Report No. 59968-NE Niger Modernizing Trade During a Mining Boom Diagnostic Trade Integration Study for the Public Disclosure AuthorizedPublic Disclosure Authorized Integrated Framework Program September 2010 Poverty Reduction and Economic Management 3 (AFTP3) Africa Region Public Disclosure AuthorizedPublic Disclosure Authorized Public Disclosure AuthorizedPublic Disclosure Authorized Document of the World Bank Public Disclosure AuthorizedPublic Disclosure Authorized i Table of Contents PREFACE ............................................................................................................................. VII EXECUTIVE SUMMARY AND ACTION MATRIX ...................................................................... VIII 1. MACROECONOMIC ENVIRONMENT ................................................................................1 A. Background .......................................................................................................................... 1 B. Growth and Structure of the Economy ............................................................................... 1 C. Macroeconomic Management ............................................................................................ 3 D. Balance of Payments and the Exchange Rate ..................................................................... 5 E. Conclusions .......................................................................................................................... 9 2. FOREIGN TRADE: FLOWS AND POLICIES ........................................................................ 11 A. For an Accurate Picture of Trade ....................................................................................... 11 B. Trade Policy ....................................................................................................................... 15 C. Trade Policy with Nigeria ................................................................................................... 18 D. Preferential Agreements ................................................................................................... 21 E. Standards and Quality ....................................................................................................... 23 F. Conclusions ........................................................................................................................ 24 3. THE BUSINESS CLIMATE AND INSTITUTIONS ................................................................. 26 A. Investment Constraints ..................................................................................................... 26 B. Legal and Regulatory Framework ...................................................................................... 28 C. Taxation ............................................................................................................................. 29 D. The Financial Sector........................................................................................................... 31 E. Other Constraints .............................................................................................................. 34 F. Business Support Institutions ............................................................................................ 37 G. Conclusions ........................................................................................................................ 40 4. CUSTOMS .................................................................................................................... 41 A. Legal Framework ............................................................................................................... 41 B. Operation of Customs Administration .............................................................................. 42 C. Some Peculiarities of the Organisation of Services ........................................................... 48 D. Combating Fraud and Corruption ...................................................................................... 49 E. Conclusions ........................................................................................................................ 51 5. TRANSPORT ................................................................................................................. 53 A. A Landlocked Country........................................................................................................ 53 B. Air and River Transport ..................................................................................................... 55 C. Road Transportation of Goods .......................................................................................... 56 D. Building a Dry Port ............................................................................................................. 60 E. Conclusions ........................................................................................................................ 62 6. AGRICULTURE: FIVE KEY SUB-SECTORS ......................................................................... 64 A. Introduction ....................................................................................................................... 64 B. Onion ................................................................................................................................. 65 C. Cowpeas (niébé) ................................................................................................................ 70 ii D. Sesame............................................................................................................................... 73 E. Souchet (Pois Sucré, Chufa, Tigernuts) .............................................................................. 76 F. Gum Arabic ........................................................................................................................ 77 G. Other Promising Export Sub-Sectors ................................................................................. 79 H. Cross-cutting Issues ........................................................................................................... 81 7. LIVESTOCK AND ANIMAL PRODUCTS ............................................................................ 85 A. The Context ....................................................................................................................... 85 B. Export Status and Prospects .............................................................................................. 86 C. Challenges and Opportunities for Increasing Livestock-Meat Exports: ............................ 89 D. Hides and Skins .................................................................................................................. 94 E. Conclusions ........................................................................................................................ 97 8. MINING ....................................................................................................................... 99 A. The Current Situation ........................................................................................................ 99 B. Interventions to Support Miners .................................................................................... 103 C. Export Opportunities ....................................................................................................... 104 D. Artisanal Mining: Constraints and Recommendations .................................................... 106 E. Legislative, Regulatory and Administrative Needs .......................................................... 107 F. Impact of Mining on Local Communities ......................................................................... 108 G. Conclusions ...................................................................................................................... 110 9. TOURISM AND HANDICRAFT ART ............................................................................... 111 A. The Tourism Sector .......................................................................................................... 111 B. Problems and Priorities ................................................................................................... 115 C. The Way Forward in Tourism .......................................................................................... 119 D. The Art Handicrafts Sub-sector ....................................................................................... 119 E. Conclusions ...................................................................................................................... 121 ANNEX 1: COMPLETE ACTION MATRIX ............................................................................... 122 ANNEX 2 : PROJETS POUR APPUYER LE SECTEUR MINIER DU NIGER .................................... 131 BIBLIOGRAPHY ................................................................................................................... 135 LIST OF TABLES Table 1.1 : Niger – Decomposition of GDP and growth performance by sector .......................... 2 Table 1.2 : Tax revenues/GDP: Niger and other WAEMU countries (%) ........................................ 4 Table 2.1 : Main exports by value according to three sources, 2001-2005 ................................. 12 Table 2.2 : Value of annual re-exports, special taxes, and customs receipts, 2002-2006 ........... 14 Table 2.3 : Major re-exported products, average for 2004-2006................................................