Economy of Niger

Niger's economy is based largely on

The GDP per capita[14] of Niger grew 10% in the 1960s. However, this proved unsustainable and it consequently shrank by 27% in the 1980s and a further 48% in the 1990s. Much of this GDP is explained through the exploitation of uranium at Arlit in the far north of the country. Ore is partially processed on site by foreign mining corporations and transported by truck to Benin. Fluctuation of GDP can be mapped to changes in international uranium prices, as well as price negotiations with the main mining company, France's Orano Cycle. Price rises in the mid-1970s were followed by a collapse in the market price through much of the 1980s and 1990s. Thus the country's GDP per capita has little direct impact on the average Nigerien, although uranium funds much government operation. The 2006 Human Development Index ranked Niger sixth from worst in the world, with a HDI of 0.370: 174 of 179 nations.^[15]

External trade and investment

Of Niger's exports, foreign exchange earnings from livestock, although impossible to quantify, are second only to those from uranium. Actual exports far exceed official statistics, which often fail to detect large herds of animals informally crossing into Nigeria. Some hides and skins are exported and some are transformed into handicrafts.

Mining

The persistent uranium price slump has brought lower revenues for Niger's uranium sector. Uranium no longer provides the majority of national export proceeds. The nation enjoyed substantial export earnings and rapid economic growth during the 1960s and 1970s after the opening of two large uranium mines near the northern town of Arlit. When the uranium-led boom ended in the early 1980s, however, the economy stagnated and new investment since then has been limited. Niger's two uranium mines (SOMAIR's open pit mine and COMINAK's underground mine) are owned by a French-led consortium and operated by French interests.

Exploitable deposits of gold are known to exist in Niger in the region between the Niger River and the border with Burkina Faso. Substantial deposits of phosphates, coal, iron, limestone, and gypsum have also been found. Numerous foreign companies, including American firms, have taken out exploration licenses for concessions in the gold seam in western Niger, which also contains deposits of other minerals.

Several oil companies explored for petroleum since 1992 in the Djado plateau in north-eastern Niger and the Agadem basin, north of Lake Chad but made no discoveries worth developing at the time. In June 2007, however,

Niger's known coal reserves, with low energy and high ash content, cannot compete against higher quality coal on the world market. However, the parastatal SONICHAR (Société nigérienne de charbon) in Tchirozerine (north of Agadez) extracts coal from an open pit and fuels an electricity generating plant that supplies energy to the uranium mines.

Economic growth

After the economic competitiveness created by the January 1994 CFA franc devaluation contributed to an annual average economic growth of 3.5% throughout the mid-1990s, the economy stagnated due to the sharp reduction in foreign aid in 1999, which gradually resumed in 2000, and poor rains in 2000. Reflecting the importance of the agricultural sector, the return of good rains was the primary factor underlying a projected growth of 4.5% for 2001.

Foreign investment

In recent years, the Government of Niger promulgated revisions to the investment code (1997 and 2000), petroleum code (1992), and mining code (1993), all with attractive terms for investors. The present government actively seeks foreign private investment and considers it key to restoring economic growth and development. With the assistance of the United Nations Development Programme (UNDP), it has undertaken a concerted effort to revitalize the sector.

Currency

Niger shares a common currency, the

The following table shows the main economic indicators in 1980–2020 (with IMF staff estimates in 2021–2026).^[17] Inflation below 5% is in green. The annual unemployment rate is extracted from the World Bank, although the International Monetary Fund finds these figures unreliable. ^[18]

