AFRICA : FOCUS SENEGAL
The West African nation of Senegal is bordered by Guinea-Bissau, Mali, and Mauritania and surrounds its much smaller Anglophone neighbor, Gambia. Relatively dry, its shoreline runs along the Atlantic Ocean at the Sahel’s westernmost point. Up to half of its population of 15.4 million (2016) is concentrated around Dakar and other urban areas.
Growth has been high, over 6% since 2014, and the forecast remains optimistic, particularly with oil and gas production expected in 2022. Growth accelerated to over 7% in 2017 and is expected to remain over 6% in 2018 and in the following years. All sectors supported growth in 2018, but agriculture – due to support programs, robust external demand, and large infrastructure investments in the context of Emerging Senegal Plan (Plan Sénégal Emergent or PSE) implementation remain key drivers. Maintaining high growth in the future will require additional efforts to strengthen the efficiency of public investment and to insure the stability of the macroeconomic framework, while sustained reforms to reduce remaining structural constraints would also help boost private investment. Looking forward, growth stands to substantially accelerate when production of offshore oil and gas begins in 2022.
Public debt continued to increase, but Senegal remains at low risk of distress, partly due to GDP rebasing. Debt (using an expanded perimeter including State Owned Enterprises (SOEs) and para-public entities) is estimated to have increased from 60.6% of GDP in 2017 to 64.5% in 2018. This is partially linked to Eurobonds issuance (around $2.2 billion in March 2018) in good financial conditions. GDP rebasing – which increased GDP by about 30% – and buying back expensive debt with part of the Eurobond proceeds helped maintain a low level of debt distress. Continued growth and fiscal discipline would help reduce debt as a share of GDP since 2019.
High growth and investments also help explain stronger imports. Exports increased rapidly – thanks to strong performance of gold, phosphoric acid and food products – but could not outpace imports. Since 2022, the external balance is expected to improve as oil and gas exploitation and exports start.
Source WORLDBANK – Apr 13, 2019 Click here for full report
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