Niger's economic growth is primarily driven by agriculture and services, with the extractive sector gaining prominence due to oil exports. Potential growth is estimated at around 6%, driven significantly by labor and peaks in physical capital investment. However, growth faces constraints from weak productivity, limited structural transformation, and inadequate diversification. Key factors for boosting growth include human capital investment, development of extractive and agro-industrial sectors, and digital technology adoption. Downside risks mainly stem from regional insecurity and adverse climate shocks, necessitating effective risk management. Sectoral analysis shows volatile growth in agriculture and industry, while services contribute steadily. The resource sector's growth is volatile, linked to commodity prices and production levels. The output gap fluctuates between -4% and 4%, with frequent negative gaps indicating underutilization of resources and labor. Labor contributes structurally to potential growth, while peaks are associated with physical capital accumulation. Human capital investment is crucial, with low levels hindering growth. Total factor productivity growth is weak, reflecting low technology adoption. Downside risks include frequent climate shocks (droughts, floods) impacting agriculture and food security, and regional insecurity disrupting trade and investment. Policy recommendations focus on leveraging technology for private sector growth, fostering financial inclusion, ensuring transparent resource sector management, enhancing climate resilience, and investing in human capital development.
