Recurring power cuts, falling purchasing power, food shortages... After seven months of Economic Community of West African States (ECOWAS) sanctions imposed after the July 26, 2023 coup, there's nothing on the streets of the capital, Niamey, to suggest that Niger could experience the continent's highest growth rate in 2024. However, according to a report by the African Development Bank (AfDB), published on March 1, the country's GDP could jump by 11.2% in 2024, following growth of 4.3% in 2023.
These "growth forecasts assume a gradual return to normal," which includes the "lifting of sanctions [effective since February 24] and the return of financing," said the World Bank. They are also based on the assumption that 90,000 barrels of oil per day will be exported via the pipeline linking the Agadem oilfield to the port of Sèmè in Benin, something which should generate around €610 million in tax revenues by 2025. Niger currently exports 20,000 barrels a day. On March 2, Chinese company CNPC, in charge of the project, announced the commissioning of the pipeline, enabling the first barrels to leave the country within two months.
Nevertheless, the growth forecast should be treated with caution, warned economist Emilie Laffiteau, associate researcher at the Institut de Relations Internationales et Stratégiques (Institute of International and Strategic Relations, IRIS). "Niger is one of the poorest countries in the world. It's always easier to create a growth peak when you're starting from a long way off," she said. Especially as the 11.2% growth will not necessarily have any effect on the country's long-term development.
"It's important to look at whether the growth is due to a volume effect, in which case Niger has conquered new markets and is exporting more. Or if this rate is the consequence of a price effect. In other words, the situation hasn't changed and the country is just benefiting from higher prices. In this case, when compared with the country's inflation rate, this growth rate would have no positive effect on the population," pointed out Emilie Laffiteau.
In the AfDB's forecasts, these two effects compete with one other. While Niger's crude oil export volumes are set to rise sharply with the completion of the pipeline, the global inflationary context since the outbreak of war in Ukraine has minimized this gain.
According to various World Bank and ADB reports, for the growth forecast to become a lasting reality, the country needs to carry out structural reforms and turn more towards the manufacturing and services sectors. As long as Niger has not embarked on industrialization and is mainly dependent on its raw materials, the country will remain vulnerable to climatic shocks and price variations set by international markets. Although service sector performance will have increased by 2022, according to the AfDB, it only accounts for a third of GDP. It's a share that is likely to decline with oil extraction.
What's more, "a high proportion of GDP is produced by the informal sector, mostly agricultural in Niger's case," according to Emilie Laffiteau. This does not allow the state to set up an effective public revenue mechanism. Especially since uranium exports – of which Niger is the world's fourth-largest producer – accounted for just 6.52% of state revenues according to the latest report by the Extractive Industries Transparency Initiative in Niger (EITI), due to the metal's low world prices.
Until the coup led by General Tiani, 40% of the state budget depended – according to the military regime – on so-called non-domestic resources: donations or loans from foreign countries or institutions. It's a resource vulnerable to political shocks, as was the case after the coup d'état, when the US, France, the European Union, the World Bank, and the West African Economic and Monetary Union (UEMOA) put an end to their partnership and the payment of development aid. Growth, which the junta wants and has estimated at "7.9% on average between 2024 and 2026," will therefore depend on Niger's resilience in absorbing all these exogenous shocks.
Some African economies have understood this. Of the 20 countries with the strongest economic growth in the world in 2024, 11 are African, according to the AfDB's ranking. Overall, these forecasts "reflect countries' efforts to diversify their economies and implement national policies reversing the rise in the cost of living and stimulating private consumption," said the report.
Like Côte d'Ivoire or Benin, whose resource sector share of GDP is less than 30% and who should see growth above 6% in 2024, this is how the situation should be since the resumption of economic activity following the Covid-19 pandemic. Buoyed by this structural economic change, the continent placed behind Asia in the ADB's 2023 ranking of fastest-growing regions. In 2024, it is expected to repeat its second-place ranking.
Translation of an original article published in French on lemonde.fr; the publisher may only be liable for the French version.