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Niger: Niger Finance Profile


Niger is one of the world's poorest nations. Most economic activity is informal in nature and the country suffers from poor infrastructure and frequent droughts. About 80 % of the people is dependent upon agriculture and fishing, which together account for 40 % of GDP.

Mineral resources, inclunding uranium and gold, are substantial, and ongoing explorations for oil have so far yielded promising results. The uranium sector is becoming increasingly significant as French and Chinese companies started to invest and committed to develop new mining sites. However, the benefits of foreign investment have so far not benefited the broader people, and the management of radioactive waste remains to be addressed.

Increase averaged 6 % between 2005 and 2008 but declined in 2009 due to the collapse of petroleum and agricultural prices. However, increase is expected to rebound to 5 % in 2010.

Niger's economy remains weak and fragmented. The number of available financial instruments is limited, and scarce access to financing hinders dynamic business activity.

As in most African low-gain nations, the banking sector is heavily concentrated and dominates the financial sector. Together, the four major commercial banks control about 90 % of total financial sector assets. The country’s deposit to GDP ratio is part the lowest in the West African Economic and Monetary Union (ECOWAS).

Capital market activity is very limited in Niger. Stock exchange activity is carried out through the regional ECOWAS exchange, based in Cote d'Ivoire, which as well has a very small branch in Niger.

Access to finance is limited, with less than 5 % of the people using any form of financial products. Only 16 out of 1,000 adults in Niger have a bank account, one of the lowest ratios internationally. Enormous bank fees, which can reach 30 % of average monthly gain, contribute to the low figure. In an effort to expand access to finance, the government has established a Microfinance Regulation Agency with a mandate to supervise and strengthen the sector.

Niger is a member of the Economic Community of West African States (ECOWAS) and shares the common currency of the Central Bank of West African States (BCEAO).

Official remittance inflows play a minor role in Niger’s economy. 2008 estimates indicate that annual remittances were roughly equivalent to 1 % of GDP.

Macro economy
Niger’s trade balance shows a structural deficit. Unlike other nations of the CFA France zone, Niger has been able to take much chance of the CFA Franc devaluation in 1994, which was supposed to boost its exports. In fact, the immediate rise of import prices has severely and durably affected the trade balance.

Niger mostly imports food products (cereals, flour, oil-based products), consumer goods and crude oil.
An extra result of the devaluation was the shift of providers. Europe has gradually lost its market share in favour of the African continent, which has become Niger’s initial trading partner.

For instance, 50%25 of international exchanges are presently made with Nigeria. Again come other nations of the Western African Monetary Union (UEMOA), thanks to the implementation of the Common Foreign Tariff (TEC).
Considered individually, France remains the major imports provider, with a rate of 19%25, followed by Nigeria and the Ivory Coast, again China, Japan and the USA.

Exports (mostly livestock and agricultural produce) to Nigeria have as well increased sharply (39.8%25), reaching 77%25 for crude oil products. Uranium exports, despite the fall in volumes and prices, remain Niger’s major source of currency, amounting to 64.017 million CFA Francs per year. Livestock comes second with 37.831 million CFA Francs per year. Again agricultural products (niebe, souchet and onions) follow, with 23.646 million CFA Francs per year.
Economic integration and its challenges .

Niger’s customs system conforms to the UEMOA’s standards, establishing a Common Preferential Tax (TPC) and the Common Foreign Tariff.

Incentives with investments
Since 1st January 2000, goods coming from the Tariff Union have been tariff-free, provided that they are eligible for the Common Preferential Tax. Non-eligible goods from the Union enjoy a 5%25 discount on tariffs. The Common Foreign Tariff is actually compound of a statistical levy and a Common Solidarity Tax (PCS) of 1%25, the import tax (TCI) of 10%25 and the protection tax ranging from 10 to 20%25. Re-exportation of goods in transit towards non-CFA Franc zone nations bears a appropriate Re-exportation Tax computed on the CAF border price. A remarkable performance indeed: Niger’s total revenues have been increasing on average by 20%25 since the year 2000, despite losses incurred by the implementation of the TEC, following the UEMOA, estimated at over 14 billion CFA Francs in 2000 and 2001. This is an example of a sacrifice in the name of integration for a country that was on the brink of bankruptcy in 1999.
Authorities have taken a lot of initiatives in order to promote the private sector and entice foreign investors approaching to Niger.

