Niger

Executive Summary

Niger is eager to attract foreign investment and has taken steps to improve its business climate, including making reforms to liberalize the economy, encourage privatization, and increase imports and exports.

In March 2016, President Issoufou was elected for a second five-year term. During his inauguration speech, he laid out his Renaissance II vision for Niger’s development, highlighting plans to further develop the nation’s mining, petroleum, and industrial sectors, while scaling up the country’s transport infrastructure. He further promised a sustained 7 percent annual GDP growth rate throughout his term in office, with it actually hovering around 5 percent.  Going into 2020,  Issoufou’s vision incorporates the need for external investment and the Government of Niger (GoN) continues to seek foreign investment – with recent investments coming primarily from China and Turkey.  Although the GoN seeks investment from everyone, there is prioritization for those that can invest quickly.  During official visits to New York, Paris, Beijing and elsewhere since 2016, President Issoufou regularly reiterates the need for FDI. In addition to the Chamber of Commerce, which supports all investors, the GoN created the High Council for Investment (HCIN) in 2017.  The HCIN is tasked with supporting and promoting foreign direct investments in Niger.  The Permanent Secretary of the High Council reports directly to the President. GoN focus areas for investment include the mining sector, infrastructure and construction (which included a new airport and luxury hotel completed in 2019, transportation, and agribusiness).

U.S. investment in the country is very small; many U.S. firms perceive risks due to the country’s limited transport and energy infrastructure, the perception of political instability and terrorist threats, low levels of education, including low levels of French and English capacity, and a climate that is dry and very hot.  Foreign investment dominates key sectors: the mining, transportation and telecommunications sectors are dominated by French firms, while Chinese investment is paramount and expanding in the oil and large-scale construction sectors.  Niger is African Growth and Opportunity Act eligible, but it has a negligible impact in Niger.  One major project that had its groundbreaking in March 2019 is the 130MV Kandadji Dam, which will rely on international assistance to fund construction.  Much of the country’s retail stores, particularly those related to food, dry goods and clothing are operated by Lebanese and Moroccan entrepreneurs. There are currently no major U.S. firms permanently operating in Niger.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2019 120 of 180 http://www.transparency.org/
research/cpi/overview
World Bank’s Doing Business Report 2019 132 of 190 http://www.doingbusiness.org/
en/rankings
Global Innovation Index 2019 127 of 129 https://www.globalinnovationindex.org/
analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2018 N/A https://apps.bea.gov/international/
factsheet/
World Bank GNI per capita 2018 USD 390.00 http://data.worldbank.org/indicator/
NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Government of Niger is committed to attracting FDI and has repeatedly pledged to take whatever steps necessary to encourage the development of its private sector and increase trade.  The country offers numerous investment opportunities, particularly in agriculture, livestock, energy, telecommunication, industry, infrastructure, hydrocarbons, services, and mining.  In the past several years, new investor codes have been implemented (the most recent being in 2014), the Public-Private Partnership law was adopted in 2018 and subsequently implemented.  Transparency has improved, and customs and taxation procedures have been simplified.  There are no laws that specifically discriminate against foreign and/or U.S. investors.  The government of Niger has demonstrated a willingness to negotiate with prospective foreign investors on matters of taxation and customs.

The Investment Code adopted in 2014 guarantees the reception and protection of foreign direct investment, as well as tax advantages available for investment projects.  The Investment Code allows tax exemptions for a certain period and according to the location and amount of the projects to be negotiated on a case-by-case basis with the Ministry of Commerce.  The code guarantees fair treatment of investors regardless of their origin.  The code also offers tax incentives for sectors that the government deems to be priorities and strategic, including energy production, agriculture, fishing, social housing, health, education, crafts, hotels, transportation, and the agro-food industry.  The code allows free transfer of profits and free convertibility of currencies.

The Public-Private Partnership law adopted in 2018 gives such projects total exemption from duties and taxes, including Value Added Tax (VAT), on the provision of services , works and services directly contributing to the realization of the project in the design and/or implementation phase.  Parts, spare parts, and raw materials intended for projects do not benefit from a duty exemption and customs taxes unless they are not available at Niger.  In the design and/or production phase, private public partnerships benefit from free registration of agreements and all acts entered by the contracting authority and the contracting partner within the framework of the project.

