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The country in brief
A Sahelian country situated in the most western part of Africa, bordering the Atlantic Ocean, Senegal surrounds Gambia, its smaller neighbor, and shares its borders with Guinea, Mali and Mauritania. The country has at least 15.4 million inhabitants (2016), of which about a quarter is concentrated around the capital, Dakar, and nearly half in other urban areas. Senegal is one of the most important economic centers in West Africa
Political situation
Senegal is also one of the most stable countries in Africa. Since his independence in 1960, he has experienced three peaceful political alternations. Its current President, Macky Sall, was elected in March 2012. In 2016, a constitutional referendum reduced the presidential term from seven to five years. Parliamentary elections were held in July 2017. The ruling coalition, Benno Bokk Yakaar ("Union around the same ideal" in Wolof, one of the main languages of the country) won 125 seats out of 165, with 49, 47% of the votes cast. Twelve other parties also sit in the National Assembly, including Wattu Senegal (19 seats), Manko Taxawu Senegal (7 seats) and the Party of Unity and Gathering (3 seats). The next presidential election is scheduled to take place in February 2019.
Economic situation
In 2014, after decades of very modest growth, Senegal adopted a new development plan: the Plan Sénégal Émergent (PSE) aims to make take the country out of this cycle of weak growth and insufficient progress in reducing poverty. According to preliminary figures, economic growth would have been 6.8% in 2017, the third consecutive year of growth above 6%. This result is partly due to the implementation of the national development plan, which has boosted public investment and stimulated private sector activity, as well as a favorable macroeconomic framework for growth and favorable exogenous conditions ( good weather conditions and relatively low oil prices). Inflation remains low and under control, despite the high growth rate.
With a growth rate above 7% (mainly driven by agriculture), the primary sector is the most dynamic, but the secondary sector is developing and should be in the lead within a few years. On the demand side, exports and investment grew the fastest. While Senegal's macroeconomic framework remains solid, some cracks are emerging, including rising debt levels and lack of liquidity. Thus, despite a fall in the budget deficit, which amounts in 2017 to 3.7% of gross domestic product (GDP), compared to 4.2% in 2016, several factors weigh on the balance of public finances: the vast program government, higher energy prices (which lead to an increase in energy subsidies and a reduction in revenues due to the freezing of gas prices) and the treasury operations that financed the deficit of other public entities. As a result, Senegal has delayed payments due to some suppliers in 2017. In addition, the public debt has continued to increase, albeit at a slower pace, and reached 60.8% of GDP in 2017. in the service of the debt, it went from 24 to 30% of the public revenue between 2014 and 2017. However, the risk of over-indebtedness remains low according to the last analysis of debt sustainability of the International Monetary Fund and the World Bank – this assessment could, however, be reviewed in the event of a worsening of the indicators concerned.
External debt would have reached 62% of GDP in 2017, according to estimates, while the current account deficit widened from 5 , 4% of GDP in 2016 to 7.9% in 2017, due to an increase in imports of oil and capital goods faster than that of exports.
The government continues the implementation of the PES and reforms that accompany. These measures, which aim to maintain sustained growth, include investment projects in energy, transport infrastructure and agriculture, as well as in-depth changes aimed at attracting more private investors. However, although reforms have been adopted in the energy sector, notably agriculture and information and communication technologies (ICT), their deployment is much slower than expected, which could be detrimental to the durability of Senegal's economic growth
Medium-term prospects
The medium-term economic outlook should remain positive if Senegal pursues and deepens its structural reforms and the international situation continues to be favorable. Growth is expected to remain at 6.8 per cent in 2018. While Senegal's program to achieve middle-income status will target growth of more than 7 per cent in the coming years, rising energy and other budgetary and external pressures could undermine the achievement of this goal. To accelerate its growth, Senegal will have to coordinate all its economic levers, so that they progress at the same pace and in the same direction. Governments will need to intensify their reform agenda to tackle the bottlenecks that hinder productivity and competitiveness; maintain a credible fiscal policy and avoid monetary overvaluation; and, finally, to create the conditions that will enable the country to benefit from a strong international context.
Social Situation
Poverty seems to have declined in recent years. The latest survey, which dates back to 2011, estimated the poverty rate at 47%. Good growth performance would have reduced this figure by 4 to 7%. Senegal ranked 162 out of 188 countries in the 2017 Human Development Index (based on 2015 data). However, with 30% of the poorest households covered, Senegal's social safety net system is one of the best in Africa. The country has made progress in child health, mainly by addressing malaria and chronic malnutrition (stunting), which now stands at 17%, the lowest rate in sub-Saharan Africa. Progress has been less important in maternal, neonatal, reproductive and adolescent health. This is partly due to the high cost of health care, especially for the poorest people. In 2013, Senegal launched its universal health insurance program to improve equal access to care, especially for the poorest households, who work in the informal sector or live in rural areas. The coverage rate is gradually increasing, but still far from the 75% target set by the authorities by the end of 2017. Source: World Bank
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