Senegal

Politics:

• Analysis

  Senegal politics: Quick View - Prime minister's reputation comes under spot

  Event

  Just weeks after a ministerial reshuffle aimed at reinvigorating the standing of his government, Senegal's prime minister, Abdoul Mbaye, finds himself under pressure for allowing the bank he was managing two decades ago to accept deposits by the former Chadian dictator, Hissène Habre.

  Analysis

  Mr Mbaye has come under the spotlight after it emerged that during the time he was managing director from 1989-97, the Compagnie bancaire de l'Afrique de l'ouest (CBAO) accepted deposits accumulated by Mr Habre during his corrupt and authoritarian rule. The claims are all the more damaging because the ex-dictator- who has lived in exile in Senegal since 1990- will soon face trial by a special tribunal to be set up under a new agreement between the African Union and the administration of the president, Macky Sall.

  The debate centres on the discovery by Ernst & Young during an audit carried out for a Moroccan financial group, Attijariwafa, which acquired the bank in 2007. Moroccan officials have reportedly said the audit only covered the five years before the takeover-and thus long after the Habre deposit was supposedly made in 1991. The accounting group has refused to comment on the issue for professional reasons.

  In today's climate, and following the introduction of tough anti-bribery laws, international accounting firms and banks based in OECD jurisdictions are under pressure to show that they do not do anything that might assist in concealing the proceeds of corruption. But Mr Mbaye's defenders both in the government and within the business community point out that today's anti-money-laundering laws were not in place at the time. Indeed, the government sees the assault on Mr Mbaye's integrity as revenge by supporters of the former president, Abdoulaye Wade, whose son Karim is currently the target of a judicial probe into corruption during his time at the head of a sprawling ministry that included many of the big capital spending portfolios.

  November 15, 2012

• Background

  Senegal: Key figures

  Abdoulaye Wade

  The 82-year-old leader of the Parti democratique senegalais (PDS) and its candidate in every presidential election since 1978, Mr Wade was first elected president in March 2000 and re-elected in February 2007. His victory in the first round of the poll confirmed his overall popularity, although the perception of cronyism and widespread corruption, his authoritarian drifts and frequent cabinet reshuffles have dented his image. Although he is yet to rule himself out of the presidential election due in 2012, he would meet vociferous opposition from opposition groups and PDS members, both on constitutional grounds and in view of his age.

  Karim Wade

  The son and adviser of the president, his supporters within the ruling PDS, known as the generation du concret (concrete generation), are reputed to be business-friendly but non-ideological. He has risen to greater domestic and international prominence recently, having co-ordinated preparations for Senegal's hosting of the Organisation of the Islamic Conference (OIC) in the capital, Dakar, in March 2008, and having reportedly held negotiations with the French president, Nicolas Sarkozy, in August about plans to construct a nuclear power station in Senegal. It is widely speculated that his father is grooming him for succession, possibly at the presidential election due in 2012, although such a dynastic transfer of power is fiercely resisted both by opposition parties and by his rivals and their supporters within the PDS. Furthermore, his popular support is undermined by his mother being French and the fact that, having been brought up mainly abroad, he does not speak Wolof fluently.

  Macky Sall

  Currently president of the National Assembly, Mr Sall has held various ministerial posts, becoming prime minister in April 2004. He carries significant political clout within the PDS and was the campaign manager for Mr Wade and the PDS in the 2007 elections, but his enemies within PDS and Mr Wade's growing mistrust of him finally led to his being dismissed as prime minister in June 2007. Mr Sall's summoning of Karim Wade to appear before the National Assembly's finance committee to answer questions about his management of construction projects for the OIC meeting in Dakar only deepened the enmity towards him from the Wade camp. In October 2008 a PDS initiative to reduce the term of office of the president of the National Assembly from five years to one—a move clearly calculated to marginalise him—was successfully passed into law. However, Mr Sall has shown himself undaunted by the efforts of his enemies within the ruling party and has sought to raise his profile abroad, notably visiting the upper house of the French legislature, the Senate, in September 2008. He would be among the front-runners in the 2012 presidential election, should he decide to stand.