Year	GDP (in Bil. US$PPP)	GDP per capita (in US$ PPP)	GDP (in Bil. US$nominal)	GDP per capita (in US$ nominal)	GDP growth (real)	Inflation rate (in Percent)	Unemployment[18] (in Percent)	Government debt (in % of GDP)
1980	4.1	704.0	3.5	609.4	4.9%	7.3%	n/a	n/a
1981	4.5	743.8	3.1	510.0	-0.2%	24.3%	n/a	n/a
1982	4.8	779.9	2.8	458.1	2.2%	10.4%	n/a	n/a
1983	4.8	753.0	2.5	395.7	-3.9%	1.6%	n/a	n/a
1984	4.2	627.5	2.1	310.0	-16.8%	8.4%	n/a	n/a
1985	4.6	674.9	2.0	295.8	7.7%	-1.1%	n/a	n/a
1986	5.0	709.2	2.7	378.7	6.4%	-3.2%	n/a	n/a
1987	5.1	704.8	3.1	430.4	0.1%	-6.6%	n/a	n/a
1988	5.7	755.9	3.2	426.0	6.9%	0.6%	n/a	n/a
1989	6.0	768.7	3.1	394.7	1.0%	-0.8%	n/a	n/a
1990	6.1	762.9	3.5	435.3	-1.3%	-2.0%	n/a	n/a
1991	6.3	760.2	3.3	394.9	-0.4%	1.5%	1.4%	n/a
1992	6.6	767.0	3.4	393.7	2.0%	-5.9%	1.4%	n/a
1993	6.7	761.3	3.0	343.2	0.3%	-0.3%	1.4%	n/a
1994	7.0	765.2	1.9	211.0	1.9%	35.5%	1.4%	n/a
1995	7.3	773.5	2.3	242.0	2.5%	10.9%	1.4%	69.4%
1996	7.5	761.5	2.4	244.0	0.1%	5.3%	1.4%	63.5%
1997	7.7	759.3	2.3	224.5	1.5%	2.9%	1.4%	69.1%
1998	8.6	815.0	2.6	250.2	10.0%	4.6%	1.4%	61.3%
1999	8.7	795.9	2.5	231.7	-0.2%	-2.1%	1.5%	63.3%
2000	8.8	775.4	2.2	197.3	-1.2%	2.7%	1.5%	82.1%
2001	9.6	819.6	2.4	207.8	7.3%	3.9%	1.5%	74.0%
2002	10.3	842.1	2.8	227.4	4.9%	2.5%	1.9%	69.0%
2003	10.7	844.8	3.4	267.4	2.2%	-1.5%	2.3%	60.6%
2004	11.0	838.9	3.7	285.4	0.4%	0.2%	2.7%	55.1%
2005	12.2	894.5	4.4	320.9	7.3%	7.8%	3.1%	49.5%
2006	13.3	940.4	4.7	335.3	5.9%	0.0%	2.6%	18.3%
2007	14.1	959.3	5.7	389.3	3.1%	0.1%	2.2%	17.8%
2008	15.5	1,014.5	7.3	477.3	7.7%	11.3%	1.7%	14.2%
2009	15.9	1,003.4	7.3	462.3	2.0%	0.5%	1.3%	15.9%
2010	17.5	1,060.6	7.8	476.1	8.6%	0.9%	0.8%	15.1%
2011	18.2	1,066.1	8.8	511.5	2.4%	2.9%	0.3%	14.7%
2012	20.6	1,156.1	9.4	528.9	10.5%	0.5%	2.2%	18.1%
2013	20.8	1,125.3	10.2	551.6	5.3%	2.3%	1.4%	19.6%
2014	21.9	1,138.8	10.8	562.9	6.6%	-0.9%	0.5%	22.1%
2015	22.9	1,145.2	9.7	484.2	4.4%	1.0%	0.5%	29.9%
2016	23.9	1,148.3	10.4	497.9	5.7%	0.2%	0.5%	32.8%
2017	25.1	1,163.6	11.2	517.8	5.0%	0.2%	0.5%	36.5%
2018	27.6	1,229.6	12.9	572.6	7.2%	2.8%	0.5%	36.9%
2019	29.7	1,276.1	12.9	553.9	5.9%	-2.5%	0.6%	39.8%
2020	30.5	1,258.7	13.7	565.9	1.2%	2.8%	0.6%	44.2%
2021	33.2	1,319.6	15.9	632.6	6.9%	0.4%	n/a	44.5%
2022	38.3	1,466.6	18.5	710.3	12.8%	2.0%	n/a	42.0%
2023	43.5	1,605.9	21.0	777.6	11.1%	2.0%	n/a	39.9%
2024	47.3	1,685.4	22.9	816.6	6.6%	2.0%	n/a	39.2%
2025	51.3	1,760.8	24.9	853.6	6.3%	2.0%	n/a	38.8%
2026	55.3	1,830.5	26.8	888.5	5.8%	2.0%	n/a	38.7%

