ECONOMIC UPDATE 2024 NIGER Special chapter PUBLIC DISCLOSURE AUTHORIZED Investing in education for inclusive growth © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any Rights and Permissions errors, omissions, or discrepancies in the information, or liability with respect to the The material in this work is subject to use of or failure to use the information, copyright. 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TABLE OF CONTENTS TABLE OF BOXES, FIGURES, AND TABLES 4 ABBREVIATIONS AND ACRONYMS 7 EXECUTIVE SUMMARY 9 1 . ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 15 1.1 Development Context 15 1.2 Recent Economic and Poverty Developments 16 1.3 Economic and Poverty Outlook 28 2 . INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 37 2.1 Sectoral context: Key challenges in the education 37 2.2 Government’s reform agenda and costs 40 2.3 Reform scenarios with associated costs 44 3 . ANNEX 51 4 . REFERENCES 53 2024 ECONOMIC UPDATE NIGER 3 TABLE OF BOXES, FIGURES, TABLES Box 1.1 Impact of sanctions on the formal private sector 18 Box 1.2 Impacts of the stop in electricity imports from Nigeria 20 Box 1.3 Food markets and food insecurity developments 27 Box 1.4 Potential Impacts of the ECOWAS Withdrawal 32 Box 2.1 Macroeconomics gains from closing the gender educational gaps 49 in Niger Figure 1.1 Pre-crisis, GDP growth in 2023 was projected at 6.9 percent, but it 17 is now expected at 2.0 percent Figure 1.2 On the supply side, agriculture, services and industry contributed 19 to growth Figure 1.3 Private consumption and inventory from oil production contributed 19 to growth on the demand side Figure 1.4 After declining consecutively between January and May, y/y 20 inflation has risen continuously since August 2023, above WAEMU region average Figure 1.5 Food and energy prices have contributed the most to the increase 20 in inflation Figure 1.6 Total expenditures in 2023 were revised down by 9.7% of GDP 23 compared to the initial budget law Figure 1.7 With limited access to financing, the budget deficit was reduced to 23 1.4% of GDP in the revised budget Figure 1.8 Changes in monetary poverty indicators 2018/19 - 2021/22 by area 24 of residence Figure 1.9 Poverty profile and trends by region: 2018/19-2021/22 25 Figure 1.10 The number of internally displaced persons (IDPs) has risen sharply 26 in recent years Figure 1.11 Mapping of forced displacement in Niger 26 Figure 1.12 In the approved budget revenues are projected to recover and 30 reach 16.8 percent of GDP, fueled by goods and services and trade related tax revenue Figure 1.13 According to the initial budget law oil-related revenue is projected 30 to reach 3.9 percent of GDP in 2024, with oil production projected to reach nearly 107,000 barrels/day Figure 1.14 The budget deficit is projected to narrow in 2024 in the approved 31 budget Figure 1.15 According to WB analysis, the fiscal deficit will likely reach 4.4% of 31 GDP in 2024 Figure 1.16 Share of total recorded imports from ROW, WAEMU, non-WAEMU 35 ECOWAS Figure 1.17 Total electricity imported and exported intra-ECOWAS (WAPP Grid), 35 2022 4 2024 ECONOMIC UPDATE NIGER Figure 1.18 Transit Flows: Maritime transit by regional port 35 Figure 1.19 People Flows: Number of Burkina Faso, Mali, and Niger diaspora by 35 host country Figure 2.1 Niger’s Human Capital Index lags that of its structural and 38 aspirational peers Figure 2.2 Primary school enrollment rate in Niger is lower than structural 38 and aspirational peers Figure 2.3 The number of primary school students is projected to rise, 38 increasing the need for more classrooms Figure 2.4 The number of students at the secondary level is also projected 38 to rise Figure 2.5 An average of 2500 new classrooms will need to be built each year 39 between 2024 and 2054 to accommodate the growing number of primary age children Figure 2.6 At the lower and upper secondary levels, an average of 1,037 new 39 classrooms will be needed annually Figure 2.7 A total of 5000 classes are planned over the next 5 years to replace 41 CPs Figure 2.8 The regions with the highest number of CPs will receive the highest 41 number of new permanent classrooms Figure 2.9 The government program include replacing all CPs, training, and 41 hiring more qualified teachers and integrating contractors into the civil service Figure 2.10 If all CPs are replaced over the next 15 years, the total cost is 42 estimated cost at 4.3 percent of GDP Figure 2.11 The majority of the financing for the 24,000 classrooms planned for 42 the next 6 years is from external sources, which are now uncertain post-crisis Figure 2.12 If all CPs are replaced over 30 years, then the total cost of the 43 government’s program is estimated to decline from about 0.4% of GDP in 2024 to 0.1% of GDP by 2054 Figure 2.13 However, if all CPs are replaced over 15 years, then the cost of the 43 government’s program is estimated to rise from 0.4% of GDP in 2024 to 0.6% of GDP by 2030 and decline to 0.04% by 2054 Figure 2.14 The number of new additional classrooms needed annually to 44 accommodate new students is projected to increase over the next three decades Figure 2.15 If enrollments rates remain constant, the cost of building new 44 classrooms needed every year to accommodate new primary and secondary school students is projected to decline from 0.46% of GDP in 2024 to 0.16% by 2054 Figure 2.16 Although net primary enrolment rate has declined since 2017, it is 45 still much higher compared to two decades ago Figure 2.17 If enrollment rates in primary and secondary schools remain 45 constant, millions of school age children and adolescents will be out of school Figure 2.18 Achieving gender parity in enrollment rate by 2028 will require 45 8,500 additional classrooms over the period 2024-2054 Figure 2.19 As a result, the annual cost of building new classrooms will rise to 45 nearly 0.6 percent of GDP in 2025 and fall to 0.2 percent by 2054 Figure 2.20 If primary and secondary enrollment rates improve then even 47 more classrooms will be needed to accommodate new students over time Figure 2.21 As a results, the cost of building classrooms will also be higher 47 2024 ECONOMIC UPDATE NIGER 5 Figure 2.22 The cost of improving access to education in Niger is projected to 47 increase from 1.3% of GDP in 2024 to 1.6% by 2029 and decline to 0.5 percent by 2054 Figure 2.23 Economic cost of out-of-school children by microeconomic 48 estimation Figure 2.24 Economic cost of out-of-school children by macroeconomic 48 estimation Figure 2.25 If implemented, the estimated costs of improving access to 48 quality education will increase government spending on primary and secondary education to nearly 3 percent of GDP Table E.1 Policy options to support the economic recovery, restore macro- 13 fiscal sustainability and increase access to quality education in Niger Table 1.1 Misses repayments by the government of Niger on the regional 23 bond market Table 3.1 Selected economic and fiscal indicators 51 6 2024 ECONOMIC UPDATE NIGER ABBREVIATIONS AND ACRONYMS AES Alliance of Sahel States BCEAO Central Bank of West African States CFAF Franc de la communauté financière en Afrique (Franc of the Financial Community of Africa) CP Classe Paillote (Straw hut classrooms) DSA Debt sustainability analysis ECOWAS Economic Community of West African States EN Ecoles Normale GDI Gender Development Index GDP Gross Domestic Product GNNSCP Government of Niger National School Construction Plan HCI Human Capital Index IDP Internally displaced persons IMF International Monetary Fund IPP Independent power producer kWh kilowatt-hour MEN Ministry of Education MW Megawatt NIGELEC Société Nigérienne d’Electricité (Nigerien Electricity Society) NPL Non-performing loans PASEC Programme d’Analyse des Systèmes Educatifs PFM Public financial management PPP Purchasing power parity SDI Service Delivery Indicator SOE State-owned enterprise SORAZ Société de raffinage de Zinder TSA Treasury single account UMOA L’Union monétaire ouest-africaine (West African Monetary Union) UN United Nations UNESCO United Nations Educational, Scientific and Cultural Organization UNHCR United Nations High Commissioner for Refugees US$ US-Dollar WAEMU West African Economic and Monetary Union West African Power Pool WAPP WFP World Food Programme XOF West African CFA franc 2024 ECONOMIC UPDATE NIGER 7 ACKNOWLEDGMENTS The Niger Economic Update is a World Bank report series produced once a year that assesses recent economic and social developments and prospects in Niger. The Economic Update also provides an in-depth examination of a selected policy issue, outlining its current challenges and potential going forward. It is intended for a wide audience, including policy makers, business leaders, financial market participants, and the community of analysts and professionals engaged in ’s evolving economy. This draft reflects data as of July 31, 2024. The Niger Economic Update was prepared by Mahama Samir Bandaogo, Blaise Ehowe Nguem, Yele Maweki Batana, with inputs provided by Yue Man Lee, Michael Evers, Christophe Rockmore, Stanislas Honkuy, Marie Jacqueline Yvette Sacadura, Mahaman Achirou Yahaya Arde, and Chimene Diane Djapou Fouthe. The report was prepared under the overall guidance of The findings, interpretations, and Clara Ana De Sousa (Country Director), Han conclusions expressed in this report do Fraeters (Country Manager), Hans Anand not necessarily reflect the views of the Beck (Practice Manager), Fulbert Tchana Executive Directors of the World Bank or Tchana (Program Leader) and Yue Man Lee the governments they represent. The World (Lead Economist). The authors are grateful Bank does not guarantee the accuracy to the peer reviewers, Emilija Timmis, Alex of the data included in this work. The Sienaert, Aly Sanoh, Juan Baron, and to boundaries, colors, denominations, and Christophe Rockmore and Fulbert Tchana other information shown on any map in Tchana for their guidance and comments. this work do not imply any judgment on the part of the World Bank concerning the legal The team thanks Micky Ananth, Theresa status of any territory or the endorsement Bampoe and Dodo Oumarou Farouk or acceptance of such boundaries. Alhousseini Sidi for their administrative support, and Yannik Strittmatter for For more information about the Bank world invaluable formatting assistance. External and its activities in Niger, please consult: and media relations are managed by https://www.worldbank.org/en/country/ Mouslim Sidi Mohamed. Niger. 8 2024 ECONOMIC UPDATE NIGER EXECUTIVE SUMMARY This 2024 Economic Update for Niger In September 2023, Burkina Faso, Mali, is articulated in two chapters. The and Niger formed the “Alliance of Sahel first chapter presents the economic and States” (AES)-a security and military pact poverty trends observed in the country in with political and economic objectives. On 2023 and the outlook from 2024 to 2026. January 28, 2024, in a joint communiqué, The second chapter focuses on access the three countries announced their to primary and secondary education and immediate withdrawal from ECOWAS. provides recommendations to ensure According to the revised ECOWAS treaty, a adequate investment to enhance access notification period of one year is required to quality education. to leave ECOWAS. The three countries remain members of WAEMU. The crisis is estimated to have Economic and poverty developments significantly reduced GDP growth to 2.0 and outlook percent in 2023 (-1.7 percent per capita, one of the lowest in Sub- Saharan In Niger, 2023 was marked by a severe Africa).1 Prior to the crisis, GDP growth political crisis, with an unconstitutional had been projected at 6.9 percent in 2023 regime change, followed by sanctions and and to rise to 12 percent in 2024, on the a large reduction in financing. Following back of large-scale oil exports through the the unconstitutional regime change on pipeline starting by end- 2023. However, July 26, 2023, the Economic Community the sanctions and border closures delayed of West African States (ECOWAS) and the this start. Government spending fell due West African Economic and Monetary Union to the freezing of government assets, (WAEMU) imposed heavy commercial and the loss of regional financing, and a financial sanctions, banning trade (including significant reduction in external financing food, pharmaceuticals, and electricity), (of approximately 7.5 percent of GDP). prohibiting financial transactions between Private investment also fell sharply in Niger and the rest of ECOWAS, freezing 2023 due to the uncertainty and a liquidity government accounts at the regional crisis in the banking sector, brought on central bank. ECOWAS also closed land by the financial sanctions. Formal trade and air borders. Most international financial volumes also fell : exports by 8.1 percent institutions paused development financing and imports by 12 percent. On the supply and the country lost access to the WAEMU side, manufacturing, construction and regional bond market. The sanctions were trade and tourism-related service sectors lifted after nearly 7 months on February 24, 2024, but their effects will likely last longer. 1 According to World Bank estimates 2024 ECONOMIC UPDATE NIGER 9 were heavily impacted. Meanwhile thus limiting the number of households total agriculture production expanded, being pushed into poverty. On the other supported by irrigated agriculture. hand, the marginal increase in agricultural GDP per capita directly affects households That GDP growth remained positive in in rural areas where the poverty rate is the face of considerable constraints relatively higher. demonstrates resilience. The authorities took proactive measures on budget However, food insecurity remained an management, to continue paying salaries issue. Food inflation and pockets of food in the public sector. They also ramped up deficits have exacerbated Niger’s chronic local electricity production in response food insecurity; 2.3 million (8.9 percent of to the cut-off of electricity imports from the population) were estimated to be food Nigeria. The characteristics of Niger’s insecure in Ǫ4-2023, 13 percent higher than economy also mitigated the impact of sanctions: Niger is an oil producer with Ǫ4 2022. There are also estimated around its own refinery capacity, and it has high 300,000 internally displaced persons (IDPs) levels of informal trade. due to insecurity and an equal number of refugees, primarily from Nigeria, Mali, Overall inflation remained stable at 3.7 and Burkina Faso. The crisis and border percent in 2023. Inflation was subdued in closures led to severe disruptions in the H1-2023 (1.2 percent on average) but rose delivery of humanitarian aid. in H2-2023 (6.3 percent on average) after the onset of the political crisis, due to food With sanctions lifted and access to inflation caused by import disruptions. financing gradually restored, growth could recover to 5.7 percent (1.8 percent Because of the crisis, the government per capita) in 2024 and average 6.5 cut expenditures and accumulated debt percent in 2025-26. The rebound would arrears. Following the reduction in financing, be driven, by large-scale oil exports, while the 2023 budget was revised. Capital non-oil industry and service sectors, which spending was cut, and the fiscal deficit accumulated heavy losses in 2023, face reduced to 5.4 percent of GDP (compared a difficult recovery. This outlook includes to 6.8 percent in 2022). As a result of the the potential negative growth impacts financial sanctions, the government missed of the ECOWAS withdrawal: higher trade several debt repayments to bondholders costs (new tariffs) and lower trade with and international financial institutions. non-WAEMU ECOWAS states, higher According to UMOA-Titres, CFAF 314 billion investors’ risk premia, and increased (US$512 million or 3.1 percent of GDP) was regional financing costs. The fiscal sector owed to bondholders as of February 19, will continue to face financing constraints, 2024. As a result of the arrears, Moody's even though arrears have been cleared and has downgraded Niger's credit rating development financing by the World Bank from B3 to Caa3. Public debt reached 54.7 and the IMF has resumed, as domestic percent of GDP, including arrears. financing will remain costly. Inflation is projected to reach 8.5 percent in 2024 The extreme poverty rate, using the due to the border closure with Benin, international poverty line, is estimated and the lower cereal production during to have remained unchanged in 2023 the 2023/2024 agricultural campaign (48.4 percent). While overall GDP per compared to the 2022/2023 campaign. capita contracted, agricultural GDP per Inflation is expected to remain above 3 capita expended marginally by 0.12 percent, percent in 2025-26 as the resumption of leading the extreme poverty rate to remain large imports from the region is offset by unchanged, despite the increase in food higher import costs due to the exit from the prices in the second half of the year. ECOWAS free trade area. With the onset On the one hand, the rise in food prices of oil exports, the current account deficit mainly affects households in urban areas is projected to narrow from 9.3 percent of where the poverty rate is relatively lower, GDP in 2023 to 8.3 percent in 2024. 