Despite having regulations in place to invite FDI, Niger’s enforcement of its tax code is not always even.  In 2018 and 2019, at least two notable foreign investors complained of unfair tax enforcement or policies.

There are no laws or practices that discriminate against foreign investors including U.S. investors.

The High Council for Investment of Niger (HCIN), created in 2017, reports directly to the President of the Republic.  HCIN is the GoN’s platform for public-private dialogue and has a goal of increasing Foreign Direct Investments, improving Niger’s business environment, and defining private sector priorities to possible investors.

In 2018, Niger’s government reviewed the HCIN’s mission as related to international best practices on attracting FDI.  Subsequently the GoN added, by Presidential Decree, a Nigerien Agency for the Promotion of Private Investment and Strategic Projects (ANPIPS).  It reports to the HCIN and is the implementing agency of HCIN’s policy initiatives.  To date the two agencies have successfully completed a number of investment agreements, notably with Chinese and Turkish firms.  In 2018, it assisted representatives from an American firm in gaining access to Niger and arranging meetings with appropriate government officials.

To improve business climate indicators, the GoN created an Institutional Framework for Improving Business Climate Indicators Office (Dispositif Institutionnel d’Amélioration et de Suivi du Climat des Affaires), within the Ministry of Commerce.  Its stated goal is to create a regulatory framework that permits the implementation of sustainable reforms.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises.  Energy, mineral resources, and national security related sectors restrict foreign ownership and control; otherwise, there are no limitations on ownership or control.  In the extractive industries, any company to which the GoN grants a mining permit must give the GoN a minimum 10 percent share of the company.  This law applies to both foreign and domestic operations.

The GoN reserves the right to require companies exploiting mineral resources to give the GoN up to a 33 percent stake in their Nigerien operations.  Although Ministry of Planning authorization is required, foreign ownership of land is permitted.  In 2015, under the auspices of the Ministry of Commerce, the GoN validated a new Competition and Consumer Protection Law, replacing a 1992 law that was never operational.  Niger also adheres to the Community Competition Law of the West African Economic and Monetary Union (WAEMU) and directives of the Economic Community of West African States (ECOWAS) as well as those offered to investors by the Multilateral Investment Guarantee Agency (MIGA) all of which provide benefits and guarantees to private companies.

The Government of Niger is an active proponent of the African Continental Free Trade Agreement, which President Issoufou stated will encourage international investments and ease trade for international investors.

Foreign and domestic private entities have the right to establish and own business enterprises.  A legal Investment Code governs most activities except accounting, which the Organization for the Harmonization of Business Law in Africa (OHADA) governs.  The Mining Code governs the mining sector and the Petroleum Code governs the petroleum sector, with regulations enforced through their respective ministries.  The investment code guarantees equal treatment of investors regardless of nationality.  Companies are protected against nationalization, expropriation or requisitioning throughout the national territory, except for reasons of public utility.

The state remains the owner of water resources through the Niger Water Infrastructure Corporation (SPEN), which was created in 2001 and is responsible for the management of the state’s hydraulic infrastructure in urban and semi-urban areas, including development, and project management.  Concessions for the use of water and for the exploitation of works and hydraulic installations may be granted to legal persons governed by private law, generally by presidential decree.  However, the day to day work is through the French investor Veolia through the Niger Water Exploitation Company (SEEN).

An investment screening mechanism does not exist under the Investment Code.  The HCIN is a de facto advisory council to the government on any large scale investment.  The HCIN would support investor engagement with appropriate government offices and facilitate meeting any regulatory requirements.

Other Investment Policy Reviews

In the past three years, the government has not undergone any third-party investment policy reviews through a multi-lateral organization.  Neither the United Nations Conference on Trade and Development (UNCTAD), nor the Organization for Economic Cooperation and Development (OECD) has carried out a policy review for Niger.