  Idrissa Seck

  Previously the PDS's second-in-command and prime minister from November 2002 to April 2004, Mr Seck has been a source of controversy within the party and with several of the PDS's allies. He was accused of mismanaging public funds in July 2005, but an additional charge against him of endangering state security was dropped in 2006. Mr Seck was tried on corruption charges by a special tribunal and expelled from the PDS in August 2005, thereby changing from the president's protege to a serious political rival. This was confirmed by Mr Seck's creation of his own opposition party, Rewmi, in September 2006 and his second place in the 2007 presidential election. He appeared at the High Court of Justice in April 2008, announcing to the press that the charges against him of financial mismanagement would be withdrawn. Although some commentators believed that this heralded his reunion with the president and the PDS, his call in June for civil disobedience in response to the planned dissolution of Thies municipality, where he is mayor, will have reopened the rift.

  November 04, 2008

• Structure

  Senegal: Political structure

  Official name

  République du Sénégal

  Form of state

  Unitary republic

  Legal system

  Based on the Napoleonic Code and the constitution of January 2001

  National legislature

  National Assembly, with 150 members elected for five years by universal suffrage in a mixed system of first-past-the-post and proportional representation

  Head of state

  President, elected by universal suffrage, currently serves a five-year term of office and may stand for re-election once

  National elections

  February/March 2012 (presidential); June 2012 (legislative); next presidential and parliamentary elections due by 2017

  National government

  The president and his Council of Ministers

  Main political parties

  Parti démocratique sénégalais (PDS, the dominant party in the National Assembly); Alliance des forces de progrès (AFP); Parti socialiste (PS); Union pour le renouveau démocratique (URD); And-Jëf/Parti africain pour la démocratie et le socialisme (AJ/PADS); Parti de l'indépendance et du travail (PIT); Ligue démocratique (LD); Rewmi; Alliance pour la République-Yaakaar (Alliance for the Republic-Hope)

  Ministers of state

  President: Macky Sall

  Prime minister: Abdoul Aziz Mbaye

  Agriculture & rural equipment: Benoit Sambou

  Armed forces: Augustin Tine

  Civil service & labour: Mansour Sy

  Communication, telecommunications & information technology: Abou Lô

  Culture & Tourism: Youssou N'Dour

  Ecology & protection of nature: Ali Haïdar

  Economy & finance: Amadou Kane

  Education: Ibrahima Sall

  Energy & mines: Ngouille Aly Ndiaye

  Fishing & maritime affairs: Aminata Mbengue Ndiaye

  Foreign affairs & Senegalese diaspora: Alioune Badara Cissé

  Health & social action: Eva Marie Coll Seck

  Higher education, universities & research: Serigne Mbaye Thiam

  Infrastructure & transport: Mor Ngom

  Interior: Mbaye Ndiaye

  Justice: Aminata Touré

  Livestock: Aminata Mbengue Ndiaye

  Planning: Cheikh Bamba Dieye

  Sports: Malick Gakou

  Trade, industry & handicrafts: Mata Sy Diallo

  Urbanisation & housing: Khoudia Mbaye

  Water & sanitation: Oumar Guèye

  Women, children &Female entrepreneurship: Mariama Sarr

  Youth, professional raining & employment: Aly Koto Ndiaye

  Governor of the regional central bank (BCEAO)

  Koné Tiémoko Meyliet

  October 25, 2012

• Outlook

  Senegal: Key developments

  Outlook for 2013-17

  • Having subsided after the peaceful presidential transition, political and social tension is likely to remain low, safeguarding Senegal's democratic credentials.
  • Separatist violence in the Casamance region has calmed, with both the president and rebel groups having signalled their willingness to enter negotiations to end the seemingly intractable 30-year insurgency.
  • The government will begin to restore control over public spending; the Economist Intelligence Unit forecasts that the fiscal deficit will shrink over the forecast period, averaging 5% of GDP, as economic growth accelerates.
  • With FDI inflows robust, industrial and agricultural output growing and public works picking up, we forecast that real GDP growth will accelerate to 5.3% in 2017. Unreliable power supply will remain a key downside risk.
  • Having moderated to an estimated 1.4% in 2012, helped by lower commodity prices, average inflation will edge back up to 2.1% in 2013-14 as economic growth picks up, accelerating thereafter as global commodity prices rise.
  • The current-account deficit is forecast to rise to a peak of 11.6% of GDP in 2012, before narrowing in 2013-17.

