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Niger Economic Outlook
Real GDP growth was an estimated 5.2% in 2018, up from 4.9% in 2017, reflecting stronger performance of the agricultural sector. On the demand side, final consumption grew by 4.5% in 2018, and investment, by 11.7% (compared with 2.4% in 2017). The GDP structure remains relatively stable, with agriculture ominating (43.4% of GDP in 2018), followed by services (35%), and industry (14.9%). Despite public finance consolidation, the fiscal deficit stood at an estimated 5.9% of GDP in 2018. Consumer price index inflation was an estimated 4.2% in 2018, reflecting an expansion in credit and money supply in the context of a contraction in net foreign assets.
The economic outlook is favorable, with real GDP growth projected at 5.3% in 2019 and 5.7% in 2020. Economic activity should continue to benefit from strong performance in the agricultural sector, underpinned by the expansion of irrigated land and the development of mini-dams. The 2017–2020 Economic and Social Development Plan provides for numerous infrastructure projects, notably the Cotonou–Niamey–Ouagadougou– Abidjan rail loop, a pipeline for exporting crude oil, the Salkadamna power project, and the Kandadji combined hydro and irrigation dam.
Recovery in Nigeria should also be profitable for Niger. The effectiveness of these prospects is also subject to risks related to climate shocks, a decline in the export price of crude oil, possible delays in the pipeline construction project, and the terrorist threat in the Sahel.
Tailwinds and headwinds
Agriculture remains a priority in the country’s strategy to strengthen and accelerate economic growth. The implementation of the five-year action plan under the 3N initiative “Nigerians feeding Nigerians” is ongoing, with encouraging results in terms of improved water resources management and increased productivity and value added for agro-sylvo-pastoral and fisheries production. The country has also undertaken numerous reforms aimed at improving the business environment and gained 26 places in four years on the World Bank’s Doing Business ranking. Despite the encouraging economic performance, poverty remains high (42.2% of the population in 2017), and access to basic services (health and education) is a major challenge.
As a large landlocked country, Niger is committed to regional integration, especially in the context of the Economic Community of West African States and the West African Economic and Monetary Union. Until early 2011, Niger exported exclusively agricultural and livestock products to these two economic areas. With the export of oil since 2012, the country has diversified its exports and improved its trade balance. Niger has implemented most regional regulations related to trade, including the Common External Tariff and its accompanying measures, and made progress in implementing the World Trade Organization’s Trade Facilitation Agreement. Niger has also signed the Continental Free Trade Agreement and is a member of the G5 Sahel subregional organization set up in 2014. Niger leads the group on climate change issues and chairs the Sahel Climate Commission.