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 of 3.9%, one of the fastest population growth rates in the world. Niger is prone to political instability, chronic food security, and natural crises, notably droughts, floods and locust infestations.
In 2011, Mahamadou Issoufou of the Socialist Party was elected president, and a new government was formed and the Economic, Social and Cultural Council and the High Court of Justice were established, in accordance with the constitution. Political tensions have been stirring since August 2013, when the Speaker of the Parliament, Hama Amadou, broke out of the ruling coalition and became the main challenger to President Issoufou. In August 2014, Amadou fled the country after his immunity was lifted in a child-trafficking scandal that shook the country's political class.
The time frame for the next general election was submitted to the Government by the Independent National Electoral Commission (INEC), and scheduling the first round of the presidential elections, coupled with legislative elections, for February 21, 2016. The second round of elections will take place on March 20, 2016, with local elections taking place in May 2016. The main opposition parties have however rejected this timeline on the grounds that the texts governing elections in Niger indicate that local elections should take place first, followed by the general elections (presidential and legislative).
On the security front, in February 2015, Parliament unanimously approved the deployment of troops as part of a regional offensive against the armed group Boko Haram. The resolution authorized the country to send some 750 troops to Nigeria to join a regional combat operation. As a result of Niger’s participation in this operation, the country was repeatedly attacked by Boko Haram resulting in hundreds of casualties and wounded, as well as thousands of refugees fleeing the conflict in search of safer havens in Niger.
Despite a difficult external environment, Niger’s economy is performing well. Low average rainfall and insecurity affecting the production of uranium offset by the increase of revenues generated from the production of oil which is estimated at 12,000 barrels/day. In 2014, economic growth accelerated to 6.5%, thanks to a rebound in agriculture and large public investment projects. Economic growth is still highly dependent on climatic conditions, large-scale investment projects in extractive industries, and security conditions.
From a macroeconomic perspective, risks of disruption through growing external or fiscal imbalances continue to be moderate, given the protection and related fiscal policy obligations provided by the West African Economic and Monetary Union (WAEMU). Yet, debt sustainability risks, still considered moderate by at the end of 2014, will continue to require close attention given the rapid increase in external public debt (from 23% of GDP in 2013 to 33% in 2014) to finance projects in extractive industries, in a context of declining uranium and oil prices. The increase is projected to peak at 37% in 2018 before declining as projects are completed. Given such exposure, the quality of debt and public investment management will continue to have an important bearing on debt and fiscal sustainability.
The social and economic impacts of the ongoing military intervention against Boko Haram on the southeastern border with Nigeria are yet to be fully known. However, preliminary estimates suggest that the fiscal impact in terms of additional security expenditure and the need to host refugees could cost 1% of GDP on an annual basis, crowding out equivalent resources to finance economic development investments.
Increased dependence on extractive revenues could indeed make the budget and public investment in particular more vulnerable to price and production changes. In addition, a larger demand for non-tradable goods and services fueled by growing revenues could affect external price competitiveness. In the face of such risks, the introduction of stabilization mechanisms and improved investment management considered under the new development policy operation (DPO) series would constitute powerful responses.
The recent violent clashes between Boko Haram and the Nigerian army have displaced over 115,000 people from Nigeria into Niger. Refugees are concentrated in Diffa, a region suffering from food insecurity and which is currently experiencing an unprecedented humanitarian crisis. In response, the government of Niger has put forward a contingency plan of $40 million and requested the assistance of the development partners to help cope with the immediate humanitarian needs up until March 2015. The World Bank Group which has established an Immediate Response Mechanism (IRM) that allows uncommitted resources (contingency funds) under projects in the existing portfolio to put together a Compact Response to help alleviate this economic burden.
Last Updated: Nov 19, 2015