Niger, one of the poorest countries in the world, is facing a deepening debt crisis as it struggles to cope with the economic and political fallout of a military coup last year.
The West African nation has missed three more payments on its domestic debt, totaling $24.2 million, according to UMOA-Titres, the regional market for government securities. This brings the total arrears to $604 million since the coup in July 2023, when a group of soldiers ousted President Mohamed Bazoum and suspended the constitution.
The coup triggered sanctions from the West African Economic and Monetary Union (UEMOA) and the Economic Community of West African States (ECOWAS), which suspended Niger from the regional financial market and the central bank. The sanctions have cut off Niger’s access to external financing and foreign exchange reserves, worsening its fiscal and balance of payments situation.
Niger is not the only country in the region facing a debt crisis. Its neighbors Mali and Burkina Faso, which also experienced coups in recent years, have also defaulted on their domestic debt obligations. The three countries announced last month that they were leaving ECOWAS with immediate effect, citing the bloc’s interference in their internal affairs.
The debt crisis has also hampered Niger’s efforts to fight poverty, insecurity, and climate change. Niger is ranked last on the United Nations Human Development Index, with more than 40% of its population living below the poverty line. It also faces recurrent droughts, floods, and locust invasions, as well as attacks from Islamist militants and criminal gangs.
Niger’s debt burden has increased significantly in the past decade, as the country borrowed heavily to finance infrastructure projects, such as roads, bridges, dams, and power plants. According to the World Bank, Niger’s public debt rose from 26.8% of GDP in 2010 to 54.8% in 2020. About 80% of its debt is owed to external creditors, mainly China, France, and multilateral institutions.
Niger has been in talks with its creditors to restructure its debt and seek debt relief under the G20 Common Framework, which aims to help low-income countries cope with the impact of the Covid-19 pandemic. However, the process has been stalled by political instability and the lack of transparency and accountability in the country.
The international community has urged Niger to restore constitutional order and hold free and fair elections as soon as possible. ECOWAS has planned a summit on Feb. 24 to discuss the situation and review the sanctions. The African Union and the United Nations have also expressed their concern and called for dialogue and respect for human rights.
Niger’s debt crisis poses a threat not only to its own stability and development but also to regional and global security and cooperation. Niger is a key partner in the fight against terrorism and illegal migration in the Sahel and the Lake Chad Basin. It also hosts the largest U.S. military base in Africa and a French-led counter-terrorism force.
Niger needs urgent support from its creditors and partners to overcome its debt crisis and address its multiple challenges. Without a comprehensive and sustainable solution, Niger risks plunging into a deeper economic and social crisis, with dire consequences for its people and the world.
Source: Bloomberg
