Macroeconomic Performance
Table 1: Overview of some macroeconomic indicators
Sanctions lowered economic growth in Niger to 1.4 per cent in 2023. The sanctions adversely affected the supply of electricity, particularly from Nigeria, and affected transit trade with its neighbours in the sub-region while making the regional capital market inaccessible to the country. The latter affected government expenditure, with reported cases of delayed public sector salary payments. Government revenues and expenditure both declined by more than 20 per cent as a result. Average inflation reduced to 3.7 per cent in 2023 from 4.2 per cent in 2022, as both public and private consumption fell drastically. Fiscal deficit declined markedly to -5.5 per cent of GDP in 2023, while public debt increased to 51.8 per cent of GDP in 2023 from 50.7 per cent of GDP in 2022. Current account balance improved to -12.8 per cent of GDP in 2023 from -16.2 per cent of GDP in 2022.
Outlook
Niger’s economy will be supported by the commencement of the export of pipeline crude oil through Benin in 2024 and beyond. However, intermittent power outages will cap economic growth in the near term, relative to prior projections. Economic growth is projected to accelerate to 6.7 per cent in 2024 and further to 7.7 per cent, primarily due to the impact of crude oil exports. Average inflation is projected to decline to 2.5 per cent and 2.1 per cent in 2024 and 2025, respectively, as the inflationary pressures associated with the economic and financial sanctions ease. Fiscal balance is projected to continue on a downward trajectory, narrowing to -4.1 per cent of GDP in 2024 and further to -3.0 per cent in 2025. The debt-to-GDP ratio is projected to decline consistently to 48.9 per cent of GDP in 2024 and further to 47.4 per cent in 2025. The current account balance is projected to ease to -6.1 per cent of GDP in 2024 and further to -5.1 per cent in 2025 as crude oil production ramps up and associated export proceeds increase.
Probable Headwinds
A fragile political situation weighs heavily on the projections, compounded by the persistent insecurity in the country. Climate change also threatens agricultural output. More importantly, the decision to leave ECOWAS will adversely affect the country and its population since more than 40 per cent of its exports are to the ECOWAS Community. A strict adherence to the ECOWAS Free Trade Agreement would mean that the country may face additional costs if it should continue to trade with the bloc after having exited.