NIGER

Key conditions andchallenges

Table 1

2023

Population, million

27.2GDP, current US$ billion

16.6

GDP per capita, current US$611.3

International poverty rate ($2.15)

a50.6
a83.1

a96.3

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a32.9

School enrollment, primary (% gross)

b64.8

b61.6

Total GHG emissions (mtCO2e)52.5Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ Most recent WDI value (2021).

The political crisis: the coup d’état, followed by sanctions and a severe reduction
in financing, together with weak agriculture production, is estimated to have lowered GDP growth in 2023 to 1.2 percent(-2.7 percent per capita) and increased theextreme poverty rate to 52 percent. With
sanctions lifted, growth could rebound to
6.9 percent, boosted by large-scale oil exports. Significant downside risks are theannounced ECOWAS withdrawal, financing conditions and climatic shocks.

Niger’s economy is agriculture dependentand highly vulnerable to climate shocks,
leading to volatile growth. With limited improvements in productivity and high population growth, over half the population lives
in extreme poverty, aggravated by genderdisparities, with some of the weakest humancapital development indicators globally.
With the completion of the Niger-Beninpipeline, oil production is expected to risefrom 20,000 to 110,000 barrels per day by2025, increasing the importance of the oil
sector in exports, revenues, and GDP.
Since 2011, Niger had been a source of political stability in the Sahel, benefiting froma significant increase in international development assistance and investment in recent years. This changed with the military
coup on July 26, 2023, which led to heavy
ECOWAS and WAEMU commercial and financial sanctions and border closures lasting nearly 7 months, and a pause in development assistance. In September 2023,
Burkina Faso, Mali, and Niger formed the"Alliance of Sahel States” (AES) - a security
and military pact with political and economic aims. On January 28, 2024, in a joint communiqué, the three countries announced
their ‘immediate’ withdrawal from ECOWAS. According to the revised ECOWAS
Treaty, a notification period of one year is required to leave ECOWAS. These developments have further increased political andpolicy uncertainty.

Recent developments
Prior to the crisis, GDP growth had been
projected at 6.9 percent in 2023 and to rise
to 12 percent in 2024, on the back of largescale oil exports through the pipeline starting by end 2023. However, the sanctions
and border closures delayed this start.
Government spending fell due to thefreezing of government assets, the lossof access to the WAEMU regional bondmarket, and a significant reduction in external financing. Private investment also
fell sharply due to the uncertainty anda liquidity crisis in the banking sector,
brought on by the financial sanctions.
Formal trade volumes fell - exports by
8.1 percent and imports by 12 percent.
On the supply side, manufacturing, construction, and trade-related services wereheavily impacted and total agricultural
production fell due to inadequate rainfall,pests, and insecurity. That GDP growth
remained positive demonstrates resilience, for example, the continuation ofpublic-sector salary payments and theramping up of local electricity production
in response to the cut-off of electricity
imports from Nigeria.
The annual average inflation remained stable at 3.7 percent in 2023, after being subdued in H1-2023 (average 1.2 percent),
then rising sharply in H2-2023 (average 6.3percent) due to food inflation caused byimport disruptions.
The 2023 budget was revised, cutting
capital expenditures, and reducing thedeficit to 3.9 percent of GDP (comparedFIGURE 1 Niger / Real GDP growth and contributions to realGDP growth

FIGURE 2 Niger / Actual and projected poverty rates andreal GDP per capita

Percent, percentage points
20Poverty rate (%)

1590

Real GDP per capita (constant LCU)

100

35000030000080

1070

250000560

200000

0

50

-540

15000030

100000

-10

20-15

10

2021

2022

Gov. cons.
Inventories
Statistical disc.

2023

2024

Exports
Private cons.
GDP

2025

2026

50000

00
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

GFCF
Imports

Source: World Bank estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pcSource: World Bank. Notes: see Table 2.

