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Program information document (pid) appraisal stage

Country and Sector Background

 

Niger’s economy is undiversified, heavily relying on agriculture and the extractive industries. Agriculture is main driver of growth and accounts for 40 percent of GDP. The vast majority of Niger’s population and the poor live in rural areas and earn their living from agriculture. However, agricultural productivity is low due to very low uptake of modern inputs and poor extension services. Niger has significant mineral wealth, including uranium and gold, and has started exporting refined oil products. These three products account for approximately 70 percent of total export values. The extractive industry accounts for 10-15 percent of government revenue.

Growth is volatile owing to frequent external shocks of different nature. Shocks impacting on the economy include security challenges, the Nigerian crisis, unfavorable weather conditions and commodity prices. Security challenges disrupted economic activities with growing social and humanitarian pressures linked to the flow of hundreds of thousand refugees and internally-displaced people. The economic downturn in Nigeria impacted export performance. Unfavorable weather conditions impacted agriculture, and depressed commodity prices adversely affected growth and revenue in the extractive industries.

Although declining, poverty remains high, and is more pronounced in rural areas. Poverty incidence declined from 53.7 percent in 2005 to 44.5 percent in 2014. Despite the decline in overall poverty incidence, the rural poor became poorer relative to their urban counterparts during the same period. Their per capita consumption relative to that of the urban poor declined from 60 percent to 43 percent. Lack of economic diversification, volatile agricultural growth, Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized, low access to physical and institutional infrastructure, and a weak human capital base limit economic opportunities, especially in rural area.

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