Three months after a military coup on July 26, Niger’s economy, one of the globe’s most impoverished, teeters on the brink due to suspended international finance and aid.
Following the coup, major international partners, including the European Union (EU) and France, promptly ceased their financial assistance. The EU, a crucial ally for the Sahel country, had earmarked 503 million euros ($554 million) for Niamey between 2021 and 2024, targeting governance, education, and sustainable growth.
However, the ousting of elected president Mohamed Bazoum resulted in a swift suspension. Recent studies from the World Bank and the World Food Programme indicate that Niger’s current financial aid stands at $254 million, a sharp decline from the $1.166 billion it received prior to the coup.
For 2023, Niger has garnered a mere $82 million in development aid, a mere 0.55% of its GDP. This figure falls significantly short of the projected $625 million (3.6% of GDP). Notably, these figures don’t factor in the U.S.’s decision to suspend roughly $500 million in aid.
According to the EU, internal revenue has funded only 62% of Niger’s national budget. Responding to intense international and regional sanctions, the country’s military regime recently announced a 40% budget cut for 2023, citing severe losses in both external and internal revenue.
These sanctions, chiefly from the Economic Community of West African States (ECOWAS), bar Niger from supporting its budget and conducting banking operations through the West African Economic and Monetary Union (UEMOA). Consequently, Niger’s government is now urging taxpayers to make cash payments since sanctions have frozen the Treasury account.
To navigate this fiscal crisis, the World Bank noted that Niger prioritized civil servant wages over public investments. Additionally, the country has defaulted on several loan interest payments, risking further suspension of international financial support.
According to a report by The Guardian, post-coup Nigeria, which previously supplied 71% of Niger’s electricity, discontinued its service. The World Bank reports that Niamey’s Nigelec company currently fulfills only 25–50% of the country’s electricity demand, with its financial health deteriorating.
The suspension of Western cooperation has jeopardized numerous infrastructure initiatives. Projects like the 30-megawatt Gorou Banda solar power plant, funded by the French Development Agency (AFD) and the EU, and the Kandadji dam, backed by the AFD, the West African Development Bank (BOAD), and ECOWAS’s investment bank (BIDC), have been paused. The World Bank warns that such delays in electric infrastructure will limit affordable and reliable power access for residents and businesses.
Initially, Niger’s GDP growth was projected at 6% this year, spurred by oil exports. However, if sanctions persist through the end of 2023, this figure could plummet to 2.3%, as per World Bank estimates.