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1Apr 24

to 6.8 percent in 2022). Due to the financial
sanctions, Niger missed several debt repayments to government bond holders
and international financial institutions. According to UEMOA-Titres, CFAF 314 billion (USD$512 million or 3.1 percent ofGDP) is owed to bondholders as of February 19, 2024. Moody’s has downgraded
Niger's credit rating from B3 to Caa3. Public debt is expected to reach 54.5 percent ofGDP, including arrears.
The decline in overall and agriculture GDPper capita and rise in food prices is expected to increase the poverty rate by 2
percentage points to 52.0 percent in 2023.
2.3 million (8.9 percent of the population)
were estimated to be food insecure in
Q4-2023, 13 percent higher than Q4 2022,
due to food inflation and pockets of fooddeficits. There are also estimated around
300,000 internally displaced persons due
to insecurity and an equal number ofrefugees from Nigeria, Mali, and Burkina
Faso. The crisis and border closures have
led to severe disruptions in the delivery ofhumanitarian aid.

OutlookWith sanctions lifted in February 2024,
growth could rebound to 6.9 percent (2.9percent per capita) in 2024 and average 4.5
percent over 2025-26, boosted by large-scaleoil exports, while the non-oil industry andservice sectors face a challenging recovery.
Growth prospects are weakened by the expected impacts of an orderly ECOWAS
withdrawal: lower non-WAEMU ECOWAS
trade, namely with Nigeria, higher investors’ risk premia, and increased regional
financing costs. The fiscal sector will remain
constrained by financing, as its resumption
depends on the clearance of arrears and reestablishing engagements. Inflation is expected to stay above 3 percent 2024-26 as theresumption of large-scale imports from theregion is counterbalanced by higher import costs from exiting the ECOWAS free
trade area. With the onset of oil exports,
the current account deficit is projected tonarrow to 8.4 percent of GDP.

TABLE 2 Niger / Macro poverty outlook indicators

The extreme poverty rate is projected toslightly decrease by 0.8 ppt to 51.2 percent
by 2026 assuming solid growth in serviceand agriculture sectors and policies thatuses oil revenues for the population. The
number of absolute poor is projected toreach nearly 15.6 million people by 2026.
The outlook remains subject to significant
downside risks, including a deteriorationin the security situation, terms of trade
shocks, climatic shocks, difficult financing
conditions, and the withdrawal fromECOWAS. An unnegotiated ECOWAS
withdrawal with disruptions to transport,
transit and free movement of goods, services, capital, and labor could exacerbate
negative impacts due to spillovers onto
WAEMU trade. The BCEAO may need tocontinue monetary tightening in 2024 tobring inflation under control and in thecontext of increased risks from the withdrawal of Niger, Mali, and Burkina Faso
from ECOWAS. A further increase in thecost of financing on the regional market
could lead to Niger cutting investment expenditure to reduce its borrowing needs.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
1.4-0.2
9.8
7.7
6.7
6.9

2022
11.5
7.0
-1.2
21.1
14.4
6.5

2023e
1.2
3.5
-11.1
-10.9
-8.1
-12.0

2024f
6.9
3.8
2.2
3.1
82.5
22.5

2025f
4.8
4.4
4.1
4.0
9.8
5.5

2026f
4.3
4.1
3.3
3.7
8.7
5.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

1.0
-5.1
4.1
5.4

11.6
27.0
-0.9
4.9

1.2
-1.2
3.9
2.5

6.9
6.5
14.9
2.8

4.7
5.5
5.6
3.3

4.3
5.5
3.4
3.4

Inflation (consumer price index)

2.9

3.9

3.7

3.5

3.7

3.5

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-7.8
2.1

-9.8
3.9

-9.4
3.2

-8.4
1.7-6.3
2.0

-4.5
-2.1

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-3.4
18.2
51.3
-2.2

-6.8
14.9
51.7
-5.6

-3.9
10.0
54.5
-2.9

-2.4
11.0
52.6
-1.8

-2.6
11.8
50.9
-2.1

-2.7
12.0
49.3
-2.3

50.6
83.1
96.3

49.9
82.6
96.052.0
83.1
96.0

50.9
82.7
95.7

51.1
82.8
95.7

51.2
82.9
95.8

4.7
7.1

4.8
7.5

3.9
7.3

4.7
7.7

4.8
8.0

4.6
8.0

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

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.

MPO2Apr 24