Statistics

GDP: purchasing power parity – $21.86 billion (2017 est.)

GDP – real growth rate: 4.9% (2017 est.)

GDP – per capita: purchasing power parity – $1,200 (2017 est.)

GDP – composition by sector:
agriculture: 41.6%
industry: 19.5%
services: 38.7% (2017)

Population below poverty line: 45.4% (2014 est.)

Household income or consumption by percentage share:
lowest 10%: 3%
highest 10%: 29.3% (1992)

Inflation rate (consumer prices): 2.4% (2017 est.)

Labour force: 6.5 million (2017 est.)

Labour force – by occupation: agriculture 79.2% , industry: 3.3%, services: 17.5% (2012 est.)

Unemployment rate: 0.3% (2017 est.)

Budget:
revenues: $1.757 billion (2017 est.)
expenditures: 2.171 billion (2017 est.)

Industries:

Industrial production growth rate: 6% (2017 est.)

electrification: total population: 15% (2013)

electrification: urban areas: 62% (2013)

electrification: rural areas: 4% (2013)

Electricity – production: 494.7 million kWh (2016 est.)

Electricity – production by source:
fossil fuel: 95%
renewable: 5%
nuclear: 0%
other: 0% (2017)

Electricity – consumption: 1.065 billion kWh (2016 est.)

Electricity – exports: 0 kWh (2016 est.)

Electricity – imports: 779 million kWh (2016 est.)

Agriculture – products:

Exchange rates: Communauté Financière Africaine francs (CFAF) per US$1 – 670 (January 2000), 560.01 (January 1999), 589.95 (1998), 583.67 (1997), 511.55 (1996), 499.15 (1995)
note: since 1 January 1999, the CFAF is pegged to the euro at a rate of 655.957 CFA francs per euro

Fiscal year: calendar year

Economic sectors

The economy of Niger centers on subsistence crops, livestock, and some of the world's largest uranium deposits. Drought cycles, desertification, a 2.9% population growth rate, and the drop in world demand for uranium have undercut the economy.

Niger shares a common currency, the

The agricultural economy is based largely upon internal markets, subsistence agriculture, and the export of raw commodities: foodstuffs and cattle to neighbors. Foreign exchange earnings from livestock, although difficult to quantify, are considered the second source of export revenue behind mining and oil exports. Actual exports far exceed official statistics, which often fail to detect large herds of animals informally crossing into Nigeria. Some hides and skins are exported, and some are transformed into handicrafts. ^[21]

Niger's agricultural and livestock sectors are the mainstay of all but 18% of the population.^[21] 14% of Niger's GDP is generated by livestock production (camels, goats, sheep and cattle), said to support 29% of the population. Thus 53% of the population is actively involved in crop production.^[21] The 15% of Niger's land that is arable is found mainly along its southern border with Nigeria.

In these areas,

As one of the Sahelian nations in West Africa, Niger has faced several droughts which led to food shortages and, in some cases, famines since its independence in 1963. This includes a series of droughts in the 1970s and 1980s and more recently in 2005–2006 and again in 2010. The existence of widespread famine in 2005–2006 was debated by the government of Niger as well some local NGOs.[25]

