Senegal flag Senegal: Economic outline

Economic Outline

Economic Indicators

After registering a decade of strong growth, the Senegalese economy was impacted by the Covid-19 pandemic, but was amongst the minority of economies that managed to avoid recession. However, during 2023, domestic socio-political unrest alongside political and security tensions in neighboring areas led to shifts in consumption and investment patterns, impacting sectors such as manufacturing (textiles, agri-food), agriculture (fertilizer and transport prices), and retail and hospitality. Consequently, economic growth was constrained (+4.1%, still below its pre-pandemic level, as per the IMF). In 2024, GDP growth is poised for a significant leap forward, propelled by hydrocarbons. The nation is banking on the initiation of two offshore fields, one for gas and the other for oil, to stimulate production, exports, investment, and tax revenues. The IMF forecasts growth at 8.8% this year and 10.2% in 2025.

Concerning public finances, the authorities remain steadfast in their commitment to achieving fiscal consolidation objectives. In 2023, they anticipated that enhanced revenue collection and improved spending control would decrease the fiscal deficit to 4.9% of GDP. Looking forward to 2024, reaching a fiscal deficit of 3.9% of GDP hinges on implementing measures to streamline tax expenditures and reduce energy subsidies to 1% of GDP. This year, authorities are accumulating liquidity buffers to ensure debt service payments during January-April 2024. Debt is projected to peak in 2023 (81% of GDP) and gradually decline as a percentage of GDP over the medium term, reflecting sustained fiscal consolidation and economic growth (decreasing to 67.6% by 2025 – IMF). Inflation receded to 6.1% in 2023 (down from 9.7% one year earlier) and is not expected to return to the WAEMU target of 3% before 2025 (IMF). After focusing on the response to external shocks, the authorities are now focused on implementing the revised Emerging Senegal Plan (PSE). The objective is to promote strong and inclusive private sector-led growth through structural transformation and diversification, with a new emphasis on accelerating the domestic production of critical supplies through sectoral policies (IMF). Increasing revenue mobilization, rebuilding fiscal buffers, putting public debt on a downward path, improving the business environment, enhancing the social safety net, broadening access to quality education, addressing youth unemployment, and tackling financial system weaknesses are the key challenges identified by the IMF.

According to the World Bank, if PSE reforms continue, the poor layer of the Senegalese population would progressively be able to access high-growth or value-added sectors, such as horticulture or agricultural processing. In 2022, the unemployment rate of the country was at 3% (World Bank, ILO estimate). In Senegal, several statistical studies conducted by the ANSD indicate that nearly 97% of economic units operate informally, with 96.4% of the active population engaged in the informal sector, encompassing both urban and rural areas. Overall, poverty (using the low middle-income poverty line) remained stable around 36.3% in 2022, while the country’s GDP per capita (PPP) was estimated at USD 4,209 (World Bank).

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 27.7431.4135.4539.9642.95
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 1,5701,7291,9002,0842,180
General Government Gross Debt (in % of GDP) 76.079.672.567.667.5
Inflation Rate (%)
Current Account (billions USD) -5.53-4.76-3.15-1.93-2.35
Current Account (in % of GDP) -19.9-15.1-8.9-4.8-5.5

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

Monetary Indicators 20162017201820192020
CFA Franc BCEAO (XOF) - Average Annual Exchange Rate For 1 GBP 800.68749.15741.42732.38737.93

Source: World Bank, 2015


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Latest Update: May 2024