The World Bank, however, cohosted a roundtable discussion in 2019 with government, civil society, and business representatives to review Niger’s business climate including its investment policies.

https://docs.wto.org/dol2fe/Pages/FE_Search/ExportFile.aspx?Id=243443&filename=q/WT/TPR/S362R1-07.pdf 

http://unctad.org/en/Pages/DIAE/Investment percent20Policy percent20Reviews/Investment-Policy-Reviews.aspx 

Business Facilitation

Niger’s one-stop shop, the Maison de l’Entreprise, is mandated to enhance business facilitation by mainstreaming and simplifying the procedures required to start a business within a single window registration process.

From 2016 to 2019, the cost and time needed to register businesses dropped from 100,000 CFA (about USD190) to 17,500 CFA (about USD33).  Furthermore, the time to obtain construction permits dropped, as well as the cost of access to water and electricity networks.  The GoN also created an e-regulations website (https://niger.eregulations.org/procedure/2/1?l=fr ), which allows for a clear and complete registration process.  Foreign companies may use this website, which lists government agencies with which businesses must register.  The business registration process was down to about 3 days by 2019, from over 14 days in 2016.

The Government maintains a policy of working with international organizations in finding ways to improve its business registration process, which is reflected in its year-over-year improvements in Niger’s Ease of Doing Business Score as measured by the World Bank.  In the 2020 doing business, Niger score 56.8 and ranked at 132 out of 190 economies.

Company registration can be done at the Centre de Formalités des Entreprises (CFE), at the Maison de l’Entreprise, which is designed as a one-stop-shop for registration.  Applicants must file the documents with the Commercial Registry (Registre du Commerce et du Crédit Mobilier – RCCM), which has a representative at the one-stop shop.

At the same location, a company can register for taxes, obtain a tax identification number (Numéro d’Identification Fiscale – NIF), register with social security (Caisse nationale de Sécurité Sociale – CNSS), and with the employment agency (Agence Nationale pour la Promotion de l’Emploi – ANPE).  Employees can be registered with social security at the same location.

When a company registers, the applicant may also request the publication of a notice of company incorporation, a mandatory step, on the Maison de l’Entreprise website: http://mde.ne/spip.php?rubrique10 .  The notice of incorporation can alternatively be published in an official newspaper (journal d’annonces légales).

Outward Investment

The government does not promote outward investment.  The government’s policy objectives, as specified in the second Nigerien Renaissance Program (section 1.2), is the development of international markets, especially that of ECOWAS, for Nigerien exports rather than investment.

The GoN does not restrict domestic investors from investing abroad.  To the contrary, Niger currently has active Bilateral Investment Treaties (BITs) with Germany and Switzerland.  BITs were signed with Algeria, Tunisia and Egypt, but are not in force.  Niger is eligible to export virtually all marketable goods duty-free in to the U.S. market via the African Growth and Opportunity Act (AGOA) system of trade preferences.

Niger does not have a bilateral taxation treaty with the United States.  The United States, however, signed a Trade and Investment Framework Agreement (TIFA) with WAEMU in 2014.  It includes Niger.  There is no ongoing systemic tax dispute between the government and foreign investors.

7. State-Owned Enterprises

State-Owned Enterprises (SOEs) in Niger are defined as companies in which the GoN is the majority stakeholder. They play a major role in Niger’s economy and dominate or heavily influence a number of key sectors, including energy (NIGELEC), telecommunications (Niger Telecom), and water resources (SEEN and SPEN), construction and retail markets (SOCOGEM); petroleum products distribution (SONIDEP); mining (SOPAMIN, SOMAIR, COMINAK, SONICHAR); oil refinery (SORAZ), textile (SOTEX) and hotels (SPEG).

SOEs do not receive non-market based advantages from the host government. According to the 2016 Public Expenditures and Financial Accountability (PEFA) draft document, there are eight wholly-owned SOEs, and six SOEs majority-owned by the state. State-Owned enterprises are answerable to their supervisory ministry and send certified accounting records to the supervisory ministries and to the Public Enterprises and State Portfolio Directorate (DEP/ PE). SOE record-keeping is expected to comply with SYSCOHADA accounting system standards.

