Niger defaults up to half billion in debt payment

Confidence UbaniFebruary 20, 20241 Mins read609

It has been reported that the Republic of Niger is facing escalating debt defaults, with the country falling behind on payments totaling $519 million since the military coup in July.

The West African debt management agency, UMOA-Titres, reported a recent default of 13.4 billion CFA francs ($22 million). The amount brings the total default to about $519 million and emphasizes the ongoing economic challenges in Niger, exacerbated by regional sanctions.

The missed repayment, due on February 16, triggered concerns as Niger has previously missed payments in August, November, and January. According to UMOA-Titres, the defaults are connected to sanctions imposed by the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA).

The debt management agency issued a statement affirming their vigilant monitoring of the situation in collaboration with relevant institutions.

Recall that sanctions were initially enforced in 2023 following the coup that ousted President Mohamed Bazoum. The July 30 coup prompted ECOWAS and UEMOA to suspend Niger from regional financial markets. The repercussions were severe, including the freezing of external bank assets, suspension of financial transactions with West African countries, and the cancellation of a planned 30 billion CFA franc ($51 million) bond issuance by the Central Bank of West African States (BCEAO).

International aid, a significant portion of Niger’s annual budget, was halted, leaving the country grappling with economic hardship. Neighboring nations closed their borders, electricity supply was disrupted, and over 70 percent of power sourced from Nigeria was severed, as West Africa Weekly earlier reported.

Despite stringent sanctions, the government consolidated its power and announced its departure from ECOWAS alongside Mali and Burkina Faso. In further retaliation, the government of the Republic of Niger placed a ban on all commercial and international flights coming from or going to Nigeria. The three Junta nations are now reportedly contemplating discontinuing the use of the CFA currency. It is unclear, at the moment, how Niger intends to tackle its debt crisis.