NIGER

RISK RATING
Severe
Default High Risk Score 8.00
Normal Average 5.80
Weighted Average 5.33
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

A peaceful transition of power in Africa’s sixth largest country bodes well for Niger’s prospects for a swift economic recovery driven by the key uranium mining and oil sectors dominated by France and China. However, the government still requires substantial development aid, budget support, and security assistance from Europe and the US, while those relations are coming under pressure over corruption scandals and mismanagement of a counterinsurgency. The need for foreign aid has become more crucial following an economic slowdown in 2020. And repairing relations with donors will be crucial for the new government. Niger’s failing security effort and emerging allegations of corruption undermine the government’s stability and increase the risk of protests in coming months. Another factor to consider is inter-communal conflict, which plays a role in the intergroup politics of the militant groups.

  • Presidential candidate Mohamed Bazoum, a former foreign and interior minister, is likely to be elected as the successor to two-term President Mahamadou Issoufou at a run-off ballot in February. Despite the side-lining of the main opposition, the presidential election is expected to pass off without much political violence, indicating that the vote will result in the first peaceful transfer of power in the coup-prone former French colony. The main risk to the elections will be the threat of terrorist and insurgent attacks, particularly in the south-eastern region of Diffa. As an Arab from Diffa, Bazoum has depended heavily on Issoufou‚Äôs endorsement to secure the vote of the ethnic Hausa, which is the largest population group. The two men‚Äôs long friendship and political alliance indicates continuity of policy under an eventual Bazoum administration which bodes well for the political and contract risk outlook for foreign investors.
  • Militant activity in western Niger has escalated, with several major attacks targeting the Nigerien military giving rise to unprecedented casualties. The Islamist insurgents, some of which remain loyal to Al Qaida and others to Islamic State, are capturing and holding territory, allowing them to benefit from lucrative rents on economic activity and control extractive sector revenues. As the security situation continues to deteriorate, as in much of the region, negative sentiment towards foreign military involvement has steadily increased. While most recent attacks in Niger have targeted state security forces, militants operating in Niger‚Äôs border regions retain a high intent to target foreign commercial assets and personnel and have demonstrated the capability to do so.
  • An array of austerity measures has been implemented to reign in public expenditure since 2019, which indicates that Niger is not coursing towards debt distress given its prospects for economic recovery and continued foreign investment potential. The main concern relates to the massive current account deficit which is expected to exceed 20 percent of GDP by 2021. The chief driver of economic growth will be developments in the uranium and crude oil subsectors. However, Chinese investors are losing confidence in the Agadem crude oil block and refinery in Zinder, thus frustrating relations with China, which remains the largest investor in the country.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
5.0
Expropriation, Nationalisation, Confiscation & Deprivation
4.5
Contract Frustration & Breach
5.0
Taxation
5.5
Bribery & Corruption
6.0
Regulatory Burden
6.0
Strikes, Riots & Civil Commotion
5.5
Security
8.0
Sovereign Default
6.0
Economic Volatiliy
6.5

Risk Rating Scale (small)

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