Mining

The Niger mining industry is the main source of national exports, of which uranium is the largest export. Niger has been a uranium exporter since the 1960s and has had substantial export earnings and rapid economic growth during the 1960s and 1970s. The persistent uranium price slump has brought lower revenues for Niger's uranium sector, although it still provides 72% of national export proceeds. When the uranium-led boom ended in the early 1980s the economy stagnated, and new investment since then has been limited. Niger's two uranium mines—SOMAIR's open pit mine and COMINAK's underground mine—are owned by a French-led consortium and operated by French company Orano.^[26][27]

As of 2007^[update], many licences have been sold to other companies from countries such as India, China, Canada and Australia in order to exploit new deposits. In 2013, the government of Niger sought to increase its uranium revenue by subjecting the two mining companies to a 2006 Mining Law. The government argued that the application of the new law will balance an otherwise unfavorable partnership between the government and Areva. The company resisted the application of the new law that it feared would jeopardize the financial health of the companies, citing declining market uranium prices and unfavorable market conditions. In 2014, following nearly a year long negotiation with the government of Niger, Areva agreed to the application of 2006 Mining Law of Niger, which would increase the government's uranium revenues from 5 to 12%.^{[26][27][needs update]}

In addition to uranium, exploitable deposits of gold are known to exist in Niger in the region between the Niger River and the border with Burkina Faso. In 2004, the first Nigerien gold ingot was produced from the

The history of oil prospecting and discovery goes back to the independence era with the first discovery of the Tintouma oil field in Madama in 1975.^[30] The Agadem basin in particular has attracted much attention since 1970 with Texaco and then Esso prospecting in the basin until 1980. Exploration permits on the same basin were held successively by Elf Aquitaine (1980–1985), Esso-Elf (1985–1998), Esso (1998–2002), and Esso-Petronas (2002–2006). While the reserves were estimated at 324 million barrels for oil and 10 billion m³ for gas, Esso-Petronas relinquished the permit because it deemed the quantities too small for production.^[30]

With the sudden increase in oil price by 2008, this assessment was no longer true; consequently, the government transferred the Agadem block rights to

The economic competitiveness created by the January 1994 devaluation of the Communauté Financière Africaine (CFA) franc contributed to an annual average economic growth of 3.5% throughout the mid-1990s. But the economy stagnated due to the sharp reduction in foreign aid in 1999 (which gradually resumed in 2000) and poor rains in 2000. Reflecting the importance of the agricultural sector, the return of good rains was the primary factor underlying economic growth of 5.1% in 2000, 3.1% in 2001, 6.0% in 2002, and 3.0% in 2003.

In recent years, the Government of Niger drafted revisions to the investment code (1997 and 2000), petroleum code (1992), and mining code (1993), all with attractive terms for investors. The present government actively seeks foreign private investment and considers it key to restoring economic growth and development. With the assistance of the United Nations Development Programme (UNDP), it has undertaken a concerted effort to revitalize the private sector.

Economic reforms

In January 2000, Niger's newly elected government inherited serious financial and economic problems including a virtually empty treasury, past-due salaries (11 months of unpaid salaries) and scholarship payments, increased debt, reduced revenue performance, and lower public investment. In December 2000, Niger qualified for enhanced debt relief under the

In addition to changes in the budgetary process and public finances, the new government has pursued economic restructuring towards the IMF promoted privatization model. This has included the privatization of water distribution and telecommunications and the removal of price protections for petroleum products, allowing prices to be set by world market prices. Further privatizations of public enterprises are in the works.

In its effort to comply with the IMF's Poverty Reduction and Growth Facility plan, the government is also taking action to reduce corruption and, as the result of a participatory process encompassing civil society, has devised a Poverty Reduction Strategy Plan that focuses on improving

A long planned privatization of the Nigerien power company, NIGELEC, failed in 2001 and again in 2003 due to a lack of buyers. SONITEL, the nation's telephone operator which was separated from the post office and privatised in 2001, was renationalised in 2009. Critics have argued that the obligations to creditor institutions and governments have locked Niger into a process of trade liberalization that is harmful for small farmers and in particular, rural women.^[32]

