DAKAR: The International Monetary Fund has approved a three-year loan deal for Niger worth around $276 million, the IMF said on Thursday, warning that security risks threatened the West African nation's economic outlook.

The decision allows the immediate disbursement of $55 million to support basic infrastructure and social spending plans, desperately needed by the 10 million Nigeriens - or 40% of the population - living in extreme poverty, according to UN data.

The coronavirus pandemic slowed economic growth by over two percentage points to 3.6% in 2020. But the IMF forecasts a rebound to 5.4% this year and increased momentum in the medium term with the start of oil exports via a new pipeline to the Atlantic coast in neighbouring Benin.

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"This broadly favourable outlook is, however, subject to significant downside risks related to heightened security challenges in the Sahel region and Niger's increased exposure to the effects of climate change," IMF Deputy Managing Director Antoinette Sayeh said in a statement.

Niger lies in the semi-arid Sahel region, where armed Islamist groups linked to al Qaeda and Islamic State have destabilised swathes of territory in recent years. They have carried out regular attacks that have killed thousands of people and displaced millions.

Niger ranks last out of 189 countries in the United Nations' Human Development Index, which measures health, education and quality of life.