“No one attacks me on my economic record,” said Macky Sall in March 2016, amidst a referendum battle over constitutional reforms, which included reducing the presidential term from seven to five years.

Since then, the ‘yes’ vote has prevailed, two of Sall’s terms have elapsed and Prime Minister Amadou Ba has been nominated as the candidate of the Benno Bokk Yakaar (BBY) coalition for the presidential election.

The country’s growth rate also accelerated from an average of 2.9% over the 2005-2011 period to 5.3% between 2012 and 2023, highlighting the progress made under the Plan Sénégal émergent, or Emerging Senegal Plan (PSE).

But while great strides have been made in terms of infrastructure, the state of affairs in other areas – employment, industrialisation, debt, governance and poverty – is more mixed.

Senegal confirmed its number-two position in French-speaking West Africa with a GDP of $27.4 bn for 17.4 million inhabitants in 2022, behind Côte d’Ivoire ($70bn for 29.3 million people), according to data from the IMF and the World Bank (WB).

Yet the gap with Abidjan has not narrowed: Senegal’s GDP increased by a factor of 1.5 between 2012 and 2022, while Côte d’Ivoire’s almost doubled.

“The widening of the budget deficit and the increase in public debt are two major areas of concern

Senegal’s per capita income rose from $2,825 to $3,565 between 2012 and 2022, but less than that of the Ivorians (from $3,652 to $5,537).

With the arrival of oil and gas fuelling hopes in Dakar, with growth forecast at 10.6% in 2024, higher than the 6.6% predicted for Abidjan (according to IMF projections), we take a look at the strengths and weaknesses of Senegal’s trajectory over the last decade.

Infrastructure, an undisputed strong point

Government critics also hail the development of the country’s infrastructure – a policy pursued as a continuation of the Wade presidency:

• Extension of the road network, including the Dakar-Blaise-Diagne International Airport (AIBD) motorway and the motorway linking Thiès to Touba,
• construction of tracks and bridges in border areas,
• creation of the new town of Diamniadio, the Regional Express Train (TER) and Bus Rapid Transit (BRT) in Dakar,
• commencement of construction of the deepwater port of Ndayane on the Petite-Côte.

Mario Pezzini, former director of the Development Centre at the Organisation for Economic Co-operation and Development (OECD), who worked on the PSE, says: “This choice has made it possible, in a Keynesian way, to achieve the hoped-for leap in growth.”

Although the cost of certain projects, including the TER, is considered too high, and certain choices are the subject of debate, such as focusing on Diamniadio to relieve congestion in the capital, the projects completed have had a ripple effect on the economy as a whole.

These efforts have not stopped paying off. “The port of Ndayane,” says Pape Sall, Citi’s director for West and Central Africa, “will boost the logistics sector, create jobs outside Dakar, and better position Senegal in the port sector.”

Progress in energy, water and agriculture

Senegal has been moving towards green energy since 2016, with the share of renewable energy (solar and wind) in national electricity production rising from 0.6% in 2015 to 20% in 2021, rising to 30% in 2023.

A strong political will, an influx of private investment and an appropriate regulatory framework have been driving this development.

At the same time, access to electricity and drinking water has increased, including in rural areas, attributable to the United Nations Development Programme (UNDP) program.

With an electrification rate of more than 70% nationwide and 85% in urban areas (compared with 56.5% in 2012) and a drinking water access rate of almost 95% (89.5% in 2012) – according to the WB – the country is among the best placed in sub-Saharan Africa.

Despite challenges, such as access to finance and the impact of global warming, the expansion of horticulture and major investment in rice production has boosted agriculture.

Extra focus on entrepreneurship and digital technology

The support policy for three target groups — young people, women, start-ups — has also been a priority.

The Fonds de garantie des investissements prioritaires (a guarantee fund for priority investment or FONGIP) and the Agence de développement et d’encadrement des petites et moyennes entreprises (Agency for the Development and Support of Small and Medium-sized Enterprises or ADEPME) have mobilised around this.

However, it is the grassroots action, in particular microcredit, from the Délégation générale à l’entrepreneuriat rapide des femmes et des jeunes (General delegation for the rapid entrepreneurship of women and young people or DER/FJ) that stands out.

In five years, the DER/FJ has financed 230,000 entrepreneurs (close to its target of 50,000 per year) to the tune of more than 110bn CFA francs ($179m) and supported 415 start-ups, half of which have received funding. Modest but tangible achievements.

