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.
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.
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