10 2024 ECONOMIC UPDATE NIGER economic growth. Improving productivity In line with the strong baseline growth in the non-oil sector will require reforms projections, the extreme poverty rate is to address Niger’s low educational projected to decrease to 42.5 percent attainment. Expected oil revenues can by 2026. This assumes solid growth in be used to increase investments in the service and agriculture sectors and the education sector. Chapter 2 analyses the adoption of policies that use increased oil fiscal costs of public investments needed revenues effectively for the benefit of the to increase access to quality education. population. The outlook remains subject to Fiscal Cost of Improving Access to significant downside risks. The security Education situation could deteriorate, and the country could suffer from further climatic shocks. Niger's low human capital development An ECOWAS withdrawal that has gaps in outcomes are a binding constraint to agreements could lead to larger disruptions achieving sustainable and inclusive in the free movement of goods, services, economic growth. Niger's human capital capital, and labor and could have spillover development is characterized by low life effects onto trade in the WAEMU zone. expectancy at birth, high under-five, and However, if new trade opportunities are maternal mortality rates, and high stunting realized, these negative impacts could be rates. In addition, access to quality mitigated. Sustained or escalated tensions education remains a major challenge. between Benin and Niger can contribute to higher trade costs and further delay or Key challenges in the education sector interrupt oil exports. The uncertain outlook include: is already reflected in higher interest rates and the partial coverage of the country's last (i) limited and poor school issuances on the regional bonds market. infrastructure: More than one-third of Further economic policy uncertainty could the existing primary school infrastructure lead to higher regional financing costs. A consists of straw hut classrooms, also financing squeeze could lead to cuts in known as Classe Paillote (CPs), which are public expenditure, which could delay not only inadequate but also unsafe for investments that stimulate growth. students and teachers. Against this backdrop, it is critical to (ii) school closures due to insecurity raise the potential for growth, including and displacement: the education system by investing natural capital from oil into is directly threatened by insecurity, which human capital. Assuming oil prices at often results in school closures; in Tillabéri, US$60/barrel, the projected production Tahoua, and Diffa, various non-state armed increase would lead the oil sector to groups linked to al-Qaeda and the Islamic account for 13 percent of Niger’s GDP State have threatened, abducted, and by 2030 (depending on production), up killed teachers, students, and parents. from approximately 2 percent in 2023. While this expansion is expected to boost (iii) low enrolment and retention rates, government revenues, it will also amplify especially for girls: Primary and secondary the volatility of growth. While this expansion school enrollment rates in Niger lag is expected to boost government revenues, structural, regional, and aspirational peers, it is likely to amplify growth volatility. leaving millions of children and youth Moreover, if there are no new discoveries, out of school. According to World Bank Niger’s oil production is projected to calculations, 4 out of every 10 primary start declining in the mid-2030’s due to school-aged children are out of school. depleting oil reserves, underscoring the criticality of enhancing productivity in the (iv) weak learning outcomes due to poor non-oil sector for sustained and inclusive quality of teaching: Learning outcomes are 2024 ECONOMIC UPDATE NIGER 11 weak due to an over-reliance on contract growth and increasing enrollment rates. teachers, most of whom lack minimum Such a program will likely cost an average literacy and numeracy skills. 92 percent of 1.2 percent of GDP annually over the of 10-year-olds in Niger cannot read and next three decades, excluding the cost of understand an age-appropriate passage. textbooks and classroom maintenance. There are several options to finance the Due to the demographic pressure, required additional spending without the government would need to build weakening fiscal sustainability. These between 3,500 and 8,100 new classrooms include: (i) improving spending efficiency on average every year to satisfy the in the education sector to free up demand for classrooms, in addition to resources; (ii) strengthening domestic replacing CPs.2 Based on a constant (net) revenue mobilization, both oil and non-oil enrollment rate3 of 57.7 percent (2021), revenues, to create additional fiscal space the net change in the number of students in a sustainable manner; (iii) channeling enrolled in primary school each year part of the expected windfall from large- is projected to increase from 102,370 in scale oil production and exports; and 2024 to a peak of 133,511 in 2045. The net (iv) mobilizing external financing from change in the number of students enrolled development partners. in secondary school is also projected to grow, although less rapidly than the Countries with large numbers of out- primary school population. In addition to of-school children face high costs in building new classrooms, the government terms of foregone GDP, so the economic would also need to hire and train more cost of not improving access to quality qualified teachers and provide enough education will be substantial. If there are school supplies including textbooks. not enough classrooms built or teachers trained, millions more children will be The existing government program to out of school in the coming years. These improve the quality and access to children will later enter the labor market education is estimated to cost up to with lower levels of productivity than 0.26 percent of GDP per year on average. what they would have had if they had The existing government program has gone to school, making the opportunity three components; (i) replace all CPs with cost of out-of-school children in terms adequate permanent structures, (ii) train of foregone GDP substantial. According to and hire more qualified teachers; and estimates by Burnett and Thomas (2013), (iii) integrate qualified contract teachers the opportunity cost of out-of-school into the civil service. The cost of the children ranges from 5.4 to 18.2 percent government’s agenda will depend on the of GDP in Mali, 4.1 to 17 percent of GDP in timeframe to replace CPs and integrate Burkina Faso, and 8.3 to 14.1 percent of the contract teachers into the civil service, GDP in Cote d’Ivoire. Moreover, the lack as well as GDP growth. of education opportunities for a growing young population can negatively impact However, the current government the security situation of the country. program will not be able to provide enough classrooms, teachers, and school materials to accommodate the growing student population. As a result, millions risk remaining out of school. In addition to replacing all CPs, training, and hiring qualified teachers and integrating contract teachers, a comprehensive policy agenda should also account for population 2 Assuming a teacher-student ratio of 1/50. 3 Net enrolment rate is the ratio of children of official school age who are enrolled in school to the population of the corres- ponding official school age 12 2024 ECONOMIC UPDATE NIGER Policy options to support the economic recovery, restore macro-fiscal sustainability and increase access TABLE E.1 to quality education in Niger Policy Objectives Policy Options Feasible to implement in the short term (1 year) Regain/increase access to budget • Continue to implement the debt arrears clearance’ plan, which will enable Niger to increase financing sources access to domestic and external financing. Strengthening public financial • Continue full return to established PFM systems and processes. management Address banking sector • Adopt the new Banking Law vulnerabilities • Clear any remaining arrears on government bonds owed (directly) to the local commercial banks to help ease the liquidity constraint Address elevated levels of food • Reopen all commercial borders – particularly those linked to the most secure and cost- insecurity effective supply routes – to normalize trade flows in and out of Niger, and ease pressure on prices. • Ensure tight monitoring of prices of staple food commodities and reinforce measures such as targeted subsidies-where possible- to support economic access to food among vulnerable populations in both rural and urban settings. • In line with the above, adopt and operationalize a National Response Plan to address the expected spike in needs during the upcoming lean season, particularly among pastoralists. Strengthen domestic revenue Oil revenues mobilization (oil and non-oil) • Implement an effective management framework for oil revenues starting with oil revenue forecasting. • Strengthen the macro-budgetary framework. Non-oil revenues • Develop capacity to assess market prices (particularly transfer prices), benchmark costs and value for money in contracts. • Strengthen the current legislation on transfer pricing with the inclusion of appropriate measures in the regulatory texts to reduce transfer pricing risk. • Finalize the revision and simplification of General tax code by broadening the tax base and removing non-essential tax exemptions Mitigate the economic impacts of • Preserve the benefits of economic integration by maintaining or negotiating new bilateral ECOWAS withdrawal and prevent or regional agreements to ensure: (i) transport and transit rights to coastal ports; (ii) visa-free travel and right to work in the ECOWAS region; (iii) and complementarity between ECOWAS and spillovers onto WAEMU trade WAEMU trade provisions, including rules and certificates of origin. • Avoid adopting tariff and non-tariff measures that would significantly increase trade costs with non-WAEMU ECOWAS states after leaving the ECOWAS free trade area. • Provide clear and consistent public communication on WAEMU membership. Increase access to education by • Continue the replacement of CPs by building the 750 planned classrooms in 2024. replacing Classe Paillote • Use increased fiscal space from oil revenues to invest in human capital development, in particular to improve access to quality education. Strengthen the quality of teaching • Implement the hiring process of the new teacher graduates from the Ecoles Normales. • Continue to implement the teacher training program at the Ecoles Normales and aim to increase the number of student teachers over time in line with the hiring capacity. • Start the integration process of contract teachers in 2024. Important to implement in the medium term (2 to 5 years) Improve management of the oil • Manage oil revenue volatility by establishing a stabilization fund with appropriate fiscal and sector and oil revenues savings rules. • Ensure efficiency of investments financed by oil revenues including the development of multi- year expenditure programming and infra-annual expenditure programming tools (procurement plan, sectoral and global commitment plans and cash flow plan). • Establish an oil sector regulator with adequate capacity to ensure the effective oversight and implementation of the regulation and that petroleum operations are being conducted efficiently, transparently and in accordance with best industry practices (including environmental and social norms). Address elevated levels of food • Accelerate investments into local value chains of fortified nutritious food, including the insecurity resumption of domestic production of specialized nutritious food for nutrition treatment and supplementation, to reduce import dependency. • Ensure adequate preventive positioning of national food reserves. Improve access to quality education • Adopt an education reform agenda that builds new classrooms, trains and hire teachers every in the medium to long-term year to meet the demand for education stemming from population growth and improving enrollment rates. Assess the fiscal costs of the plan and adjust reform plan to take into account fiscal constraints. The fiscal costs should be integrated into the government’s medium-term expenditure framework. • Continue to allocate more teachers, classroom construction, and materials to underserved areas. 2024 ECONOMIC UPDATE NIGER 13 14 2024 ECONOMIC UPDATE NIGER 1 ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 1.1 Development Context The development context is From 2011 to 2023, Niger had been seen characterized by high demographic as a source of political stability in the pressures, vulnerability to climate Sahel, benefiting from a significant increase in international development shocks and recent political instability. assistance and investment. However, this changed with the unconstitutional Niger’s economy has been dependent regime change on July 26, 2023. The on agriculture, that is highly vulnerable crisis led to regional sanctions and border to climate shocks, leading to volatile closures and a pause in development growth, and is projected to become more assistance. In September 2023, Burkina dependent on hydrocarbon, exposing it Faso, Mali, and Niger formed the “Alliance to even higher volatility. The agriculture of Sahel States” (AES)—a security and sector contributes about 40 percent to GDP. military pact with political and economic Although irrigation has increased in recent aims. In November 2023, Niger and Burkina years, rain-fed agriculture remains the Faso announced their withdrawal from bedrock of the sector, exposing it to climate the G5 Sahel, after Mali had already left shocks. For instance, a weak growth of 1.4 in May 2022.4 On January 28, 2024, in a percent in 2021 due to poor rainfalls, was joint communiqué, the three countries followed by strong growth of 11.5 percent announced their immediate withdrawal in 2022 due to a better- than-average rainy from the Economic Community of West season. With limited improvements in African States (ECOWAS). According to the productivity and high population growth, revised ECOWAS Treaty, a notification period over half the population lives in extreme of one year is required to leave ECOWAS. poverty, aggravated by gender disparities, Subsequently, on July 6, 2024, the three with some of the weakest human capital countries signed the Treaty establishing development indicators globally. With the the Confederation of Sahel States. These completion of the Niger-Benin pipeline, developments have increased political oil production is expected to rise from and policy uncertainty. The three countries 20,000 to 107,000 barrels per day by 2025 remain members of West African Economic (according to the government), increasing and Monetary Union (WAEMU). the importance of the oil sector in exports, revenues, and GDP. 4 In December 2023, Chad and Mauritania declared to dis- solve the alliance. ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 15 1.2 Recent Economic and Poverty Developments In Niger, 2023 was marked by a severe Ouagadougou-Dori-Niamey corridor for political crisis that triggered regional the transportation of various shipments economic and financial sanctions and a with the support of Burkinabe and disruption in external financing. Nigerien military convoys, (ii) increasing local power production (solar and existing Niger faced heavy ECOWAS and WAEMU diesel plants), (iii) requiring cash payments commercial and financial sanctions of taxes and duties instead of depositing and border closures that lasted nearly into the frozen treasury single account 7 months. On July 30, in response to (TSA) at the BCEAO, and (iv) conducting the unconstitutional regime change, the government transactions outside of the Economic Community of West African established PFM systems. States (ECOWAS) and the West African Economic and Monetary Union (WAEMU) imposed economic and financial sanctions The crisis is estimated to have that included: (i) the closure of land and air significantly reduced GDP growth to borders between ECOWAS countries and 2.0 percent in 2023 (-1.7 percent per Niger; (ii) the suspension of all commercial capita).5 transactions between Niger and WAEMU and ECOWAS countries, without Prior to the crisis, GDP growth had been exception; (iii) the suspension of financial projected at 6.9 percent in 2023 and to transactions between Niger and WAEMU rise to 12 percent in 2024, on the back and ECOWAS countries; (iv) the freezing of large-scale oil exports through the of public assets of the government, state- pipeline starting by end 2023. However, owned enterprises and parastatals held the sanctions and border closures delayed in the BCEAO (regional central bank of this start. Government spending fell due WAEMU) and in commercial banks in the to the freezing of government assets, WAEMU region; (iv) the suspension of Niger decline in tax revenues, the loss of access from all regional financial assistance. In to the WAEMU regional bond market, and a general, the sanctions were implemented significant reduction in external financing. and enforced by ECOWAS countries and Private investment also fell sharply due institutions, with the exception of Guinea, to the uncertainty and a liquidity crisis Burkina Faso, and Mali, which supported in the banking sector, brought on by the the de facto authorities in Niger. financial sanctions. On the supply side, total agriculture production expanded In addition to the sanctions, the despite a drop in cereal production, unconstitutional regime change however manufacturing, construction, triggered a sharp decline in external trade and tourism-related service sectors financing. Overall, an estimated 7.5 were heavily impacted. percent of GDP in external financing was not disbursed in 2023 due to pauses in That GDP growth remained positive at international development assistance. 