Economy:

Economy—overview: Niger is a poor, landlocked Sub-Saharan nation, whose economy centers on subsistence agriculture, animal husbandry, reexport trade, and increasingly less on uranium, its major export since the 1970s. Terms of trade with Nigeria, Niger's largest regional trade partner, have improved dramatically since the 50% devaluation of the West African franc in January 1994; this devaluation boosted exports of livestock, cowpeas, onions, and the products of Niger's small cotton industry. The government relies on bilateral and multilateral aid for operating expenses and public investment and is strongly induced to adhere to structural adjustment programs designed by the IMF and the World Bank. The US terminated bilateral assistance to Niger after the coup of 1996. Other donors have reduced their aid.

GDP: purchasing power parity—$6.3 billion (1997 est.)

GDP—real growth rate: 4.5% (1997 est.)

GDP—per capita: purchasing power parity—$670 (1997 est.)

GDP—composition by sector:
agriculture: 41%
industry: 18%
services: 41% (1996)

Inflation rate—consumer price index: 5.3% (1996)

Labor force:
total: 70,000 receive regular wages or salaries
by occupation: agriculture 90%, industry and commerce 6%, government 4%

Unemployment rate: NA%

Budget:
revenues: $370 million (including $160 million from foreign sources)
expenditures: $370 million, including capital expenditures of $186 million (1998 est.)

Industries: cement, brick, textiles, food processing, chemicals, slaughterhouses, and a few other small light industries; uranium mining

Industrial production growth rate: 0.5% (1994 est.)

Electricity—capacity: 63,000 kW (1995)

Electricity—production: 170 million kWh (1995)
note: imports about 200 million kWh of electricity from Nigeria

Electricity—consumption per capita: 40 kWh (1995)

Agriculture—products: cowpeas, cotton, peanuts, millet, sorghum, cassava (tapioca), rice; cattle, sheep, goats, camels, donkeys, horses, poultry

Exports:
total value: $188 million (f.o.b., 1996)
commodities: uranium ore 67%, livestock products 20%, cowpeas, onions
partners: France 41%, Nigeria 22%, Burkina Faso, Cote d'Ivoire, Japan 18%

Imports:
total value: $374 million (c.i.f., 1996)
commodities: consumer goods, primary materials, machinery, vehicles and parts, petroleum, cereals
partners: France 24%, Nigeria 19%, Cote d'Ivoire, China, Belgium-Luxembourg

Debt—external: $1.3 billion (1996 est.)

Economic aid:
recipient: ODA; bilateral donors: France, Germany, EU, Japan

Currency: 1 Communaute Financiere Africaine franc (CFAF) = 100 centimes

Exchange rates: CFA francs (CFAF) per US$1—608.36 (January 1998), 583.67 (1997), 511.55 (1996), 499.15 (1995), 555.20 (1994), 283.16 (1993)
note: beginning 12 January 1994, the CFA franc was devalued to CFAF 100 per French franc from CFAF 50 at which it had been fixed since 1948

Economy
One of the poorest countries in the world, Niger's economy is based largely on subsistence crops, livestock, and some of the world's largest uranium deposits. Drought cycles, desertification, a 3.3 percent population growth rate and the declining world demand for uranium have undercut an already marginal economy. Deteriorating terms of trade due to persistently high domestic wage levels and currency devaluations in Nigeria have also contributed to economic decline. Many of the modern sector's private and parastatal industries have shut down, leaving only a handful of companies engaged in light industry that mostly transform imported inputs (textile manufacturing, corrugating steel sheets, drink bottling, soap production). The northern- based Tuareg rebellion has impacted negatively on tourism since early 1992.

Niger's agricultural and livestock sectors are the mainstay of all but 10- 15 percent of the population. 12-13 percent of Niger's GDP is generated by livestock production (camels, goats, sheep and cattle), said to support 29 percent of the population. Only about 12 percent of land is arable. Rainfall varies, though Niger has seen relatively good rains in recent years. When there is not sufficient rainfall, Niger has difficulty feeding its population and must rely on grain purchases and food aid to meet food requirements. Rains, which were good in 1990 and 1991, were less well-distributed in 1992 and 1993, creating food deficits in certain regions. Millet, sorghum and cassava are Niger's principal rain-fed subsistence crops. Irrigated rice for internal consumption, while expensive, has, since the devaluation of the CFA franc, sold for below the price of imported rice, encouraging additional production. Cowpeas and onions are grown for commercial export, as are small quantities of garlic, peppers, potatoes and wheat.

