The World Bank in Niger

Niger, which is located in the heart of the Sahel, has a poorly diversified economy, with agriculture accounting for 40% of its GDP. More than 10 million people (42.9% of the population) were living in extreme poverty in 2020.

Niger is grappling with an influx of refugees fleeing conflicts, particularly in Nigeria and Mali. In February 2021, the United Nations High Commissioner for Refugees (UNHCR) identified 241,321 refugees and 300,320 displaced persons in the country.

Political Context

Mohamed Bazoum, the candidate of the party in power, was elected president in elections held in December 2020 and February 2021, marking the first democratic transfer of power in the country’s history.

Niger is facing a security crisis in the areas bordering Nigeria, Burkina Faso and Mali, where armed groups carry out repeated attacks against the security forces and civilians. A state of emergency was declared in the Diffa, Tahoua and Tillaberi regions.

Economic Overview

The growth rate fell from 5.9% in 2019 to 3.6% in 2020 as a result of the health, climate and security crises. However, the favorable economic outlook for 2021 could lead to a 5.1% rebound in growth. Agriculture will benefit from the reopening of the border with Nigeria while the industrial sector will benefit from the increase in the global demand for and boom in oil production. Real GDP is projected to reach 6.2% in 2022 and approximately 10% as of 2023 once the pipeline has been completed and oil exports have begun.

Recent gains in combating poverty are in danger of being wiped out, following a 0.2% drop in per capita income in 2020. The favorable economic outlook is expected to help reduce the poverty rate from 41.2% in 2020 to 37% in 2023.

However, an annual population growth rate of 3.8% and a fertility rate of 6.9 children per woman continue to limit the fiscal space available to reduce poverty.

Fiscal deficit indicators have deteriorated, owing to the falloff in growth and the need to protect households and businesses. The fiscal deficit widened from 3.6% of GDP in 2019 to 4.9% in 2020, while public debt hit 45%. This deficit was financed by the issuance of government securities and donor resources and is expected to increase to 6.3% in 2021, reflecting the impact of the July 2021 supplementary budget, which increased expenditure by 6.9%. 

Weak earnings from uranium and oil exports will dampen government revenues, and public debt is projected to reach 48.6% in 2021. Increased oil exports are expected to strengthen Niger’s public finances and external position over the medium term.  

Three factors could undermine Niger’s economic performance: a new COVID-19 wave and a slow launch of the vaccination campaign; deteriorating security conditions; and vulnerability to climate shocks and fluctuations in global non-oil commodity prices.

Last Updated: Oct 05, 2021

In September 2017, Niger adopted a new Economic and Social Development Plan (PDES), which the World Bank used to prepare its Country Partnership Framework (CPF) with Niger for the 2018-2022 period. The World Bank’s strategy in Niger is based on three pillars:

• Boosting productivity and income in rural areas;
• Developing human capital and social protection; and
• Strengthening governance.

The goal is to accelerate economic and social development in Niger by tackling the obstacles that impede growth and poverty reduction efforts. The World Bank’s strategy also addresses fragility, conflict and violence by supporting Niger’s response to the existing crises and helping reduce rising tensions.

On September 20, 2021, the World Bank was financing 19 national projects and 13 regional projects valued at $3.19 billion (grants and loans included). These projects support the development of several sectors:

• energy and extractive industries (15.1%)
• water and sanitation (13.5%)
• agriculture (10.2%)
• transport and infrastructure (9.9%)
• social protection and employment (9.1%)
• assistance with reforms (7.8%)
• health and nutrition (7.5%) 
• education (7.4%)
• urban development, disaster management and resilience (6.4%) 
• social sustainability and inclusion (5%)
• governance (4.4%)
• digital development (3.1%) and
• poverty and equitable growth (0.6%)

To address the COVID-19 pandemic crisis, the World Bank approved $13.9 million in emergency health financing from IDA in April 2020, $5.3 million in grant funding from the Pandemic Emergency Financing Facility, and a $36 million emergency social protection operation to provide cash transfers to 400,000 urban and rural households in Niger. An additional $29.2 million in financing to secure vaccines was approved in June 2021. 

