Financial Sanctions Hit Niger Hard Following Coup

Regional and Western allies have imposed a series of financial sanctions on Niger following the July 26 coup, aimed at restoring democratic rule.

Economic Impact

The country, which is the world’s seventh-biggest producer of uranium, stands to lose significant revenue as a result. According to projections, over 40% of Niger’s budget was expected to come from external partners in 2023, with a total budget of $5.53 billion for the fiscal year.

Sanctions Imposed

• The Economic Community of West African States (ECOWAS) has imposed some of the most stringent sanctions on Niger to date:
  • Suspended power supplies from Nigeria
  • Halted imports and exports of Nigerien goods
  • Shut down its branches in Niger
• European partners have also imposed sanctions:
  • The European Union (EU) has suspended financial support and cooperation on security with Niger
  • France has halted development aid and budget support until a prompt return to constitutional order is achieved
  • The Netherlands has temporarily suspended its direct cooperation with the government, and Canada has suspended direct development assistance
• The United States has paused assistance programs valued at over $100 million following the coup.
• The World Bank has suspended disbursements until further notice, except for private-sector partnerships, which will continue with caution.

Consequences

As a result of these sanctions:

• Niger faces the risk of defaulting on its debt repayments
• Its planned bond issuance in the West African regional debt market was canceled by the regional central bank
• The country’s economy is already struggling, and these sanctions could have far-reaching consequences