May 27, 2009 / 3:21 PM / 9 years ago

Political uncertainty worries Niger investors

* Businessmen worried by dissolution of parliament

* Political uncertainty grips uranium exporter

By Abdoulaye Massalatchi

NIAMEY, May 27 (Reuters) - Niger’s decision to dissolve parliament has worried investors already closely watching a debate over whether the president can extend his rule of the uranium exporter, businessmen and politicians said on Wednesday.

President Mamadou Tandja, who is due to step down after completing two terms in power later this year, dissolved parliament on Tuesday, a day after Niger’s constitutional court declared his bid for a referendum on staying in power unlawful.

That bid has divided the government and sparked demonstrations, fuelling political instability in a nation that has attracted investors such as France’s Areva as it seeks to become one of the world’s top exporters of uranium.

“It is clear that in this context, investors are hesitating over or delaying their projects,” said Abdoulkarim Aksar, the local manager of London-listed Niger Uranium, which has exploration licenses in the Tim Mersoi Basin in Niger’s north.

“One way or another, the situation is worrying,” he added.

As the cost of oil and fears over global warming have rekindled interest in nuclear energy, Niger has handed out over 130 prospecting licenses, most of which have been for uranium.

But just 10 percent of these are currently active as the political uncertainty comes on top of a two-year revolt led by Tuareg nomads calling for greater autonomy for the north, and a larger slice of the revenues from natural resources.

Niger was due to hold presidential and parliamentary polls at the end of the year but, according to the constitution, a new parliament must now be elected within three months.

“No one can say if the parliamentary elections will be organised under a new constitution or the one currently in place. We’ll have to see,” Mariama Alhassane, vice president of the dissolved parliament and a supporter of Tandja’s, was quoted saying on local radio on Wednesday.

PERIOD OF UNCERTAINTY

The 70-year-old Tandja had previously vowed to stand down after two terms in office but now says he is seeking constitutional reform to allow him to remain in power as the population wants him to finish projects he has begun.

Analysts, however, say it may have more to do with a projected spike in uranium revenues.

Areva is developing the Imouraren mine at a cost of 1.2 billion euros ($1.67 billion) while Niger has also signed deals with China and South Korea. (For a FACTBOX on firms with uranium projects in Niger, click on).

After a series of coups and successful third term bids across Africa in recent years, West Africa’s regional body ECOWAS has warned that Niger risks economic sanctions if the debate over extending Tandja’s mandate is not handled correctly.

“The country is entering a period of uncertainty which makes me nervous,” Nabazago Tawaye, a senior official at the ‘Nouvelles Techniques d’Impression’ printing company in Niamey.

“It is making everyone nervous. Tell me who would invest in the current conditions? Everyone knows things are not going well.”

Writing by David Lewis; Editing by Daniel Magnowski

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