International Finance Corporation (IFC)

In recent years, IFC has focused on identifying ways to support private sector development. 

As part of the Sahel Irrigation Initiative, the Management Advisory Service (MAS) launched a project in 2016 to spur private investment in irrigated agriculture. Efforts were stepped up in late 2017 with the organization of the Niger Renaissance Conference in Paris and large-scale private sector participation.

Building on this momentum, in early 2019, the MAS team organized consultative support for some 20 SMEs in order to enhance their capacity to mobilize funds from local financial intermediaries (including IFC clients).

On the energy front, IFC announced a partnership with the government of Niger in June 2021 to develop renewable energy production under the Scaling Solar program. This agreement will enable Niger to procure utility-scale solar power from reputable independent power producers more quickly and affordably.

Last Updated: Oct 05, 2021

The following are examples of progress made possible by World Bank financing:

Energy

The World Bank is helping Niger transform its electricity sector with a view to increasing access to electricity for all its people on a sustainable basis. It is providing financial and technical support through two major projects: the Niger Electricity Access Expansion Project (NELACEP) and the Niger Solar Electricity Access Project (NESAP). These projects have already facilitated access to electricity for over 290,000 persons out of a target of almost one million by end-2023. NESAP has also brought new dynamism to the solar equipment market, with the availability of a line of credit and technical assistance for private businesses.

By providing technical assistance and budgetary support to the government of Niger, the World Bank has also contributed to the adoption of the National Strategy for Access to Electricity (SNAE), which aims to raise the rate of access to electricity to 80% by 2035. The Bank also supported the adoption of regulatory provisions that have helped make Niger’s electricity sector one of the best economic performers in the subregion. The reforms being implemented have placed the country in a good position to exploit solar energy and attract private investment.

Social Safety Nets

The World Bank has been providing support to the government of Niger for almost 10 years for the development of an effective social protection system.  The aim is to support the poorest households by providing monthly cash transfers in conjunction with other measures to strengthen human capital and develop productive activities. This program also helps households improve resilience and cope with unexpected shocks, such as those associated with climate change.

The Adaptive Safety Net Project 2 “Wadata Talaka” (PFSA 2), which became effective on June 20, 2019, has directly benefited more than 3 million people as follows:

• 30,000 households (around 210,000 persons) have benefited from monthly transfers of CFAF 15,000[1] over 24 months, as part of the program of cash transfers to build resilience.
• 13,200 households (about 92,000 persons) have benefited from the establishment of cash for work activities, which led in 2020 to the construction and/or rehabilitation of some 40 community assets.
• Cash transfers in response to the socioeconomic impact of COVID-19: 400,000 urban and rural households (approximately 2,800,000 persons) each received a one-time transfer of CFAF 45,000, with a total value of $36 million.

30,000 households participating in the cash transfer program benefited from the implementation of support and awareness-raising measures designed to encourage behavioral change to enhance their resilience and strengthen the human capital of their children.

[1] On March 25, 2021, $1 was equal to CFAF 551.

Last Updated: Oct 05, 2021

The World Bank collaborates with various multilateral agencies and donors, such as the Agence Française de Développement, the African Development Bank and the European Union, to coordinate its support for Niger’s development.

In July 2017, Germany, the African Development Bank, the World Bank, France, the European Union, and the United Nations Development Programme launched the Sahel Alliance with the aim of providing a coordinated and tailored response to the challenges faced by the G5 Sahel member countries (Burkina Faso, Chad, Mali, Mauritania and Niger). Since that time, Denmark, Italy, Luxembourg, the Netherlands, Spain and the United Kingdom have joined the Alliance. 

Last Updated: Oct 05, 2021