The tournament favorite finished third in Group C after the loss while Tunisia and Guinea qualified for the quarter-finals.
Tunisia humbled Niger 5-0 in the other group game played at the same time to top the group.
Ibrahima Sory Sankhnon scored the lone goal at the stroke of half time to give the Guinea team the lead.
The Nigerians, who beat Niger 4-1 in their opening match, attacked in the second half but failed to score.
At the Nyamirambo Stadium, Tunisia was in good form and run rings around a 10-man Niger side that had Youssouf Oumarou Alio send-off.
Saad Bguir scored the opening goal after five minutes before getting his second of the day after 39 minutes.
Tunisia’s leading scorer at the tournament Ahmed Akaichi made it 3-0 after 76 minutes before Mohamed Amine Ben Amour and substitute Essifi Hichem netted two more goals.
“We are happy to qualify as Group leaders. We shall now go and plan for the knock out stage,” said a happy Tunisian coach Hatem Missaoui.
Tunisia and Guinea join Rwanda, Democratic Republic of Congo, Zambia and Cote d’Ivoire in the quarter finals. Enditem