Country Risk Rating

A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high. - Source: Coface

Business Climate Rating

The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.


  • World’s fourth largest producer of uranium
  • Net exporter of oil products and gold
  • Drive to invest in agriculture and infrastructure
  • Member of the West African Economic and Monetary Union
  • Financial support from multilateral lenders


  • Economy vulnerable to weather events and to fluctuations in commodity prices
  • Economy still largely dependent on subsistence agriculture
  • Inadequate system for collecting tax and customs duties
  • Porous borders, favoring illegal immigration and trafficking
  • Rapid population growth and high rate of poverty
  • Deteriorating security situation and terrorist threats

Current Trends

Growth Stimulated by Infrastructure Investments Despite a Difficult Security Situation

Growth in 2018 will likely be stimulated by infrastructure investments, higher agricultural productivity, as well as relative rises in the price of uranium which will boost production.

The implementation of an Extended Credit Facility arrangement with the IMF in January 2017 (DTS 100 million over three years) will help stimulate investment in infrastructure, reassure investors and provide a framework for development aid. Focused chiefly on energy (Kandaji Dam; the Agadem oil pipeline project to connect with the existing Chad-Cameroon pipeline) and transport (Niamey interchange), these different projects should help fill the infrastructure gaps and, at the same time, attract more investment and boost production capacity.

Higher uranium prices (31% of exports in 2015) should attract new investment and stimulate production, especially with the rise in yields from the Madaouela (GoviEX) mine, which is due to become fully operational in late 2018. However, business climate failings put pressure on the implementation of these projects and threaten their completion. Meanwhile, agricultural infrastructure development projects, associated in particular with the 3N Initiative (Nigeriens Nourish Nigeriens), should help boost agricultural productivity.

Domestic demand is expected to remain firm, stimulated by fairly stable public spending and private consumption, associated with strong demographic growth and price stability, with inflation still below the 3% target set by the WAEMU central bank. However, these growth prospects are still subject to security, climate, and humanitarian risks in a country that already has one of the highest poverty rates in the world.

Investment Projects Putting a Strain on the Public and Current Accounts, But the Restructuring Drive Underway

Contributions from international donors have helped reduce the public deficit (from 11.0% to 6.2% of GDP in 2016). Higher revenues, thanks to the growth in commodities exports, will probably only partially offset the strong rise in public spending on investment and security. Nevertheless, the drive to collect taxes and customs duties under the aegis of the IMF should facilitate continued deficit reduction. In this context, the public debt is likely to continue to increase, as three-quarters of it is held by foreign public-sector creditors and is mostly concessional. However, because Niger belongs to the WAEMU (West African Economic and Monetary Union) and the CFA franc exchange rate is fixed against the euro, depreciation is unlikely and Niger’s debt is, therefore, not significantly exposed to exchange rate risk.

With regard to the external accounts, the balance of goods and services is largely in deficit (19.7% of GDP in 2016). Niger’s poor economic conditions will continue to weigh heavily on activity. Higher exports of commodities will not be sufficient to offset the increase in imports associated with infrastructure projects. Remittances from expatriate workers and foreign budget aid are set to help bring the current account deficit down to 15.5% of GDP. This deficit is financed primarily by FDIs (7.6% of GDP), as well as by grants and loans intended for project financing (6.8% of GDP).

A Degraded Security Situation

Niger’s political situation is characterized by President Mahamadou Issoufou’s (Nigerien Party for Democracy and Socialism) control over various institutions since his party’s victory in the presidential and parliamentary elections in February/March 2016. Although marginalized, the opposition is very critical of the president’s repressive actions and could catalyze public discontent. However, the main threat lies in the highly degraded security situation: terrorist groups in the region (Boko Haram, AQMI, Al-Murabitoun) find Niger to be fertile territory for recruitment (high poverty rate and few prospects), and its porous borders favorable to their campaigns.

International cooperation should continue to strengthen among the Sahel G5 countries (Mauritania, Mali, Niger, Chad, and Burkina Faso) attempting to stem the unrest observed in neighboring countries (especially Nigeria). This international action is, however, under threat after the death of four US soldiers in October 2017, which could prompt Donald Trump to review his cooperation policy. This uncertain security situation is putting pressure on the business climate, in which the risk of abduction targeting foreign nationals is still high.


Coface (01/2018)