major macro economic indicators
|2014||2015||2016 (f)||2017 (f)|
|GDP growth (%)||7.0||3.5||5.2||5.0|
|Inflation (yearly average) (%)||-0.9||1.0||1.6||2.0|
|Budget balance (% GDP)||-8.0||-9.1||-6.9||-5.3|
|Current account balance (% GDP)||-14.1||-17.2||-17.8||-17.5|
|Public debt (% GDP)||33.4||45.1||48.9||50.4|
(e) Estimate (f) Forecast
- World's fourth largest producer of uranium
- Net exporter of oil products
- Drive to invest in agriculture and infrastructure
- Economy vulnerable to climate shocks and commodity price fluctuations
- Landlocked country
- Rapid population growth and high level of poverty
- Deteriorating security situation
Growth continuing despite a difficult security situation
Despite the worsening security situation and a decline in commodity prices, growth strengthened in 2016 due to the recovery of activity in agriculture and in the oil sector (increase in production at the Zinder refinery). The outlook for growth remains favourable but is subject to the risks of climatic shocks and on commodity export prices, and to security tensions. Activity will, in particular, be sustained by the start of major infrastructure projects. The Export-Import Bank of China is expected to finance a certain number of these projects (train loop, Kao cement factory, Dosso sugar complex, Sakadalma coal mine, development along the coast of Niamey). Also planned are the start of road infrastructure projects and the construction of an oil pipeline to Chad and Cameroon, which should help increase production at the Agadem oilfield and crude exports. This project has however been delayed, as has that for the exploitation of the giant uranium mine at Imouraren, mothballed while waiting for market conditions to improve.
Despite its abundant resources and although some social indicators have improved, Niger remains one of the poorest countries in the world. It is bottom on the list of nations in terms of the Human Development Index (HDI). Only growth of about 7% a year would enable a noticeable reduction in poverty and unemployment. Meanwhile, the business climate has improved but there are still obstacles to the free circulation of goods and opaque practices are still deemed worrying by business circles.
Inflation, driven in large part by movements in food prices, is expected to remain below the WAEMU convergence criterion of 3%, thanks, in particular, to the price stabilisation programme.
Fiscal adjustment effort under way and widening current account deficit
The government's economic programme is supported by an arrangement with the IMF (Extended Credit Facility), which was extended until the end of 2016. The authorities were committed, under this agreement, to adjust public accounts in 2016. Revenues, other than on natural resources, benefited from the steps taken to improve the collection of taxes and from the rebound in activity, while capital spending was cut. In the medium term, a special effort should be made to control current spending. The public debt level rose significantly with the implementation of structural projects and the clearing of domestic arrears. Future drawdowns, specifically under a framework agreement negotiated with China, could put pressure on the sustainability of this debt.
Exports, consisting mainly of commodities including uranium and refined oil products (50% of sales abroad), remain dependent on movements in world prices. The current account deficit remained high in 2016 in GDP terms. The fall in commodity prices was partly offset by a reduction in government investment spending and delays in the construction of the pipeline. Exports are unlikely to increase significantly in 2017, as the expected price improvement would be moderate. The trade deficit is compounded by the balance of services deficit (transport costs, imported services associated with extractive activities). In contrast, the surplus in the balance of transfers has grown in line with the increase in migrant workers' remittances. The country benefits from a not-insignificant flow of foreign direct investments, which are expected to grow from 2017 with the construction of the pipeline. In these conditions, the country's external position is expected to remain comfortable with foreign exchange reserves covering 4.5 months of imports of goods and services.
A degraded security situation
President Mahamadou Issoufou and his party, the Nigerien Party for Democracy and Socialism, easily won the parliamentary and presidential elections held between February and March 2016. The opposition was divided - one of its components subsequently joined the ruling coalition - and one of its leaders was imprisoned before the poll.
The main risk continues to be the security context, which has become more precarious since the deterioration of the political situation in Mali, Nigeria and in Libya. The country needs to deal both with attacks by the Nigerian Boko Haram Islamist group in the south-east and those by Jihadist groups from Mali in the east. These attacks, which have led to an influx of refugees and displacement of populations, are disrupting cross-border trade and putting pressure on the budget. Moreover, the risk of abduction, targeting foreigners, remains high and sporadic clashes between nomadic herders and settled farmers in the centre of the country are of great concern.
Last update: January 2017