NIGER INVESTMENT & PARTNERSHIP MAPPING April 26, 2019 This report was produced for review by the United States Agency for International Development. It was prepared by Dalberg Consulting U.S., LLC for the USAID Investment Support Program (ISP). CONTENTS Executive Summary .............................................................................................................. 1 Approach & Methodology ..................................................................................................... 4 Overview of Niger’s economy .............................................................................................. 6 Assessing Key sub-sectors ..................................................................................................... 9 4.1 Sub-sector screening overview ............................................................................................................................. 9 4.2 Selection of Sub-Sectors ....................................................................................................................................... 13 Investment cases .................................................................................................................. 22 5.1 Meat ........................................................................................................................................................................... 22 5.2 Cowpea ..................................................................................................................................................................... 28 5.3 Onion ........................................................................................................................................................................ 34 5.4 Solar ........................................................................................................................................................................... 40 Conclusion ............................................................................................................................ 47 Annex A: Additional analysis on imports & exports ................................................................ 48 Annex B: Stakeholder list ........................................................................................................... 50 Annex C: Sources Cited ............................................................................................................. 52 Annex D: Investment case financial models .............................................................................................................. 54 Annex E: Long list of investment opportunities ....................................................................................................... 54 Annex F: Presentation – Information Market Gap Research ................................................................................ 54 Annex G: Presentation – Value Chain Investment Opportunities Analysis ...................................................... 54 LIST OF FIGURES Figure 1: Metrics for sub-sector prioritization ........................................................................................................... 4 Figure 2: Illustration of process for selecting the shortlisted investment opportunities.................................. 5 Figure 3: Trends in export products and FDI flows .................................................................................................. 7 Figure 4: List of sub-sectors and industries ................................................................................................................. 9 Figure 5a: Assessment of demand ................................................................................................................................ 10 Figure 6: Assessment of Potential for job creation & Alignment ......................................................................... 12 Figure 7: Summary of prioritized sub-sectors following screening ...................................................................... 13 USAID Investment Support Program (ISP) Niger – Investment & Partnership Mapping Figure 8: Geographic distribution of selected sub-sectors ......................... Error! Bookmark not defined. Figure 9: Market characteristics and opportunities for meat export .................................................................. 23 Figure 10: Key constraints along the meat value chain ................................ Error! Bookmark not defined. Figure 11: Example of key requirements for cowpea buyer in Nigeria .............................................................. 29 Figure 12: Key constraints along the cowpea value chain ...................................................................................... 30 Figure 13: Selection of potential food and beverage and retail outlets that may source onion powder ... 35 Figure 14: Key constraints along the onion value chain ......................................................................................... 36 Figure 15: Overview of solar products market and barriers to entry in Niger ............................................... 42 USAID Investment Support Program (ISP) Niger – Investment & Partnership Mapping ACRONYMS ANFO National Association of Onion Farmers’ Cooperatives BAGRI Banque Agricole du Niger CAGR Compounded Annual Growth Rate CEO Chief Executive Officer CFAF West African Financial Community franc CGIAR formerly the Consultative Group for International Agricultural Research CTO Chief Technology Officer ECOWAS Economic Community of West African States FAO Food and Agriculture Organization FDI Foreign Direct Investment FnB Food and Beverage company FISAN Food Security and Nutrition Investment Fund GDP Gross Domestic Product Ha Hectare I3N Nigeriens Feeding Nigeriens Initiative ICT Information and Communications Technology IRR Internal Rate of Return K Thousand KG Kilogram kWh kilowatt hour MFI Microfinance institutions MNO Mobile Network Operator MT Metric Ton NESAP Niger Solar Electricity Access Project NGO Non-governmental organization PAYG Pay as You Go PICS Purdue Improved Crop Storage R&D Research and Development REGIS-AG Resilience and Economic Growth in the Sahel – Accelerated Growth SFDA Saudi Food and Drug Authority SHS Solar home system SME Small and Medium Enterprise USAID Investment Support Program (ISP) Niger – Investment & Partnership Mapping SMLS Small multi-room lighting system SNV SNV Netherlands Development Organization SOE State-owned enterprise SPS Sanitary and Phytosanitary SSA Sub-Saharan Africa UAE United Arab Emirates USAID United States Agency for International Development USD United States Dollar VSF Veterinarians Without Borders WTO World Trade Organization USAID Investment Support Program (ISP) Niger – Investment & Partnership Mapping EXECUTIVE SUMMARY USAID is working to spur private sector-led growth in Niger by supporting potential domestic or international investors. Niger has experienced an average annual GDP growth rate of 6.6% over the last 10 years, mainly driven by agriculture, livestock, trade and telecommunications. Niger’s exports – primarily comprised of uranium, oil seeds, and refined petroleum – more than doubled between 2015 and 2017.1 Some key initiatives are underway to improve the business environment and attract more investment, including the revision of the labor law to address human capital constraints and the establishment of an agency for the support of public-private partnership investments, among others. However, Niger faces key challenges related to its geography and governance. High road transportation costs – which are exacerbated by poor infrastructure – increase the price of goods produced in the country. Niger has one of the world’s fastest growing working-age population, but the labor market is faced with many challenges and much of the labor force is engaged in the informal sector. Niger’s GDP per capita at USD 378 is among the lowest in the world and limits purchasing power–but this is mitigated to a certain extent by the country’s proximity to Nigeria with the potential to serve a market of 200 million people.2 In spite of these challenges, there are readily available investment opportunities in areas where Niger has both strong current activity and growth potential in regional and international exports – this combination justifies the efforts investors will need to make to overcome key structural challenges of the Nigerien market (landlocked geography, insecurity, poor infrastructure). This report provides analysis of Niger’s main sub-sectors with potential for commercial investment. From an initial 12 pre-identified sectors of opportunity, over thirty sub-sectors were included in the initial screening for commercial opportunities. What emerged was three categories of sub- sectors that differed based on their potential for commercial returns and potential for social impact (as measured by potential for job creation for Nigeriens). Further analysis was conducted of the sectors with both high commercial and job creation potential: cowpeas, onions, meat, dairy, hides, skins and leather, moringa, artisanal goods, solar, transport, and ICT/digital infrastructure. Analysis of the market demand, competitiveness, and commercial viability led to a selection of four commercial opportunities for which financial models of returns on investment and business cases were developed. Of the four business cases, meat and cowpeas were identified as having the