Economy of Senegal

Dakar, Senegal's place de l'Indépendance: a center of government, banking and trade. In the background is the commercial port and the tourist area, Gorée island.
The headquarters of the Central Bank of West African States, Dakar.
A jet of the national airline, Air Senegal International.
A sugar processing plant of the Compagnie sucrière sénégalaise at Richard Toll.
The main street of the tourist resort town of Saly.
Many small businesses, like this tyre repair shop in Touba, are financed through the Mouride Islamic brotherhood.
Paris Salon international de l'Agriculture 2007: the government actively promotes agricultural exports to markets outside the developing world.
Small scale fishing for local markets is visible all through the country. Here fishermen return to the beach at Soumbedioun, Dakar.
A Rock phosphate surface mine in western Senegal, near Taïba.

Predominantly rural, and with limited natural resources, the Economy of Senegal gains most of its foreign exchange from fish, phosphates, groundnuts, tourism, and services. The agricultural sector of Senegal is highly vulnerable to variations in rainfall and changes in world commodity prices. The former capital of French West Africa, is also home to banks and other institutions which serve all of Francophone West Africa, and is a hub for shipping and transport in the region.

Senegal also has one of the best developed tourist industries in Africa. Senegal depends heavily on foreign assistance, which in 2000 represented about 32% of overall government spending—including both current expenditures and capital investments—or CFA 270.8 billion (U.S$. 361.0 million). Senegal is a member of the World Trade Organization.

History

The GDP per capita[1] of Senegal shrank by 1.30% in the 60s. However, it registered a peak growth of 158% in the 70s, and still expanded 43% in the turbulent 1980s. However, this proved unsustainable and the economy consequently shrank by 40% in the 90s.

IMF and 1990s economic reforms

Since the January 1994 CFA franc devaluation, the International Monetary Fund (IMF), the World Bank, and other multilateral and creditors have been supporting the Government of Senegal’s structural and sectoral adjustment programs. The broad objectives of the program have been to facilitate growth and development by reducing the role of government in the economy, improving public sector management, enhancing incentives for the private sector, and reducing poverty.

In January 1994, Senegal undertook a bold and ambitious economic reform program with the support of the international donor community. This reform began with a 50% devaluation of Senegal's currency, the CFA franc, which was linked at a fixed rate to the French franc. Government price controls and subsidies have been steadily dismantled as another economic reform.

This currency devaluation had severe social consequences, because most essentials goods were imported. Overnight, the price of goods such as milk, rice, fertilizer and machinery doubled. As a result, Senegal suffered a large exodus, with many of the most educated people and those who could afford it choosing to leave the country.

After an economic contraction of 2.1% in 1993, Senegal made an important turnaround, thanks to the reform program, with a growth in GDP averaging over 5% annually during 1995-2004. Annual inflation had been pushed down to the low single digits.

As a member of the West African Economic and Monetary Union (WAEMU), Senegal is working toward greater regional integration with a unified external tariff and a more stable monetary policy. Senegal still relies heavily upon outside donor assistance, however. Under the IMF's Highly Indebted Poor Countries debt relief program, Senegal will benefit from eradication of two-thirds of its bilateral, multilateral, and private sector debt, contingent on the completion of privatization program proposed by the government and approved by the IMF.

Current state of economy

External trade and investment

The fishing sector has replaced the groundnut sector as Senegal's export leader. Its export earnings reached U.S.$239 million in 2000. The industrial fishing operations struggle with high costs, and Senegalese tuna is rapidly losing the French market to more efficient Asian competitors.

Phosphate production, the second major foreign exchange earner, has been steady at about U.S.$95 million. Exports of peanut products reached U.S.$79 million in 2000 and represented 11% of total export earnings. Receipts from tourism, the fourth major foreign exchange earner, have picked up since the January 1994 devaluation. In 2000, some 500,000 tourists visited Senegal, earning the country $120 million.

Senegal’s new Agency for the Promotion of Investment (APIX) plays a pivotal role in the government’s foreign investment program. Its objective is to increase the investment rate from its current level of 20.6% to 30%. Currently, there are no restrictions on the transfer or repatriation of capital and income earned, or investment financed with convertible foreign exchange. Direct U.S. investment in Senegal remains about U.S.$38 million, mainly in petroleum marketing, pharmaceuticals manufacturing, chemicals, and banking. Economic assistance, about U.S.$350 million a year, comes largely from France, the IMF, the World Bank, and the United States. Canada, Italy, Japan, and Germany also provide assistance.

Senegal has well-developed though costly port facilities, a major international airport serving 23 international airlines, and direct and expanding telecommunications links with major world centers.

Indebtedness

With an external debt of U.S.$2,495 million,[2] and with its economic reform program on track, Senegal qualified for the multilateral debt relief initiative for Heavily Indebted Poor Countries (HIPC). Progress on structural reforms is on track, but the pace of reforms remains slow, as delays occur in implementing a number of measures on the privatization program, good governance issues, and the promotion of private sector activity.

Macroeconomic indicators show that Senegal turned in a respectable performance in meeting IMF targets in 2000: annual GDP growth increased to 5.7%, compared to 5.1% in 1999. Inflation was reported to be 0.7% compared to 0.8% in 1999, and the current account deficit (excluding transfers) was held at less than 6% of GDP.