The digital sector, which contributes 10% of GDP and has created 140,000 jobs between 2016 and 2022, has experienced real growth, which needs to be consolidated.

Employment and industry: Great disappointment

With more than 100,000 young people entering the labour market each year, job creation was at the heart of the PSE.

But despite the 255,000 new jobs recorded outside the agricultural sector between 2014 and 2018, job creation in the formal private sector has been sluggish ever since.

Estimated at 325,000 at the end of 2018, the number of jobs fell to 305,000 at the height of the Covid-19 pandemic in 2020, and had only risen to 335,000 by the beginning of 2023, according to the national statistics and demography agency (ANSD).

The unemployment curve confirms this observation: from 16% at the end of 2015, the jobless rate fell briefly to 14.3% at the end of 2018, before rising again, reaching 24.1% at the end of 2021 and a further 21.9% at the end of 2022.

What’s more, despite the dynamism of the agro-industry, the revival of tourism and the boom in services, the expected industrialisation has not taken place.

“No oil mills, no processing of fishery products, no leather industry… despite the potential of these sectors,” says Aminata Touré, former prime minister (2013-2014), who — echoing a disappointment widely shared within the private sector — left the presidential camp in September 2022.

Status-quo on black market

It’s the other missed opportunity: reducing the underground sector’s share in the economy.

Despite existing measures – such as the Contribution globale unique (Single Global Contribution or CGU), a simplified tax for companies with a turnover of less than 50m CFA francs ($81,000) – and those recently adopted, including the modernisation of the legal framework for SMEs and the creation of a one-stop shop for formalisation, 97% of economic entities in Senegal are informal, according to government estimates.

This figure, linked to the country’s low bank penetration rate – 18.9% in 2021, compared with 26.1% in Côte d’Ivoire, 30.1% in Togo and 34.7% in Benin – has not changed in recent years. There may have been a glimmer of hope, but this was dashed by the Covid-19 period.

In addition to the loss of revenue for the state, the phenomenon fosters opacity and corruption. The latter has worsened in recent years, according to a number of business leaders and observers.

The Transparency International index offers a more measured interpretation: while Senegal’s score improved from 36 to 45 out of 100 between 2012 and 2016, it stagnated until 2020, before falling back slightly to 43/100 in 2021 and 2022.

Purchasing power, the uphill battle

Senegal’s international profile rose as a result of the work carried out by Sall during his presidency of the African Union, from February 2022 to February 2023, but the internal socio-economic (and political) situation has become even more tense.

Admittedly, the country has honourable health indicators – life expectancy of 67 years and infant mortality rate of 29%, better than those of Côte d’Ivoire (at 57 years and 52%), according to the WB – and, despite the difficulties, it continues to extend universal health coverage (CMU).

The monetary poverty rate has fallen, from 43% in 2011 to from 37.8% in 2018-2019, according to the latest ANSD data. Over the past three years, the government has also put in place an anti-inflation arsenal to preserve purchasing power.

Debt under scrutiny

“The widening of the budget deficit and the increase in public debt are two major areas of concern,” the IMF said in July, a month after the granting of $1.8bn in support.

Senegal is emerging from the Sall years with its debt indicators in the red: public debt has risen steadily — from 45% of GDP in 2012, it will reach 76.6% in 2022, a ratio higher than the standard of 70% imposed by the West African Economic and Monetary Union (WAEMU).

According to the Fund’s projections, the country will not get back on track before 2026.

The trend in the budget deficit reflects the impact of recent crises – the Covid-19 pandemic and the war in Ukraine – which generated inflation and increased public spending.

The deficit fell between 2012 and 2017, from 6% to 3% of GDP, but has since risen again, exceeding 6% in 2020, 2021 and 2022. Estimated at 4.9% for 2023, it should fall to 3.9% from 2024, in line with a commitment made to the IMF.

The implementation of cost-cutting measures (reduction in tax exemptions, gradual end to energy subsidies, better targeting of social spending) and the start-up of oil and gas production, synonymous with increased revenues, should provide a breath of fresh air.

Yet given the interest rate and exchange rate risks, as well as the scale of the debt burden, which is due to peak between 2025 and 2027, the task will be an arduous one. Ultimately, while the risk of over indebtedness remains moderate, the country has very limited wiggle room for absorbing any new shocks in the short term.