* Economy had been seen growing 6.2 percent
* Islamist attack on Areva uranium mine halted production
for a month
* Increased military spending could undermine efforts to
tackle budget deficit
By Daniel Flynn
NIAMEY, Sept 17 Niger's economy will grow by 5.8
percent this year, slightly less than previously forecast, as
security problems weigh on the crucial uranium mining sector,
the International Monetary Fund said.
The IMF's resident representative in Niger, Ahmed Zorome,
said increased military spending after May suicide attacks by
Islamists could also cause some budgetary slippage despite
government efforts to reduce a substantial budget deficit.
An Islamist suicide attack on a uranium mine operated by
France's Areva in the northern town of Arlit on May
23 shut down production for more than a month. Uranium accounts
for more than 40 percent of exports from Niger, the world's
fourth largest producer.
The IMF had previously forecast Niger's 3.6 trillion CFA
franc ($7.3 billion) economy would grow by 6.2 percent this
year, after a 11.4 percent leap in 2012 on the back of rising
oil production. China's CNPC started pumping oil from
its Agadem bloc in Niger in late 2011.
"Growth expectations for the economy have been revised down
to around 5.8 percent this year, against the backdrop of the
attack on the uranium mine," Zorome said in an interview.
"It is not the only reason but the security context is not
very conducive to growth," he said.
Niger, which ranks bottom in the world in U.N. human
development index, deployed some 680 troops to neighbouring Mali
as part of a French-led military intervention that destroyed an
Islamist enclave this year. The troops now form part of a U.N.
peacekeeping mission as France winds down its presence.
President Mahamadou Issoufou's government is making a
concerted effort to increase tax revenues and tackle corruption,
Zorome said. Niger improved 21 places on graft watchdog
Transparency International's index of corruption perceptions in
2012, to rank in 113th place from 174 countries.
But, at around 16.5 percent of gross domestic product
(GDP), government tax revenues remain among the lowest in West
Africa and well below spending, running at around 27 percent of
GDP on average according to IMF figures.
A large informal economy and low levels of disposable income
due to poverty makes it difficult for the government to capture
tax revenues, Zorome said.
"It is quite possible that for the current year some
slippages may also come from security expenditures given that
the country had to upgrade its defences against urban
terrorism," Zorome said.
"It has a substantial negative impact on the budget
deficit," he added.
High military spending already widened the budget deficit by
one percentage point of GDP more than forecast last year, he
However, the start of oil production in 2011 in a joint
partnership between CNPC and the Niger state offered hope for an
improvement in government finances. Production is running at
around 16,500 barrels per day, Zorome said.
"The oil industry has picked up nicely and if it keeps on
that trend it will become a major contributor to the budget and
also to the ability of the country to invest in productive
infrastructures, like roads, schools, and telecommunications,"
he said. ($1 = 491.3900 CFA francs)
(Additional reporting by Abdoulaye Massalatchi; Editing by Joe