Trade unions

Further information: Trade unions in Senegal

Senegalese trade unions include The National Confederation of Senegalese Workers (CNTS) and its affiliate the Dakar Dem Dikk Workers Democratic Union (Dakar Public Transport workers), The Democratic Union of Senegalese Workers (UTDS), The General Confederation Of Democratic Workers Of Senegal (CGTDS) and the National Union of Autonomous Trade Unions of Senegal (UNSAS). Mean wages were $0.99 per man-hour in 2009.

Stock exchange

Senegal's corporations are included in the Bourse Régionale des Valeurs Mobilières SA (BRVM), a regional stock exchange serving the following eight West African countries, and located in Abidjan, Cote d'Ivoire.

Regional and international economic groupings

Statistics[3]

Senegal's export destinations, 2006.
GDP (purchasing power parity)

U.S.$33.61 billion (2014 est.)

GDP (official exchange rate)

U.S.$15.58 billion (2014 est.)

GDP - real growth rate

4.5% (2014 est.)

GDP - per capita (PPP)

U.S.$2,300 (2014 est.)

GDP - composition by sector

agriculture: 15.6% industry: 23.8% services: 60.6% (2014 est.)

Population below poverty line

46.7% (2011 est.)

Household income or consumption by percentage share

lowest 10%: 2.5% highest 10%: 31.1% (2011)

Inflation rate (consumer prices)

-0.5% (2014 est.)

Investment (gross fixed)

41% of GDP (2006 est.)

Labor force

4.876 million (2009 est.)

Labor force - by occupation

agriculture: 75% industry and services: 25% (1990 est.)

Unemployment rate

48%; note - urban youth 40% (2001 est.)

Distribution of family income - Gini index

40 (2005)

Budget
revenues
U.S.$2.023 billion
expenditures
U.S.$2.377 billion; including capital expenditures of $357 million (2006 est.)
Public debt

22.5% of GDP (2007 est.)

Industries

agricultural and fish processing, phosphate mining, fertilizer production, petroleum refining, construction materials, ship construction and repair

Industrial production growth rate

5.2% (2007 est.)

Electricity - production

2.159 billion kWh (2007)

Electricity - consumption

1.859 billion kWh (2007)

Electricity - exports

0 kWh (2004)

Electricity - imports

0 kWh (2004)

Oil - production

0 bbl/d (0 m3/d) (2004 est.)

Oil - consumption

35,000 bbl/d (5,600 m3/d) (2007 est.)

Natural gas - production

50 million cu m (2005 est.)

Natural gas - consumption

50 million cu m (2004 est.)

Natural gas - exports

0 cu m (2004 est.)

Natural gas - imports

0 cu m (2004 est.)

Current Account Balance

U.S.-$1.458 billion (2007 est.)

Agriculture - products

peanuts, millet, maize, sorghum, rice, cotton, tomatoes, green vegetables; cattle, poultry, pigs; fish

Exports

U.S.$1.65 billion f.o.b. (2007 est.)

Exports - commodities

fish, groundnuts (peanuts), petroleum products, phosphates, cotton

Exports - partners

Mali 18.4%, France 8.9%, Italy 5.8%, India 5.6% The Gambia 5.1% (2008 est)

Imports

U.S.$3.650 billion f.o.b. (2010 est.)

Imports - commodities

food and beverages, capital goods, fuels

Imports - partners

France 22.2%, Nigeria 11.6%, Brazil 8.1%, China 7.4%, Thailand 5.2%, Belgium 4.5% (2008)

Reserves of foreign exchange and gold

U.S.$1.18 billion (2006 est.)

Debt - external

U.S.$1.88 billion (2010 est.)

Economic aid - recipient

U.S.$449.6 million (2003 est.)

Currency (code)

Communaute Financiere Africaine franc (XOF); note - responsible authority is the Central Bank of West African States

Exchange rates

Communaute Financiere Africaine francs (XOF) per US dollar - 522.89 (2006), 527.47 (2005), 528.29 (2004), 581.2 (2003), 696.99 (2002). In 2006, 1 € = 655.82 XOF (West-African CFA), or 1 XOF = 0.001525 € / € to XOF / XOF to €

Fiscal year

calendar year

Macro-economic trends

This is a chart of trend of gross domestic product of Senegal at market prices estimated by the International Monetary Fund with figures in millions of CFA Francs.

Year Gross Domestic Product US Dollar Exchange Inflation Index (2000=100)
1980 652,221 211.27 CFA Francs ?
1985 1,197,462 449.32 CFA Francs 66
1990 1,603,679 272.27 CFA Francs 66
1995 2,309,091 499.15 CFA Francs 93
2000 3,192,019 709.96 CFA Francs 100
2005 4,387,230 526.55 CFA Francs 107

Average wages in 2007 hover around $4–5 per day.

See also

References

  1. ↑ EarthTrends -> Economics, Business, and the Environment -> Variable -> Searchable Database Results: Economics, Business, and the Environment — GDP: GDP per capita, Units: Current US$ per person
  2. ↑ 2006
  3. ↑  This article incorporates public domain material from the CIA World Factbook document "2014 edition".

External links

Published works

This article is issued from Wikipedia - version of the Wednesday, May 04, 2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.