The government of Niger is planning to borrow up to $500 million from international banks next year, we learnt. But it’s not specified whether the operation is a syndicated loan or a Eurobond issue. For the time being, the country is in talks with the World Bank to secure a partial guarantee.
The money Niger will mobilize will be used to restructure its public debt for longer maturity terms and interest rates that better match with its liquidity constraints. The country has to refund a set of bonds over the 2019-20 period for about $320 million; and according to experts, such an amount cannot be raised on the WAEMU capital market which has become very constraining for minor borrowers like Niger.
To deal with this scenario, the government could not rely on its domestic banking system, which closed the FY2018 with an overall loan-to-deposit ratio of more than 100%. An indicator that shows that commercial banks have little flexibility to find massive financing solutions for the state.
In a recent note, the rating agency Moody's points out that the country’s public debt remains bearable with an average maturity profile of between 8 and 10 years. 56% of its stock are concessional loans from multilateral institutions and 13% comes from bilateral debt. Big oil projects under way in the country are supported by the private sector and the agriculture projects are backed by international initiatives. Finally, 16% of Niger's debt is denominated in euros, a currency with which the country has a fixed parity, reducing the risk of volatility in debt service.
Idriss Linge