Senegal Economic Outlook
- Estimated at 4.5% in 2014, compared with 3.5% in 2013, growth is projected to be 4.6% in 2015 and 5.0% in 2016.
- The first set of PSE flagship projects and reforms was launched in 2014, and their effective implementation will be indispensable in meeting PSE goals.
- Decentralisation Act III has been adopted to organise Senegal into territories that are viable, competitive and conducive to sustainable development, but its success will depend on improving the capacities of local actors.
Though initially projected at 4.9%, growth in 2014 has been revised downwards at 4.5% because of the expected negative impacts of the Ebola virus outbreak on the tourism sector (0.2 percentage points of gross domestic product [GDP]) and of delayed rainfall on the agriculture sector (0.2 percentage points of GDP). It was, however, stronger than in 2013 (3.5%) and is projected at 4.6% in 2015, driven by a revival of the primary sector and the vitality of activities in the secondary and tertiary sectors. Associated with the execution of the “emerging Senegal plan” (Plan Sénégal émergent – PSE), this dynamism should continue and growth is projected at 5.0% in 2016.
The first set of 14 of the 27 flagship projects and 5 of the 17 major reforms of the PSE were launched in 2014. The PSE seeks to turn Senegal into an emerging economy by 2035. For its first implementation period (2014-18), the PSE is organised around three focuses: structural transformation of the economy and growth; human capital, social protection and sustainable development; and governance, institutions, peace and security. It aims to achieve 7% growth on average during this period. This new development strategy should find expression in basic structural reforms designed to raise the potential for growth and to stimulate creativity and private initiative. The primary goal is to meet the population’s high aspirations to see an improvement in their well-being.
To achieve PSE goals, the authorities will have to ensure sustained implementation of its flagship reforms, in particular those related to energy, land tenure, logistics and infrastructure, information and communications technology, and the business environment. Execution of the PSE could however be delayed and be vulnerable to adverse weather. Moreover, opening the economy has made the country sensitive to the fluctuations of international markets and to economic changes in Europe. Senegal is also vulnerable to the security situation in Mali and a possible spread of the Ebola epidemic.
The authorities have decided to set a long-term strategy for a more balanced and harmonious territorial development. They are developing a national spatial-development plan, the Plan national d’aménagement et de développement territorial (PNADT 2015-35), a revision of the 1997 plan. Its goal is to make territories viable, competitive and conducive to sustainable development. In parallel, on 28 December 2013 the government adopted Decentralisation Act III, a general code for local communities. A fast and effective execution of the PNADT and the decentralisation reform will be critical to achieving the country’s territorial development goals.