Niger: Staff Report for the 2011 Article IV Consultation

IMF Staff Country Reports, December 19, 2011

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Niger's government has adopted an ambitious development plan based on the use of oil and mining revenue for public investment in infrastructure, agriculture, health, and education.
IMF staff emphasized the need to step up efforts to improve the business climate to attract more jobs and thereby create private investment in the nonnatural resources sector of the economy.
Expanded reliance on revenues from natural resources will increase Niger’s vulnerability to commodity price fluctuations, augmenting the high vulnerability to climatic shocks.

Development strategy centers on using oil and mining revenue for public investment in infrastructure, agriculture, health, and education.
Private investment in the nonnatural resources sector is currently insufficient and requires a better business climate to generate jobs.
Reliance on natural resource revenues raises exposure to commodity price volatility.
Niger faces high vulnerability to climatic shocks, which is compounded by volatility in resource revenues.

Step up efforts to improve the business climate in Niger to attract more jobs.
Foster private investment in the nonnatural resources sector of the economy to diversify growth away from resource dependence.
Manage and plan for the increased vulnerability associated with expanded reliance on natural resource revenues, including exposure to commodity price fluctuations and climatic shocks.

Central policy ambition: use resource revenues (oil and mining) for public investment across multiple social and economic sectors.
Main risk channels:
- Commodity price fluctuations affecting revenue stability.
- Climatic shocks exacerbating economic vulnerability.
- Insufficient private-sector job creation if business climate reforms lag.