Economy of Senegal
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Predominantly rural and with limited natural resources, the Economy of Senegal gains most of its foreign exchange from fish, phosphates, groundnuts, tourism, and services. Its agricultural sector is highly vulnerable to variations in rainfall and changes in world commodity prices. Dakar, as 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 regio.n It also boasts one of the best developed tourist industries in Africa. Senegal still 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).
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[edit] History
The GDP per capita[1] of Senegal shrank by 1.30% in the 60s. But it registered a peak growth of 158% in the 70s. In the turbulent 80s, it still expanded 43%. However this proved unsustainable and it consequently shrank by 40% in the 90s.
[edit] 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. Even if the end result is an increase on the GDP, the social consequences of this devaluation was really hard on the population, because most of the essentials goods were imported. It meant that over night, the price of goods like milk, rice, fertilizer and machinery doubled. In return, the country suffered a large exode and the most educated persons and those who could afford it fled the country. After seeing its economy contract by 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, in exchange of the completion of a privatization programs proposed by the government and approved by the IMF
[edit] Current state of economy
[edit] 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.
[edit] 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. However, 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.
[edit] Notable Senegalese companies
Large Senegalese companies include Senelec, the national power company; Air Sénégal International airlines; Sonatel, the principal telecommunications provider in Senegal; and Industrie chimique du Sénégal, a chemical processing company.
[edit] Trade unions
Senegalese trade unions include: Dakar Dem Dikk Workers Democratic Union Democratic Union of Senegalese Workers National Confederation of Senegalese Workers National Union of Autonomous Trade Unions of Senegal
[edit] 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.
[edit] Regional and International economic groupings
- Organization of African Unity (OAU)/Africa Union
- The Franc Zone
- The Lomé Convention
- Economic Community of West African States (ECOWAS)
- Union économique et monétaire Ouest Africaine (UEMOA)
- The African Groundnut Council
- the Organisation pour la mise en valeur du fleuve Sénégal
[edit] Statistics[3]
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- GDP (purchasing power parity)
U.S.$21.54 billion (2006 est.)
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- GDP (official exchange rate)
U.S.$8.331 billion (2006 est.)
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- GDP - real growth rate
2% (2006 est.)
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- GDP - per capita (PPP)
U.S.$1,800 (2006 est.)
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- GDP - composition by sector
agriculture: 18.3% industry: 19.2% services: 62.5% (2006 est.)
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- Population below poverty line
54% (2001 est.)
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- Household income or consumption by percentage share
lowest 10%: 2.6% highest 10%: 33.5% (1995)
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- Inflation rate (consumer prices)
2% (2006 est.)
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- Investment (gross fixed)
41% of GDP (2006 est.)
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- Labor force
4.749 million (2006 est.)
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- Labor force - by occupation
agriculture: 77% industry and services: 23% (1990 est.)
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- Unemployment rate
48%; note - urban youth 40% (2001 est.)
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- Distribution of family income - Gini index
41.3 (1995)
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- Budget
- revenues
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- U.S.$2.023 billion
- expenditures
- U.S.$2.377 billion; including capital expenditures of $357 million (2006 est.)
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- Public debt
17.8% of GDP (2006 est.)
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- Industries
agricultural and fish processing, phosphate mining, fertilizer production, petroleum refining, construction materials, ship construction and repair
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- Industrial production growth rate
3.2% (2006 est.)
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- Electricity - production
1.453 billion kWh (2004)
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- Electricity - consumption
1.351 billion kWh (2004)
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- Electricity - exports
0 kWh (2004)
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- Electricity - imports
0 kWh (2004)
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- Oil - production
0 bbl/day (2004 est.)
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- Oil - consumption
31,000 bbl/day (2004 est.)
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- Natural gas - production
50 million cu m (2004 est.)
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- Natural gas - consumption
50 million cu m (2004 est.)
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- Natural gas - exports
0 cu m (2004 est.)
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- Natural gas - imports
0 cu m (2004 est.)
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- Current Account Balance
-U.S.$895.2 million (2006 est.)
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- Agriculture - products
peanuts, millet, maize, sorghum, rice, cotton, tomatoes, green vegetables; cattle, poultry, pigs; fish
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- Exports
U.S.$1.478 billion f.o.b. (2006 est.)
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- Exports - commodities
fish, groundnuts (peanuts), petroleum products, phosphates, cotton
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- Exports - partners
Mali 18.5%, India 14.3%, France 6.9%, Italy 5.1%, The Gambia 5% (2006)
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- Imports
U.S.$2.98 billion f.o.b. (2006 est.)
