Oil, Uranium Projects Brighten Medium-term Prospects in Niger

Higher natural resource revenues to improve fiscal, external position

Resources earnings should be leveraged into faster growth, poverty reduction

Negotiations with IMF on new program expected to start soon

Higher natural resources revenues should also help improve Niger’s fiscal and external position in the medium term.

An integrated oil project that includes extraction and refining of 20,000 barrels per day of crude oil is due to start operations in 2012. A new uranium mine that will make Niger the world’s second-largest uranium producer is scheduled to start production by 2014.

IMF Managing Director Christine Lagarde will arrive in Niger during a December 18-22 trip to Africa. Her itinerary includes meeting with President Mahamadou Issoufou and taking part in a cabinet meeting focused on “The Challenges of Economic Development in Niger”. She will also address the National Assembly, and meet with representatives of the financial institutions and the private sector.

Mining exports

Niger’s oil and mining exports are projected to triple between 2011 and 2016, boosting government revenue from natural resources. These large projects are expected to improve Niger’s fiscal and external position in the medium term, creating favorable conditions for growth and poverty reduction. Niger’s GDP growth is forecast to soar to 14.1 percent in 2012 from a projected 3.8 percent in 2011.

Niger’s main priority in the period ahead is to leverage the expected scaling up of oil and mining production to accelerate growth and poverty reduction. The IMF review said Niger’s new government has adopted an ambitious development strategy, based on the use of oil and mining revenue to finance public investment in infrastructure, agriculture, health, and education.

IMF missions visiting Niger urged careful management of natural resources, medium-term planning of the public investment program, continued fiscal reform to enhance domestic revenue collection and improve the efficiency of expenditure, and measures to improve the business climate.

Libya crisis effects

Despite its natural resource endowment, Niger remains a low-income country. Its economy remains highly dependent on rain-fed agriculture and vulnerable to external shocks. The country relies substantially on external assistance.

A democratically elected government took office in April 2011, and Niger’s relations with international donors normalized. The crisis in Libya triggered the return of tens...