2.0 percent in 2023 in the face of several However, development partners continued constraints demonstrates considerable to provide humanitarian assistance with resilience. This resilience is partly due to the help of implementing partners in Niger, the country’s economic characteristics with significant delays in implementation. such as high level of informal trade (less affected by sanctions) and being To mitigate the impact of the sanctions, oil-producing with a domestic refinery new authorities took several proactive that can supply fuel to the domestic measures, including: (i) redirecting trade flows through Burkina Faso using the 5 Based on World Bank estimations. 16 2024 ECONOMIC UPDATE NIGER market, including for local thermal power local electricity production response to the production (Box 1.2). It also reflects the cut-off of electricity imports from Nigeria. measures taken by the authorities, for However, the growth slowdown in 2023 example on budget management to resulted in a 1.7 percent decline in GDP per ensure the continuation of public-sector capita, bringing real GDP per capita below salary payments, and the ramping up of the level observed in 2021 (Figure 1.1). Pre-crisis, GDP growth in 2023 was projected at 6.9 percent, but it is now estimated at 2.0 percent FIGURE 1.1 Real GDP Growth (%) Real GDP per capita growth (%) 14 12.5 11.5 12 10 9.1 8.5 8.0 8.5 6.9 7.4 8 5.7 6 5.2 4.6 4.5 4.3 4 3.0 1.4 2.0 1.8 2 0.8 0 -2 -0.2 -2.3 -1.7 -4 2021 2022 2023p 2024p 2025p 2026p 2020 2021 2022 2023p 2024p 2025p 2026p Actual and Pre-crisis Projections Post-crisis Estimates and Projections (August 2024) Source: INSN and World Bank staff estimates Despite low cereal production, the Commercial sanctions and insecurity agriculture sector remained resilient, disrupted activities in the extractive supported by strong production sector. Growth in the sector was projected from irrigated agriculture. Rain-fed to be strong in 2023, driven by the onset production of the main cereals declined of oil exports and improvements in other by 12 percent compared to 2022. The mining activities. Delays in finalizing the decline in production is mainly attributed pipeline resulted in delays in oil production, to (i) severe weather events, including leading to lower growth of 12 percent, insufficient rainfall, flooding and bush fires compared to 30 percent initially projected.6 that destroyed a share of the production; The suspension of uranium production in (ii) civil insecurity, which has reduced September 2023 linked to the shortage of cultivated areas, and pastoral land in chemical imported inputs and the closure several regions; and (iii) drought and pest of artisanal gold mining sites due to security infestations. This decline was offset by the concerns have resulted in a significant increase in irrigated production, leading decline in output. Uranium production fell to an expansion in overall agricultural by approximately 1.8 percent, while gold output and a positive contribution of 1.2 production decreased by 60.1 percent. percentage points (ppts) to GDP growth, compared to a positive contribution of 9.3 ppts in 2022 (Figure 1.2). The shortfall in cereal production, combined with the effects of the economic and financial sanctions, have left more than 2.3 million The equipment needed for the pumping stations had been people in a situation of food insecurity (see 6 blocked at the border with Benin when the borders were Box 1.3 for more details). closed. They were later redirected to the Ouaga-Niamey cor- ridor, which caused a delay in the commissioning of the pipe- line ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 17 The crisis affected secondary (non- infrastructure projects, severely affecting extractives) and tertiary sectors. Before the construction sector while limited the crisis, production in the secondary and intermediate and capital goods imports tertiary were expected to grow respectively and electricity shortages/higher cost of by sectors 5.7 and 8.5 percent, driven by power (Box 1.2) affected manufacturing. buoyancy in the construction sector and Trade sanctions and border closures led the growing post covid demand. However, to lower travel and trade flows, affecting the pause in external development trade, tourism, and transport-related financing led to delays in public service sectors. BOX 1.1 IMPACT OF SANCTIONS ON THE FORMAL PRIVATE SECTOR According to a survey conducted by the Niger Chamber of Commerce and Industry (CCI), the sanctions have disrupted private sector activities and resulted in significant financial losses. The CCI recently completed a survey of its members to assess the impact of the sanctions on their activities. Channels of impacts: A summary of the results shows that in the first three-month (July 30 – October 31), the private sector was affected by (i) the trade sanctions: more than 42,000 tons of goods worth more than CFAF 14 billion that were in transit to Niger through neighboring countries, particularly Benin and Nigeria, were held up. For instance, in August and September, imports fell by almost 60 percent; (ii) electricity shortages: firms had to rely on costlier alternative energy sources (i.e., diesel generators). As a result, the cost of the energy factor has risen by more than 20 percent for at least half the firms surveyed; (iii) the pause in external financing: Limited access to financing for the government led to an increase in fiscal pressure. Almost 70 percent of firms surveyed experienced an increase in tax pressure, with requests for advance tax payments and other cash advances. All sectors of the economy were affected. Power cuts and the increase in the price of electricity following the interruption of power supply from Nigeria have affected the operations of businesses in all sectors. In the hospitality sector, hotel bookings fell by nearly 85 percent between August and November. In the construction sector, large public projects tied to external financing have been halted, with some companies in the sector ceasing operations altogether. The constraints in the private sector have likely led to some firm closures and an increase in underemployment and unemployment. Many firms have had to reduce working hours or to lay off workers in order to continue their operations. However, some firms have had to cease operations. Although, there is no recent labor market data, the CCI highlights the likely increase in unemployment. A firm survey is planned in April 2024 by the World Bank, in collaboration with the Ministry of Economic and Finance. Source: Adopted from a summary of findings from a firm survey conducted by the Chamber of Commerce of Industry of Niger On the demand side, the trade sanctions limited government consumption and and border closures reduced external investment. Private investment slowed demand and investment. The trade amid heightened political uncertainty sanctions and border closures reduced and reduced credit from the banking exports, including uranium, and delayed sector but remained positive, mainly due the start of oil production for export. to investment from the first half of 2023. With a significant reduction in external Private consumption (thanks to good budget support and project financing agricultural production at the end of 2022, from international donors, large public which were consumed in 2023) and the investment projects such as the Kandjaji change in inventories (part of the crude oil Dam have been put on hold. In addition, produced and destined for export, which the financial sanctions implemented by is currently in transit to the port of Benin, the central bank, including the freezing of considered the exit point for exports) government and SOE accounts and the supported growth and helped avoid a loss of access to the regional debt market, contraction of the economy in 2023. 18 2024 ECONOMIC UPDATE NIGER On the supply side, agriculture, services Private consumption and inventory from FIGURE 1.2 and industry contributed to growth FIGURE 1.3 oil production contributed to growth on the demand side Supply side contribution to growth (in %) Demand side contribution to growth (in %) 15 15 14 14 12 12 10 10 10 8 10 6 8 5 4 6 2 0 4 5 0 -2 2 -5 -4 0 2019 2020 2021 2022 2023e -10 0 2019 2020 2021 2022 2023e Private consumption Public consumption Agriculture Services Investment Statistical discrepancy Industry Net tax on production Change in inventories Exports, GNFS GDP growth (Factor Cost, RHS) Imports, GNFS GDP growth (RHS) Source: INSN and World Bank staff estimates Source: INSN and World Bank staff estimates The sanctions significantly disrupted positive but narrowed to 0.1 percent of the external accounts… GDP (2022: 1.4 percent of GDP) due to remittance inflows continuing despite The sanctions have severely disrupted the financial sanctions via regional money external trade transactions in 2023. Niger transfer agencies that operated outside has a large structural trade deficit, being a the BCEAO network. As a result, the current net food importer and relies extensively on account deficit slightly improved to 9.3% imports to meet the demand for energy, of GDP in 2023, from 9.8 percent of GDP capital, and intermediate goods. Before the in 2022. crisis, the trade balance was expected to deteriorate given large imports of capital The capital account balance is expected goods and services for ongoing large to narrow to about 1 percent of GDP due infrastructure projects. Border closures to reduced issuances on the WAEMU severely impacted formal trade volumes, regional bond market and a decline in with exports (namely uranium, gold, drawings on external debt. On the financial and onions) declining by 8.1 percent and account side, foreign direct investment and imports (namely, electricity and capital portfolio investment remained dynamic goods) falling by 12 percent. Nonetheless, thanks to the finalization of oil -related informal trade (food and other goods such investments in the first half of 2023, before as fuel and livestock) remained significant, the crisis. However, the slowdown in the especially along the long Niger-Nigerian pace of major private investment after border as evidenced by the continued the crisis and the reduction of financial availability of imported goods in markets transactions with external financial in Diffa, and Zinder (See Box 1.3 for more institutions (trade credit, currencies, and detail). deposits) affected financial inflows leading to a reduction of financial account balance Disruption in trade led the current from 6.9 percent of GDP in 2022 to 5.6 account deficit to moderately widen. The percent of GDP in 2023. large decline in imports led to a smaller trade deficit of 9.3 percent of GDP than the 13.4 percent initially projected. Despite the suspension of official development assistance, the primary and secondary income balance is expected to remain ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 19 … and caused prices to rise sharply in on-year inflation rate was on a downward the second half of 2023 trend in 2023, declining from 3.1 percent in January to 0.2 percent in May 2023 (Figure After declining consecutively between 1.4). However, from June 2023, year-on- January and July, inflation has risen year inflation was on an upward trend, continuously since August 2023, reaching 7.2 percent in December 2023, exceeding the average in the WAEMU mainly driven by higher food and energy region (3%). As Niger is heavily dependent prices other than electricity and fuel for on food imports, the combination of low which prices remained unchanged since agricultural production and closure of August 2022 (Figure 1.5). Niger’s annual borders and major corridors (Benin and average inflation reached 3.7 percent 2023 Nigeria) led to a fall in supply, resulting in above the WAEMU’s convergence range of price hikes especially during the second 1-3 percent. half of the year. In fact, pre-crisis the year- After declining consecutively between Food and energy prices have contributed FIGURE 1.4 January and May, inflation has risen FIGURE 1.5 the most to the increase in inflation continuously since August 2023, above WAEMU region average Contribution to inflation (in %) Headline inflation (in %) 8 15 6 10 4 5 2 0 0 -5 23-Mar 23-Apr 23-May 23-Nov 23-Oct 22-Dec 23-Jan 23-Feb 23-Jun 23-Aug 23-Sep 23-Dec 23-Mar 23-Apr 23-May 23-Nov 23-Oct 22-Dec 23-Jan 23-Feb 23-Jun 23-Aug 23-Sep 23-Dec Food inflation Energy inflation Niger WAEMU Core inflation Headline inflation Source: INS and World Bank staff calculation Source: INS and World Bank staff calculation BOX 1.2 IMPACTS OF THE STOP IN ELECTRICITY IMPORTS FROM NIGERIA Before the crisis, electricity imports from Nigeria accounted for 71% of national consumption, mainly benefiting two regions – the Western Zone (Niamey, Dosso and Tillaberi) and the Central Eastern Zone (Maradi, Tahoua and Zinder). In the Western Zone, the installed capacity is ~169MW (excluding imports), while the maximum demand is currently ~220MW between 8pm and midnight. Without imports from Nigeria, ~23% of the peak demand would not be met. The situation in the Center-East zone is more critical with an installed functional capacity of ~25MW (excluding imports) against a maximum demand of more than 50MW. Without imports from Nigeria, more than half of the demand would not be met during peak hours. After Nigeria stopped exporting electricity to Niger on July 31st, NIGELEC – Niger’s national electricity company – ramped up domestic power production significantly, albeit at higher generation costs. Nigelec increased domestic production at the existing Gorou Banda diesel plant (80 MW), the Istithmar IPP (89 MW in Niamey and 22 MW in Zinder) and was able to commission the Gorou Banda solar plant (50 MW). Niger was able to do this despite the sanctions due to domestic supply of fuel from the local refinery (SORAZ), which refines local crude oil from the CNPC oil company for its local thermal power plants. Niger was able to significantly reduce electricity rationing, and blackouts observed at the beginning of the crisis. As a result of higher costs to supply electricity while tariffs remain unchanged, NIGELEC’s financial situation has deteriorated, with higher-than-expected deficits in 2023 to 2027. Imports from Nigeria were the cheapest source of power supply at 6 US cents/kWh, while the local diesel plants are more expensive. The financial deficit for Nigelec/the sector in 2023 due to tariffs 20 2024 ECONOMIC UPDATE NIGER being below cost recovery level is expected to be higher than previously estimated (FCFA 28 billion pre crisis due to the delay in tariff increase). The sanctions and disruption in external financing have also delayed policy reforms and energy sector expansion. Planned (lower cost) generation expansion depends on projects that have been delayed by the sanctions and disruption in development financing, including Scaling Solar, Dorsale Nord Interconnection (Nigeria), and Kandaji. Shifting from imported electricity to domestic power production in the generation mix could become a longer-term energy security strategy, which would increase the cost of electricity at least in the short-term. In addition, it has been announced that tariffs will remain unchanged in 2024, while the Government’s ability to subsidize the sector is now significantly lower due to limited fiscal space. Nigelec’s financial deficits could increase further, limiting its ability to make investments needed to expand access. Niger’s ambitious plans for increasing electricity access (tripling number of connections and energy consumption by 2030) could be scaled back significantly. Already in 2023, given the reduced energy supply, Nigelec had to pause new electricity connections. The financial sanctions led to a liquidity The liquidity crisis persisted despite crisis and a deterioration of portfolio the financial sanctions being lifted. As quality in the banking sector of mid-March, several banks continued to implement daily cash withdrawal The sanctions created a liquidity crisis limits. Only a fraction of the banks held in the domestic banking sector. The government bonds from other WAEMU announcement and implementation of countries, so were able to access the the sanctions led to large withdrawals and payments made by those countries during a decline in deposits by consumers and the sanctions but held in frozen accounts. businesses in the banking and microfinance However, all banks continue to face liquidity sectors. This was exacerbated by the fact constraints due to limited access to new that access to liquidity through the BCEAO government securities, higher liquidity was constrained to BCEAO’s short-term/ price stemming from monetary policy weekly refinancing windows and not the tightening by BCEAO, and lower deposits longer-term liquidity.7 In addition, Nigerien by consumers. banks held bonds issued by WAEMU governments (including Niger), which due In addition, banks' portfolios have to the sanctions meant they were not deteriorated, and lending has slowed. able to receive payments on the bonds, According to the BCEAO, at the end of further affecting liquidity. According to December, NPLs reached 23 percent, BCEAO data, at the end of December 2023, compared to 8.7 percent in WAEMU. The banks' cash holdings was down by 52.3 ratio varies across banks, with those percent compared to December 2022. providing credit for public spending and In response to the decrease in liquidity, import-export being the most impacted. commercial banks imposed daily limits on The quality of the portfolio deteriorated cash withdrawals, with only a few banks further than the NPL ratio suggests, allowing withdrawals up to XOF 500,000 because Nigerien banks are holding unpaid (US$ 815) per day. Niger government bonds that the WEAMU banking commission has decided to not classify as non-performing. Moreover, in December 2023, the value of new bank loans declined by 4.7 percent yoy, mainly due to a slowdown in lending to the private sector. 