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Niger Economic Outlook
Recent macroeconomic and financial developments
Real GDP growth rebounded to 7.2% in 2022, on strong performance across all sectors, particularly primary and tertiary services (which grew 7%), on the supply side and ongoing major infrastructure projects on the demand side. Inflation exceeded the west African Economic and Monetary Union (wAEMU) target of 3%, fueled by higher consumer food prices and the deteriorating international economic situation. The budget deficit widened to 6.6% of GDP in 2022 from 6.1% in 2021 due to public spending rising more than public revenue. Constraints on budgetary performance continue to be both structural (tax base, economic structure, economic and social needs, and the like) and cyclical (lower global price for uranium, closing of the border with Nigeria). The budget deficit was financed primarily by external resources (budgetary support and projects), mainly grants. Public debt rose slightly to 51.2% of GDP in 2022 from 50.9% in 2021. Foreign loans accounted for 65% of public debt—below the wAEMU target—resulting in moderate risk of external debt distress. The chronic current account deficit widened to 15.1% of GDP in 2022 from 13.9% in 2021, financed by concessional loans and foreign direct investment, which rose substantially between 2017 and 2020. The social situation remains precarious, with extreme poverty at 42% in 2021.
Outlook and risks
Real GDP is projected to grow 7.0% in 2023 and 11.8% in 2024, with all sectors growing at least 5%. Consumption and higher oil investment as well as exports enabled by the new pipeline are projected to boost GDP growth. Possible headwinds include lack of security, climate change, a deteriorating international economic situation, and the like. Inflation will be contained below the wAEMU target of 3%. Public finances are expected to consolidate, with a substantial increase in public revenue from oil production, and the quality of public spending is improving under the new public finance reform strategy. Public debt is projected to remain sustainable, with most external borrowing contracted on concessional terms. The current account and trade deficits are projected to narrow. Social conditions are also expected to improve thanks to economic recovery and the resilience-building measures in the new Economic and Social Development Plan 2022–2026.
Climate change issues and policy options
Niger is highly exposed and vulnerable to the effects of climate change, with substantial energy requirements for its economic and social development. The country’s objective is to fulfill its commitments under the Paris Agreement, particularly in terms of limiting the rise in temperature to less than 2°C or even 1.5°C by 2050. To meet this challenge and implement the revised Nationally Determined Contribution roadmap, Niger has developed a private sector financing strategy. The strategy sets out five intervention areas: mobilizing and involving private industry and professional organizations in adaptation planning, implementation, and monitoring and evaluation; updating the overview of the market’s state of progress by identifying the sectors that are most promising and of the most interest to companies, compiling an inventory of companies in these sectors or with the potential to participate in them, and conducting a financing needs assessment; mobilizing financial resources from private funders as well as private stakeholders and corporations and implementing an annual work plan and budget; promoting climate technology innovation; and building capacity for company training and support structures as well as for companies themselves.
