NIGER Key conditions and Recent developments challenges Prior to the crisis, GDP growth had been projected at 6.9 percent in 2023 and to rise Table 1 2023 Niger’s economy is agriculture dependent to 12 percent in 2024, on the back of large- Population, million 27.2 and highly vulnerable to climate shocks, scale oil exports through the pipeline start- GDP, current US$ billion 16.6 leading to volatile growth. With limited im- ing by end 2023. However, the sanctions GDP per capita, current US$ 611.3 provements in productivity and high popu- and border closures delayed this start. a 50.6 International poverty rate ($2.15) lation growth, over half the population lives Government spending fell due to the a 83.1 in extreme poverty, aggravated by gender freezing of government assets, the loss Lower middle-income poverty rate ($3.65) a 96.3 disparities, with some of the weakest human of access to the WAEMU regional bond Upper middle-income poverty rate ($6.85) Gini index a 32.9 capital development indicators globally. market, and a significant reduction in ex- School enrollment, primary (% gross) b 64.8 With the completion of the Niger-Benin ternal financing. Private investment also b 61.6 pipeline, oil production is expected to rise fell sharply due to the uncertainty and Life expectancy at birth, years from 20,000 to 110,000 barrels per day by a liquidity crisis in the banking sector, Total GHG emissions (mtCO2e) 52.5 2025, increasing the importance of the oil brought on by the financial sanctions. Source: WDI, Macro Poverty Outlook, and official data. sector in exports, revenues, and GDP. Formal trade volumes fell - exports by a/ Most recent value (2021), 2017 PPPs. b/ Most recent WDI value (2021). Since 2011, Niger had been a source of po- 8.1 percent and imports by 12 percent. litical stability in the Sahel, benefiting from On the supply side, manufacturing, con- a significant increase in international de- struction, and trade-related services were velopment assistance and investment in re- heavily impacted and total agricultural cent years. This changed with the military production fell due to inadequate rainfall, The political crisis: the coup d’état, fol- coup on July 26, 2023, which led to heavy pests, and insecurity. That GDP growth lowed by sanctions and a severe reduction ECOWAS and WAEMU commercial and fi- remained positive demonstrates re- in financing, together with weak agricul- nancial sanctions and border closures last- silience, for example, the continuation of ture production, is estimated to have low- ing nearly 7 months, and a pause in de- public-sector salary payments and the velopment assistance. In September 2023, ramping up of local electricity production ered GDP growth in 2023 to 1.2 percent Burkina Faso, Mali, and Niger formed the in response to the cut-off of electricity (2.5 percent per capita) and increased the "Alliance of Sahel States” (AES) - a security imports from Nigeria. extreme poverty rate to 52 percent. With and military pact with political and econom- The annual average inflation remained sta- sanctions lifted, growth could rebound to ic aims. On January 28, 2024, in a joint com- ble at 3.7 percent in 2023, after being sub- 6.9 percent, boosted by large-scale oil ex- muniqué, the three countries announced dued in H1-2023 (average 1.2 percent), their ‘immediate’ withdrawal from ECOW- then rising sharply in H2-2023 (average 6.3 ports. Significant downside risks are the AS. According to the revised ECOWAS percent) due to food inflation caused by announced ECOWAS withdrawal, fi- Treaty, a notification period of one year is re- import disruptions. nancing conditions and climatic shocks. quired to leave ECOWAS. These develop- The 2023 budget was revised, cutting ments have further increased political and capital expenditures, and reducing the policy uncertainty. deficit to 3.9 percent of GDP (compared FIGURE 1 Niger / Real GDP growth and contributions to real FIGURE 2 Niger / Actual and projected poverty rates and GDP growth real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 20 100 350000 15 90 300000 80 10 70 250000 5 60 200000 0 50 40 150000 -5 30 100000 -10 20 50000 -15 10 2021 2022 2023 2024 2025 2026 0 0 Gov. cons. Exports GFCF 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate Statistical disc. GDP Upper middle-income pov. rate Real GDP pc Source: World Bank estimates. Source: World Bank. Notes: see Table 2. MPO 1 Apr 24 to 6.8 percent in 2022). Due to the financial