The results of the fundraising event held December 5 and 6 in Paris exceeded the expectations of Niger: €31.4 billion, twice the amount initially hoped for. Private investors and the country's technical and financial partners – international financial institutions, UN agencies, the European Union and other development banks – have pledged to support Niamey's Economic and Social Development Plan (ESDP) for the years 2022-2026. The pledge marks increased interest in the country, which is fragile but relatively politically and economically stable in a region swept by coups d'état and jihadist violence.
This five-year plan aims to stimulate economic growth to an average annual rate of 9.3% over this period (compared to an average of 5.4% between 2017 and 2020). The goal is to contain inflation below 3% a year, along with the overall fiscal deficit. Another priority is to reduce the poverty rate from 43% in 2022 to 35% in 2026. "The previous plan [2017-2021] was implemented in a difficult security and health environment, but it allowed progress to be made," noted Sergio Pimenta, vice president for Africa at the International Finance Corporation (IFC, a World Bank subsidiary). He added that "there is real scope for promising investments," particularly in telecoms, electrical energy and infrastructure.
In addition to its partners' contributions, Niger's government will add €13.35 billion to finance the PDES. "This effort reflects first and foremost the responsibility of the state," emphasized Minister of Planning Abdou Rabiou. This extremely substantial amount (equivalent to the GDP for 2021) will be possible "thanks to the development of oil production and exports," explained Minister of Foreign Affairs Hassoumi Massaoudou.
Leap forward
Niger plans to pump 110,000 barrels a day by 2023, compared to the current 20,000. This leap forward is possible because of the forthcoming commissioning of a 2,000-kilometer pipeline to the Benin coast, which will allow the additional production to bypass the country's limited refining capacity. Oil revenues could represent "up to half of the country's tax revenues and a quarter of GDP," according to government estimates. "The state will then have scope in its budget for much more extensive funding of development and social spending," Mr. Rabiou argued.
According to Mr. Rabiou, "so far, all foreign investors in the oil sector in Niger are Chinese"
This would only be the beginning of the process, given the oil and gas potential of Niger, where the reserves according to President Mohamed Bazoum "are estimated at more than 1,200 million barrels and more than 17 billion cubic meters respectively." Mr. Bazoum was careful to point out that "several blocks are still available." "So far, all foreign investors in the oil sector in Niger are Chinese," said Mr. Rabiou, adding, "We would like to see interest from the French."
Attracting French private partners was the purpose of President Bazoum's visit on Tuesday morning to MEDEF (France's largest employer federation). He called on the 30 or so top executives at the organization's headquarters to "develop the enormous investment potential Niger has to offer." These opportunities include the extractive sector, economic infrastructure (airports, roads, energy, dry marinas), agriculture, processing and the industrial use of agro-pastoral products.
'A reputable country'
Apparently, more companies responded than originally expected. Declarations of intent, a preliminary stage in agreements, have been signed for a total amount of €8.5 billion (compared with the expected €6 billion), as reported in the communiqué at the close of the two days of roundtable discussions on financing the ESDP.
To attract companies, Niger stresses its geostrategic location. "An advantageous position between West Africa and the Maghreb, giving access to a market of 550 million consumers," as President Bazoum described it. "Niger is a reputable country that stands out from its neighbors," a development actor very involved in the region emphasized.
The threats are at the country's frontiers, where Chad, Libya, Nigeria, Mali and Burkina Faso are both potential economic markets and sources of destabilization. "The number of violent acts committed in Niger by armed jihadist groups linked to al-Qaeda or the Islamic State has decreased this year, but there are still some. The situation remains very tense and may discourage some investors, especially small businesses," our source added.