Niger – Joint World Bank-IMF Debt Sustainability Analysis

Overview & Synopsis

Niger’s risk of external and overall public debt distress is assessed as high, downgraded from the previous DSA published in July 2024, and the public debt is deemed sustainable. The downgrading is primarily attributed to lower revenue projections, which induced breaches in the external debt service-to-revenue ratio threshold in 2024 and 2025; other debt indicators remain below their thresholds under the baseline scenario. Nonetheless, for domestic debt, roll-over risks are more elevated due to Niger’s overreliance on relatively higher-cost and shorter maturity financing following the military takeover. Special attention should be paid to the evolution of risks, particularly those linked to crude oil price volatility, prolonged border tensions with Benin, a deterioration in the security situation, and vulnerability to climate change, as they may impact debt sustainability if they materialize. Given high levels of uncertainty, prudent debt policies should still be pursued. Strengthening fiscal position and significantly greater efforts on domestic revenue mobilization remain imperative in the face of heightened vulnerabilities. In the short term, it is essential to fully implement the arrears clearance plan to ensure fiscal stability, rebuild public trust, and support economic recovery. At the same time, it is crucial to maintain a zero ceiling on non-concessional debt and avoid overreliance on higher-cost domestic borrowing to finance the budget. In the medium and long term, continuous efforts should be made to entrench sound macroeconomic policies, implement reforms, enhance debt management practices, improve public investment management, and increase public spending efficiency to buttress debt sustainability amid more significant economic uncertainty. Given Niger’s vulnerabilities to climate change, it is essential to build resilience through adaptation investments and policies while maintaining fiscal prudence.