Washington, March 29, 2022 – A new World Bank Economic Memorandum for Niger released today, suggests that Niger should diversify its economy in order to achieve deeper structural transformation, higher income growth, and faster poverty reduction.
Niger experienced relatively robust growth over the past 20 years. The economy grew by 5.2% on average and extreme poverty declined from over 50% to 41% during this period. However, due to population growth and the minimal increase in average per capita income, the number of people living in extreme poverty (with less than $1.90 a day in purchasing power parity terms) continues to rise, and reached 10.5 million in 2021, an increase of 21% during the past decade.
Pierre Xavier Bonneau, Acting World Bank Country Manager for Niger, says that “Niger’s economy has grown steadily over the years, despite poor diversification and the challenging conditions facing the country. Ambitious institutional and economic reforms are needed to place Niger on an even more dynamic development trajectory and thus make the economy more resilient to these shocks, while offering better economic opportunities to the entire population, especially women and young people.”
Titled Pathways to Sustainable Growth in Niger, the report analyses three priority areas for creating the conditions for economic emergence: the use of modern technologies, particularly information and communication technologies, to accelerate private sector development; the operation and sound management of the extractive industries, including future oil rents; and the establishment of disaster risk management and finance frameworks in a context of climate change. The report identifies the bottlenecks that have stymied Niger’s past performance in each area and makes recommendations and suggestions, based on lessons learned from other developing countries, for removing these obstacles and thus boosting Niger’s long-term economic performance in the areas of growth, poverty reduction, and increased shared prosperity.
The report recommends the adoption of modern technologies in all sectors, starting with agriculture to make it more commercial and productive, and to provide increased and more inclusive financing. These recommendations are particularly urgent as Niger prepares to usher in an era of significant oil production. “The prospects for increased oil production are likely to generate strong domestic demand that is bound to create inflationary pressures and thus harm the competitiveness of the other economic sectors. It is therefore critical to boost agricultural productivity and promote private sector financing to avoid these price increases,” notes Paolo Di Lorenzo, Senior Economist and co-author of the report.
Furthermore, “Putting effective risk management and financing systems in place to respond to crises and natural disasters will help Niger build its resilience and more easily address all the enormous challenges that it faces,” notes Fatou Fadika, private sector specialist and co-author of the report.
The Niger Country Economic Memorandum aims to support policymakers and all stakeholders in their efforts to achieve sustainable, ambitious growth.