Economic Analysis


Population 16.3 million
GDP per capita 1,441 US$
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 7.1 6.7 5.2 1.0
Inflation (yearly average, %) 1.3 0.5 1.1 2.0
Budget balance (% GDP) -3.0 -3.6 -3.8 -7.0
Current account balance (% GDP) -7.3 -8.8 -9.6 -9.0
Public debt (% GDP) 60.6 63.3 64.1 68.6

(e): Estimate. (f): Forecast.


  • Support from international lenders within the framework of the Emerging Senegal Plan, particularly the IMF with its Policy Coordination Instrument
  • Belongs to the West African Monetary Union (WAEMU) zone
  • Progress in terms of business environment and governance
  • Strong track record of political stability
  • Large offshore oil and natural gas reserves


  • Growth will decelerate due to the consequences of the pandemic (especially on tourism)
  • Growth and exports are dependent on climatic hazards and changes in base commodity prices (groundnuts, cotton, horticulture)
  • Inadequate infrastructure (energy, transport)
  • Large external deficit
  • Rising poverty and unemployment, already at high levels, because of the crisis


Growth will decelerate sharply

Despite the lack of a strict lockdown, the COVID-19 pandemic ended Senegal's vigorous growth in recent years. Indeed, the effects of measures taken to curb the virus, such as restrictions on interregional travel, prohibition of gatherings, curfews and border closures, as well as the fall in external demand, were felt in the second quarter of 2020. With the easing of most restrictions in May and the reopening of borders in July, a moderate recovery is expected in the second half of the year and should continue into 2021, unless the pandemic is protracted. Income losses generated by the crisis (following job losses and lower remittances from expatriates) have reduced the level of private consumption. However, the impact of this decline has been mitigated by the implementation of a strong fiscal policy under the Economic and Social Resilience Program (7% of GDP), aimed at helping the most vulnerable households, by subsidizing water and electricity consumption, and by increasing public spending on health. Furthermore, investments in the Sangomar offshore oil field and the Grand Tortue Ahmeyim gas field have slowed, seemingly confirming the postponement of their exploitation to 2023 (initially planned for 2020). This is a hard blow for the country, as it was initially counting on these resources to boost its economy. Moreover, these resources would have helped consolidating the post-Covid recovery. However, the increase in public investment (from 7.3% of GDP in 2019 to 8.7% in 2020), in response to the expected decline in private investment, will partly compensate this.
Moreover, the pandemic has heavily affected some sectors, notably tourism, which saw its activity drop by 60%, while accounting for 7% of the Senegalese GDP and 28,000 direct jobs. Agriculture (which accounts for 15% of GDP and 30,000 direct jobs) seems to be resisting the crisis well, unlike the tertiary sector, which has been hit hard (tourism, catering, and transport). However, the services sector accounts for nearly a third of total outstanding credit, which could weaken the banking system. Nevertheless, it appears that the liquidity of the system remains adequate for now and that bank loans have not dropped sharply.


Widening of the public deficit, stability of the current account deficit

With a public deficit already higher than the WAEMU community threshold (3% of GDP) in previous years, the pandemic will worsen the situation of Senegalese public accounts in 2020. The increase in public expenditure and the decrease in revenue induced by the decline in growth will widen the deficit, which will weigh on the Senegalese public debt, 84% of which is held by foreign creditors. The deficit will be financed by budgetary support from international donors and issuance of regional debt, while the suspension of debt service until the end of 2020 under the initiative supported by the G-20 and the Paris Club would enable Senegal to save USD 131.7 million in 2020, or 0.6% of GDP.

Conversely, the current account deficit might not increase. The balance of goods deficit would be slightly reduced, notably because of the drop in imports of equipment related to hydrocarbons and the decrease in the cost of fuel imports. This would offset the impact of the fall in tourism on the services deficit, as well as the impact of the fall in remittances from foreign workers (around 10% of GDP in 2019) on the transfer surplus. Finally, the repatriation of foreign investment income, combined with the payment of interest on the external public debt (which has been on the rise in recent years) will further burden the income deficit. However, the increase in multi- and bilateral external budgetary aid, in the wake of the USD 442 million emergency aid from the IMF, should reduce the current account deficit, which will still be covered, for the most part, by foreign direct investments and concessional financing of investment projects, notably by the IMF.


A stable political situation but not free of tensions

Senegal is reputed as one of the most stable countries in Africa. The last presidential election in February 2019 resulted in the victory of Macky Sall and had a very high turnout. Senegalese institutions appear to be strong enough to maintain political stability in the coming years. However, some elements that could create tensions should be taken into consideration. Indeed, the pandemic has led to an increase in unemployment and poverty. The loss of income of many Senegalese could then generate social tensions because of the increase in inequalities in the country. Furthermore, the country has experienced numerous strikes in several civil service bodies (teachers, judiciary), as well as students, and several accusations of corruption, including some against the President's brother, have tainted the Senegalese democracy.
The business environment in Senegal is improving, with the country moving up from 141st to 123rd in the World Bank's Doing Business ranking. Efforts have been made and structural reforms were adopted in various fields (energy, telecom, digital), in line with the priorities set out in the Emerging Senegal Plan. However, certain points still need to be improved, such as solvency procedures that are longer than the average for sub-Saharan Africa.



Last updated: October 2020

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