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Working Paper - 208 - The Main Obstacles to Firms Growth in Senegal Implications for the Long-Run
Several decades ago, Africa’s economic development was on par to that of South Asia (Collier and Gunning, 1999). However, in the 70s and 80s, economic growth in many African countries lagged and the development paths of the two developing continents diverged (Berthelemy and Söderling, 2001). As a result of the very low rates of growth and deterioration in terms of trade 37 Sub-Saharan African countries adopted stabilization and structural adjustment programs with the financial support of the International Monetary Fund (IMF) and the World Bank. In 1994, Senegal embarked upon Structural Adjustment Programs composed of currency devaluation and a step by step liberalization of the economy in the following two decades. These reforms were able to resuscitate annual growth to rates above 5%. Is this trend sustainable? How can Senegal keep growing? What are the key policies to facilitate this growth trajectory?