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Quick Facts
- Population:
- GDP (PPP):
- $20.1 billion
- 4.0% growth
- 6.5% 5-year compound annual growth
- $1,107 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
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Niger’s economic freedom score is 49.5, making its economy the 160th freest in the 2018 Index. Its overall score has decreased by 1.3 points, with a steep decline in fiscal health offsetting substantial improvements in the judicial effectiveness and business freedom indicators. Niger is ranked 36th among 47 countries in the Sub-Saharan Africa region, and its overall score is below the regional and world averages.
Although landlocked Niger has enjoyed robust growth led by mineral exports, the lack of entrepreneurial dynamism will likely undermine this growth in the longer term. Efforts to scale up public investment, particularly investment related to infrastructure, and increased security spending have caused public debt to increase. The financial system remains underdeveloped, weak, and fragmented, reflecting the small size of the formal economy. Outmoded labor regulations and an inefficient regulatory and legal environment constrain commercial operations and investment.
Background
After independence from France in 1960, Niger was governed by a single-party military regime for three decades until elections that led to democratic government in 1993. The military overthrew President Mamadou Tandja in 2010 after he tried to extend his rule beyond the constitutional two-term limit. Mahamadou Issoufou of the opposition Nigerien Party for Democracy and Socialism was elected in 2011 and reelected to a second five-year term in a 2016 runoff after his chief rival was imprisoned before the election. Ongoing challenges include a restive Tuareg population in the North and spillover violence from conflicts in Libya and Mali. Niger has some of the world’s largest uranium deposits, but its economy is centered on subsistence crops and livestock.
Niger has made enforcement of contracts easier by creating a specialized commercial court in Niamey. Interests in property are enforced when the landholder is known, but property disputes are common in rural areas subject to customary land titles. The rule of law remains hampered by an ineffective judicial framework and a weak court system that is vulnerable to political pressure. The political culture tolerates widespread corruption.
The top personal income tax rate is 35 percent, and the top corporate tax rate is 30 percent. Other taxes include interest and capital gains taxes. The overall tax burden equals 23.4 percent of total domestic income. Over the past three years, government spending has amounted to 30.1 percent of total output (GDP), and budget deficits have averaged 7.9 percent of GDP. Public debt is equivalent to 45.9 percent of GDP.
In 2016, Niger made starting a business easier by reducing the time and cost needed to register a company or resolve a bankruptcy. The labor market is poorly developed. As much as 90 percent of the nonagricultural workforce is employed in the informal economy. The cost of food and other subsidies increased in 2017.
Trade is significant for Niger’s economy; the combined value of exports and imports equals 57 percent of GDP. The average applied tariff rate is 11.8 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. Despite some progress toward modernizing the financial sector, financing options for starting private businesses are limited. Overall bank credit to the private sector remains low.