7 According to the BCEAO, Nigerien Banks had access to all the liquidity windows at the BCEAO during the sanctions, but they could not increase their liquidity because (i) they did not have enough government bonds since they couldn’t participate in regional bonds market; and (ii) they couldn’t offer competitive rates amidst monetary policy tightening. ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 21 The fiscal performance in 2023 percent of GDP. The deficit includes was characterized by budget cuts, interest arrears accumulated in 2023. accumulation of arrears, and use of Public financial management has been parallel systems for public finance weakened, first during the sanctions management8 and now by a recent presidential decree exempting defense spending In response to reduced revenues and from controls. As the government did financing, the authorities revised the not have access to its treasury accounts budget for 2023 by cutting capital at the central bank, it had to conduct expenditures. The crisis, sanctions and transactions outside of the established subsequent economic slowdown led to a PFM systems. With the sanctions lifted, decrease in tax revenue. Moreover, budget the administration should be able to financing was significantly impacted by return to using the PFM systems. On the loss of access to the regional bond February 23, 2024, a presidential decree market and remove non necessary (Ordonnance No 2024-05) declared that space disruption in external financing. the purchase of equipment of any kind, Consequently, the government adopted a and services or projects carried out for new budget law for 2023, with a downward the benefit of both the armed forces and revision in revenues, expenditures, and the presidential palace, are no longer the fiscal deficit. Expenditures were subject to public procurement and public projected to decline by 9.7 percent of accounting laws. These expenses are also GDP, compared to the initial budget, and exempted from taxation until the end by 5.4 percent of GDP, compared to the of the transition period. The decree also revised budget submitted to the IMF applies to purchases of goods and services Board. However, the outturn for 2023 and projects for the benefit of official revealed that expenditures declined by residencies. This decree would make Niger 10.3 percent of GDP, compared to the an outlier among Sahel countries in terms initial budget law, by only 0.6 percent of of lack of transparency and accountability GDP, compared to the revised budget law. on defense and security spending. As expected, the public sector wage bill was prioritized while capital investment was cut significantly (Figure 1.6). Total revenues in 2023 were projected to decline by 4.5 percent of GDP compared to the initial budget law and by 1.5 percent of GDP compared to the revised budget submitted to the IMF Board in June 2023, but, total revenue was estimated at 10.5 percent of GDP. That the revenue decline was not more severe given the freezing of public assets in BCEAO accounts was due to actions taken by the authorities, including requesting payment of taxes in cash. The budget deficit was estimated at 5.4 percent of GDP in 2023, compared to 1.4 percent of GDP in the revised budget law and 5.3 percent of GDP in the revised budget submitted to the IMF board on July 5, 2023. At the end of December, realized expenditures stood at 15.9 percent of GDP, while revenue collected was estimated at about 10.5 8 Fiscal numbers for 2023 will likely be updated before publi- cation of the Economic Update. 22 2024 ECONOMIC UPDATE NIGER Total expenditures in 2023 were revised With limited access to financing, the FIGURE 1.6 down by 9.7% of GDP compared to the FIGURE 1.7 budget deficit was reduced to 1.4% of GDP initial budget law in the revised budget but reached 5.4 % of GDP in 2023 2023 Expenditure (in % of GDP) 2023 Government budget (in % of GDP) 30% 20% 19.6% 15% 16.6% 15.1% 25% 10% 10.5% 5% 20% 0% 15% -5% -1.4% -10% -6.6% -5.3% -5.4% 15.5% 11.0% 5.7% 10% 6.4% -15.9% -15% -16.5% 9.9% 9.9% 9.6% 9.1% -20% -21.9% 5% -25% -26.2% 0% -30% Initial Revised budget Revised Realized Initial Revised budget Revised Realized budget agreed with budget expenditure budget agreed with budget budget law the IMF law law the IMF law Current expenditure Capital expenditure Total expenditures Total revenues Budget deficit Source: MOF and WB Staff calculations Source: MOF and WB Staff calculations Note: Expenditures include net lending The realized expenditure includes interest arrears. Without interest arrears the realized budget deficit is estimated at 4.9% of GDP With no access to its account at billion in principal and interest payments the central bank, the government (see Table 2).9 In sum, total domestic accumulated domestic and external arrears were estimated at CFAF 395.2 arrears. Niger's Public Treasury missed billion at the end of December 2023.10 several debt repayments to bond holders Furthermore, the government has also on the regional market. According to UMOA- accumulated external arrears with regional Titres, the regional agency responsible and international financial/development for promoting and managing treasury institutions, estimated at CFAF 70.5 billion. bonds in the WAEMU zone, at the end of Following the missed repayments, Moody's December 2023, the Nigerien government downgraded Niger's credit rating from B3 had failed to repay a total of CFAF 267 to Caa2, then to Caa3. Missed repayments by the government of Niger on the regional bond market TABLE 1.1 At the end of Dec. 2023 At end of February 19, CFAF billion 2024 CFAF billion Missed payments ................................................................................................................... 267.1 313.9 Principal ...................................................................................................................................... 260.5 300.1 Interest ........................................................................................................................................ ~6.5 13.8 Source: UMOA -Titres and WB staff calculations Public debt as a share of GDP is expected were due to sanctions and not a lack of to have risen to around 54.7% in 2023 capacity to repay. As of end-April, the based on the projected fiscal deficit and government has started to clear its stock low GDP growth. This includes expected of arrears, allowing it to resume access to domestic expenditure arrears, estimated (concessional) financing and supporting at less than 1 percent of GDP, incurred to debt sustainability. maintain expenditures. The last joint Bank- Fund Debt Sustainability Analysis (DSA) conducted in June 2023 had concluded that the overall risk of debt distress remains moderate. This risk rating is likely 9 By February 19, 2024, the of the amount had reached CFAF 313.9 billion. to remain unchanged given that the arrears 10 According to IMF data ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 23 The poverty rate at national poverty line, poor people over the period, from 8.9 to remained unchanged during 2018-2021. 9.9 million. At the same time, we observe an opposite trend in the indicators of The incidence of poverty, as measured the poverty gap and the poverty severity, using the national poverty line, remained which have decreased over the period, virtually unchanged at around 41 percent suggesting that the situation of the poor between 2018 and 2021. However, due and the poorest was better at the end of to high population growth (3.7 percent), 2018-2021. this corresponds to one million additional Changes in monetary poverty indicators 2018/19 - 2021/22 by area of residence FIGURE 1.8 Poverty incidence Poverty gap Poverty severity 5.0 46.8 3.9 50 46.4 15 13.0 5 4.3 41.2 11.2 3.4 40.8 40 11.2 4 9.9 10 30 3 21.1 14.3 20 4.5 2 1.5 5 2.9 0.8 10 6.0 1 4.9 1.2 0.4 0.8 0.2 0 0 0 National Niamey Other Rural National Niamey Other Rural National Niamey Other Rural urban urban urban 2018/19 2021/22 2018/19 2021/22 2018/19 2021/22 Source: World Bank calculations based on EHCVM 2018/19 and 2021/22using the national poverty line There are significant spatial disparities agricultural sector in 2022. Moreover, there in poverty. While the slight increase in the were significant disparities in monetary poverty incidence is driven by the increase poverty among Niger’s regions, with in urban poverty, the reductions in the Tillaberi remaining the poorest region with a poverty gap and in the poverty-severity is poverty incidence of 52.7 percent, followed the result of the reduction in rural poverty. by Maradi and Diffa (48.0 and 46.4 percent Inflation during the period seems to have respectively). Niamey and Agadez remain mainly affected urban households, which the least poor regions with incidences of explains the increase in urban poverty, 4.9 and 14.4 percent respectively (Figure while the reduction in rural poverty is 1.9). explained by the good performance of the 24 2024 ECONOMIC UPDATE NIGER Poverty profile and trends by region: 2018/19-2021/22 FIGURE 1.9 (a) Poverty incidence map, 2021/22 (b) Changes in poverty incidences by region: 2018/19 - 2021/22 Percentage points (50,55] 15 (45,50] 12.5 (40,45] 10.4 (30,40] 10 (20,30] (10,20] [0,10] 5 1.8 1.8 0.3 0 -2.0 -5 -4.0 -7.0 Niamey -10 Agadez Diffa Dosso Maradi Tahoua Tillaberi Zinder Niamey (c) Map of poor people numbers, 2021/22 (d) Changes in the number of poor by region: 2018/19 -2021/22 Change in number of poor (in thousands) (2000,2500] (1500,2000] 600 568.8 (1000,1500] (500,1000] (100,500] 400 [0,100] 269.3 230.3 200 125.5 10.0 19.3 0 -10.9 -200 -212.3 Niamey -400 Agadez Diffa Dosso Maradi Tahoua Tillaberi Zinder Niamey Source: World Bank staff calculation based on EHCVM 2018/19 and 2021/22 In 2023, the extreme poverty rate, On the one hand, the rise in food prices using the international poverty line, is mainly affects households in urban areas estimated to have remained unchanged where the poverty rate is relatively lower, (48.4 percent). While overall GDP per thus limiting the number of households capita contracted, agricultural GDP per being pushed into poverty. On the other capita expended marginally by 0.12 percent, hand, the marginal increase in agricultural leading the extreme poverty rate to remain GDP per capita directly affects households unchanged, despite the increase in food in rural areas where the poverty rate is prices in the second half of the year. relatively higher. ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 25 Elevated food prices have also led to a Nigeria, Mali, and Burkina Faso. The crisis rise in food insecurity, intensifying the and border closures have led to severe humanitarian situation. disruptions in the delivery of humanitarian aid. With persistent insecurity, the Tillaberi, 2.3 million people (8.9 percent of the Tahoua, Diffa, and Maradi regions are most population) were estimated to be food affected by displacements, which are insecure in Q4-2023, 13 percent higher exacerbated by climate shocks such as than Q4 2022, due to food deficit, flooding and droughts. Furthermore, over inflation, and insecurity (Box 1.3). There are 621 schools have been closed as a result of also estimated around 300,000 internally insecurity, with more than 55,000 deprived displaced persons due to insecurity and of schooling as a result. an equal number of refugees, chiefly from The number of internally displaced Mapping of forced displacement in Niger FIGURE 1.10 persons (IDPs) has risen sharply in recent FIGURE 1.11 years 400 000 Personnes Déplacées Internes 372 000 Réfugiés 350 000 Demandeurs d'asile Autres personnes 300 000 250 000 200 000 859 104.656 150 000 1.913 35.172 1.936 1 00 000 116.290 133.236 76.161 50 000 37.768 10.237 42.451 16.307 0 Niamey 42.713 289 62.343 2016 2018 2020 2022 2010 2012 2014 4.917 4.917 5.190 1 5.190 Source: Internal Displacement Monitoring Centre Source: UNHCR, January 2024. BOX 1.3 FOOD MARKETS AND FOOD INSECURITY DEVELOPMENTS Niger faced unusually high food prices throughout 2023, even before the military crisis and subsequent ECOWAS-imposed sanctions. Before the crisis in July, national prices of millet, the country’s main staple grain were already 12% above the five- year seasonal average. This was then significantly exacerbated by border closures with key trading partners Nigeria and Benin after the crisis with prices of imported rice in particular soaring by 17% week-on-week in the week following the crisis By end of August - the peak of the lean season, when households are most at risk of food insecurity – the price of millet was 23% higher than the seasonal average and 5% higher than the previous record-breaking levels of 2022. While the local harvest brought a temporary dip in prices in September, prices remain relatively high. Trends in average national millet prices - Niger, 2021-2023 360 340 320 300 280 260 240 220 200 Janu Feb March Apr May June July Aug Sept Oct Nov Dec ECOWAS Sanctions 2023 2021 2022 2023 Average last 5 years Source: Data from System d’Information des Marchés Agricoles (SIMA) Niger; Analysis by WFP 26 2024 ECONOMIC UPDATE NIGER Food remained largely available in markets despite the sanctions – albeit at much higher prices -thanks to significant informal trade flows. While formal trade with Nigeria and Benin fell, food imports into Niger continued through informal channels along the porous borders (as reported by traders and local authorities and evidenced by the continued availability of imported goods in the Diffa, Maradi and Zinder markets). Niger's non-ECOWAS neighbors maintained open borders (while Libya and Chad play a minor role, Algeria remained a crucial source of oil, sugar, and wheat products). Mali and Burkina Faso, who did not apply the sanctions, lifted previously imposed cereal export bans as a gesture of solidarity towards Niger’s new authorities. Plus, Burkina Faso and Niger organized joint escorted convoys to bring in goods through routes that had been previously abandoned due to insecurity. The new authorities also took several steps to bolster food availability, including releasing stocks intended for exports on local markets, cutting import taxes for key staples, and warning wholesalers against engaging in speculation/ stock hoarding to increase prices further. While no shortages were reported (apart from a brief shortage of imported rice), food stocks nevertheless remained lower than usual – in particular in hard-to-reach areas, where 50% of households surveyed in the aforementioned October 2023 national survey reported decreased availability of staple foods in their local market in the past four weeks. Change in regional food trade flows since the 30 July 2023 ALGERIA LIBYA sanctions (as of mid-December) wheat products, veg oil, suger MALI Increased flows cereals, fish Decreased flows No change in flows CHAD Countries not applying ECOWAS BURKINA FASO sanctions Niamey cereals, suger, Livestock, cereals Countries applying ECOWAS veg oil, wheat cereals, pulses, (incl rice), products fresh produce veg oil, sanctions fresh produce + fresh livestock produces NIGERIA BENIN TOGO GHANA CÔTE D'IVOIRE CENTRAFRIQUE CAMEROON Source: WFP analysis based on key informant interviews with local authorities, traders, and market analysts The crisis's impact on food prices and livelihoods directly impacted the country’s already worrying food security situation and fragile economy. The latest Cadre Harmonisé/ IPC analysis conducted in March 2024 projects that 3.4 million people (12.9 percent of the total population) will be severely food insecure during the June- August 2024 lean season period (categorized in Cadre Harmonisé crisis or emergency phase). This represents an 18 percent increase compared to the same period in 2023. Key drivers include food prices inflation, pockets of low crop or fodder production due to localized drought (especially in pastoral areas) during the 2023 growing season, and insecurity. These supply-side factors were compounded by falling household income due to loss of livelihoods due to the political crisis. The national food security survey conducted in October 2023 (Sites Sentinelles) found that 34% of households living in accessible areas and 66% of those in hard-to-reach areas reported experiencing unusual livelihoods-related challenges over the previous two months – with the most widely-reported challenge being the decrease in selling price and/or demand for commodities produced or sold by the household due to border closures. Food insecurity was also exacerbated by disruptions to humanitarian assistance programmes in 2023 - in part due to the political crisis and sanctions, which prevented imports of food and specialized nutritious products for children, reduced donor funding for the government and partner’s food assistance programmes, and restricted humanitarian access to parts of the country. This has a direct knock-on effect on 2024 food insecurity and child malnutrition levels, as households who were already severely food insecure last year but were not assisted are extremely likely to fall further into food insecurity during the upcoming lean season. Source: World Food Programme Niger ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 27 1.3 Economic and Poverty Outlook With sanctions lifted, large-scale oil domestic borrowing.Inflation is projected production and exports effective, and to reach 8.5 percent in 2024 due to the border closure with Benin, and the lower a significant share of arrears cleared, cereal production during the 2023/2024 growth is set to recover, but the outlook agricultural campaign compared to the is subject to significant downside risks. 