Population 15.553 million
GDP 6.556 US$ billion
@rating
country
Business climate
assessment
| 2010 | 2011 | 2012(e) | 2013(f) | |
|---|---|---|---|---|
|
GDP growth (%)
|
8 |
2.3 |
11.3 |
6.2 |
|
Inflation (yearly average) (%)
|
0.9 |
2.9 |
2 |
2 |
|
Budget balance (% GDP)*
|
-7.4 |
-6.8 |
-10.4 |
-11.6 |
|
Current account balance (% GDP)
|
-21.1 |
-25.9 |
-25.2 |
-20.1 |
|
Public debt (% GDP)
|
17.6 |
16.6 |
20.4 |
23.6 |
| (e) Estimate (f) Forecast * grants excluded |
||||
STRENGTHS
- Uranium production potentially rising to second place in the world from 2014
- Net exporter of oil products from 2012
- Debt relief under HIPC and MDRI initiatives
WEAKNESSES
- Dependence of the agricultural sector on climatic conditions
- Exposure to raw materials price volatility
- Landlocked country
- Worsened security context
Risk assessment
Growth driven by oil and mining sectors
Niger recorded sharply accelerated growth in 2012 thanks to the entry into operation of the Agadem oil field and good agricultural performances. In 2013, the economy will be mainly supported by the expansion of the extractive industry sector. Medium term economic prospects remain promising. Not only is oil production expected to increase but also on-going investments in the mining sector (the giant Imouraren mine) are likely to enable the doubling of uranium exports by 2016. The country is expected, moreover, between now and then to join the top ranks of uranium producers. Nevertheless, the economy remains vulnerable to the evolution of the security situation in the region and to climatic shocks, the latter being the source of recurrent food insecurity. Inflation is noticeably below the 3% criterion fixed within the WAEMU in 2012 thanks to food-aid programmes. In 2013, price pressures are expected to remain limited due to the good harvest in the summer of 2012.
Rapid growth of the extractive industries is likely to enable the consolidation of public and external accounts but raises many challenges
The current account deficit has risen to a very high level due to import flows linked to the mining and oil sectors; flows fuelled by substantial foreign direct investments (60% of the current account deficit). This deficit is, however, expected to decline progressively in the coming years as exports in the extractive sector rise. With regard to the budget, delays in reform of the customs administration and lower than expected exports of oil products adversely affected tax revenues in 2012. At mid-term, however, the objectives have been respected thanks to the postponement of certain investments. Capital spending nevertheless remains high notably because of large grants received from external partners. The rise in oil and mining revenues is expected eventually to consolidate the fiscal position and make it possible to limit the growth of the external debt burden, which noticeably eased in 2006 as a result of the debt cancellation granted under the MDRI. This godsend must, however, be prudently managed. The economy’s vulnerability to external shocks could increase if there were a downturn in prices and there is a risk of oil reserves drying up in a few years. The rise in exports and fiscal revenues may have only a limited impact on employment. Hence the need for rapid reform of the financial sector and for an improvement in the business climate in order to diversify the economy and create a private sector capable of absorbing the increased labour supply.
A fairly stable political situation but a worsened security situation
Since his election as President of the Republic in March 2011, the former opposition leader, Mahamadou Issoufou, has set about consolidating democracy and reforming the economy. This has enabled the country to resume its relations with the outside world. The Head of State has the support of a majority of parties in the National Assembly and the opposition does not currently offer a credible alternative. The government coalition is, however, not exempt from tensions and the trade unions are exerting pressure. Nevertheless, the country is still primarily having to contend with a high terrorist threat linked to the presence of AQIM, aggravated by the deterioration of the security situation in northern Mali and the intensification of terrorist activity in the north of Nigeria.