A conference has been organised in November 2000 to gather investors. This was aimed at collecting technical and financial means in order to boost the private sector and enable Nigerien contractors to meet and to tie business links with foreign investors.
Apart from these actions, it is worth mentioning that the Nigerien Investments Code is very much in favour of investors, whether it be at the completion stage or at the operational level of the investments.

The setting up of a Small and Medium Sized Companies Promotion Fund should as well relieve the access of firms to bank financing, whilst the creation of the National Investments Council is aimed at promoting short-term investments.
The National has ruled severely against having an informal economy: since it is not liable for Commercial and Industrial Tax, a 3%25 compulsory tax is levied on imports.
The government as well decided to tax the identification number (NIF), which is used to estimate all formal and informal operations, in order to replace some kind of fairness towards formal economy.
The NIF is mandatory to tender for National markets. The purpose here is to lift extreme tax burdens that are imposed on the formal sector by broadening the taxation scope to lesser-known sectors.

Why invest in Niger ?
The globalisation of the economy, which has become one of the conditions of economic and social development, has started to unfold just at the same time as promoting the private sector and fighting poverty became a major issue for Niger.
Therefore, a Framework Programme against Poverty and a National Private Sector Support Framework Programme have been drafted and implemented.
Through these two major programmes, the National is striving to promote the private sector’s involvement in economic development and to support private initiatives in relation to investments in all sectors of Niger’s economy. These efforts should, in a little while, boost National production and domestic and foreign demands.
Hence the Government’s policies supporting trade development and promoting private sector, which should be able to sustain the Country’s production development in all activities. The efforts that are being made should, in the short term, boost national production and increase national and international request.
This is why the Government has decided to develop a policy whose aim is to develop trade and promote the private sector, which will be able to support the development of national production in all sectors.

The Minister in charge of this department was asked by the Prime Minister to undertake the following actions:

  • To elaborate a foreign trade stimulation strategy and programme in order to rapidly stabilise the Country’s cash balance;
  • To create the conditions for making Nigerien products competitive abroad and attract private industrial investments;
  • To hold a conference about the private sector;
  •  To continue with the restructuring and privatisation of public companies (CCAIAN, SONIDEP, CSPPN, OPVN RINI, etc);
  • To replace and boost activities initiated through former programmes, run them until their completion, improve their results on the development of national and foreign trade inclunding industry;
  • To support and supervise decentralised entities working on industrial and trade development, nationally and internationally;
  • - To stimulate private investments, particularly those of Nigerien contractors in relation to national or international trade and industrial sectors;
  • To encourage civil structures inclunding communities and private sector willing to carry out projects related to industry and national or international trade;
  • To entice Nigeriens abroad to invest in commercial and industrial activities located in Niger;
  • To take the necessary steps to promote agriculture, forests and pastoral products on a regular basis;
  • To promote industrial development; in particular that of agriculture, forests and pastoral products transformation;
  • To adapt National trading laws to local, regional and international agreements and treaties;
  • To search foreign markets for Nigerien products;
  • To develop trade exchanges by establishing regional and international trading relationships.

Many significant actions have been carried out to fulfil the objectives mentioned above:

  • Controlling the commercialisation of agricultural (Rice, cotton) and pastoral products, in order to make commercial activities additional professional;
  •  Drafting proper competition and consumer protection rules;
  •  Fighting against fraud and checking professional licences;
  • Setting up a new pricing system for crude products;
  • Planning for a new exports development programme;
  •  Reinforcing bilateral and multilateral trade cooperation;
  • Reviving struggling industrial activities;
  • Simplifying the investors agreement procedure;
  • Creating a Council for Industrial Partnerships (CIP);
  • Working on a world industrial programme with the ONUDI;
  • Promoting industrial ownership in Niger;
  • Providing the necessary tools to fasten permanent economic infrastructures;
  • Enticing informal economy players to enhance their management techniques;
  • Supporting small and medium-sized company contractors by helping them finance their projects;
  • Collecting debts;
  • Stimulating economic activity at a regional level;
  • Perfecting control tools and thinking of other projects.