Infrastructure

Transportation infrastructure

Transport is crucial to the economy and culture of this vast landlocked nation, with cities separated by huge uninhabited deserts, mountain ranges, and other natural features. Niger's transport system was little developed during the colonial period (1899–1960), relying upon animal transport, human transport, and limited river transport in the far south west and south east. No railways were constructed in the colonial period. Construction of a network of paved roads linking major cities began after the independence reaching its heights during the uranium boom in the 1970s and 1980s. Primary or paved road systems are limited to bigger cities or connection between major cities. Road connections or networks in rural areas are mostly unpaved, all-weather laterite surfaces to grated dirt or sand plowed roads with various degrees of maintenance. In 2012, there was 19,675 kilometres (12,225 mi) of road network throughout Niger, of which 4,225 kilometres (2,625 mi) were paved.^[33]

The Niger River, which crosses the southwestern part of the country, is unsuitable for river transport of any large scale, as it lacks depth for most of the year, and is broken by rapids at many spots. Camel caravan transport was historically important in the Sahara desert and Sahel regions which cover most of the north.

Air transport is mainly concentrated in Niamey. Niger's only

In 2014, construction for the railway extension connecting Niamey (Niger) to Cotonou via Parakou (Benin) began and was expected to be completed by 2016. However, the project was still ongoing in 2018,^[34] and no recent reports have been made as of 2022. It includes the construction of 574 kilometres (357 mi) new railway from Niamey to connect to the existing line in Parakou (Benin). Besides Niamey, the railway line will go through Dosso city and Gaya.

Energy infrastructure

Accessibility to energy

Niger has insufficient access to the energy it needs. The country's energy consumption is considered one of the lowest in the world.

Sustainable and renewable energy

Niger also gets partial access to hydroelectric power from dams created alongside the Niger River.^{[39][unreliable source?]} Hydroelectric power contributes about 280 megawatts (MW) to Niger's energy collectively from several hydropower sources, including 130 MW from the Kandadji, 122.5 from River Niger in Gambou, and 26 MW from Dyondyonga in Mekrou.^[37] Getting renewable energy via hydropower has proven controversial, due to the importance of rainfall in acquiring energy. Again, these hydroelectric power dams are creating energy for Niger via Nigeria.^[39]

Solar energy has also been used to provide energy access. From 2004 to 2010 solar power generation was implemented, but there was a significant drop from 2010 to 2012. However, since 2016 approximately 5 Gwh of solar power have been used.^[38]

Niger has the potential to provide sustainable and renewable energy access within the country, which would help increase its energy intake and cope with the growing demands of the population. Several projects have been discussed to make use of clean energy sources such as solar power, hydropower, grid power, and wind power.

Many NGOs are working on funding projects to provide sustainable and renewable energy in parts of Africa. Affording the resources to create sustainable energy is one of the biggest barrier Niger faces, but agencies such as International Renewable Energy Agency (IRENA) and AbuDhabi Fund for Development (ADFD) are funding low developing countries, including Niger, to help develop local renewable projects. Theses agencies will support projects including a hybrid micro-grid project employing solar PV and advanced lithium-ion batteries, a hydropower project, integrated wind and solar, and a combination project consisting of micro-grid and solar home kits. In addition, Lighting Africa, an NGO primarily working in Niger, is assisting in sustainable energy development through two World Bank-sponsored Energy Access Projects: the Niger Solar Electricity Project (NESAP), and the Regional Off-Grid Electrification Project (ROGEP). These projects will work with grid systems in two piloting countries, and this includes Niger. They will aim to increase electricity access in households, businesses, and communities through modern off-grid electrification.

See also

• List of companies based in Niger
• List of countries by percentage of population living in poverty
• List of countries by Human Development Index
• List of countries by GDP (nominal)
• List of countries by GDP (nominal) per capita
• List of countries by GDP (PPP)
• List of countries by GDP (PPP) per capita
• List of countries by GNI (nominal) per capita
• List of countries by GDP growth
• List of countries by industrial production growth rate
• United Nations Economic Commission for Africa

References