Country Brief

Senegal is located on the west coast of Africa and is part of the West African Economic and Monetary Union (WAEMU). With a population estimated at about 10 million, its economy is dominated by a few strategic sectors, including groundnuts, chemistry, tourism fisheries, and services.

After independence in 1960, the country has been highly visible in the international arena and has maintained a relatively stable political and social environment. Starting in the 1980s, the country faced a conflict in the southern part of the country (Casamance) aimed at independence from Senegal. The government has since signed a peace agreement with the MFDC (Mouvement des forces démocratiques de Casamance).

Economic/political/Social context

Today, Senegal is viewed as a good performer in Sub-Saharan Africa with its economy growing at a steady rate of about 5 percent since the devaluation in 1994. However, economic performance was weak in 2006, with a GDP growth rate slow down to 2 percent due to the rise in international oil prices and a decline in agricultural production. The weakening of the economy in 2006 confirms the need for the government to push its Accelerated Growth Strategy, mostly focused on private sector development, especially export-oriented activities. Macroeconomic developments were positive in 2007, with GDP growth estimated at 5 percent, driven by the services and construction sectors. The challenge for the country is to enhance growth and reduce poverty. Senegal is aiming for a new growth model (Accelerated Growth Strategy), aimed at increasing the growth potential of the economy by improving the business environment, diversifying exports, and improving infrastructure.

In June 2000 Senegal became eligible to receive support under the Heavily Indebted Poor Countries Initiative (HIPC), and in April 2004, it reached the Completion Point. Senegal has exited the recent enhanced HIPC Initiative and the Multilateral Debt Relief Initiative (MDRI) with a good basis for maintaining sustainable external debt levels over the medium term.

In February 2007 Mr. Wade was re-elected president of the Republic of Senegal. Legislative elections were held in June 2007. President Wade is a supporter of the New Partnership for Africa’s Development (NEPAD) and plays an active role in encouraging conflict resolution in West Africa.

Senegal remains a poor country, with a GNI per capita of US$840 in 2006. Notwithstanding a decline in the incidence of poverty from 68 percent in 1994 (61.4 percent of households) to 51 percent in 2005, poverty remains high, particularly in rural areas.

Development picture/donor coordination

In addition to the World Bank and the IMF, Senegal’s development partners include France, the European Union (EU), the African Development Bank, USAID, Japan, Germany, Canada, and many UN agencies. Donor coordination has been strengthened around the government’s new Poverty Reduction Strategy Paper (PRSP II) and the new Accelerated Growth Strategy, which aim at sustaining high pro-poor growth in Senegal. The Consultative Group (CG) meeting took place in Paris in October 2007.

The World Bank Group’s role

As of March 2008, the World Bank had approved 121 projects for Senegal totaling about US$2.9 billion. The commitment value of nineteen ongoing IDA-financed operations is about US$701.5 million equivalent, with an undisbursed balance of about US$447.2 million. The nineteen operations are in agriculture, rural development, infrastructure, environment, transportation, population/health/nutrition, social protection, energy/water, public and private sector development, and natural disaster management. Portfolio performance is discussed quarterly with the government, and the next quarterly portfolio review is planned for.

In FY07, the following projects were approved by the Bank’s Board of Executive Directors: Local Authorities Development Program, Second Quality Education For All (Phase 2), Nutrition Enhancement (Phase 2), West Africa Agricultural Productivity Program, and Third Poverty Reduction Support Credit. Projects under preparation include the Dakar-Diamniadio Toll Road an the Energy Sector Recovery DPL. The new Country Assistance Strategy (CAS) was presented to the Board on June 20, 2007, with a proposed lending program of about $420 million over the period FY07-10.

Within the context of the Strategic Initiative for Africa, International Finance Corporation (IFC)’s activities in Senegal are focused on pro-active project development especially in financial markets, SME development, technical assistance, tourism, agribusiness, Information and Communication Technology (ICT), mining, infrastructure and housing. Through Private Enterprise Partnership for Africa (PEP Africa), IFC is focusing on investment climate, tourism initiatives, and access to Finance for Micro, Small and Medium size Enterprises. As of February 2008, IFC’s committed portfolio amounted to US$86 million, out of which US$44 million was outstanding.

At present, MIGA does not have any exposure arising from investment in Senegal.

The Agency has insured Sonatel of Senegal--against the risks of expropriation, transfer restriction, breach of contract and war and civil disturbance--in support of three telecommunications projects in Guinea, Guinea-Bissau and Mali. The combined gross exposure from these investments is US$110.0 million.

Senegal has been one of the most active African countries in WBI programs. This is partly due to the well-managed Dakar distance learning center and the fact that Senegal is taking advantage of its role as a regional hub.

Contacts

Mr. Madani M. Tall
Country Director (based in Dakar, Senegal)
Tel: (221) 33 849-50-00
Fax: (221) 33 849 50 27
E-MAIL: Mtall@worldbank.org

Ms. Françoise Perrot
Senior Operations Officer (based in Dakar, Senegal)
Tel: (221) 33 849-50-00
Fax: (221) 33 849 50 27
E-MAIL: Fperrot@worldbank.org

Ms. Joelle Dehasse
Acting Country Program Coordinator/
Senior Operations Officer
Tel: (202) 458-5437
Fax: (202) 473-5450
E-mail: jdehasse@worldbank.org

Ms. Barbara Weber
Senior Operations Officer
Tel: (202) 473-7893
Fax: (202) 473-5450
E-mail: bweber@worldbank.org