2022/2023 campaign. Inflation is expected to remain above 3 percent in 2025-26 as As of May, the government had cleared the resumption of large imports from the a significant portion of domestic and region is offset by higher import costs external arrears. First, the government due to the exit from the ECOWAS free has cleared its arrears to the World Bank trade area. With the start of oil exports, and African Development Bank at the end the current account deficit is projected to of April 2024. Second, the government narrow slightly from 9.3 percent of GDP in reached on an agreement with UMOA- 2023 to 8.3 percent in 2024. Titres on its domestic arrears in order to re-tap the regional market. Under the Large-scale oil production has begun, agreement, (i) Niger agrees to pay half of with crude oil reaching the port in Sèmè the interest arrears; (ii) the capital arrears (Benin), but effective export – shipment will be refinanced with the new bonds; from the port- was delayed due trade (iii) Niger agrees to pay the remaining half dispute with Benin. Following the of the interest arrears within 30 days. commissioning of the Niger-Benin pipeline Following the agreement, on April 26, Niger in November 2023, oil production rose successfully raised 457 billion in its first above domestic consumption for testing foray into the regional financial market along the pipeline and pre-filling of storage since August 2023. The issuance, totaling tanks. Crude oil was subsequently pumped ~419 billion CFAF (equivalent to the amount through the pipeline and reached the port of market debt maturing between July in Sèmè at the end of April, but shipment 2023 and April 2024), comprised treasury has been delayed due to Benin preventing bills (maturity 12 months) and treasury ships to load until Niger reopens the land bonds (maturity 3 years et 5 years). border with Benin, which remains close despite the lifting of sanctions. In mid- Growth in 2024 could rebound to 5.7 May and mid-August, the Benin authorities percent (1.8 percent per capita) in 2024 authorized ships to load and export crude and average 6.5 percent in 2025-26, oil from Niger. However, the escalation of boosted by large oil exports. The non- the trade dispute led the Niger authorities oil industry and services sectors, which to close the pipeline and halt oil production have accumulated losses in 2023, face a for export in mid-June. With oil exports difficult recovery. This projection includes effective, Nigerien authorities expect oil the expected negative growth impacts of production to reach nearly 107,000 barrels/ an orderly ECOWAS withdrawal (Box 1.4), day in 2024, a more than 5-fold-increase which assumes that trade and transit in domestic oil production, compared agreements are put in place and free to previous years (~20,000 barrels/day). movement of goods, services, and people Assuming oil prices at US$60/barrel in 2010 are maintained, thereby limiting impacts to constant prices, the production increase higher trade costs (new tariffs) and lower will lead the oil sector to account for 13 trade with non-WAEMU ECOWAS countries, percent of Niger’s GDP (up from ~2 percent higher investors’ risk premia, and increased in 2023). regional financing costs. The fiscal sector will continue to face financing constraints In anticipation of crude oil exports, Niger as several development partners will borrowed US$400 million from China, likely continue to pause their financial repayable over one year at 7 percent commitments, and because of costlier interest. Niger and China signed a total 28 2024 ECONOMIC UPDATE NIGER of three agreements, including the loan of sanctions in early 2024, with borders agreement for the advance payment, a fully open for international trade; (ii) a memorandum of understanding, and a resumption of disbursements (projects contract for the joint marketing of crude and budget support) by external partners; oil. The loan is secured by Niger’s share (iii) economic growth of 11.3 percent; (iv) oil of crude oil destined for exports, however production of 107,000 barrels/day valued additional details of the loan such as at US$79.9/barrel. production and price assumptions have not been disclosed. The agreements are The increase in oil production and export for one year, and the prime minister noted is expected to increase government that the government will re-evaluate and revenues. Total revenue is expected to choose the deal/partner that best serves reach 16.8 percent of GDP, mainly supported the country’s interests. by a recovery in tax revenue to 11.8 percent of GDP, compared to 8.1 percent of GDP in The outlook remains subject to 2023. Oil-related revenues are expected significant downside risks, including a to reach 3.9 percent of GDP (Figure 1.14). deterioration in the security situation, This represents about 23.5 percent of total terms of trade shocks, climatic shocks, government revenue and 33.4 percent of difficult financing conditions, the tax revenue. The projected oil revenues withdrawal from ECOWAS, and sustained are based on production reaching nearly political tension. An ECOWAS withdrawal 107,000 barrels a day over the entire year that has gaps in agreements leading to priced at US$79.9 per barrel. larger disruptions to transport, transit and free movement of goods, services, capital Meanwhile, a recovery in capital and labor and spillovers onto WAEMU expenditure will boost total expenditure. trade would see larger negative impacts of Expenditure rationing in 2023 mainly the exit. Realizing new trade opportunities concerned capital expenditure, while would mitigate impacts (Box 1.4). Sustained current spending remained almost or escalation of political tensions between the same. In 2024, total expenditure is Benin and Niger will contribute to higher expected to reach 20.2 percent of GDP, trade costs and further delay oil exports. compared to 15.9 percent of GDP in 2023. The uncertain outlook has translated into Capital expenditures are projected at 11.3 a higher risk premium on Niger’s bonds, percent of GDP, and current expenditure with higher interest rates on the country’s at 8.9 percent of GDP, compared to 5.7 issuances on the regional bond market in percent of GDP and 9.6 percent of GDP 2024. Further economic policy uncertainty respectively in 2023. could lead to higher regional financing costs and the BCEAO may need to continue The fiscal deficit is projected at CFAF monetary tightening in 2024 to bring 394 billion or 3.4 percent of GDP. inflation under control. A financing squeeze Amortization is projected at 2.5 percent of could lead to cuts in public expenditure, GDP. To meet the gross financing needs of affecting growth-enhancing investments, ~6 percent of GDP, the government plans as security expenditure pressures mount. to borrow from the regional bond market, but also from international partners for budget and project financing. In particular, The national budget for 2024 is the budget assumes project loans at 1.8 percent of GDP, budget support at 2.0 underpinned by increased revenues from percent of GDP, and domestic borrowing large-scale oil exports but may not be at 2.2 percent of GDP. realistic in terms of revenue or financing sources11 Revenue collection and financing in 2024 is likely to be lower than projected According to the approved budget for in the approved budget, which would 2024, revenues are expected to recover. then lead to lower expenditures than The key assumptions that underpinned projected. First, large-scale oil production the initial budget law include (i) the lifting has begun, but exportation through the pipeline has been delayed due to trade dispute with Benin. The Beninese 11 Based on the initial budget law for 2024 ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 29 authorities have so far allowed only two Borrowing on the regional market is likely cargoes of oil to be loaded and exported to be limited and costlier so the fiscal to China, and are preventing further envelope for expenditures (revenue shipments, demanding the re-opening of plus financing) is therefore expected to the land border. In response, the Nigerian be significantly smaller. After reaching authorities have closed the pipeline and an agreement with UMOA-Titres on its halted oil production for export since mid- domestic arrears, Niger successfully raised June. Second, the price of a barrel of oil CFA457 billion ($747 million) on April 26 used is the expected Brent oil price, which on the regional financial market for the does not likely reflect the appropriate first time since August 2023. The interest reference price for Niger. Third, the budget rates were higher interest rates compared assumed a resumption in regional and to those preceding the crisis, reflecting a external financing, including projects premium for investing in Niger compared to and budget financing, from international other regional issuers. Nevertheless, these organizations/partners in early 2024. While rates are comparable to those in Burkina the government has started to clear the Faso and Mali. According to World Bank stock of arrears access to financing will estimates, the fiscal deficit is likely to remain limited and costlier. reach 4.4 percent of GDP, with revenues and expenditures projected at 10.9 and 15.2 percent of GDP respectively (Figure 1.16). In the approved budget revenues are According to the initial budget lawOil-related FIGURE 1.12 projected to recover and reach 16.8 FIGURE 1.13 revenue is projected to reach 3.9 percent of percent of GDP, fueled by goods and GDP in 2024, with oil production projected services and trade related tax revenue to reach nearly 107,000 barrels/day Budget Revenues (% of GDP) Oil-related revenue (% of GDP) 30% 4.5% 25% 4.0% 3.5% 0.78% 20% 3.0% 0.76% 15% 2.5% 2.0% 0.74% 10% 1.5% 0.20% 0.30% 1.0% 5% 0.19% 0.5% 0.40% 0% 0.0% 2019 2020 2021 2022 2023 2024 Revised Tax oil Domestic VAT, oil sector budget Customs import duty, oil law Oil ad volorem royalties sector Internal tax on Wages Interest Import VAT, oil sector petroleum products Goods and services Capital expenditures Other oil-related fiscal Profit taxes, oil sector revenue Subsidies and transfers Profit oil Source: Internal Displacement Monitoring Centre Source: UNHCR, January 2024. 30 2024 ECONOMIC UPDATE NIGER The budget deficit is projected to narrow According to WB analysis, the fiscal deficit FIGURE 1.14 in 2024 in the approved budget FIGURE 1.15 will likely reach 4.4% of GDP in 2024 Approved budget composition (in % of GDP) WB estimated expenditure, revenue and budget deficit 20% (in % of GDP) 15% 15 10% 10 5% 5 0% 0 -3.6% -4.4% -5.3% -5.4% -5% -6.1% -6.8% -5 -3.2% -4.4% -3.9% -10% -10 -15% -15 -20% -20 2024 2025 2026 -25% 2019 2020 2021 2022 2023 2024 Tax revenue Grants Capital expenditures Tax Revenue Non-tax revenue Non-tax revenue Grants Current expenditures Current expenditures Capital expenditures Budget deficit Budget deficit Source: MOF and WB Staff calculations Source: MOF and WB Staff calculations The extreme poverty rate is expected However, the poverty outlook is subject to decline by 2024-26, in line with to significant uncertainties. First, the projected growth rates. evolution of poverty will critically depend on policies that transmit oil and gas rents Over the period 2024-2026, the extreme to the general population, particularly the poverty rate, at the international line poor. This is the case when growth takes (US$2.15 per person per day), is projected place in a sector that does not employ to decline, in line with the strong baseline poor people. Second, nearly 80 percent of growth projections. Assuming solid households depend mainly on agricultural growth in agriculture sectors and policies activities which are vulnerable to climatic that use increased oil revenues effectively shocks. Finally, a deterioration of the for the population, the poverty rate is security situation and an increase in IDPs expected to decrease to 42.5 percent by would hinder poverty reductioreduction 2026. Despite the relatively high inflation, and exacerbate Niger’s chronic food expected to reach 8.5 percent in 2024 and insecurity situation. average 5.4 percent in 2025-2026, the real GDP growth in agriculture, which accounts Policy options (see Table E.1) are available for about 69 percent of the income of to strengthen Niger’s macro-fiscal poor households, is expected to be above framework and support the economic 5 percent, significantly higher than the recovery following seven (7) months of population growth. As a result, the number sanctions. In the short term, it is critical of absolute poor is projected to decrease to (i) establish and implement a realistic and reach nearly 12.9 million people by and credible domestic arrears clearance 2026, representing a decrease by 473,000 plan to enable Niger to resume access to poor since 2024. regional and external financing sources; (ii) return to established PFM systems; (iii) establish an effective management ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 31 framework for oil revenues, starting with oil adequate capacity could ensure the revenue forecasting; and (iv) take actions to effective oversight and implementation mitigate negative impacts of the ECOWAS of the regulation and that petroleum withdrawal and minimize spillovers onto operations are being conducted efficiently, WAEMU trade. In the medium-term, transparently and in accordance with best establishing an oil sector regulator with industry practices. BOX 1.4 PRELIMINARY ANALYSES OF THE POTENTIAL IMPACTS OF THE ECOWAS WITHDRAWAL This box looks at the existing regional linkages, lays out the key potential transmission channels and expected economic impacts of the withdrawal and highlights further risks, as well as opportunities. These are preliminary analyses based on scenarios and assumptions, which would need to be updated as the situation evolves, e.g., as bilateral trade agreements are negotiated, and external tariffs are set. Burkina Faso, Mali and Niger have been members of the Economic Community of West African States (ECOWAS)12 since 1975 and also the West African Economic and Monetary Union (WAEMU) since 1994. ECOWAS has an ambitious regional economic integration agenda promoting free movement of people, goods, capital and services (key instruments include the ECOWAS passport, a free trade area (FTA) with a common external tariff (CET), transport and transit regime, and regional integration projects such as the West African Power Pool (WAPP). WAEMU shares a complementary economic integration agenda (it also has a FTA with a CET aligned with ECOWAS). In addition, WAEMU member states are in a monetary union with a regional central bank (BCEAO) and a common monetary policy and currency. The WAEMU bond market is a key source of financing for member states, including Mali and Burkina Faso. On January 28, 2024, in a joint communiqué, the three countries announced their immediate withdrawal from ECOWAS. According to the revised ECOWAS Treaty, a notification period of one year is required to leave ECOWAS. At the ECOWAS Heads of State summit held on February 24, 2024, ECOWAS lifted all sanctions on Niger and called for unity and the three countries to reconsider their decision.13 The three countries remain members of WAEMU. Existing socio-economic linkages between the three countries and the rest of ECOWAS (Figure 1.17 – 20): The potential benefits of being part of a larger economic community are significant for the three smaller and landlocked countries: Burkina Faso, Mali and Niger are among the lower-income member states of ECOWAS, accounting for around 8 percent of GDP but 17 percent of the population. For the three countries, the key socio-economic linkages are imports from ECOWAS, land transit corridors and 3 million diaspora residing in the region: ▪ The level of formal intra-ECOWAS trade is lower than that of other regional economic zones - only 8 percent of total trade is intra-regional compared to 18 percent for the East Africa Community and 20 percent for the Southern African Development Community. Less than 5 percent of Burkina Faso, Mali and Niger’s formal exports14 go to ECOWAS as exports are dominated by gold (70-95 percent of total exports by value) and other extractives to countries outside of ECOWAS (Figure 1.17). ▪ However, more than one-third (37 percent) of the three countries’ imports of goods come from ECOWAS15 - in particular, food products and fuels from Cote d’Ivoire, Senegal, and Nigeria. Of that, Mali and Burkina mostly import from other WAEMU countries, whereas Niger also imports significantly from Nigeria (Figure 1.17). ▪ In addition, a large share of domestic electricity demand has been met through regional imports: Burkina Faso from Ghana, Mali from Cote d’Ivoire, and Niger from Nigeria, providing power at lower cost than domestic power production. However, this regional energy trade has been disrupted since 2023, contributing to electricity shortages and deepening financial deficits in the sector (Figure 1.18).16 ▪ Beyond direct trade, land transit corridors in the ECOWAS region are key for the three landlocked countries to connect to other countries in the region and to the region’s coastal ports (Dakar, Abidjan, Lome, Cotonou, Tema) for imports from the rest of the world (ROW) (Figure 1.19).17 ▪ People flows are substantial and bring in important remittances: Burkina Faso, Mali and Niger citizens with the ECOWAS single passport travel visa free and have the right to reside and work in the region. Approximately 3 million diaspora members (Burkina Faso: 1.6 million, Mali: 900,000, Niger: 400,000) reside in ECOWAS (mostly in WAEMU i.e., Cote d’Ivoire, but also in 12 ECOWAS membership in Jan 2024: 15 countries, with 8 also in WAEMU (Benin, Burkina Faso, Guinea-Bissau, Côte d'Ivoire, Mali, Niger, Senegal and Togo) and 7 non-WAEMU (Cabo Verde, The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone) 13 ECOWAS (2024). Extraordinary Summit of the Ecowas Authority of Heads of State and Government on the Political, Peace and Security Situation in the Region. https://www.ecowas.int/wp-content/uploads/2024/02/EXT-ORD-SUMMIT-FINAL-COMMUNIQUE-EN- GLISH-_240225_160529.pdf 14 Informal exports are not captured in the data, including for example Niger’s agricultural and livestock exports to Nigeria. 