Niger's Growth Story Gains IMF Confidence as Fiscal Reforms and Oil Revenue Drive Recovery

The IMF finds that Niger's economy remained resilient with 6.9% growth in 2025 despite security, climate and regional trade challenges, supported by strong reforms, fiscal discipline and rising oil revenues. It urges continued governance reforms, prudent management of oil income, stronger domestic revenue mobilisation and sustained support from development partners to ensure inclusive and long-term economic growth.

Niger has demonstrated that strong economic reforms can deliver results even under extremely difficult circumstances. According to the International Monetary Fund's (IMF) latest review under the Extended Credit Facility (ECF) programme, the country has maintained economic stability despite facing terrorism, repeated climate disasters, regional trade disruptions, and tighter global financing conditions. The IMF approved the ninth review of the programme, releasing an additional US$33 million and bringing total support to about US$342 million. The report, prepared by the IMF in collaboration with the Government of Niger and the Central Bank of West African States (BCEAO), highlights steady progress in fiscal reforms, debt management and governance while outlining the next set of priorities for policymakers, development partners and investors.

Economic Resilience Offers Important Lessons for Policymakers

One of the report's strongest findings is Niger's ability to sustain growth despite multiple crises. The economy expanded by 6.9% in 2025, supported by stronger agricultural production, higher oil output and growth in the mining sector. Growth is expected to remain robust at 7% in 2026 before averaging around 6% annually over the medium term. Inflation, which fell to -4.7% in 2025 because of lower food prices and a good harvest, is projected to return gradually to around 2%, in line with the regional target.

For governments, the report highlights the importance of balancing macroeconomic stability with investments in productive sectors. Improved tax collection and spending discipline enabled Niger to perform better than expected even while increasing expenditure on security and disaster response. The IMF recommends maintaining fiscal discipline while expanding investments in agriculture, irrigation, education, healthcare and infrastructure to support long-term economic growth. It also advises governments to strengthen domestic revenue mobilisation through better tax administration, fewer exemptions and improved customs systems so that development programmes rely less on external borrowing.

Oil Wealth Can Accelerate Development if Managed Carefully

The report identifies Niger's growing oil sector as one of its biggest economic opportunities. Higher global oil prices are expected to increase government revenues by about 0.7% of GDP, providing additional fiscal space. Rather than using these earnings for permanent expenditure, the IMF recommends directing them towards reducing the fiscal deficit, strengthening foreign exchange reserves and financing priority sectors such as food security, healthcare, education and social protection.

At the same time, the report cautions that dependence on oil carries risks. Niger's regulated fuel pricing system currently creates explicit and implicit subsidies estimated at around 0.6% of GDP, limiting fiscal flexibility. The IMF suggests gradually reviewing the subsidy system while protecting vulnerable households from higher fuel prices. It also recommends monitoring the non-oil primary fiscal balance instead of relying only on overall budget balances, allowing policymakers to assess the country's financial health independent of volatile oil revenues. This approach could help governments in other resource-rich developing economies improve long-term fiscal planning.

Development Partners Have a Bigger Role Beyond Financial Support

The report underscores that continued support from international development partners will remain essential. Alongside IMF financing, institutions such as the World Bank, African Development Bank and other multilateral agencies can help strengthen public financial management, climate resilience, tax administration and governance reforms.

The findings also point to opportunities for development agencies to increase investments in climate-smart agriculture, irrigation systems, renewable energy, healthcare, education, digital public services and social protection. Niger continues to face serious challenges from flooding, food insecurity and regional instability, making long-term institutional support as important as financial assistance. The IMF also calls for continued technical assistance to improve debt management, budget planning, digital tax systems and transparency in public administration. These reforms will help create stronger institutions capable of sustaining economic progress even after the current IMF programme concludes.

Private Sector Confidence Depends on Continued Reforms

For businesses and investors, the report presents a cautiously positive outlook. Expansion in oil production, mining, agriculture, transport and infrastructure offers new investment opportunities, while stronger fiscal management and improved debt sustainability reduce macroeconomic risks. The government's success in clearing most outstanding debt arrears and restructuring domestic debt through longer-term securities has also strengthened investor confidence.

However, challenges remain. Security threats, climate shocks, banking sector weaknesses and regional trade disruptions continue to affect the investment environment. The IMF notes that banks still face liquidity pressures and high levels of non-performing loans, making financial sector reforms a priority. It recommends stronger bank supervision, recapitalisation where needed and restructuring of the microfinance sector to improve access to credit for businesses and farmers.

The report also stresses the importance of governance reforms in attracting private investment. Greater transparency in public procurement, publication of oil contracts, stronger anti-corruption measures and improved oversight of state-owned enterprises will help create a more predictable business environment. If Niger continues implementing these reforms while investing additional oil revenues in productive sectors, it could strengthen economic resilience, attract greater private investment and generate more inclusive growth. For policymakers, development partners and businesses alike, the report offers a practical roadmap showing that sustained reforms, sound fiscal management and institutional strengthening remain the foundation for long-term economic development.