Niger is a large landlocked country of 1.27 million square kilometers. As of January 2016, the population of Niger was estimated to be 19.8 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. In accordance with the constitution, an Economic, Social and Cultural Council and a High Court of Justice were also established. In August 2013, the Speaker of the Parliament, Hama Amadou, broke out of the ruling coalition and became the main challenger to President Issoufou, and political tensions have been stirring since. In November 2015, Amadou was imprisoned under allegations of child-trafficking.
The 2016 presidential and legislative elections took place on February 21, 2016. The incumbent candidate President Mahamadou Issoufou gained 48% of the votes and Hama Amadou, who campaigned from behind bars via proxies, was second with 17%. As neither candidate took 50% of the vote, a run-off election took place on March 20, 2016 with incumbent President Issoufou winning 92% of the votes. The run-off elections were boycotted by supporters of Hama Amadou, resulting in low voter turnout, and continue to be contested by the opposition.
On the security front, in February 2015, Niger’s 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. The government has declared a state of emergency in its southeastern region.
Despite a difficult external environment, Niger’s economy is performing well. Low average rainfall and insecurity affecting the production of uranium was offset by the increase of revenues generated from the production of oil which is estimated at 18,000 barrels/day. In 2014, economic growth accelerated to 6.9%, 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. In 2015, GDP was 4.4%, down from 6.9% in 2014. This deceleration is mainly due to a 3.5% contraction of the agriculture sector. As prices are mainly driven by food supply, annual consumer price inflation slightly rebounded to 1% in 2015, yet remain well below the West African Economic and Monetary Union (WAEMU) convergence criteria of 3%.
Growth is expected to rebound in 2016 up to 5%, driven mainly as always by the mining and agriculture sectors. If current trends are maintained, average inflation would remain in check. Security at the borders with Mali, Libya, and Nigeria, as well as climatic and commodity-price shocks, will nonetheless continue to expose Niger to significant macroeconomic risks.
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 WAEMU. However, debt sustainability risks, still considered moderate at the end of 2014, will continue to require close attention given the rapid increase in external public debt (from 27% in 2014, to 33% in 2015 and 35% in 2016) 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. Overall fiscal balance deficit improved from 8.3% of GDP to 7.3% in 2015, and is projected to be 7.5% in 2016.
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 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.
With a poverty rate of 48.9% and a per capita income of $420, Niger is one of the world’s poorest nations. In 2015, it ranked 188th of 188 countries on the United Nations Human Development Index.
Last Updated: Apr 13, 2016