15 Imports could reflect service trade integration where goods from outside ECOWAS are imported by the coastal countries, often by wholesalers, who then re-export them to the three countries. 16 Exports of electricity from Cote d’Ivoire to Mali have declined from ~120 MW to ~10MW currently due to large payment arrears, contributing to the current energy crisis. Prior to the ECOWAS sanctions, 70 percent of Niger’s electricity demand was met by imports from Nigeria; Niger ramped up domestic thermal production (more expensive) in response to the sanctions. 17 Mali is primarily dependent on Dakar, Senegal, then Abidjan, CIV. Niger uses primarily Cotonou, Benin. Burkina Faso uses Lome, Togo, Abidjan, CIV and Tema, Ghana. 32 2024 ECONOMIC UPDATE NIGER Nigeria), sending large remittances that support external balances and household incomes (Figure 1.20). The three countries are implicated in 21% of intra-ECOWAS remittances exchange (equivalent to around USD 3.5 billion). Key Potential Channels of Transmission, ECOWAS Withdrawal Scenarios and Expected Impacts Given the socioeconomic linkages, the key potential transmission channels for the three countries from leaving ECOWAS are disruptions to trade, transit and people flows and higher investors’ risk premia. ▪ Trade Flows (Imports): Higher import costs (due to new tariffs and non-trade barriers (NTBs)) would lower imports (foods and fuels) from non-WAEMU ECOWAS countries after leaving the ECOWAS FTA. In theory, trade with WAEMU countries should not be affected by leaving the ECOWAS FTA if the WAEMU FTA continues to function well. ▪ Transit Flows: Disruptions to land transit corridors would reduce trade with other WAEMU countries and the ROW. ▪ Spillovers onto regional energy trade - not directly linked to ECOWAS membership,18 but could be impacted by broader regional dynamics. Reductions in electricity imports would likely increase the cost of power in the short term. ▪ People Flows: Disruptions to the free movement of its citizens within the ECOWAS region. ▪ Increased economic policy uncertainty could lead to higher investors’ risk premia and, in turn, higher costs of WAEMU regional financing. Bond yields for Niger had already increased significantly since January 2022 up to July 2023 - similar to the rest of WAEMU (1-year T-bills at 7.69 percent and 3-year bonds at 7.37 percent). Niger lost access to the WAEMU regional bond market due to the sanctions. It regained access in April 2024; average yields for all instruments have been more than 100 basis points higher compared to June-July 2023. The importance of the transmission channels and the expected impacts on the economy will depend on the manner of the ECOWAS exit and if there are spillovers onto WAEMU trade and onto regional energy trade. Given the many uncertainties, two stylized scenarios have been defined to analyze the potential impacts on the three countries. In both scenarios, the three countries remain in WAEMU and there are minimal disruptions to the free movement of people given the desire to avoid large social disruptions. SCENARIO 1: An orderly ECOWAS exit with negotiated agreements that minimizes spillovers onto WAEMU. This scenario would limit the impacts to the exit of the ECOWAS FTA with higher trade costs and lower trade with non-WAEMU ECOWAS member states. Transport and transit instruments are renegotiated/or included in new bilateral agreements. Trade with other WAEMU countries is conducted according to the WAEMU FTA. Regional energy imports remain at their current levels – i.e., lower than pre-2023 levels – as the three countries look to enhance energy independence, leading to electricity costs remaining high in the short term. Agreements are in place to preserve the visa-free travel and right to reside and work for its citizens throughout the ECOWAS region. The uncertainty over the exit and the impacts leads to increased investors’ risk premia and higher WAEMU regional financing costs. Overall, we would expect annual GDP growth for 2024-2026 to be slightly lower as a result of the ECOWAS withdrawal (compared to a counterfactual scenario of no ECOWAS exit). The expected demand-side impacts would be slightly lower volumes of imports from non-WAEMU ECOWAS countries, and slightly lower levels of private and public investments due to increased risks and higher costs of WAEMU regional financing. Inflation would be slightly higher due to higher import costs. In terms of the supply-side, agriculture and extractives sectors would not be materially affected by disruptions in regional supply chains, with mining (gold, uranium) and oil exports going outside ECOWAS by air and the Benin pipeline. In contrast, manufacturing and service sectors would be more impacted by higher costs of imported inputs and power, and lower trade volumes. SCENARIO 2: An ECOWAS exit with gaps in agreements that lead to substantial spillovers onto WAEMU. In this scenario, there would be higher tariffs and NTBs on imports from non-WAEMU ECOWAS countries compared to Scenario 1, which could boost custom revenues in the short-term but would lower import volumes significantly. Transport and transit instruments are not fully renegotiated/or included in new bilateral agreements so that there are gaps disrupting trade flows with WAEMU countries and the rest of the world. There could also be trade frictions within the WAEMU FTA, e.g., there is complexity in using the WAEMU instead of the ECOWAS certificate of origin. Energy independence is even more strongly emphasized, leading to lower regional energy imports than current levels and higher costs of electricity in the short term. There are larger increases in investors’ risk premia and regional financing costs compared to Scenario 1. However, agreements are in place to preserve the visa-free travel and right to reside and work for its citizens throughout the ECOWAS region. Overall, we would expect negative impacts on annual GDP growth for 2024-2026 to be larger than in Scenario 1, but still moderate. The expected demand-side impacts would be larger than Scenario 1 in terms of the reduction in imports (from WAEMU as well as non-WAEMU ECOWAS countries), the reduction in levels of private and public investments, and the inflationary impacts of imports. Niger could see larger impacts than Burkina Faso and Mali due to its stronger trade linkages with non-WAEMU ECOWAS (Nigeria) and macro-fiscal vulnerabilities from 7 months of economic and financial sanctions. While WAPP is an ECOWAS institution, regional energy trade is governed by bilateral power purchase agreements and transmission 18 service agreements between the trading countries. ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 33 That the overall expected impacts under these two scenarios are only slightly to moderately negative reflect the economic structure of the three countries: the importance of agriculture (mainly non-tradeable domestic food production) and extractives sectors, and large informal trade flows across the region, which are likely to be less affected from leaving the ECOWAS FTA. Further Risks and Opportunities The expected socioeconomic impacts would be much more significant if the ECOWAS exit disrupted the free movement of people, impacting the millions in the diaspora and their remittance flows. The ECOWAS communique of February 24, 2024, highlights this risk: “The withdrawal will automatically affect the immigration status of the citizens as they may be required to obtain visa to travel around the region. Citizens may no longer be able to reside or set up businesses under ECOWAS arrangements and may be subject to diverse national laws. The three countries will cease to use ECOWAS passports, ECOWAS Biometric National Identity Card and the region-wide ‘ECOWAS Brown Card’ vehicle insurance.” The three countries remain in WAEMU; however, the decision to exit from ECOWAS created some uncertainty. Market analysts see a WAEMU exit as a low probability risk,19 but one which would have substantially more severe impacts on growth, inflation, external and fiscal balances, given the stronger trade linkages with other WAEMU countries and because the monetary union provides an anchor for macroeconomic stability (through the CFA franc peg to the Euro, buffer of pooled external reserves, common macroeconomic stabilization rules).20 Therefore, if there are heightened perceived risks of a WAEMU exit, this could further increase the countries’ risk premia and regional financing costs even if they remain in WAEMU. This would be challenging at a time of high gross financing needs and increasing reliance on the WAEMU regional bond market, this could lead to cutting of public spending to limit financing needs. Finally, there could be important medium-to-longer term impacts for the three countries in terms of `missed development opportunities' in energy, food systems, security, digital, pandemic preparedness, if the countries' participation in regional integration programs, as well as in trade facilitation efforts, is disrupted. However, there are also new trade opportunities, e.g., intensifying existing or establishing new bilateral trading relations, including with countries outside ECOWAS - already ~2/3 of imports are from outside ECOWAS - though these could take time to be fully realized as new trade agreements need to be negotiated and new trade/transit routes need to be established. 19 S&P Global Ratings (2024). What The Departure of Burkina Faso, Mali, and Niger from ECOWAS Would Mean for WAEMU. https:// www.spglobal.com/ratings/en/research/articles/240226-what-the-departure-of-burkina-faso-mali-and-niger-from-ecowas-would- mean-for-waemu-13004298 20 The potential impacts are difficult to assess, though we can note Mali’s previous exit from the CFAF monetary union in 1962, which saw a devaluation of its new currency, macroeconomic imbalances, and a long period of low growth. Mali rejoined WAMU in 1984. 34 2024 ECONOMIC UPDATE NIGER Share of total recorded imports from ROW, Total electricity imported and exported intra- FIGURE 1.16 WAEMU, non-WAEMU ECOWAS FIGURE 1.17 ECOWAS (WAPP Grid), 2022 2000 Burkina Faso 65.0 30.9 4.1 1500 1000 500 Energy (GWH) Mali 56.3 43.1 0.6 - (500) (1000) Niger 79.0 12.2 8.8 (1500) (2000) (2500) 3 countries 62.6 34.3 3.1 (3000) Senegal Niger Gambia Ghana Liberia Nigeria Benin/Togo Burkina Faso Mali Cote d’Ivoire Sierra Leone Guinea-Bissau 0% 20% 40% 60% 80% 100% Rest of World WAEMU Non-WAEMU ECOWAS Imports Exports Note: All figures are averages for the period 2018-22. Trade is in goods, excludes electricity imports. Source: UNCOMTRADE, 2024, using mirror trade statistics, WB staff analysis Source: ECOWAS-WAPP, 2024 Transit Flows: Maritime transit by regional port FIGURE 1.18 Maritime transit for Mali (Mt.) Maritime transit for Burkina Faso (Mt.) Maritime transit for Niger (Mt.) 5.0 8.0 5.0 4.0 6.0 4.0 3.0 3.0 4.0 2.0 2.0 1.0 2.0 1.0 0.0 0.0 0.0 2020 2020 2020 2010 2010 2019 2019 2018 2018 2014 2014 2016 2016 2010 2012 2015 2021 2012 2015 2021 2019 2013 2013 2018 2014 2016 2017 2017 2012 2015 2021 2013 2017 2011 2011 2011 Dakar Abidjan Abidjan Lome Cotonou Other ports Other ports Tema Other ports Source: Port Authorities People Flows: Number of Burkina Faso, Mali, and Niger diaspora by host country FIGURE 1.19 1.8 1.6 0.1 1.4 0.1 Millions of people 1.2 Rest of World 1.0 Other ECOWAS 1.4 0.1 0.8 0.2 Nigeria 0.6 0.2 Other WAEMU 0.4 Cote d’Ivoire 0.1 0.2 0.5 0.2 0.0 0.1 Burkina Faso Mali Niger Source: https://www.migrationdataportal.org/regional-data-overview/western-Africa, WB staff analysis ECONOMIC AND POVERTY DEVELOPMENTS AND OUTLOOK 35 36 2024 ECONOMIC UPDATE NIGER 2 INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 2.1 Sectoral context: Key challenges in the education Increasing access to education is Access to education remains a major challenged by limited and poor school challenge at the primary and secondary infrastructure, growing insecurity, and levels due in part to limited and poor heavy demographic pressures school infrastructure, and more recently insecurity. Despite recent improvements Niger's low human development in access to public primary education, the outcomes are a binding constraint to system is struggling to absorb the rapidly promoting economic growth and shared growing young population. More than 50 prosperity. The World Bank's Human percent of children between the ages of 7 Capital Index (HCI) shows that Nigerians and 16 remain out of school. The situation born today are expected to reach only 32 is worse for girls, especially after school percent of their productivity potential due closures due to COVID-19 and subsequent to serious deficiencies in health, nutrition, insecurity. In 2022, approximately 36 and education.21 The low HCI is due to a percent of the country's 81,947 primary combination of interrelated challenges: and secondary classrooms were classified high infant and maternal mortality rates, as “Classe Paillote” (CPs) or Straw Hut low child immunization coverage, high Classroom. Across the country, these rates of stunting, high levels of chronic classrooms serve as a stopgap measure malnutrition that place the country in in the absence of permanent school a state of "emergency" according to the infrastructure and are a last resort for World Health Organization's classification, children, families, and communities living and poor educational outcomes. in areas without nearby schools. These makeshift schools do not meet even minimum safety standards and increase the risk of fire; they are permeable to 21 World Bank Group (2022). Niger Human Capital Country Brief. rain and cannot accommodate certain October 2022. The World Bank. https://thedocs.worldbank.org/ en/doc/64e578cbeaa522631f08f0cafba8960e-0140062023/re- equipment needed for schooling, such lated/HCI-AM23-NER.pdf. INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 37 as lighting, temperature control, teaching from 102,370 in 2024 to peak at 133,511 and learning materials, and digital and in 2045 and decline to 122, 342 by 2054. laboratory equipment. Insecurity in parts Therefore, in addition to replacing CPs, an of the country has displaced many people average of 2500 new classrooms will need and led to school closures. As a result, to be built each year to accommodate the many affected children can't attend school. growing number of primary age children (Figure 2.5). At the lower and upper Demographic pressures will make secondary levels, an average of 1,037 increasing access to education / new classrooms will be needed annually enrollment rates even more difficult in between 2024 and 2054 (Figure 2.6). These the future. Based on a net enrollment rate projections assume constant enrollment of 57.7 percent (2021), the net change in rates, so if enrollment rates improve, even the number students enrolled in primary more classrooms will be needed. school each year is projected to increase Niger’s Human Capital Index lags that of Primary school enrollment rate in Niger is FIGURE 2.1 its structural and aspirational peers FIGURE 2.2 lower than structural and aspirational peers Human Capital Index (scale 0-1) Percentage (0-100) 0.45 0.41 100 94.0 99.2 0.38 0.38 0.40 0.38 0.38 90 67.8 88.5 76.2 87.8 0.40 80 57.7 0.35 0.32 70 0.30 60 0.25 50 0.20 40 30 0.15 20 0.10 10 0.05 0 Uganda, 2017 0.00 Niger, 2021 Burkina Faso, 2022 Afghanistan, 2019 Malawi, 2019 Rwanda, 2022 Ethiopia, 2022 Uganda Niger Rwanda Ethiopia Burkina Faso Afghanistan Malawi Structural peers Aspirational Aspirational peers Structural peers peers Source: WDI and WB staff illustration Source: WDI and WB staff illustration The number of primary school students The number of students at the secondary FIGURE 2.3 is projected to rise, increasing the need FIGURE 2.4 level is also projected to rise for more classrooms Change in nbr of primary sch. stdts Percentage Change in nbr of secondary sch. stdts Percentage 140000 5% 5% 60000 120000 4% 4% 50000 100000 3% 40000 3% 80000 60000 30000 2% 2% 40000 20000 1% 1% 20000 10000 0 0% 0 0% 2027 2027 2037 2047 2024 2030 2033 2036 2039 2042 2045 2048 2051 2054 2023 2025 2029 2031 2033 2035 2039 2041 2043 2045 2049 2051 2053 Primary school enrollment (change) Secondary school enrollment (change) Primary school enrollment (growth) (Right axis) Secondary school enrollment (growth) (Right axis) Source: WB staff calculation based on UN population projections and UNICEF data on enrollment rates 38 2024 ECONOMIC UPDATE NIGER An average of 2500 new classrooms will At the lower and upper secondary levels, FIGURE 2.5 need to be built each year between 2024 FIGURE 2.6 an average of 1,037 new classrooms will and 2054 to accommodate the growing be needed annually number of primary age children 3000 1200 2500 1000 2000 800 1500 600 1000 400 500 200 0 0 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 Source: WB staff calculation based on UN population projections and UNICEF data on enrollment rates Weak pedagogical environment, of second graders meet the minimum shortages of educational resources, and threshold for literacy.23 In addition, recent underperforming teachers contribute to learning assessments ranked Niger 10th out poor learning outcomes of 14 participating francophone countries in reading achievement at the end of the In addition to low enrollment, Niger's first cycle of primary school.24 primary school completion rate is relatively low compared to peers. In In Niger, the learning poverty estimate 2021, the primary completion rate was 57.6 is 0.90, meaning that 90 percent percent, which was lower than structural, of 10-year-olds cannot read and aspirational, and regional peers (except understand a short story. At the end of Chad) (Figure 2.2). Structurally, most primary school, only 17 percent of students children are out of school, whether primary have textbooks for reading and 30 percent (more than 50 percent) or secondary (60 for math. In addition, the distribution of percent).22 textbooks varies widely between schools and localities, despite measures taken at For children enrolled in the education the central level to distribute resources system, weak educational outcomes equitably. The other main factor which translate into a severe learning crisis. contributes to low learning outcomes is While the HCI (2020) for Niger shows that poor quality of teaching. children complete an average of 5.3 years of schooling by the age of 18, this equates Niger has the highest teacher to only 2.6 learning-adjusted years of absenteeism rate in the region. Among schooling. In short, the system is getting the 14 francophone West African countries children into school, but they are learning that participated in the 2019 PASEC at half the expected rate. According to education assessments. PASEC (2019) the Programme d'Analyse des Systèmes found that 72.2 percent of teachers had Educatifs (PASEC) (2019), only 44.5 percent 1-5 absence days over the last 2 months. 