Niger key statistics
Economy and growth strategy
Economy and growth strategy
Niger is a landlocked country in West Africa covering 1,266,700km1, ranking as the 19th largest in the world by land area. The terrain is mainly desert with arable land in the South West and South East of the country and its economy is focused around subsistence agriculture and raw commodity export. Niger is among one of the poorest countries in the world with a GDP per capita of $411, ranking 207 out of 209 countries1. The country faces significant social, economic and demographic challenges, which the Government is confronting with two important strategic plans:
- Firstly, the “Strategy for Sustainable Development and Inclusive Growth to 2035” which has the objective of “building a peaceful and well governed country with an emerging and sustainable economy, in a society based on common values and the sharing of the fruits of its progress”; and
- Secondly, the “Social and Economic Development Strategy for 2017-2021” (or “PDES”, Plan de Developpement Economique et Social), within which Niger asserts its firm desire for change at all levels, including the desire to eradicate poverty and inequality through social development and demographic transition, together with the acceleration of economic growth.
Hydrocarbons have become the driving force of the Nigerien economy and the growth of the hydrocarbons sector is the principal basis on which the Nigerien Government plans to implement its social and economic strategy. Hydrocarbon revenues are being reinvested in basic social sectors such as public health, education, agriculture and infrastructure.
Potential of the oil industry in Niger
Niger has significant geological potential, but to date this has been largely under‑explored:
- 90% of the territory is covered by two sedimentary basins (the Western basin and the Eastern basin) with most of the exploration having been focused in the Eastern Basin;
- Despite the recent exploration success in the Agadem and Kafra basins, where the majority of the discoveries were made in the shallowest Tertiary sequence, the Eastern Basins remained largely under-explored. Significant potential exists in the adjacent basins and the deeper Cretaceous sequence; and
- There has been little exploration in the east of the country due to the previous absence of export solutions and lack of technical data.
Research undertaken in recent years has helped to increase the level of Niger’s oil reserves significantly, with current estimates of 3,754 million barrels of oil reserves in place and 957 million barrels of recoverable oil reserves. Current gas reserves in place are estimated at 34 billion cubic metres with recoverable reserves of 24 billion cubic metres. Niger’s current oil production capacity is 20Kbopd, which is mainly sold domestically with some also exported to northern Nigeria. Most of the identified reserves in Niger are located in the Agadem area, which currently supplies approximately 20,000 barrels of oil per day to the SORAZ refinery.
The oil sector has generated more than US$2 billion of cumulative income since 2011 and, depending on the year, accounted for between 4-7% of GDP, 17% to 30% of tax revenues and 16% to 29% of exports. In total, the oil sector generated approximately West African CFA 864 billion (approximately US$1.5 billion) for the Nigerien Treasury between 2011 and 2019. The development of Niger’s nascent oil and gas industry is a key stated objective of the Government of Niger and has the potential to constitute 24% of GDP, 50% of revenues and 70% of export earnings by 2025 as the country moves to becoming an oil exporting nation.2
Currently there are four energy companies active in Niger: China National Petroleum Corporation in consortium with OPIC from Taiwan and the State of Niger for the exploration of 112 deposits; China National Petroleum Corporation International Bilma which has operated the Bilma block since 2003; Sonatrack from Algeria through its international subsidiary, SIPEX; and Savannah Energy. Savannah, as one of only four energy companies currently operating in Niger, has the ability to contribute significantly to the future economic development of the country and aims to play a major role in developing the nascent energy sector of Niger.
1. Source: World Bank
2. Source: Republique Du Niger, Politique Pétrolière Nationale, December 2018.
Stable political and favourable business environment
Niger has a well-established multi-party democratic system of government, which has played a key role in fostering economic growth. Niger recently held free and transparent democratic Presidential elections, which saw President Elect Mohamed Bazoum declared the winner on March 21st 2021 with 55.66% of the vote. The outgoing president, HE President Issoufou Mahamadou, has overseen two consecutive terms in office since 2011, during which Niger saw a 48.5% increase in GDP and a 17% reduction in the number of Nigeriens living below the poverty line. HE President Mahamadou was recently awarded the prestigious Mo Ibrahim Prize, in recognition of his many achievements in office, excellence in leadership, and respect for term limits and democratic elections. President Elect Bazoum Mohamed is expected to consolidate on the achievements of his predecessor, with policies which focus on attracting Foreign Direct Investment into the energy sector and on promoting education.
Niger implemented a new petroleum code in 2017 designed to create a competitive and operational legal and fiscal framework for the industry, preserving the interests of the state while attracting oil operators with a competitive global context. The Government offers a stable and attractive fiscal and regulatory framework for companies operating in the energy sector with cost recovery against 70% of revenues in any given year and any unrecovered costs able to be carried forward to future years and the retention of 45-60% of profit oil.
The latest 2020 World Bank report on “Doing Business” found that Niger had made considerable progress, achieving improved rankings at both an African and international level. At the world level, Niger advanced from 143rd to 132nd position in the last year and achieved a ranking of 22nd at an African level, placing it fourth, fifth and sixth in the Economic Community of West African States, the West African Economic and Monetary Union and in the Organisation pour l’Harmonisation en Afrique du Droit des Affaires system respectively.