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.
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 allowing 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 became 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.
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. Despite housing thousands of refugees who have fled from the conflict, Niger has been mainly spared the violence with only a few sporadic attacks carried out on its territory at the beginning of the joint military offensive with Chad against Boko Haram.
Despite a difficult external environment, Niger’s economy is performing well. Low average rainfall and insecurity affecting the production of uranium offset 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. Such a rate 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 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. A swift and successful military intervention will undoubtedly positively affect the country in the medium to long run.
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 good and services fuelled 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 is putting together a Compact Response using uncommitted resources of the existing portfolio to help alleviate this economic burden.
Niger’s poverty rate, at 46.3%, 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: Jun 01, 2015