contribute to increase Niger
export potential in mineral and meat products. It will also improve cross border trading
through better road connections and reduced administrative barriers and procedures. It is
expected that project intervention will ultimately contribute to attract potential investment
from Nigeria especially in the K2M corridor.
33. Ultimately, through its economy wide demonstration effect, the project is likely to
generate benefits for a much larger number of SMEs, with wider implications for private
sector growth, job creation and poverty reduction.
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