Insights on Niger’s Economy

Niger is by some measures the poorest country in the world, yet its economy is growing rapidly. Several recent analyses are worth a read. All of them highlight both possibilities and constraints for the economy over the coming years:

  • IMF, May 18: “Despite a deterioration of the security context in the region, real gross domestic product (GDP) in 2014 rebounded to 6.9 percent, from 4.6 percent in 2013. Growth was driven by agriculture and services. Average inflation receded to negative 0.9 percent in 2014 thanks in particular to an improved food supply in part due partly to the government’s food aid program, which helped to attenuate the increase of prices of food products. Weak revenue collections, unanticipated security expenditure and a shortfall in external budget assistance adversely impacted fiscal outcomes and, as a result, most of the program’s fiscal targets for end-2014 were missed. However, the economic outlook for 2015 and the medium-term remain favorable. Although real GDP growth is expected to recede to 4.3 percent in 2015, average growth is projected to average 7 percent during 2016-2018, mainly as a result of the expansion of the extractive industries sector and an increase in public investments.”
  • Facinet Sylla and Mansour Ndiaye, May 28: “Niger is very much a landlocked country, with two-thirds of its land mass desert. The population is concentrated in a narrow strip in the south, where its main activities are farming and herding. The population is doubling every 18 years, with a high birth rate entrenched in the culture. This is a real challenge for food security, education, healthcare, family planning, employment and social protection. The government has therefore made spatial inclusion one of its aims in its national development policy, the main tool of which is the creation of local development bodies. However, the policy’s impact is limited by challenges related to demographics and the transfer of resources, as well as by a relatively weak institutional capacity and regional bodies that are illequipped to bring about sustainable local growth.” The authors’ full paper is available in French here; it features additional discussion of different sectors (agriculture, extractive industries, and commerce), macroeconomic and fiscal policy, and other matters.
  • Adamou Louché Ibrahim (French), June 2, discusses three risks: climatic, physical insecurity, and energy insecurity. He argues that the high cost of energy constrains growth: “Even though Niger has been a net exporter of petroleum products since 2011, their high price (unleaded: 540 FCFA/liter; diesel: 538 FCFA/liter, more than half the daily salary of a salaried worker paid the minimum guaranteed salary of 30,047 FCFA monthly) makes them quasi-inaccessible for the majority of Nigeriens. So, contrary to what certain politicians in the country affirm, a drop in the price of energy would have a very significant positive impact on growth…boost[ing] internal demand, and our economy would enter a virtuous cycle. Thus the government would have everything to gain by renegotiating the contract that binds it to the China National Petroleum Corporation.”

 

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