- Flexible real government expenditure - government savings is exogenous and set to grow  at a modest 2 percent a year.<sup>17</sup> Thirty percent of government income is allocated to public investment; the remainder is spent on current expenditures.

- The mobility of factors depends on the specification of the experiment.  Labor by type is generally mobile across sectors (with agricultural labor used only in the two agricultural sectors and unskilled labor used only in the non-agricultural sectors); the labor supply growth rate is set exogenously at 3.5 percent a year. Land is only used in the two agricultural sectors and grows at 1.5% per year.<sup>18</sup> Capital may be mobile or fixed depending on the simulation and is explained further below.

# **_Reference Scenario_**

A baseline scenario is defined as the historical growth case of Niger. In this base case, GDP is the non-oil GDP from the base year 2009, growing by the historical growth rate of the 2000s, at 3.5 percent a year - that is, before the mineral oil revenue is expected to flow. It is therefore a low growth case without the benefit of the new revenue.

**Table 14: Projections of uranium and oil production and government revenue, 2013-2030**

||2013<br>Proj.|2014<br>Proj.|2015<br>Proj.|2016<br>Proj.|2017<br>Proj.|2018<br>Proj.|2019<br>Proj.|2020<br>Proj.|Annual<br>average<br>2021- 2025<br>Proj.|Annual<br>average<br>2026- 2030<br>Proj.|
|---|---|---|---|---|---|---|---|---|---|---|
|**Uranium**|||||||||||
|Value CFAF billion|290|292|308|320|441|589|634|653|803|942|
|Volume (tons)|4,790|5,050|5,374|5,551|7,733|10,417|11,106|11,298|11,298|11,298|
|Average price (US$/kg)|130|123|121|120|119|118|119|121|148|174|
|_Government Revenue CFAF billion_|73|73|77|80|110|147|159|163|201|235|
|**Oil**|||||||||||
|Value CFAF billion (refined and crude)|298|379|1,336|1,337|1,363|1,390|1,418|1,446|1,535|1,694|
|Production (barrel/day)|16,000|20,000|80,000|80,000|80,000|80,000|80,000|80,000|80,000|80,000|
|Average price (US$/barrel)|109|110|96|96|98|99|101|103|110|121|
|_Government Revenue CFAF billion_|55|79|294|293|474|634|648|705|771|863|
|US$:FCFA exchange rate|467.28|471.40|475.12|478.80|478.80|478.80|478.80|478.80|478.80|478.80|

_Source:_ World Bank and IMF staff calculations.

Against this baseline scenario, we introduce the effects of an exogenous increase in mineral revenue and various key assumptions as alternative policy scenarios. In particular, as shown in Table 14, we assume that in 2015 Niger starts to export 60,000 barrels/day of crude oil and that this level of exports is sustained throughout the projection period. Uranium production which generates export revenue is also projected to increase significantly under the assumption that the Imouraren mine starts production as planned. In the analysis, the additional mineral revenue that accrues to Niger is the share of mineral export revenue that is

> 17 We tried several “rules based” macroeconomic assumptions regarding the internal and external balance. We report results using an annual growth rate of the internal balance at 2 percent per year and the external balance set to maintain its share of GDP.

> 18 Land expansion is equivalent to land improving investment (i.e. land embodied technological change).

19