Niger is a large landlocked country of 1.27 million square kilometers. It has a current population of 17 million and a population growth rate 3.9%, one of the fastest population growth rates in the world. Prone to political instability and natural crises, notably droughts, floods and locust infestations, Niger suffers from chronic food insecurity.
After a 13 month military transition in 2011, Niger returned to political stability. Under President Mamadou Tandja (1999-2010), the country experienced a decade of relative stability however his efforts to seek constitutional changes to allow himself to run for a third term led to a political crisis. The turmoil ended in a coup d’état in February 2010.Throughout the following year, Niger was ruled by a transitional government that adopted a new constitution by referendum. A series of local, legislative, and presidential elections, generally considered fair and transparent, paved the way for a return to democracy. Mahamadou Issoufou of the Socialist Party was elected president, and a new government was formed in April 2011. In accordance with the constitution, the Economic, Social and Cultural Council and the High Court of Justice were established. Political tensions have risen since August 2013 when the Speaker of the Parliament Hama Amadou broke out of the ruling coalition and stood up as the main challenger to President Issoufou. In August 2014, he fled the country after his immunity was lifted in a child-trafficking scandal that has shaken the country's political class.
Despite a difficult external environment, Niger’s economy is performing well. In 2013, gross domestic product (GDP) grew by 4.1%, driven by the primary sector. The deceleration compared to 2012 was mainly due to a lack of rainfall, following an exceptional agricultural harvest and the launch of oil production. Consumer price inflation, which reached a record-low of 0.5% in December 2012 thanks to an abundant food supply, began to climb in 2013 as food prices started to increase but remained contained below 3%.
Being part of a monetary union with a fixed peg to the Euro, Niger’s economic policy is anchored around the maintenance of a moderate fiscal deficit of around 3% of GDP, financed through non concessional external borrowing and restrained domestic and regional financing. Strict cash based management allows authorities to promptly respond to shocks. In 2013, higher than anticipated expenditures (wage arrears clearance, health and education goods and services, and security expenditures) and lower than anticipated non tax revenue were offset with cuts in investment expenditures (including co-financed projects with donors) to maintain an overall balance of 3% on a commitment basis.
According to the updated debt sustainability analysis (DSA), Niger remains subject to moderate risk of debt distress. In comparison with the previous DSA, the large oil project is expected to generate net revenue and lead to an improvement in the fiscal and external accounts. In the baseline scenario, the external and public debt indicators remain below their policy-dependent thresholds throughout the projection period. However, Niger’s continued risk of debt distress calls for the authorities’ continued commitment to strengthen debt management. An expected refinancing loan to SORAZ refinery and individual loans contracted under the Chinese master facility would increase the public external debt stock.
In 2013, current account deficit including grants increased by 1.6 point of GDP percentage. In the coming years, current account dynamics will continue to be mostly driven by large scale mining investments projected to expand in 2014 through 2016, before gradually tapering off.
The medium-term economic outlook remains favorable. Growth is expected to rebound in 2014 up to 6.3%, driven mainly by the mining and agriculture sectors. If current trends are maintained, average inflation would remain in check. The fiscal deficit will increase to 16% of GDP in 2014 due to a project loan of 437.4 billion West African francs (CFAF) to refinance the loan for the construction of the Soraz refinery. Border security with Mali, Libya, and Nigeria as well as climatic and commodity-price shocks will nonetheless continue to expose Niger to significant macroeconomic risks. The pursuit of the program with the IMF, as well as efforts from the Government and its partners to strengthen security, diversify the economy (mining, electricity, irrigation) and reinforce social resilience will partially mitigate these risks.
Niger’s poverty rate, at 46.3% of the population, makes it one of the world’s poorest countries. Per capita income, at $360, puts it at the bottom of the United Nations Development Program (UNDP) Human Development Index (HDI) with a ranking of 187th out of 187 countries in the 2014 HDI. Niger’s social indicators have improved significantly over the past two decades but remain low. HIV/AIDS prevalence has remained at 0.7%, one of the lowest in sub-Saharan Africa. Progress toward the Millennium Development Goals (MDGs) is a main priority of the Government, although most of them still remain out of reach.
Last Updated: Dec 11, 2014