  Review

  • Trying a new approach to the resolve the troubles in Casamance, the president, Macky Sall, has offered separatist militants the prospect of dialogue and has chosen the region to spearhead a new model of decentralisation.
  • The outlook for mining companies is positive after they posted strong second-quarter results; Teranga Gold's profits increased and TiZir's dredging project is well under way, with production expected to begin in late 2013.
  • Under a new agreement with the African Union, Senegal has agreed to try, by special tribunal, Hissène Habré, the former Chadian dictator who has been living in quiet exile in Dakar since 1990.
  • Relations with The Gambia were strained following the execution of two Senegalese nationals there in late August, with Mr Sall calling for sanctions.
  • To free up some US$15m of public funds to prevent a recurrence of flooding that devastated parts of Dakar, the country's senate has been abolished.
  • Data from the national statistics bureau reveal that real GDP growth accelerated to 3.1% year on year in the second quarter, up from 2% in the first three months of 2012.
  • The presidential coalition, Benno Bokk Yakaar, is showing signs of internal tensions, as component parties and factions seek to reassert their identity.

  October 25, 2012

Economy:

• Background

  Senegal: Economic background

  Real gross domestic product by sector
  (% share of GDP)
  	2003	2004	2005	2006	2007
  Agriculture	17.6	17.3	17.7	16.6	16.0
  Industry	19.8	20.1	20.0	19.2	19.4
  Services	62.6	62.6	62.3	64.1	64.6
  Source: Economist Intelligence Unit.

  Download text file (csv format)

  Measured by expenditure, GDP is dominated by private consumption, which accounted for an estimated 79.1% in 2007. The contribution of government consumption to GDP declined from 13.9% in 2004 to 12.7% in 2006, before rising again in 2007, to 13%, driven by increasing expenditure to cover energy and food price subsidies. The contribution of investment has increased significantly, from 20.4% in 2004 to 25.2% of GDP in 2007, largely reflecting the stepping up of public works.

  November 04, 2008

• Structure

  Senegal: Economic structure

  Data and charts: Annual trends charts

  
  

  

  October 25, 2012

• Outlook

  Senegal: Country outlook

  Senegal: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: Having come under pressure ahead of the March 2012 presidential election, Senegal's record as one of the most democratically developed and stable polities in Sub-Saharan Africa has been reaffirmed by the peaceful transfer of power to a new president, Macky Sall, after the former incumbent, Abdoulaye Wade, conceded defeat. There had been widespread anti-Wade protests, but Mr Wade's swift concession and decision not to challenge the result averted the possibility of even greater unrest.

  ELECTION WATCH: With the backing of all other opposition candidates, Mr Sall, a former prime minister, was elected as Senegal's new president in the second round of the election on March 25th. He has promised to shorten the presidential term from seven to five years, so no presidential election is expected until at least mid-2017. Mr Sall's Benno Bokk Yakaar coalition took 119 of the 150 seats in the National Assembly in the July legislative election, with the Parti démocratique sénégalais (PDS) a distant second with 12. Three months on, there are signs that the alliance is under some strain and could conceivably fracture by the time of the next legislative election due by 2017, given that the constituent parties will not have the shared experience of opposition to keep them united and may want to stake out their own territory. Former PDS luminaries have since established their own parties, which may weaken the party further. Senate elections were due in September 2012, but the upper house was abolished two weeks beforehand in order to save money.

