Niger Economic Outlook
- Economic growth rebounded to 5.2% in 2016 from 3.5% in 2015, thanks mainly to agricultural production and growth is projected to remain strong at 5.6% in 2017.
- Terrorism and security threats from neighbouring countries (Mali, Libya and Nigeria), falling world oil and uranium prices, and slower growth in the Nigerian economy continue to have an impact on Niger’s economic situation.
- Entrepreneurship in Niger is mainly informal, while industrialisation remains weak and continues to face several challenges, including problems with electricity supply.
Growth accelerated to 5.2% in 2016 and is projected to continue accelerating in 2017 (5.6%) and 2018 (6.7%). The upturn in 2016 is thanks mainly to the good winter harvest in 2016 and the increase in oil production. The recovery could have been stronger had neighbouring Nigeria’s economy not fallen into recession at the end of the third quarter of 2016. Other reasons for the good economic outlook include ongoing work on road infrastructure, the expected relaunch of the open-pit uranium mining project in Imouraren and the start of work to build an oil pipeline to export crude oil. However, this outlook is subject to risks related to climate shocks, oil-price shocks, possible delays to the pipeline and security tensions. Agriculture remains the main driver of growth, despite climate vagaries that make the economy very vulnerable.
Security and humanitarian shocks linked to the surge in Boko Haram attacks have hurt public finance management. These shocks could affect the pace of reforms and the implementation of important development programmes for Niger under the 2017-21 Economic and Social Development Plan (PDES). This situation affected the implementation of the 2016 budget, causing revenue shortfalls and overspending, especially on wages and on investments in the defence and security forces.
Entrepreneurship remains very weak in Niger due to the size of the informal economy, but measures to promote youth entrepreneurship through the National Strategic Framework for the Promotion of Entrepreneurship in Niger (CSNPEN) are reversing that trend, albeit still only slowly. Industry’s contribution to GDP averaged 15.1% for the four-year period from 2013 to 2016. Pro-industrialisation measures are hampered by many challenges, especially the longstanding lack of a development policy geared towards processing and the country’s limited electricity production. Niger will build its promotion of entrepreneurship and industrialisation around the oil and mining sectors, which have strong potential. By way of example, between the third quarter of 2015 and the third quarter of 2016, the industrial and mining production index grew by 39.5%, driven in particular by mining production (+14.6%) and manufacturing (+160.2%).