Niger loses aid as Western countries condemn coup

NIAMEY, July 29 (Reuters) - The European Union and France have cut off financial support to Niger and the United States has threatened to do the same, after military leaders this week announced they had overthrown the democratically elected president, Mohamed Bazoum.

Niger is one of the poorest countries in the world, receiving close to $2 billion a year in official development assistance, according to the World Bank. It is also a security partner of former colonial power France and the United States, which both use it as a base to fight an Islamist insurgency in West and Central Africa's wider Sahel region.

Niger's foreign allies so far have refused to recognize the new military government led by General Abdourahamane Tiani, previously head of the presidential guard, who officers declared head of state on Friday.

Bazoum has not been heard from since early Thursday when he was confined within the presidential palace, although the European Union, France and others say they still recognize him as the legitimate president.

"In addition to the immediate cessation of budget support, all cooperation actions in the domain of security are suspended indefinitely with immediate effect," EU foreign policy chief Josep Borrell said in a statement.

The French foreign ministry said France had suspended all development aid and budget support with immediate effect, demanding a prompt return to constitutional order with Bazoum back in charge. French development aid for Niger was at around 120 million euros ($130 million) in 2022, and expected to be slightly higher this year.

U.S. Secretary of State Antony Blinken said: "The very significant assistance that we have in place for people in Niger is clearly in jeopardy."

The United States has two military bases in Niger with some 1,100 soldiers, and also provides hundreds of millions of dollars to the country in security and development aid.

On the bustling streets of the capital Niamey, business owners worried about uncertainty damaging trade, and about the prospect of financial flows from abroad abruptly drying up.

"We've noticed that our clientele have dropped. There are hardly any customers at all," lamented electronics shop owner Abdoul Karim Mahama.

Niamey-based economist Abdoulaye Soly said: "All externally-funded projects will come to a halt. Development projects financed by the EU, World Bank, IMF and others will be halted. Budgetary aid given to Niger will be stopped."

Niger is a key partner of the European Union in helping curb the flow of irregular migrants from sub-Saharan Africa. The EU also has a small number of troops in Niger for a military training mission.

The bloc allocated 503 million euros ($554 million) from its budget to improve governance, education and sustainable growth in Niger over 2021-2024, according to its website. Through its European Peace Facility, the EU had approved around 70 million euros to support Niger's armed forces since July last year, including 4.7 million euros of weapons approved on June 8.

The United Nations said the coup has not affected its deliveries of humanitarian aid.

It was difficult to assess how much support the coup has among the population. Some crowds came out in support of Bazoum on Wednesday, but the following day coup supporters also took to the streets.

The Economic Community of West African States (ECOWAS), and the West African Monetary Union will hold emergency summits in Nigeria on Sunday to discuss the situation, and further economic and financial sanctions could be decided.

After an emergency meeting on Friday, the African Union issued a statement demanding the military return to their barracks and restore constitutional order within 15 days. It did not say what would happen after that.