  INTERNATIONAL RELATIONS: Despite universal international support for his election, Mr Sall will concentrate on domestic issues early on. The fragile post-coup civilian administration in Guinea-Bissau will focus on restoring domestic stability rather than assisting Senegal's anti-separatist campaign in Casamance, where rebels reportedly draw support from kinsmen in Guinea-Bissau. Relations with Guinea may improve, given that the Guinean president, Alpha Condé, had accused Mr Wade of complicity in a mid-2011 attempted assassination. Disputes over Air Senegal's expansion are unlikely to damage regional relations seriously. France (Senegal's main trading partner) and the US have welcomed the peaceful transfer of power, while relations with China and the Gulf States are flourishing. Relations with The Gambia, historically volatile, have worsened following the execution of two Senegalese prisoners in Banjul, the capital of The Gambia, in September.

  POLICY TRENDS: The new president has made a bold start in unpicking the patronage networks of his predecessor, auditing a number of government projects and institutions, and shutting down 59 state bodies in order to save public money and restore investor confidence. He will also focus on rural development and bringing down the cost of living rather than high-profile infrastructure projects and has abolished the upper house in order to direct more money into flood prevention. Senegal retains IMF approval for its reform programme; the Fund approved a new three-year policy support instrument in December 2010 to assist economic reform through reducing the fiscal deficit, increasing transparency, encouraging the private sector and strengthening the financial sector. The new government will continue to reduce private-sector arrears. It targets annual real GDP growth of 7%--an unrealistic figure given the economy's structural constraints, never mind the adverse global economic conditions. Nonetheless, higher investment, particularly in energy, infrastructure, agriculture, fisheries, tourism, textiles, information technology and increasingly mining, will encourage growth. The former government's energy plan, Plan Takkal, expected to cost US$1.5bn in 2012-15, is being audited. With the US$500m Eurobond issue of May 2011, Senegal has reached its IMF-agreed ceiling for non-concessional borrowing. The country has reversed its slippage in the World Bank's Doing Business competitiveness survey, climbing three places in 2012 to 153rd out of 183 countries. A review of customs and tax codes, as well as plans to reduce bureaucratic delays, should improve the business environment.

  ECONOMIC GROWTH: Economic growth was weak in 2011 owing to a large contraction in agricultural output (because of poor rains) and chronic power shortages that the former government calculated cost the country 1.4 percentage points in lost output. However, growth should accelerate over the forecast period, driven by the ambitious infrastructure investment programme funded by the US$500m Eurobond issued in 2011 and by recovering agricultural output thanks to increased government investment in horticulture, despite the withdrawal of some marketing subsidies. Industrial production should also rise from 2012 as power reliability improves and cement and phosphates output continues to recover. A pick up in iron ore exploitation, having stalled again in 2012, remains a distant prospect. Services growth will be led by banking and telecommunications, as well as by Dakar's expanded air and sea logistics capacity. Domestic demand, restrained by higher consumer prices in 2012, will pick up over the forecast period, contributing to an acceleration of real GDP growth from an estimated 3.8% in 2012 to 5.3% in 2017. Deepening ties with China will also boost investment.

  INFLATION: Food remains the primary driver of price growth (also felt through the enlarged weighting of the restaurants sub-index). Higher domestic food production, government subsidies and price caps on essential goods will help to anchor local food prices. Having dipped to an estimated 1.4% in 2012 as global commodity prices eased and agricultural output recovered, average inflation is forecast to pick up to 2.1% in 2013-14, as further currency weakening and accelerating GDP growth offset further falls in global non-oil commodity prices, especially in 2014. Rising global commodity prices from 2015 and robust domestic demand will see inflation accelerate to 2.3% in 2015-17.

  EXCHANGE RATES: The CFA franc--which is pegged to the euro at CFAfr655.96:EUR1--will fluctuate against the US dollar in line with the euro:dollar exchange rate. Heightened concerns over the double-dip recession in the euro zone, as it grapples with its fiscal and sovereign debt crisis, have seen the euro slide since mid-2011. After a modest recovery in early 2012, it has lost ground since March on worries that some members of the currency union may be forced to leave. These lost ground has been recovered since July on hopes of a resolution of the crisis, but the euro-pegged franc is still forecast to depreciate from an estimated average of CFAfr511:US$1 in 2012 to CFAfr530:US$1 in 2015, before strengthening to CFAfr521:US$1 in 2016-17. A euro zone break-up would lead to significant volatility.