23 PASEC (2019). PASEC2019 – Performances du système édu- 22 The proportion of children out of school (especially for girls) catif nigérien : Compétences et facteurs de réussite au pri- is highest in the poorest households (quintile 1) compared to maire. PASEC, CONFEMEN, Dakar the richest households (quintile 5). For instance, 41% of girls 24 PASEC (2019). PASEC2019 – Performances du système édu- have never been in school compared to 35% of boys in quintile catif nigérien : Compétences et facteurs de réussite au pri- 1 (EHCVM 2021-2022). maire. PASEC, CONFEMEN, Dakar INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 39 The insufficient and unstable supply of stable income and clear career paths. The teachers with inadequate qualifications lack of job security and career prospects is also a major factor in the unsatisfactory in turn discourages young talent who educational outcomes. Due to the would otherwise apply for ENs and enter relatively low entry requirements for the the teaching profession. Furthermore, a Ecoles Normales (ENs) and the inadequate national assessment of contract teachers quality of the training, students graduating in 2017 found that only 34 percent of them from the ENs were underqualified and were had the minimum literacy and numeracy not guaranteed a teaching position upon skills, and 20 percent received a score graduation.25 Due to the insufficient quality below 25 percent. Contract teachers in the of EN graduates and the limited budget, Diffa region performed the worst, with 40 the teacher workforce is dominated percent scoring below 5 out of 20, while by contract teachers, whose contracts those in Niamey and Tillabéri performed are renewed annually by the Ministry of the best. The Service Delivery Indicator Education (MEN), rather than permanent (SDI; 2015) also showed that less than one (civil servant) teachers. In 2021, 73.3 percent percent of primary school teachers had of the approximately 70,000 primary the minimum knowledge required to teach school teachers were contractual, lacking mathematics. 2.2 Government’s reform agenda and costs The government’s agenda include In the first phase, a total of 5,000 new replacing all CPs with permanent classrooms will be built over the next classrooms, hiring more permanent five years (2024-2028) (Figure 2.7). The teachers, and improving teachers’ regions with the highest number of CPs - training Maradi, Zinder, Tahoua, Dosso and Tillaberi - will receive the largest number of new To improve access to education, the permanent classrooms (Figure 2.8). The Government of Niger has embarked on construction plan only addresses the an ambitious agenda to replace CPs replacement of CPs and does not address with permanent and more appropriate the growing new demand for classrooms classrooms. To address the immense due to population growth. In addition, the need for classrooms, the government construction of such numbers of improved has approved a Zéro classes paillotte classroom structures in large numbers program that aims to replace 36,000 remains a challenge. While the Fonds CPs with better classrooms. The phased Commun Sectoriel de l’Éducation (FCSE) replacement of CPs announced in the construction plan for 2022-2023 called for Sector Education Plan 2020 is underway. the construction of 545 classrooms, only The implementation of the program's 162 have been built to date due to weak school infrastructure construction plans is institutional capacity and low absorption expected to significantly improve learning rates of available funding. time, working conditions and overall safety for all students. 25 Initial and in-service training for preschool and primary school teachers is provided by the Ecoles Normales (ENs), which initially offered two years of training and a salary to those recruited from among students with four years of se- condary education. 40 2024 ECONOMIC UPDATE NIGER A total of 5000 classes are planned over The regions with the highest number of FIGURE 2.7 the next 5 years to replace CPs FIGURE 2.8 CPs will receive the highest number of new permanent classrooms 1400 7000 6000 1200 1250 5000 1000 1000 1000 1000 4000 800 3000 750 600 2000 1246 1000 940 400 1000 651 614 316 129 101 200 0 Maradi Zinder Tahoua Dosso Tillaberi Niamey Diffa Agadez 0 2024 2025 2026 2027 2028 Number of CPs Planned classrooms (2024-2028) Source: Ministry of National Education (Ministère de l’Education Nationale, MNE) Yearbook 2022. In addition to building classrooms, primary school teachers. The government the government has taken steps to plans to recruit 3,000 EN graduates each strengthen the quality of teaching and year from 2024. In 2024, about four percent improve educational outcomes. The of the primary school teaching force will quality of teachers is being improved on be replaced by those (EN graduates and three levels: qualified contract teachers) with the new • Increasing the number of student qualification standard. teachers entering teacher training colleges. • Improve the tenure and salary of Efforts have been made in recent years graduates of teacher training schools at to increase the recruitment level of ENs, the beginning of their careers. including a new entry requirement and • Implementation of the plan to integrate training curriculum from 2022. From 2022, contract teachers into the civil service. The the entry requirement for ENs will be raised recruitment of new contract teachers will from a junior high school diploma to a high be stopped. At the same time, the existing school diploma. In 2022 and 2023, 2,516 pool of teachers will be "renovated" by and 1,561 student teachers, respectively, absorbing qualified contractual teachers. will be accepted for two years of training This will include those who have graduated at a teacher training college. Successful from initial training centers and those who graduates will be hired directly into the have been selected on the basis of merit civil service as teachers. From 2024, only from the pool of contract teachers prior to qualified graduates from the ENs will be this new reform. recruited directly into the civil service as Social assistance expenditure trends and benchmarking FIGURE 2.9 Replace all 36 000 CPs with permanent classrooms 1 Train and hire more qualified teachers in the civil service 2 Absorb qualified contractual teachers into the civil service 3 Source: World Bank staff illustration INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 41 The government’s program to replace 4.3 percent of GDP (for the entire period); all CPs, train and hire more qualified If CPs are replaced over the next 30 years, teachers and integrate contract teachers then the total cost is estimated to be 3.5 into the civil service could cost up to percent of GDP (Figure 2.10). 0.26 percent of GDP per year on average The implementation of the GNNSCP Replacing the 36,000 CPs with classrooms is likely to be delayed. The announced that meet national school construction contribution of the development partners standards will cost approximately US$1 and the government's budget plan to cover billion (constant US$). Based on World the needs for the next six years amounts Bank estimates, it cost approximately to US$ 582 million for the implementation US$26,889 (in 2022) to build one classroom of the GNNSCP. The various sources of that meets national school construction funding are shown in Figure 2.11. Based on standards. Not adjusted for inflation, the the estimate in the previous paragraph, total cost of replacing all 36,000 CPs will be this amount is not sufficient to cover approximately US$968 million. According the cost of replacing CPs and building to the Government of Niger National School additional classrooms to meet the Construction Plan (GNNSCP), the cost of increasing demand due to population replacing the 36000 CPs is approximately growth. Moreover, the current construction US$936 million (US$26000 per classroom). plan, which is scheduled to come into An important factor/aspect is the timeline effect in 2024, is highly uncertain, as many required to build the new classrooms. DPs that provided funding for this initiative Based on World Bank estimates, if all CPs have stopped disbursements following the are replaced over the next 15 years, the military crisis of July 2023. total estimated cost is likely to be about If all CPs are replaced over the next 15 The majority of the financing for the FIGURE 2.10 years, the total cost is estimated cost at FIGURE 2.11 24,000 classrooms planned for the next 6 4.3 percent of GDP years is from external sources, which are now uncertain post-crisis Percent of GDP 0.5% 3% 0.4% 16% 33% 0.3% 0.2% 21% 0.1% 0.0% 27% 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 World Bank National Budget Cost of replacing CPs (over 30yrs) Islamic Development Bank Education Common Fund Cost of replacing CPs (over 15yrs) Other DPs and NGOs Source: World Bank Staff calculation Source: National operational strategy for the school construction Note: GDP projections for 2024-2026 are from the WB current program in Niger (2023). short-term projections presented in Chapter 1. Longer term GDP projections (2026-2055) are from the Long-term Growth Model projections in the Niger CEM 2022.26 26 World Bank 2022, “Pathways to sustainable growth in Niger”. Country Economic Memorandum 42 2024 ECONOMIC UPDATE NIGER For simplicity we assume that it is equal levels are paid 47 percent and 44 percent, to the full (average) salary of a teacher. respectively, of the average salary of their The 2016, the average monthly salary of civil service counterparts. Therefore, we a primary school teacher was almost assume that contract teachers are paid US$300, or US$3,600 per year. Thus, it the starting salary of primary school costs about US$7,200 to train one teacher teachers when they join the civil service. for 2 years and US$21.6 million to train Given their years of experience, they are 3,000 teachers for 2 years-not adjusted for likely to receive a higher salary, so this inflation. All trained teachers from the ENs should be considered a lower bound. In are then hired into the civil service at the addition, the starting salary for secondary starting salary, adjusted for inflation. school teachers is likely to be higher than US$300. In this case, it will cost Hiring contractors into the civil service approximately US$157, US$208, and means paying them a higher salary. US$234 more per month, respectively, The current (average) monthly salary of to integrate each contract teacher at the a contract teacher in primary school is primary, lower, and upper secondary levels about US$143, which is about 48 percent into the civil service. We also assume that of the current average salary of a primary all contractors (63,495) will be integrated school teacher in the civil service. Contract over 15 years, which is 4,233 contractors teachers at the lower and upper secondary per year. The number of primary school students The number of primary school students FIGURE 2.12 is projected to rise, increasing the need FIGURE 2.13 is projected to rise, increasing the need for more classrooms for more classrooms Percent of GDP Percent of GDP 0.45% 0.7% 0.40% 0.6% 0.35% 0.5% 0.30% 0.25% 0.4% 0.20% 0.3% 0.15% 0.2% 0.10% 0.05% 0.1% 0.00% 0.0% 2027 2037 2047 2027 2037 2047 2024 2025 2026 2028 2029 2030 2031 2032 2033 2034 2035 2036 2038 2039 2040 2041 2042 2043 2044 2045 2046 2048 2049 2050 2051 2052 2053 2054 2024 2025 2026 2028 2029 2030 2031 2032 2033 2034 2035 2036 2038 2039 2040 2041 2042 2043 2044 2045 2046 2048 2049 2050 2051 2052 2053 2054 2055 Cost of intregrating contractors (over 15yrs) Cost of intregrating contractors (over 15yrs) Cost of training teachers Cost of training teachers Cost of hiring newly trained teachers Cost of hiring newly trained teachers Cost of replacing CPs (over 30yrs) Cost of replacing CPs (over 30yrs) Total cost (CPs in 30yrs) Total cost (CPs in 30yrs) Source: World Bank Staff calculation Note: GDP projections for 2024-2026 are from the WB current short-term projections presented in Chapter 1. Longer term GDP projections (2026-2055) are from the Long-term Growth Model projections in the Niger CEM 2022. Inflation is assumed to equal 1 percent. INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 43 2.3 Reform scenarios with associated costs It will cost a total of 10.3 percent of GDP far from sufficient to keep pace with the to build all the new classrooms needed growth in primary school enrollment, and over the next 30 years (2024-2054), in the proportion of precarious classrooms continues to rise. addition to replacing CPs, if enrollment rates remain constant Based on World Bank estimates, it will cost a total of 10.3 percent of GDP to The education sector is under strong build all the new classrooms needed demographic pressure and requires over the next 30 years (2024-2054), in additional resources to meet the growing addition to replacing CPs, assuming that demand for education, provision of enrollment rates remain constant. If school infrastructure and equipment/ enrollment rates remain constant over the materials, and qualified teachers. next 30 years, an average of 3,535 (2508 According to UN population projections in primary and 1037 in secondary) new for 2022, the school-age population - classrooms would be needed annually between the ages of 7 and 19 - will increase to accommodate new enrollments in from 8.7 million in 2022 to 23.6 million in primary and secondary schools (Figure 2055, an average of 448,000 additional 2.14). The annual cost of building the new school-age children per year. And if classrooms is projected to decline from enrollment rates remain constant, there 0.46 percent of GDP in 2024 to 0.16 percent will be more than 6.7 million primary and in 2054 (Figure 2.15). This cost is in addition 2.6 million secondary students in 2055, to the cost of replacing CPs. Under these compared with 2.7 million and 0.95 million, projections, the government's plan to train respectively, in 2023. Assuming constant and hire 3,000 primary teachers per year, primary and secondary enrollment rates if sustained, is likely to provide a large and a teacher-student ratio of 1/50, a enough pool of well-trained teachers to total of about 113,113 new classrooms will accommodate the new students and new be needed to accommodate nearly 5.7 classrooms in primary schools. However, million new students between 2023 and a program to train and recruit teachers at 2055. The current level of construction is the secondary level will also be needed. The number of new additional classrooms If enrollments rates remain constant, FIGURE 2.14 needed annually to accommodate new FIGURE 2.15 the cost of building new classrooms students is projected to increase over the needed every year to accommodate new next three decades primary and secondary school students is projected to decline from 0.46% of GDP in 2024 to 0.16% by 2054 4000 3500 0.5% 3000 0.4% 2500 2000 0.3% 1500 0.2% 1000 0.1% 500 0 0.0% 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 Source: World bank Staff calculation Source: World bank Staff calculation 44 2024 ECONOMIC UPDATE NIGER Unfortunately, this scenario will leave due to insecurity (Figure 2.16). The recent millions of children and adolescents decline in net primary enrollment is out of primary and secondary school unfortunate, as it was