Economy of Niger

Macro-economic trend

This is a chart of trend of gross domestic product of Niger at market prices estimated by the International Monetary Fund with figures in millions of CFA Francs.

Mean wages were $0.37 per man-hour in 2008

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Overall

Niger's economy is based largely on subsistence crops, livestock, and some of the world's largest uranium deposits. Drought cycles, desertification, a 3.4% population growth rate and the drop in world demand for uranium have undercut an already marginal economy. Traditional subsistence farming, herding, small trading, and informal markets dominate an economy that generates few formal sector jobs. Between 1988 and 1995 28% to 30% of the total economy of Niger was in the unregulated Informal sector, including small and even large scale rural and urban production, transport and services.

GDP per capita

Current GDP per capita of Niger grew 10% in the 1960s. But 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 price, as well as price negations with the main mining company, France's Areva NC. Price rises in the mid-1970s were followed by a collapse in the market price through much of the 1980s and 1990s. Thus the 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.

Agriculture

Niger's agricultural and livestock sectors are the mainstay of all but 18% of the population. Fourteen percent of Niger's GDP is generated by livestock production (camels, goats, sheep and cattle), said to support 29% of the population. The 15% of Niger's land that is arable is found mainly along its southern border with Nigeria. Rainfall varies and when insufficient, Niger has difficulty feeding its population and must rely on grain purchases and food aid to meet food requirements. Although the rains in 2000 were not good, those in 2001 were plentiful and well distributed. Pearl millet, sorghum, and cassava are Niger's principal rain-fed subsistence crops. Irrigated rice for internal consumption, while expensive, has, since the devaluation of the CFA franc, sold for below the price of imported rice, encouraging additional production. Cowpeas and onions are grown for commercial export, as are small quantities of garlic, peppers, potatoes, and wheat. Groundnuts, and to a lesser degree Cotton, introduced by former colonial power France in the 1930s and 1950s respectively, account for most of the world market for Nigerien industrial agriculture. Prior to the mass exploitation of uranium in the early 1970s, groundnut oil was the largest Nigerien export by worth.

The majority of Niger's population are rural residents engaged in agriculture, mostly in the south centre and south west of the nation. While these people are dependent on the agricultural market portions of their production and consumption, much of Nigerien farming is subsistence agriculture outside of the marketplace.

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 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 CFA franc, and a common central bank, the Central Bank of West African States (BCEAO), with six other members of the West African Monetary Union. The Treasury of the Government of France supplements the BCEAO's international reserves in order to maintain a fixed rate of 100 CFA (Communauté Financière Africaine) to the French franc (to the euro as of January 1, 2002).

Government restructuring

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 arrears) and scholarship payments, increased debt, reduced revenue performance, and lower public investment. In December 2000, Niger qualified for enhanced debt relief under the International Monetary Fund program for Highly Indebted Poor Countries and concluded an agreement with the Fund on a Poverty Reduction and Growth Facility (PRGF).

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 comply with the IMF's Poverty Reduction and Growth Facility plan, the government also is taking actions 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 health, primary education, rural infrastructure, and judicial restructuring.

Foreign Aid

The most important donors in Niger are France, the European Union, the World Bank, the IMF and other United Nations agencies (UNDP, UNICEF, FAO, WFP, and UNFPA). Other principal donors include the United States, Belgium, Germany, Switzerland, Canada, and Saudi Arabia. While USAID does not have an office in Niger, the United States is a major donor, contributing nearly $10 million each year to Niger’s development. The U.S. also is a major partner in policy coordination in such areas as food security and HIV/AIDS. The importance of external support for Niger's development is demonstrated by the fact that about 45% of the government's FY 2002 budget, including 80% of its capital budget, derives from donor resources. In 2005 the UN drew attention to the increased need for foreign aid given severe problems with drought and locusts resulting in a famine endangering the lives around a million people.

Statistics

GDP: purchasing power parity - $9.6 billion (9.6 G$) (1999 est.)

GDP - real growth rate: 2% (1999 est.)

GDP - per capita: purchasing power parity - $1,000 (1999 est.)

GDP - composition by sector:
agriculture: 40%
industry: 18%
services: 42% (1998)

Population below poverty line: 63%

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

Inflation rate (consumer prices): 4.8% (1999)

Labour force: 70,000 receive regular wages or salaries

Labour force - by occupation: agriculture 90%, industry and commerce 6%, government 4%

Unemployment rate: NA%

Budget:
revenues: $377 million, including $146 million from foreign sources
expenditures: $377 million, including capital expenditures of $105 million (1999 est.)

Industries: uranium mining, cement, brick, textiles, food processing, chemicals, slaughterhouses

Industrial production growth rate: 5.1% (2003 est.)

Electricity - production: 180 GWh (1998)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 363 GWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 196 GWh (1998)

Agriculture - products: cowpeas, cotton, peanuts, pearl millet, sorghum, cassava (tapioca), rice; cattle, sheep, goats, camels, donkeys, horses, poultry

Exports: $269 million (f.o.b., 1997)

Exports - commodities: uranium ore 65%, livestock products, cowpeas, onions (1998 est.)

Exports - partners: US, Greece, Japan, France, Nigeria, Benin

Imports: $295 million (c.i.f., 1997)

Imports - commodities: consumer goods, primary materials, machinery, vehicles and parts, petroleum, cereals

Imports - partners: France, Ivory Coast, US, Benelux, Nigeria

Debt - external: $1.3 billion (1999 est.)

Economic aid - recipient: $222 million (1995)

Currency: 1 Communauté Financière Africaine franc (CFAF) = 100 centimes

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