3 Aug 2018
Senegal: Market Profile
Major Economic Indicators
- Senegal is located at the westernmost part of Africa, with its western side wholly bordered by the Atlantic Ocean and land bordered by Mauritania, Guinea Bissau and Mali on the other sides. Senegal’s landscape mainly consists of low-lying rolling plains, which makes it vulnerable to natural hazards particularly floods and coastal erosion.
- As a relic of Senegal’s colonial past, French is the country’s official language. It is regularly used by a minority of Senegalese who were educated or work in the government. Most of the Senegalese speak their own ethnic language, mainly Wolof, Pular and Serer.
- The agricultural industry occupied more than two-thirds of the labour force population and contributed around 15% of the country’s GDP. The most important agricultural activity has been peanut production but the sector has started to diversity its cash and food crops since early 1980s. Other agricultural products include millet, corn, rice and cotton.
- A large-scale flooding in 2009 has caused the country for more than US$100 million in losses and damages. With agricultural activities playing an important role in the Senegalese economy, the government has taken steps to advance disaster risk management by establishing the Ministry for Restructuring and Managing Flood Zones in 2012 and launched the Ten-Year Flood Management Plan (2012-2022) for sustainable flood management projects.
- Senegal has relatively more developed industrial production than other Western African countries. Major industrial activities are mining and manufacturing, which contributed 21% of the country’s GDP, of which 11% are from manufacturing production. Senegalese industries process a wide range of outputs, including food (fish canning and sugar refining), textiles, construction materials and chemicals (refined petroleum, fertilizers and plastics).
- In fact, Senegal was already a tertiary economy as early as the 1980s and accounted over 55% of the economy in 2016. It benefits from the country’s excellent telecommunications infrastructure which encourages investments in telecommunication services. Senegal’s position as the hub of francophone West Africa in financial services has enabled the country to develop domestic financial markets as well as the real estate subsector. With its mild climate and great beaches, Senegal is also a popular tourist destination, especially for European travellers.
- In 2014, the Senegalese government adopted the Plan Senegal Emergent (PSE) in the effort to exit a cycle of low economic growth with high poverty and boost economy. The plan was considered successful as we see encouraging signs of 6.8% real GDP growth just one year after its implementation and it has maintained more than 6% growth in the following years. Meanwhile, the government continues the PSE implementation and its related reforms, targeting sectors such as energy, transport infrastructure and agriculture.
- As a member of the West African Economic and Monetary Union (UEMOA), Senegal shares its currency, the CFA franc, with seven other member countries. The currency has been officially pegged to the Euro since 2002.
- Senegal has a reputation of having stable democracies and political system, compared to the rest of West Africa. It only had three major political transitions which each of them are found peaceful. The country’s presidential elections have been consistently credible with an active civil society as well as qualified political candidates. Its serving president, Macky Sall, was elected in March 2012 and the next presidential elections are expected to be held in February 2019.
- Since its independence in 1960, Senegal has been free from civil war and does not have any military coups. Because of that, a considerable number of multinationals and NGOs have chosen to set up their regional office in Senegal for their West Africa operations.
- China has assisted Senegal’s development by taking part in infrastructure projects as well as providing funding. The National Wrestling Arena located in the eastern part of Dakar, the capital of Senegal, was built by China’s Hunan Construction Engineering Group. China have also financed a highway linking Dakar to Touba, its second main city.
- As part of the PSE, Senegal’s new Diamniadio industrial park aimed to attract Chinese manufacturing firms and unlock the door to industrialization. C&H Garments, a Chinese firm with production base in East Africa, signed a memorandum of understanding (MOU) with the Senegalese government in 2015 to invest and set up a clothing manufacturing factory at Diamniadio. China Geology Overseas Construction Group (CGCOC Group) has also invested in a PVC pipe plant in the industrial park.
- Senegal has become one of the Belt and Road Initiative partners with China, when the two countries signed bilateral deals during Chinese President Xi Jinping’s West Africa trip in late July 2018. In addition to infrastructure plans in Senegal, China also promised to support the country with anti-terror, peacekeeping and maintaining social stability.
- Inward FDI stock in Senegal reached US$3.7 billion in 2016, which has increased more than 7 times compared to US$0.5 billion ten years ago. Cumulative FDI from China amounted US$0.15 billion in 2016.