Country Brief

History

Niger is a vast landlocked country with an estimated population of 14 million, the majority of whom live along a narrow band of arable land on the country’s southern border. The economy is dominated by agricultural activity, including rearing livestock, mining (uranium), and informal trading activities. The primary sector, which accounted for about 46.7 percent of GDP in 2006, is dominated by rain-fed agriculture, while livestock production accounts for about a third of the value added in the sector.

In 2008, Niger was ranked 174 out of 179 countries on the UNDP's Human Development Index.  Sixty-one percent of Niger’s population lives in extreme poverty on less than a dollar a day and the average per capita income was estimated at US$280 in 2007.  Social indicators are low, with an infant mortality rate of 81 per 1,000 live births, life expectancy of 56.2 years, a literacy rate of 29.8 percent in 2006, and gross primary school enrollment preliminary estimates of 62.1 percent in 2008. GDP growth has been highly volatile but low on average, outpaced by the population growth rate, and estimated at 3.4 percent in 2008. GDP was estimated at 9.5 in 2008 (against 3.3 percent in 2007 and 5.2 percent in 2006, after reaching 7.4 percent in 2005), reflecting the strong performance of the agriculture sector (about 26 percent growth in real terms) following its recovery from the 2004 drought (GDP growth of -0.8 percent this year).  The government took measures to ensure the replenishment of the grain reserve in 2006 and is working to find a sustainable solution to this structural problem with the support of the donor community.  Real GDP preliminary estimate is at about 1 percent in 2009.

Economic and political context

The conflict in the Northern region of the country which started in early 2007 has now almost dissipated with no reports of armed attacks since June 2008, although the government considered the northern region a military zone as recently as November 2008. Under the auspices of Libya, the Government and rebels have recently signed an agreement whose implementation would help resolve the crisis.  On the political front, Niger, President Mamadou Tandja proposed an extension of three years, through a referendum, of his second presidential term, expected to end in December 2009. The President dissolved the National Assembly and the Constitutional Court, actions which were unfavorable to his plan to change the Constitution.

Legislative and local elections have been scheduled respectively for October 2009 and December 2009.

The global economic crisis could have a serious impact on the regional demand for traditional agriculture and livestock which could decrease substantially. In addition, terms of trade for oil and electricity could deteriorate, hence affecting Niger’s growth prospects.  While recent large investments in the mining sector will provide more fiscal resources to the Government, informal activities based on trade will be affected by the general slump.  In response to these risks, the Government has been strengthening its debt management capacity to keep its debt levels sustainable.  The Government is also launching several reforms through its Bank-supported development policy operation approved in March 2009 (Growth Policy Reform grant) to encourage the growth of the formal sector and the diversification of the economy. 

The Bank has worked closely with the IMF to encourage the Government to control spending and manage mining revenues transparently.  Tax policies to alleviate the immediate impact of the crisis on the private sector have been discussed.  The Bank is providing technical assistance to help strengthen capacity at the institutional level (a 10 million dollars technical assistance operation was approved by the Board on July 2, 2009).  Anticipating a possible decrease in resource flow, the size of the budget support operations, investment lending operations, and the commitment of other donors to deliver ODA is also being discussed.  On the project side the implementation of projects supporting the agriculture sector as well as measures to stimulate private sector growth are being put in place to help mitigate the short to medium term risks of the crisis.  Finally, the continued program of transport infrastructure investments also financed by the Bank will help address possible impact of the crisis.

From 2005-2007, Niger made significant progress in strengthening its economy with an average growth rate of 6.0 percent. This represents a recovery from 2004, when the economy contracted due to drought, a locust plague and higher energy prices.

In April 2004, Niger reached the HIPC Completion Point and received debt relief from IDA, including topping-up, equivalent to US$142 million. The country also qualified for US$300 million in debt relief from the Multilateral Debt Relief Initiative (MDRI) which is freeing up an additional US$30 million in resources annually for the 10 years.

The Government’s Second Poverty Reduction Strategy Paper (PRSP), which was approved by Decree on October 10, 2007, proposes that Niger will have to maintain real GDP growth rate of 7 percent annually to reach the MDGs. A baseline scenario for growth is 4.2 percent. In 2006, the GDP growth rate rose to an estimated 5.2 percent reflecting strong agricultural production and continued robust growth in non-agricultural sectors (uranium and telecommunications).

A three-year PRGF arrangement with the IMF was endorsed by the Fund’s Board in January 2005 for a total amount of US$40 million, and five reviews of the program were successfully completed. The sixth review took place in March 2008 and was discussed at IMF Board in May 2008 together with a new PRGF-supported program.

Donor coordination

France , Germany, Belgium, Canada, Japan, China, the European Union, the African Development Bank, the World Bank and the IMF are key development partners in Niger. International and local nongovernmental organizations (NGOs) have an active presence in the country. Several UN agencies provide relief through famine and refugee programs. The UNDP and the World Bank play an active role in donor coordination in Niger. The government revised the PRSP with strong donor support.  It was adopted in October 2007 by the government and endorsed by donors at a PRSP II financing Round Table in Brussels (October 25 to 26, 2007). A Joint Bank/Fund Staff Assessment Note (JSAN) on the PRSP II was discussed on April 29, 2008 at the Bank Board and on May 16, 2008 at the IMF Board.

The World Bank Group's role

As of end September 2009, the commitment value of thirteen ongoing IDA-financed operations is about US$349 million equivalent, with an undisbursed balance of about US$215.58 million. The portfolio supports: (i) investments in water infrastructure; (ii) rural development, promotion of agricultural exports, and irrigation; (iii) HIV/AIDS; a nation-wide community action program to support development programs at the community level; (iv) education for improving access to and quality of basic education; (v) reforming and restructuring the financial sector; (vi) health sector and institutional strengthening; (vii) natural disaster management; (vii) and an Emergency Food Security Support Project to mitigate the impact of food price hikes. Policy reforms to support improved public expenditure management and remove bottlenecks are being undertaken under a series of development policy lending operations, the first of which was approved in FY06 (Rural and Social Sector Policy Reform), the second one approved by the Board on June 19, 2007, and the third was approved on March 24, 2009 (Growth Policy Reform Grant).  Disbursement of the Growth Policy Reform Grant has been held up in the absence of parliament to ratify fiscal reforms and pending an IMF assessment of the macro environment.

A new Country Assistance Strategy (CAS) covering Fiscal Years F08-FY11 was approved by the Board on May 29, 2008.The government and the Bank are working closely together to address implementation issues including strengthening capacity building, simplification, harmonization and modernization of procurement and financial management processes and resolution of low project disbursement rates.

IFC’s Strategy in Niger is to develop projects in Health and Education, Agribusiness, Infrastructure, GMS, and Infrastructure sectors. IFC is also considering a potential Private Enterprise Partnership Africa involvement in the implementation of investment climate reforms.

Niger signed the MIGA Convention on April 11, 1994, but has yet to complete all the requirements for membership. Under these circumstances, the Agency cannot underwrite any investments in support of the country.

In FY10, WBI is implementing its Strategic Renewal with a focus on seven cross-cutting themes that are responsive both to corporate priorities and to strong country demand, including: Fragile and Conflict-affected States, the Global Economic Crisis, Governance, Climate Change, Health Systems, Urban Development, and Public-Private Partnerships (Service Delivery). Opportunities will be sought to engage Niger in these activities. A program on higher education was delivered for Niger in FY09. However, activities being offered in the sub-region across many sectors are available.

Contacts

For contacts, click here.