already lagging its over the next 30 years (2024-2044), the peers (Figure 2.2). If primary and secondary majority of whom will be girls. Primary enrollment rates remain constant over the and secondary school enrollment rates next 30 years, the number of children and have improved over the past two decades, adolescents will reach nearly 25 million. with primary enrollment improving from Such a scenario will have high economic 23.4 percent in 1997 to 66 percent in 2017, and social costs. but declining to 57.7 percent in 2021, likely Although net primary enrolment rate has If enrollment rates in primary and FIGURE 2.16 declined since 2017, it is still much higher FIGURE 2.17 secondary schools remain constant, compared to two decades ago millions of school age children and adolescents will be out of school Percent 25 Millions 70 25.7 20 57.7 60 54.2 15 50 40.5 40 11.4 10 28.1 30 25.7 20.5 5 20 17.1 13.5 12.5 11.4 0 10 5.8 6.6 3.5 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 0 1999 2005 2010 2017 2021 Enrolled students (primary + secondary) School age population out of school Primary Lower secondary Upper secondary School age population Source: UNESCO Source: World bank Staff calculation based on UNESCO data In a scenario where gender parity is compared to 60.3 percent for boys (29.9 achieved in primary and lower secondary percent in lower secondary school). Closing by 2028, nearly 8,500 additional the gender gap in education in Niger can classrooms will be needed over the increase potential economic output by 11 period 2024-2054 to accommodate percent (Box 2.1). As a result, the cost of the additional girls enrolled (Figure building new classrooms will rise to nearly 2.18). In 2021, the enrollment rate for 0.6 percent of GDP in 2025 and fall to 0.2 girls in primary school was 55 percent percent by 2054. (26.3 percent in lower secondary school), Achieving gender parity in enrollment rate As a result, the annual cost of building FIGURE 2.18 by 2028 will require 8,500 additional FIGURE 2.19 new classrooms will rise to nearly 0.6 classrooms over the period 2024-2054 percent of GDP in 2025 and fall to 0.2 percent by 2054 4500 Percent of GDP 4000 0.6% 3500 0.5% 3000 2500 0.4% 2000 0.3% 1500 0.2% 1000 0.1% 500 0 0.0% 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 Additional classroom need (gender parity) Cost of additional classroom need (gendar parity) New additional classrooms (cst enrollment rate) Cost of additional classroom need (cst enrollment) Source: World Bank Staff calculation based on UN population Source: World Bank Staff calculation projections (2022) INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 45 A more comprehensive policy agenda to 1- The cost of textbooks and other improve access to quality education is materials, as well as classroom estimated to cost about 1.2 percent of maintenance cost will increase the GDP on average every year, in addition to estimated cost. current spending 2- Considering that classrooms should Demand for classrooms in the future will be built, and teachers trained before also be driven by rising enrollment rates. the school year begins, the annual costs As average incomes rise, enrollment rates are likely to be different. The costs of are likely to increase over time, as they classrooms and teacher training have been have in recent decades. Between 2001 and allocated to the same year but are likely to 2021, the enrollment rate in primary, lower be incurred in previous years. secondary, and upper secondary schools will increase by 27.7, 16.7, and 8.5 percent, 3- Improving access to education will respectively. Therefore, we consider a have a positive impact on economic scenario in which the enrollment rates in growth, implying a lower cost as a share primary and secondary schools - starting of GDP. Simulations in Niger Country in 2022 - improve linearly with the same Economic Memorandum (World bank trend as in the previous two decades 2020) showed that, education reforms (2001-2021). For example, we assume that as discussed in this chapter will have the primary enrollment rate increases by substantial effects on long-term economic 27.7 percent between 2022 and 2042 and growth. Improving access to education is continues to increase until it reaches 100 likely to boost economic growth through percent in 2052. Figure 2.20, and Figure 2.21 several channels: (i) spending on school show the future demand for classrooms construction will boost physical investment and the estimated construction costs as in the country, albeit in the short run, but a share of government expenditures under continuously meeting the demand for this scenario. classrooms implies a sustained investment in physical capital; (ii) more and better All told, improving access to education qualified teachers are likely to lead to is likely to cost an average of 1.2 percent better learning and educational outcomes; of GDP over the next three decades. and (iii) with a higher share of children To improve the quality of education and having access to education, aggregate increase access to it for all new school- labor productivity is likely to rise over time age children and youth, the government's as successive cohorts with an increasing reform agenda should include (i) replacing share of educated people enter the labor all CPs, (ii) integrating all contractors market. into the civil service, (iii) building enough classrooms to accommodate new 4- Building classrooms and training students (due to demographic pressures and hiring teachers alone will likely and rising enrollment rates), (iv) training not be enough to increase and sustain enough qualified primary and secondary enrollment rates throughout the teachers, and (v) recruiting them into the country. The government ought to adopt civil service. The cost is projected to be a comprehensive policy to increase 1.3 percent of government expenditure enrollment rates, such as building canteens in 2024, peaking at 1.6 percent of GDP in to provide students with a minimum level 2029 and declining to 0.5 percent of GDP of adequate nutrition. by 2054 (Figure 2.22). Several factors are likely to influence the projected costs: 46 2024 ECONOMIC UPDATE NIGER If primary and secondary enrollment As a results, the cost of building FIGURE 2.20 rates improve then even more classrooms FIGURE 2.21 classrooms will also be higher will be needed to accommodate new students over time Percent of GDP 0.9% 12000 0.8% 10000 0.7% 0.6% 8000 0.5% 6000 0.4% 4000 0.3% 2000 0.2% 0.1% 0 0.0% 2027 2037 2047 2023 2025 2029 2031 2033 2035 2039 2041 2043 2045 2049 2051 2053 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 Additional classrooms needed every year (cst enrollment) Annual new classroom cost (cst enrollment rate) Additional classrooms needed every year (improving Annual new classroom cost (improving enrollment enrollment) rates, primary & secondary) Source: World Bank Staff calculation Source: World Bank Staff calculation The cost of improving access to education in Niger is projected to increase from 1.3% of GDP in 2024 to FIGURE 2.22 1.6% by 2029 and decline to 0.5 percent by 2054 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 2027 2037 2047 2024 2025 2026 2028 2029 2030 2031 2032 2033 2034 2035 2036 2038 2039 2040 2041 2042 2043 2044 2045 2046 2048 2049 2050 2051 2052 2053 2054 Cost of integrating all contractors (over 15 years) Cost of hiring teachers needed Cost of replacing all CPs in 15 years Build new classrooms (improving enrollment rate) Cost of training, teachers needed Total cost Source: World Bank Staff calculation Some estimates show that countries with According to estimates by Burnett and large numbers of out-of-school children Thomas (2013), the opportunity cost face high costs in terms of foregone of out-of-school children likely ranges GDP, so the cost of not improving access from 5.4 to 18.2 percent of GDP in Mali, to quality education is substantial. If not 4.1 to 17 percent of GDP in Burkina Faso, enough classrooms are built and teachers and 8.3 to 14.1 percent of GDP in Cote trained, millions more children will be d’Ivoire. Niger is not the sample, but these out of schools in the coming years. These estimates for regional peers suggest that children will later enter the labor market the cost of out-of-school children is likely with lower levels of productivity than if as high. they had access to school, making the opportunity cost of out of school children in terms of foregone GDP substantial. INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 47 Economic cost of out-of-school children Economic cost of out-of-school children FIGURE 2.23 by microeconomic esamaaon FIGURE 2.24 by macroeconomic esamaaon Percent of GDP Percent of GDP 12% 20% 10.3% 18.2% 10% 18% 17.0% 8.3% 7.8% 16% 8% 14.1% 6.7% 14% 13.5% 13.0% 6% 5.4% 12% 4.1% 4% 10% 8% 2% 6% 0% Gambia Cote Nigeria Liberia Mali Burkina 4% 3.1% d'Ivoire Faso 2% Probability weighted loss from foregone secondary education 0% GDP loss from foregone primary education Mali Burkina Cote Gambia Nigeria Liberia Economic cost of OOSC Faso d'Ivoire Source: Burneq, N., and M. Thomas (2013) and WB staff illustrason Source: Burneq, N., and M. Thomas (2013) and WB staff illustrason Note: The micro-estimated cost is the direct economic cost (lost Note: The macro approach estimates the cost of OOSC as the diffe- productivity as measured by wages) incurred by today's out-of- rence between two hypothetical, forward-looking scenarios. In the school children that will not complete primary education when first scenario, education policy follows the status quo so that the those out-of-school children reach working age. It attempts to expected number of years of schooling in each country (estimated answer the following question: If all of today's children expected in UNDP 2013) is unchanged. In the second scenario, a stronger not to complete primary school actually complete basic education, push is made to achieve universal primary education, so that the how much higher will GDP be when that cohort of children enters expected lifetime schooling of the population rises in proportion the labor market in ten years, relative to a counterfactual in which to the current percentage of children expected not to complete those OOSC never completed primary education? primary education. These estimates are generally higher than the microeconomic estimates, likely because this second method cap- tures some of the positive externalities associated with primary education, rather than solely direct private income gains. If implemented, the estimated costs was lower than the average of structural, will increase government spending aspirational, and regional peers based on on primary and secondary education the latest available data. By spending an to nearly 3 percent of GDP. In 2017, additional 1.2 percent of GDP annually, government spending on primary and total government spending on primary secondary education was estimated at and secondary education will rise above 1.7 percent of GDP (primary: 1.2 percent of average of the comparator countries. GDP; secondary: 0.5 percent of GDP). This If implemented, the estimated costs of improving access to quality education will increase government FIGURE 2.25 spending on primary and secondary education to nearly 3 percent of GDP 3.5 3 2.5 2 1.5 1 0.5 0 Niger Uganda Afghanistan Burkina Malawi Rwanda Ethiopia Chad Benin Cote Mali 2017 2014 2017 Faso 2016 2018 2015 2018 2015 d'Ivoire 2017 2015 2018 Structural peers Aspirationnal peers Regional peers Additionnal spending to improve acess (primary+secondary) Govt spendind (primary %GDP) Govt spendind (secondary, %GDP) Average Source: UNESCO and WB staff illustration 48 2024 ECONOMIC UPDATE NIGER There are several ways to finance this rise to 5 percent of GDP by 2030, from less additional spending on education without than 1 percent of GDP currently. Part of this jeopardizing fiscal sustainability. First, imminent windfall can be used to invest improving the efficiency of spending on in social sectors in general and education education will free up additional resources in particular. In addition, international that can be reinvested in the sector (World development partners have a crucial role Ban 2020). Second, following the start of to play in providing financial and technical large-scale oil production and exports, assistance to support access to quality government oil revenues are expected to education in Niger. BOX 2.1 MACROECONOMICS GAINS FROM CLOSING THE GENDER EDUCATIONAL GAPS IN NIGER Gender development in Niger is relatively weak due to low educational attainment. On the United Nations Gender Development Index (GDI), Niger performs worse than the average for sub-Saharan Africa, the WAEMU countries, and peers in the Sahel region. The index measures gender disparities in three basic dimensions of human development: i) health, measured by female and male life expectancy at birth; ii) child education, measured by female and male expected years of schooling; iii) adult education, measured by female and male average years of schooling for adults aged 25 and over. Niger performs well on life expectancy at birth compared to its peers but lags on education indicators. The average years of schooling in Niger is only 1.7 and 2.8 for females and males, respectively, compared to 5.1 and 6.9 years in Sub-Saharan Africa and 2.5 and 4.6 years in the WAEMU region. Recent research shows that closing the gender gap in education in Niger would improve labor market outcomes, long-term growth, and fiscal sustainability. Ouedraogo and Gomes (2022) simulate a public policy that increases education spending to enroll more girls in school so that the number of years of education is equal for boys and girls within the same income percentile. The results of the simulation suggest that closing the gender gap in education would increase female labor force participation, raise women's earnings, and improve fiscal outcomes. It is also expected to increase female labor force participation by 85.6 percent and reduce the overall gender gap in average effective hours worked, as measured by the male-to-female ratio, by 59.5 percent. In addition, the new policy would increase aggregate economic output by 11.2 percent, mainly due to the increase in effective hours worked. Aggregate private consumption is expected to increase by 3 percent due to higher labor income. To implement the new education policy, the government will need to increase spending on public education by 21.2 percent, which represents a 3 percent increase in total government spending. Such an increase in education spending would require budget reallocation and efficiency improvements. Aware of the importance of gender equality, the Niger authorities have taken several initiatives to close the gender gap. The authorities have adopted a new National Gender Policy with the aim of working with all stakeholders to build a country without discrimination by 2027, where men and women, girls and boys have equal opportunities to participate in its development and enjoy the benefits of its growth. Girls' education is a key priority, with the authorities planning to build 100 girls' boarding schools by 2025 and close the gender gap in primary and secondary school enrollment by 2026. Adopted from: Ouedraogo, R. and Gomes, D. 2022. Macroeconomic Gains From Closing Gender Educational Gaps in Niger. IMF Selected Issues Paper SIP/2023/006 INVESTING IN EDUCATION FOR INCLUSIVE GROWTH 49 50 2024 ECONOMIC UPDATE NIGER TABLE 3.1 ANNEX Selected economic and fiscal indicators National Accounts 2021 2022 2023 Estimate Annual percentage change, unless otherwise indicated 3 2024 2025 Projections 2026 GDP at constant prices 1.4 11.5 2.0 5.7 8.5 4.6 Private consumption -0.2 7.0 3.5 3.8 4.6 4.7 Public consumption 9.8 -1.2 -7.0 3.5 2.9 1.2 Investment 7.7 21.1 -10.4 4.0 7.6 2.8 Exports of goods and services 6.7 14.4 -8.1 45.2 39.1 9.2 Imports of goods and services 6.9 6.5 -12.0 13.3 10.1 4.1 Agriculture -5.1 27.0 3.1 6.5 6.8 5.2 Industry 4.1 -0.9 3.9 12.1 5.6 3.4 Services 5.4 4.9 0.1 1.1 12.2 4.5 Inflation GDP deflator 3.1 3.8 3.7 10.4 10.5 5.3 Consumer prices (average) 2.9 3.9 3.7 8.5 6.7 4.2 External sector Exports fob 7.3 1.0 -2.4 49.8 - - Imports fob 9.6 13.8 -6.3 3.4 - - Terms of trade -5.1 146.5 -0.4 13.1 12.0 12.3 Percent of GDP, unless otherwise indicated Current account balance -7.8 -9.8 -9.3 -8.3 -3.8 -2.9 Foreign direct investment 2.1 3.9 3.2 1.6 1.7 1.7 Fiscal accounts Overall fiscal balance (incl. grants) -3.4 -6.8 -5.4 -4.4 -3.9 -3.2 Primary balance -2.2 -5.6 -4.5 -3.8 -3.5 -2.8 Total revenues and grants 18.2 14.9 10.5 10.9 11.4 11.1 Tax revenues 10.1 9.4 8.1 7.9 8.0 7.8 Taxes on goods and services 3.8 3.5 3.0 2.9 2.5 2.5 Direct Taxes 2.5 2.5 2.7 2.5 2.2 2.1 Taxes on international trade 2.7 2.4 1.7 1.7 2.2 2.1 Non-tax revenues 0.8 0.6 0.5 0.7 0.7 0.7 Grants 7.3 4.7 1.7 2.1 2.6 2.4 Total expenditures 21.5 21.7 15.9 15.2 15.3 14.3 Current expenditures 10.7 9.9 8.8 7.9 6.8 6.5 Wages and compensation 3.8 3.6 3.6 3.3 2.9 2.8 Goods and services 1.8 1.4 1.1 1.0 0.9 0.9 Interest payments 1.1 1.2 0.9 0.6 0.4 0.3 Current transfers 3.9 3.7 3.1 2.9 2.6 2.6 Capital expenditures 13.5 11.6 5.7 6.3 7.7 7.3 Debt Public debt (external and domestic) 51.3 51.7 54.7 53.3 51.3 50.6 External government debt 33.5 32.5 34.5 31.6 28.6 26.7 Memorandum items GDP per capita (change in %) -2.3 7.4 -1.7 1.8 4.5 0.8 Nominal GDP (CFAF, billions)| 8270.8 9569.9 10129.0 11815.2 14167.1 15603.8 Nominal GDP (USS, billions) 14.9 15.3 16.8 19.4 23.2 25.5 2024 ECONOMIC UPDATE NIGER 51 52 2024 ECONOMIC UPDATE NIGER REFERENCES Child. 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