Paper Example on Niger's Economy: Subsistence Livestock & Crops, West African CFA Franc Currency.

Introduction

Despite having some of the largest Uranium deposits in the world, Niger's economy is still anchored on subsistence livestock and crops.

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The currency of "Niger."

The legal money for Niger is the West African CFA franc. The legal tender has an ISO code XOF is also used by other West African Countries such as Senegal and Togo. After World War II, the West African CFA franc was introduced to replace the French franc, whose value was falling by the end of the war. The currency is issued by Niger's Central bank, which is also mandated with the management of all the financial assets of the country. The legal tender is released in the form of banknotes and coins. One US Dollar is equivalent to 596.9640 West African CFA Franc.

Major Economic Features

Niger's Population

Niger is the largest country in West Africa and the 22nd largest in the whole world by landmass (Goumandakoye, 2016). However, over 80 percent of the land is a desert, which explains the low population density in the country. According to the UN data, the population of Niger as of mid-year 2019 was estimated to be 23310715. The people of Niger represent about 0.3% of the entire world population (Niamey, 2012).

Furthermore, regarding countries' people and dependencies, Niger ranks 57 globally. Most importantly, the population density was recorded at 18 per Km2. About 16 percent of the entire population of Niger inhabit the urban areas while the remaining population is distributed across the peri-urban and the rural countryside (Kiprop, 2019). Niger's median age is 15 years. Hausa community forms over 50 percent of Niger's population. The population of males is more than females, with females at 49.8 percent, while the males 50.2 percent (Niamey, 2012).

Major Natural Resources

Minerals and oils

Niger was the fifth largest producer of Uranium in the entire world by the year 2010. Niger's Uranium production accounted for over 7.8% of the whole of global uranium production (Goumandakoye, 2016). However, the ever-fluctuating uranium prices within the country dramatically affect Niger's economy. The country is also endowed with natural mineral resources such as coal, silver, gold, gypsum, limestone, tin, and salt (Kiprop, 2019). Although Samira Hill mine of Niger is endowed with Gold deposits, Canada has 80 percent of the holdings compared to only 20 percent of Niger (Goumandakoye, 2016).

Between 2009 and 2010, over 3000kg of Gold had been obtained from Samira Hill Mines (Goumandakoye, 2016). Oil deposits were discovered in the country by 1975. Such discovery attracted many companies that were interested in the country's oil resources. By 2013 it was estimated that at least 2 billion barrels of oil could be obtained from the oil fields (Kiprop, 2019). The processing of extracted oil within the country is done at Soraz refinery (Goumandakoye, 2016). The government plans to invest in the extraction of more minerals shortly to boost the revenue base for the country (Kiprop, 2019). However, the increased reliance on extractive revenue increases the vulnerability of the country's budget, primarily due to the fluctuations in mineral prices and production. Niger's economy has also been affected by terror attacks that are often witnessed around the uranium mines as well as the political instability in neighboring Mali (Kiprop, 2019).

Niger is also endowed with several coal mines, with the largest located in Anou Araren (Kiprop, 2019). Even though little effort has been made in exploiting coal, the country believes that it would form an alternative fuel source soon.

Forests

About 0.9 percent of the total land area of Niger is covered by forests, which are mostly categorized as primary forests. There have been numerous efforts by the government of Niger to increase the forest cover since the 1980s. According to the UN report, Niger has some 684 known species of birds, amphibians, reptiles, and mammals, with most of them inhabiting the forest ecosystems of the country (Goumandakoye, 2016).

Other significant features of the Economy

Livestock rearing

Animal husbandry forms one of the most significant Niger's economic activities. The animals kept by the country's population include goats, camels, and sheep. Most importantly, the government estimates animal husbandry and livestock sector generally accounts for 14 percent of the government revenue each year.

Approximately 29 percent of the population is supported by the livestock sector (Niamey, 2012). Some of the animals and their products are also exported to countries like Ghana and Nigeria, among others. However, the major challenge affecting the livestock sector include pests and diseases, as well as prolonged drought, contributed to by the desert condition experienced in the country (Kiprop, 2019). The most severe of all droughts ever experienced in Niger occurred between the 1960s to late 1980s. During this season, Niger's farmers lost large numbers of animals as a result of food and water shortage (Kiprop, 2019).