The extreme poverty rate is projected to sanctions, Niger missed several debt re- slightly decrease by 0.8 ppt to 51.2 percent payments to government bond holders Outlook by 2026 assuming solid growth in service and international financial institutions. Ac- and agriculture sectors and policies that cording to UEMOA-Titres, CFAF 314 bil- With sanctions lifted in February 2024, uses oil revenues for the population. The lion (USD$512 million or 3.1 percent of growth could rebound to 6.9 percent (2.9 number of absolute poor is projected to GDP) is owed to bondholders as of Feb- percent per capita) in 2024 and average 4.5 reach nearly 15.6 million people by 2026. ruary 19, 2024. Moody’s has downgraded percent over 2025-26, boosted by large-scale The outlook remains subject to significant Niger's credit rating from B3 to Caa3. Pub- oil exports, while the non-oil industry and downside risks, including a deterioration lic debt is expected to reach 54.5 percent of service sectors face a challenging recovery. in the security situation, terms of trade GDP, including arrears. Growth prospects are weakened by the ex- shocks, climatic shocks, difficult financing The decline in overall and agriculture GDP pected impacts of an orderly ECOWAS conditions, and the withdrawal from per capita and rise in food prices is ex- withdrawal: lower non-WAEMU ECOWAS ECOWAS. An unnegotiated ECOWAS pected to increase the poverty rate by 2 trade, namely with Nigeria, higher in- withdrawal with disruptions to transport, percentage points to 52.0 percent in 2023. vestors’ risk premia, and increased regional transit and free movement of goods, ser- 2.3 million (8.9 percent of the population) financing costs. The fiscal sector will remain vices, capital, and labor could exacerbate were estimated to be food insecure in constrained by financing, as its resumption negative impacts due to spillovers onto Q4-2023, 13 percent higher than Q4 2022, depends on the clearance of arrears and re- WAEMU trade. The BCEAO may need to due to food inflation and pockets of food establishing engagements. Inflation is ex- continue monetary tightening in 2024 to deficits. There are also estimated around pected to stay above 3 percent 2024-26 as the bring inflation under control and in the 300,000 internally displaced persons due resumption of large-scale imports from the context of increased risks from the with- to insecurity and an equal number of region is counterbalanced by higher im- drawal of Niger, Mali, and Burkina Faso refugees from Nigeria, Mali, and Burkina port costs from exiting the ECOWAS free from ECOWAS. A further increase in the Faso. The crisis and border closures have trade area. With the onset of oil exports, cost of financing on the regional market led to severe disruptions in the delivery of the current account deficit is projected to could lead to Niger cutting investment ex- humanitarian aid. narrow to 8.4 percent of GDP. penditure to reduce its borrowing needs. TABLE 2 Niger / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2021 2022 2023e 2024f 2025f 2026f Real GDP growth, at constant market prices 1.4 11.5 1.2 6.9 4.8 4.3 Private consumption -0.2 7.0 3.5 3.8 4.4 4.1 Government consumption 9.8 -1.2 -11.1 2.2 4.1 3.3 Gross fixed capital investment 7.7 21.1 -10.9 3.1 4.0 3.7 Exports, goods and services 6.7 14.4 -8.1 82.5 9.8 8.7 Imports, goods and services 6.9 6.5 -12.0 22.5 5.5 5.5 Real GDP growth, at constant factor prices 1.0 11.6 1.2 6.9 4.7 4.3 Agriculture -5.1 27.0 -1.2 6.5 5.5 5.5 Industry 4.1 -0.9 3.9 14.9 5.6 3.4 Services 5.4 4.9 2.5 2.8 3.3 3.4 Inflation (consumer price index) 2.9 3.9 3.7 3.5 3.7 3.5 Current account balance (% of GDP) -7.8 -9.8 -9.4 -8.4 -6.3 -4.5 Net foreign direct investment inflow (% of GDP) 2.1 3.9 3.2 1.7 2.0 -2.1 Fiscal balance (% of GDP) -3.4 -6.8 -3.9 -2.4 -2.6 -2.7 Revenues (% of GDP) 18.2 14.9 10.0 11.0 11.8 12.0 Debt (% of GDP) 51.3 51.7 54.5 52.6 50.9 49.3 Primary balance (% of GDP) -2.2 -5.6 -2.9 -1.8 -2.1 -2.3 a,b International poverty rate ($2.15 in 2017 PPP) 50.6 49.9 52.0 50.9 51.1 51.2 a,b Lower middle-income poverty rate ($3.65 in 2017 PPP) 83.1 82.6 83.1 82.7 82.8 82.9 a,b Upper middle-income poverty rate ($6.85 in 2017 PPP) 96.3 96.0 96.0 95.7 95.7 95.8 GHG emissions growth (mtCO2e) 4.7 4.8 3.9 4.7 4.8 4.6 Energy related GHG emissions (% of total) 7.1 7.5 7.3 7.7 8.0 8.0 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026. b/ Projections using microsimulation methodology. MPO 2 Apr 24