A Land of Opportunities
West Africa’s largest country, Niger, is landlocked and has a vast amount of natural resources including uranium, whose extraction accounts for 80% of the country’s exports, as well as gold, iron, coal, petroleum and natural gas. Agriculture is the main contributor to Niger’s income, accounting for up to 50% of GDP.
Niger’s mining industry started in the 1970s with the production of uranium from the Arlit and Akokan mines. Today, Niger is the world’s fourth largest uranium producer. Investment in the sector is ongoing and 38 mining licenses have been awarded since 2013. An array of international companies are currently exploring, while three enterprises are producing uranium. France has been a major partner for the country since the inception of exploration activities. French uranium producer Orano (formerly Areva) created two joint-ventures in Niger, Somaïr and Cominak, both partly state-owned by the Niger government. China, which is Niger’s top foreign investor, entered the mining sector in 2007 when the China National Nuclear Corporation created Somina, partly owned by the Nigerien state. In August 2020, Niger obtained $100 million from the World Bank in order to strengthen decentralised administration and management of the national mining sector.
Although the development of the Nigerien petroleum sector is nascent, exploration is set to intensify in the coming years due to great potential reserves coupled with a governmental push to develop the industry. First major production flowed from the Agadem oilfield in 2011 when the Chinese National Petroleum Corporation commissioned an integrated upstream and downstream project comprising the oilfield, a pipeline and a dedicated refinery. Since 2011, several discoveries have been made by British independent Savannah Energy as well as Sonatrach’s international branch Sipex.
On January 11, 2019, the Nigerien government approved a key decree aiming to develop an indigenous hydrocarbons industry through two drivers: production increase and sustainable revenue management. The goal is for the petroleum industry to account for one quarter of the country’s gross domestic product and over a third of total exports by 2025.
In the power sector, 13% of Niger’s population has access to electricity. This figure is set to grow rapidly, thanks to a government commitment to reach universal access by 2035. An electricity code was introduced in 2018 aiming to incentivize the power sector for private investors and increase the presence of independent power producers. Strong potential in fossil fuels, as well as renewable sources, will support the country’s ambitious development plan.
Investment across the energy value chain is paramount in order to take advantage of the numerous opportunities available in the energy and mining sectors of Niger.
Investment in the energy sector is supported by several mechanisms that are available in Niger and across Africa. The U.S. has launched a number of initiatives including Power Africa, whose goal is to increase access to electricity in sub-Saharan Africa by adding more than 30,000 MW of capacity. Power access is further supported by the Millennium Challenge Corporation, developed by USAID, aiming to increase access to electricity by investing up to $1 billion in African power systems through grants. Renewable energy development is also supported through the African Development Bank’s Sustainable Energy Fund for Africa.
Niger’s increasingly attractive business environment is set to encourage public-private partnerships with local and foreign investors to take part in major infrastructure projects. For example, the Kandadji dam project was funded by a consortium of ten international partners including the Saudi Fund for Development, the Kuwait Fund for Arab Economic Development and the OPEC Fund for International Development. Niger undertook major reforms to improve attractiveness, including a law governing public-private partnerships, which enables the country to benefit from an attractive framework for the funding of large-scale projects in the infrastructure and energy sectors. The length of time to set up a business is just seven days, compared to 27 days on average in Africa. Niger’s investment promotion agency was created in 2018 in order to support potential investors and drive foreign investment.