Major Imports and Exports of Niger

Crops such as cowpeas and onions are also grown in the country majorly for export, while others grown in small quantities such as potatoes, wheat, and paper are grown for subsistence. Niger's economy mainly relies on subsistence agriculture, internal markets, as well as the export of raw materials such as foodstuffs and animal products to the neighboring countries. Uranium export also contributes to Niger's economy. Between 1988 and 1995, Niger's economy was totally in the unregulated informal sector, including small and large scale production, transport, and services within the urban and rural areas of the country.

Niger was ranked as the second least developed nation in the world in 2006 by the United Nations following the factors that affect the country, such as high population growth rate, food insecurity, the weak educational sector as well as few prospects of the job beyond the subsistence farming and herding. There is also a lack of a formal private sector investment in Nigeria that could contribute to economic diversification within the country.

Niger's Trade Partners

The largest trading partners with Niger include China, Mali, South Korea, Switzerland, India, Ghana, and Belgium-Luxemburg. The major export of Niger includes Refined Petroleum, radioactive chemicals, gold, petroleum gas as well as other oily seeds. Niger imports several products, including; dice, palm oil, pesticides, cement, and packaged medicaments, among others. Niger also exports groundnuts and animal products to neighboring Nigeria.

Niger Trade Agreements

Niger has membership in regional, multi-lateral, and sub-regional trade organizations. Such organizations include the Economic Community of West African States (ECOWAS), West African Economic and Monetary Union (WAEMU) as well as the world trade organization (WTO). The rules of these organizations govern trading activities between Niger and other countries. Besides, Niger receives preferential aids from the European Union, United States, as well as other World Trade Organization member countries under the general mechanisms of preferences.

In 2018, the Gross Domestic Product (GDP) of Niger was 9.24 US dollars, which represent only 0.01 percent of the entire world economy. According to the World Bank, the Gross National income of Niger as of 2017 was 21.36 billion PPP dollars (Niger National Debt, 2017). The poverty rate of Niger was at 44.1% and a per capita income of close to 420 US dollars (Kiprop, 2019). Therefore, Niger is considered one of the largest countries in the world by the United Nations Human Development Index. The unemployment rate in Niger is about 0.5 percent and is projected to be trending around 0.40 percent by the year 2020, according to various economic models (Goumandakoye, 2016).

Moreover, in 2017, the public debt of Niger was at 3986million dollars, which represented an additional 657 million dollars from the preceding year. These values imply that by 2017, the federal debt had reached 48.97% of the country's GDP (Niamey, 2012). In 2017, the capita debt of any inhabitant was 185 US Dollars.

Niger's Economic Relationship with the U.S

According to the United States Department of State, Niger has bilateral economic relations with the US, which involve the exportation and importation of goods between the two countries. For instance, the United States exports to Niger products such as rice, machinery, vehicles, fats, and oils as well as food-preparation goods. Niger enjoys the benefits of the preferential trade under the African Growth and Opportunity Act. Furthermore, the United States has an investment and trade framework agreement with the ECOWAS. Both the United States and Niger belong to some similar international trade organizations such as the World Bank, World Trade Organization, and the International Monetary Fund, among others.

In conclusion, Niger is one of the poorest countries in the world despite the natural resource endowments in the country. Animal husbandry and subsistence farming is the primary source of livelihood for the Nigeriens.

References

Goumandakoye, H. (2016). Oil in Niger: A foundation for promise or a new resource curse?. The Extractive Industries and Society, 3(2), 361-366. https://doi.org/10.1016/j.exis.2016.02.007

U.S. Relations With Niger - United States Department of State. (n.d.). Retrieved from https://www.state.gov/u-s-relations-with-niger/.

Niamey, C. (2012). Niger. https://www.cemnet.com/content/gcr/intros/156.pdf

Kiprop, Joseph. (2019, March 18). What Are The Major Natural Resources Of Niger? Retrieved from https://www.worldatlas.com/articles/what-are-the-major-natural-resources-of-niger.html

Niger National Debt, 2017. (2019, March 19). Retrieved from https://countryeconomy.com/national-debt/niger.