Niger, who now top Group G with nine points, prevailed through goals on either side of the beak from Dankwa E Kofi and Ouwa Moussa Maazou, while Andile Jali was on target for the visitors.
The defeat - Bafana Bafana's first of the campaign - leaves them a point behind Mena with the final round of matches to play.
"They did not play any better than us but they found those two chances and scored," said Modise, who struck the woodwork at the General Seyni Koutche Stadium.
"I really feel that we were unfortunate to be on the losing side, especially having created more chances, but that is how football goes sometimes."
Bafana now need to beat Sierra Leone at home next month and hope that Egypt, who fielded an experimental side in Saturday's loss to the Leone Stars, either draw or defeat Niger in Cairo.