There are no laws or rules that offer preferential treatment to SOEs. They are subject to the same tax rules and burdens (although many remain in tax arrears) as the private sector, and are subject to budget constraints. Niger is not a member of the OECD and does not adhere to its guidelines.

Privatization Program

Most sectors of the economy, except for specified SOEs, have been privatized.  The state-owned oil-distribution company (SONIDEP) no longer has a monopoly over oil exportation; exportation authority is now equally shared between SONIDEP and the Chinese National Petroleum Corporation (CNPC).  Likewise, although the national electricity company (NIGELEC) continues to hold a virtual monopoly on electricity distribution, steps were taken in 2016 to allow third party access to the country’s electricity grid.  Competition in the mobile telecommunication sector forced the GoN to combine state-owned fixed line telecommunications provider SONITEL with the state-owned mobile provider Sahelcom to form a new parastatal, known as Niger Telecom. Although the state continues to hold a monopoly on fixed-line telephony, mobile communications is open to competition.

Foreign investors are welcome to participate in the country’s privatization program. Privatization operations are conducted under the technical direction of the ministry that currently controls the company.  After a detailed analysis of business operations conducted by an internationally known independent audit firm, the government issues a call for bids.

When privatization occurs, there is a process for public bidding. Depending on the ministry responsible, there may be no electronic bidding. Rather tenders may be announced only in local media.

9. Corruption

The constitution, adopted in 2010, contains provisions for greater transparency in government reporting of revenues from the extractive industries, as well as the declaration of personal assets by government officials, including the President  Since his re-election in February 2016, President Issoufou has made combatting corruption within the GON one of the stated focus points of his presidency.

The High Authority for the Fight against Corruption and Related Offenses (HALCIA) has the authority to investigate corruption charges within all government agencies.  HALCIA is limited by a lack of resources and a regulatory process that is still developing.  Despite the limitations, HALCIA was able to conduct a number of successful investigations during 2019.

Laws related to anti-corruption measures are in place and apply to government officials, their family members, and all political parties.  Legislation on Prevention and Repression of Corruption was passed into law in January 2018; a strategy for implementation was still pending at year’s end.

Niger has laws in place designed to counter conflict of interest in awarding contracts and/or government procurements. Bribery of public officials by private companies is officially illegal, but occurs regularly despite GON denunciations of such conduct.

Law number 2017-10 of March 31, 2017, prohibits bribery of public officials, international administrators, and foreign agents, bribes within the private sector, illicit enrichment and abuse of function by public authorities. The High Authority Against Corruption and Relating Crimes (HALCIA) is further tasked with working with private companies on internal anti-corruption efforts.

Bribery of public officials occurs on a regular basis. Though most companies officially discourage such behavior, internal controls are rare except among the largest (mostly foreign) enterprises.

The government/authority encourages or requires private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.

The government does not provide any additional protections to NGOs involved in investigating corruption.

The government/authority encourages or requires private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.

Niger has joined several international and regional anti-corruption initiatives including the UN Convention against Corruption in 2008, the African Union Convention on Preventing and Combating Corruption in 2005, and the Protocol on Combating Corruption of the economic community of the states of West Africa (ECOWAS) in 2006. Niger is also member state of the GIABA, which is an institution of the Economic Community of West African States (ECOWAS) responsible for facilitating the adoption and implementation of Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) in West Africa.

As of April 2019, there are no U.S. firms invested in Niger, for reasons which include – but are not limited to – the perception of corruption. Cases of suspected corruption occasionally appear in media reports concerning GON procurement, the award of licenses and concessions and customs.

Resources to Report Corruption

Gousmane Abdourahamane
President
High Authority to Combat Corruption and Related Infractions (HALCIA)
BP 550 Niamey – Niger
(+227) 20 35 20 96
issoufbour@gmail.com

Wada Maman
President
Transparency International Niger (TI-N)
BP 10423, Niamey – Niger
(+227) 20 32 00 96 / 96 28 79 69
anlcti@yahoo.fr

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