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- Imports - commodities
food and beverages, capital goods, fuels
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- Imports - partners
France 21.3%, Nigeria 10.6%, UK 8.9%, Netherlands 4.9%, PR of China 4.8%, Brazil 4.1% (2006)
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- Reserves of foreign exchange and gold
U.S.$1.18 billion (2006 est.)
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- Debt - external
U.S.$1.628 billion (2006 est.)
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- Economic aid - recipient
U.S.$449.6 million (2003 est.)
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- Currency (code)
Communaute Financiere Africaine franc (XOF); note - responsible authority is theCentral Bank of West African States
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- 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 €
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- Fiscal year
calendar year
[edit] 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 $4-5 per day.
[edit] See also
- Senegal
- Tourism in Senegal
- Agriculture in Senegal
- Communications in Senegal
- Transport in Senegal
- List of universities in Senegal
- Economy of Africa
- CFA franc
[edit] References
- ^ [http://earthtrends.wri.org/text/economics-business/variable-638.html EarthTrends -> Economics, Business, and the Environment -> Variable -> Searchable Database Results: Economics, Business, and the Environment — GDP: GDP per capita, current US dollars Units: Current US$ per person]
- ^ 2006
- ^ CIA World Factbook 2006, Unless otherwise noted
- This article contains material from the CIA World Factbook which, as a U.S. government publication, is in the public domain. [1]
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[edit] External links
- Economy of Senegal at the Open Directory Project
- (French) Official Website: Republique du Senegal: MINISTÈRE DE L'ECONOMIE ET DES FINANCES.
- (French) Annuaire des services administratifs, Republique du Senegal: MINISTÈRE DE L'ECONOMIE ET DES FINANCES.
- SENEGAL: CHINESE GOODS STIMULATE INFORMAL TRADING ECONOMY. Interpress Service, Publication Date: 28-AUG-07.
- François Boye. A Retrospective Analysis of the Senegalese Economy, December 1990: Conference paper from School of Business, Montclair State University.
- ECOWAS.info: Economy of Senegal.
- The Senegalese Country Commercial Guide, published by the United States government to aid the export of US products to foreign markets, can be found at: Senegalese Country Commercial Guides.
- Wages of Senegalese workers
- Institute for Security Studies Senegal Economic Summary, 2001.
- Senegal Commerce Business and Trading: Republic of Senegal. (/)
- Senegal: Economy. Aggregated press articles at OneWorldAfrica
- African Studies, Columbia University: Senegal, Banking and investment information.
[edit] Published works
- Amadou Sakho. Senegal's slide from "model economy" to "least developed country". Misanet.com / IPS (2001).
- Birahim Bouna Niang. A diagnosis of Senegal's public external debt, Provisional report. Republic of Senegal Ministry of Economy and Finance, Political Economy Unit (UPE). January 2003.
- Pamela Cox. The Political Economy of Underdevelopment: Dependence in Senegal. African Affairs, Volume 79, Number 317. Pp. 603-605
- Maghan Keita. The Political Economy of Health Care in Senegal, Journal of Asian and African Studies, Vol. 31, No. 3-4, 145-161 (1996)
- John Waterbury and Mark Gersovitz, eds., The political economy of risk and choice in Senegal .Frank Cass & Co. Ltd, London, (1987) ISBN 0-7146-3297X
- Christopher L. Delgado, Sidi Jammeh. The Political Economy of Senegal Under Structural Adjustment. School of Advanced International Studies, Johns Hopkins University (1991). ISBN 0-275-93525-6
- Cathy L. Jabara, Robert L. Thompson. Agricultural Comparative Advantage under International Price Uncertainty: The Case of Senegal. American Journal of Agricultural Economics, Vol. 62, No. 2 (May, 1980), pp. 188-198
- Peter Mark. Urban Migration, Cash Cropping, and Calamity: The Spread of Islam among the Diola of Boulouf (Senegal), 1900-1940. African Studies Review, Vol. 21, No. 2 (Sep., 1978), pp. 1-14
- Monique Lakroum. Le Travail Inegal: Paysans et Salaries Senegalais Face a la Crise des Annees Trente. Paris (1982).
- Ibrahima Thioub, Momar-Coumba Diop, Catherine Boone. Economic Liberalization in Senegal: Shifting Politics of Indigenous Business Interests. African Studies Review, Vol. 41, No. 2 (Sep., 1998), pp. 63-89
- Catherine Boone. Merchant Capital and the Roots of State Power in Senegal, 1930-1985, McGill, (1995).
- (French) Jean Copans, Philippe Couty, Jean Roch, G. Rocheteau. Maintenance sociale et changement economique au Senegal I: Doctrine economique et pratique du travail chez les Mourides. Paris (1974).
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