  EXTERNAL SECTOR: A weaker CFA franc and lower global commodity prices will offset an improvement in local output in the early part of the forecast period, and US-dollar-denominated exports are forecast to edge up to an average of US$2.8bn in 2012-14, before rising to US$3.1bn in 2017. The import bill is expected to stay broadly stagnant, averaging US$5.4bn in 2012-14, owing to lower non-oil commodity prices, before rising to US$5.9bn in 2017 as domestic demand accelerates and global commodity prices rise. Though having not collapsed so far, tourism receipts are expected to improve only modestly given their vulnerability to economic weakness in their primary source, western Europe. Donor transfers and remittances will be constrained by hard-pressed public finances and weak labour markets in the US and the euro zone. The current-account deficit is forecast to narrow from an estimated 11.6% of GDP in 2012 to an average of 7.9% of GDP in 2013-14. We forecast that it will stabilise in 2015-16 before edging down to 7.2% of GDP in 2017, owing partly to an expected increase in gold output and services exports, with Senegal positioning itself as a regional transport hub. The benefits of the stalled Falémé iron ore project are unlikely to materialise during the forecast period.

  October 14, 2012

• Forecast

  Senegal: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growth	3.8	4.3	4.8	4.9	5.1	5.3
  Industrial production growth	4.4	5.4	6.4	7.4	8.4	9.4
  Gross agricultural production growth	3.3	3.6	3.4	3.3	3.3	3.3
  Consumer price inflation (av)	1.4	2.0	2.1	2.4	2.3	2.3
  Lending rate	14.3	14.3	14.3	14.1	14.2	14.0
  Government balance (% of GDP)	-7.2	-5.8	-4.9	-5.0	-4.7	-4.6
  Exports of goods fob (US$ m)	2,594	2,784	2,886	2,924	3,063	3,137
  Imports of goods fob (US$ m)	-5,453	-5,277	-5,390	-5,561	-5,800	-5,949
  Current-account balance (US$ m)	-1,487	-1,104	-1,062	-1,141	-1,236	-1,261
  Current-account balance (% of GDP)	-11.6	-8.3	-7.5	-7.6	-7.6	-7.2
  External debt (year-end; US$ m)	4,103	4,056	4,041	3,996	3,967	3,922
  Exchange rate CFAfr:US$ (av)	511.0	519.6	523.7	530.1	520.6	521.6
  Exchange rate CFAfr:¥100 (av)	643.4	629.0	603.9	595.6	564.8	570.5
  Exchange rate CFAfr:€ (end-period)	656.0	656.0	656.0	656.0	656.0	656.0
  Exchange rate CFAfr:SDR (end-period)	786.2	794.6	795.4	784.9	780.5	782.4
  a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts.

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  October 25, 2012

View detailed map

Country Briefing

Total area

197,161 sq km

Population

13.6m (2012 Economist Intelligence Unit estimate)

Main towns

Population in '000 (World Gazetteer estimates, 2012)

Dakar (capital): 2,682

Thiès: 282

Mbour: 234

Kaolack: 182

Climate

Tropical

Weather in Dakar (altitude 40 metres)

Hottest months, September-October, 24-32°C; coldest month, January, 18-26°C; driest months, April-May, 1 mm average rainfall; wettest month, August, 254 mm average rainfall

Languages

French, Wolof, other local languages

Measures

Metric system

Currency

CFA franc (CFAfr), fixed to the euro, backed by a guarantee from the Banque de France; it was devalued from CFAfr50:FFr1 to CFAfr100:FFr1 in 1994 and has been pegged at CFAfr655.96:€1 since France adopted the euro in 1999

Time

GMT

Public holidays

January 1st; April 4th (Independence Day); May 1st; Christian holidays of Christmas, All Saints' Day, Assumption and variable dates for Easter Monday and Ascension Day; all Islamic holidays are observed in accordance with the lunar calendar, which may mean that the following dates are approximate: Mawlid al-Nabi (the birthday of the Prophet, February 4th 2011); Eid al-Fitr (end of Ramadan, August 19th); Eid al-Adha (Feast of the Sacrifice, October 26th); Islamic New Year (November 15th)

March 20, 2012