Of Niger's exports, foreign exchange earnings from livestock, although impossible to quantify, are second only to those from uranium; actual exports far exceed official statistics, which often fail to detect large herds of animals informally crossing into Nigeria. Some hides and skins are exported and some are transformed into handicrafts.

The persistent uranium price slump has brought lower revenues for Niger's uranium sector, although uranium still provides 68 percent of national export proceeds. Industry officials have been working to reduce excessive costs of production, including personnel, electricity, transportation, hospital administration, mining town management fees and debt. Niger's two uranium mines (SOMAIR's open pit mine and COMINAK's underground mine) are primarily owned and operated by French interests. COMINAK is partially by other shareholders including Japan, Germany, Spain and Niger, all of which negotiate to purchase and sell certain quantities of uranium. In recent years, only France and Germany have contracted to sell uranium. American participation in Niger's uranium industry ended in 1983, when CONOCO gave its shares in the Imouraren concession back to Niger. Large reserves of low-grade uranium at Imouraren remain untapped due to the depressed state of the global uranium market.

Hunt Oil of Texas began exploring for petroleum in 1992 in the Djado plateau in northeastern Niger. The French company Elf Aquitaine (62.5 percent) and Exxon (37.5 percent) have a joint exploration permit for the Agadem basin, north of Lake Chad. Elf conducts the actual exploration and has found significant quantities of petroleum to justify further exploration and development.

Exploitable deposits of gold are known to exist in Niger in the region between the Niger River and the border with Burkina Faso. The government of Niger recently adopted a new Mining Code and hopes to obtain commitments soon from interested foreign investors. Niger's known coal reserves, with low energy and high ash content, cannot compete against higher quality coal on the world market. However, the parastatal SONICHAR (Societe Nigerienne de Charbon) in Tchirozerine (north of Agadez) extracts coal from an open pit and fuels an electricity generating plant that supplies energy to the uranium mines. Parastatal tin production stopped in 1991 and tin is currently produced at artisanal levels.

While France and Taiwan provided significant budgetary assistance in 1992, Niger accrued lower total assistance in 1991-1992 from its other major donors, which include the United States, Germany, Canada, Saudi Arabia, the European Community and the U.N.Development Program (UNDP). In early 1994, the IMF and Niger agreed to a stand- by agreement which ended Niger's isolation from the international financial community.

Niger shares a common currency, the CFA Franc, and a common central bank, the Central Bank of West African States (BCEAO), with six other members of the West African Monetary Union. The Treasury of the Government of France supplements the BCEAO's international reserves in order to maintain a fixed rate of 100 CFA (Communaute Financiere Africaine) to the French franc.

Economic Reform
In 1993, Niger's newly elected government inherited a tangle of financial and economic problems including: past-due salary and scholarship payments (5 months of arrears), increased debt, reduced revenue performance, and lower public investment. The CFA franc was devalued in January 1994, doubling Niger's external debt (quantified in dollars) overnight. The rectification of exchange rates should increase demand for Nigerien exports and create a larger domestic market.

The government of Niger is also currently taking actions to streamline civil services, reduce corruption, reorient expenditures in the education sector, and enhance revenues. In February 1994, Niger signed a stand by agreement with the IMF. They are currently negotiating for an Enhanced Structural Adjustment Facility.

Foreign Aid
The United States was the third largest bilateral donor to Niger and the fourth largest donor overall. Total U.S. aid in averages around $15 million per year though this figure is expected to increase. Other major donors include: France, Germany, The World Bank, The European Economic Community, and The United Nations. The importance of donor activity in Niger's development plans is best demonstrated by the fact that about 97 percent of the GON's investment budget derives from donor resources.

Niger's 1993 elections were smooth and successful, in part due to the donors' 56 percent contribution (25 percent of the total from the French) to the election budget.