Senegal Economic Outlook

Economic performance and outlook

Economic growth is projected to increase from an estimated 6.8% in 2017 to 7% in 2018, fueled by the secondary sector (projected to grow 7.4%) and the tertiary sector (projected to grow 7%). Demand is driven primarily by increased gross fixed capital formation (which grew 8.9% in 2017). The budget deficit is projected to drop from 3.7% in 2017 to 3% in 2018; the current account balance is projected to drop to 5.2% in 2018. This marked improvement from 2015–16 is due to robust exports, particularly of phosphate, peanuts, and zircon.

Macroeconomic evolution

Fiscal policy in 2017 was bolstered by stronger revenue collection and control over current expenditures. The inflation rate remained low at 1.7% in mid-2017, well below the West African Economic and Monetary Union (WAEMU) ceiling of 3%. Exchange rate policy is based on a fixed rate for the CFA franc, which appreciated in 2016 against the naira (up 52.1%), the British pound (up 20.4%), and the Guinean franc (up 16.3%). Public debt reached 62% of GDP in 2017, up from 59.5% in 2016. Although public debt increased sharply, from 19% of GDP in 2006, the debt ratio remains below the WAEMU ceiling of 70%. The increase is attributable to large infrastructure programs with high longterm impacts that have been implemented in recent years in agriculture, transportation, and special economic zones. According to the International Monetary Fund (IMF) and the World Bank, the public debt is sustainable and presents no major risks.


Senegal has worked to improve services that support production, particularly energy and transportation. The country has taken advantage of lower oil prices in recent years. Energy output jumped sharply, with installed capacity rising from 898 MW in 2015 to 1,168 MW in 2016 as new power plants came online. The average cost of production dropped from CFAF 62 in 2015 to CFAF 45 in 2016. There are now fewer power outages, and the national electricity company, SENELEC, received no subsidies in 2016 and 2017. Thanks to resources mobilized by the government, infrastructure and transportation services were constructed or updated, with information technology–related reforms and policies facilitated substantial changes. The mining sector grew stronger; Grande Côte Opération increased zircon production, and Sabodala Gold Opération increased gold production.


The main challenges to growth are delays in implementing reforms and the effects of climate shocks. Another headwind is security in the subregion. Subsidies for electricity may be needed again if oil prices rise substantially. Human capital objectives have yet to be realized, despite investment in education and training. The main challenges include improving the primary school completion rate, examination results, and work schedules of teachers. Preventative measures and actions need to be taken in risk and disaster management. In terms of local governance, initiatives are required to increase the endowment and capital development funds allotted to local communities and to continue reforming local taxation.