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Senegal Overview

    Context

    Country Overview

    Senegal is located in the western most part of Africa’s Sahel region and has a national territory that spans 196,722 km². Its population is estimated at 13.5 million, 50% of which live in urban zones.  

    Political Context

    Senegal is one of the most stable countries in Africa, and has considerably strengthened its democratic institutions since its independence from France in 1960. Senegal has had four presidents: Leopold Sedar Senghor (1960-1980), Abdou Diouf (1981- 2000), Abdoulaye Wade (2000- 2012). In 1980, Senghor resigned and since then, political transitions in 2000 and 2012 have been peaceful and transparent. The incumbent president Macky Sall won the run-off election with 65.8% of the vote in March 2012.

    The next presidential election is expected in 2019, however, President Sall has proposed to shorten his term from seven to five years, which if adopted by a referendum in 2016, would move elections up to 2017.

    Economic Overview

    Senegal aspires to become an emerging country by 2035. However, it has been stuck in a low-growth equilibrium since 2006. Over the last decade Senegal has been outperformed by Sub-Saharan Africa which grew at an average rate of 6% whereas growth in Senegal averaged only 3.3% since 2006. Senegal also performed poorly as compared with non-resource rich Sub-Saharan countries. Moreover, while output per capita grew slowly, the volatility of growth was greater than that of other West African Economic and Monetary Union (WAEMU) countries. Within Senegal, poverty remains high at 46.7%, and the number of poor has risen since 2006. Given an estimated annual population growth of 2.6%, gross domestic product (GDP) growth remains well below the rate necessary for significant poverty reduction.

    In 2014, growth began to trend upward, however expansion remained sluggish. GDP growth rose in 2014 to an estimated 4.5%, its highest pace since 2008. Services continued to be the most dynamic sector (+5.6%), but the secondary sector, led by construction, has improved significantly, increasing by 4.9% after declining in 2013. Erratic rainfall once again led to a disappointing harvest, with rain fed cereals production down 20%, although production in irrigated rice improved by 28%. As a result, 30% of rural households are estimated to face food insecurity and more than 55% of those households are poor.

    Medium-term outlook

    The Senegalese economy is expected to continue to accelerate in 2015. More favorable oil prices coupled with a rebound in agriculture and the end of the Ebola epidemic will benefit the national economy. However, Ebola has had a serious negative impact on tourism in the first half of the year. World Bank forecasts estimate a real GDP growth rate of 4.8% with the economy driven mainly by the services sector, particularly telecommunications and financial services. Uncertain rainfall could hamper agricultural production once again, while shocks in neighboring countries (a prolonged Ebola epidemic, renewed insecurity in Mali) could limit growth in tourism, trade and transport. Sluggish policy implementation of reforms in the energy and agriculture sectors could also depress growth.

    Development Challenges

    An unfavorable investment climate, costly energy, and weak governance systems have prevented the private sector from stimulating the economy. External shocks and natural disasters have also slowed growth and increased the vulnerability of the entire economy.

    In addition, poor management of exports such as peanuts, seafood, and phosphates have slowed growth. The tourism sector, which has substantial potential, has been neglected. In order to strengthen the Senegalese economy and increase its resilience to internal and external shocks, more efforts are needed to diversify the economy in the areas of horticulture, mining, telecommunications, and manufacturing.

    The new government has developed an ambitious program that prioritizes diversification and exports. The Emerging Senegal Plan or “Plan Senegal Emergent” (PSE) aims to increase the productivity of Senegal’s economy in the public and private sectors. However, current plans to accelerate public investment will test the authorities’ ability to improve the quality of projects, and could lead to higher debt without commensurate positive impact on GDP. In particular, improving the quality of public investment and promoting domestic and foreign private investment will be critical to achieving the ambitious goals of the PSE. In addition, the government’s capacity to implement effective policies that mitigate the impact of recurrent shocks on the poor and vulnerable people remains a challenge.

    Social Context

    Poverty remains high in Senegal, affecting 46.7% of the population. GDP growth is well below the rates necessary for significant poverty reduction, and a growing reliance on capital-intensive exports rather than labor-intensive sectors limits the creation of new jobs. Repeated shocks in recent years have further hampered progress, with poverty incidence decreasing only by 1.8 percentage points between 2006 and 2011, and the number of poor actually increasing to reach 6.3 million in 2011.

    Inequality in Senegal is moderate, and slightly lower than the Sub-Saharan African average. However, geographic disparities are very pronounced, with almost 2 out of 3 residents poor in rural areas, especially in the south, versus one in four in Dakar. Progress has been made on access to education, but a significant number of youth only go to Koranic schools that are not aligned with the public school curriculum. Child begging related to some of these schools remains a problem, notably in Dakar.  More broadly, a majority of the Millennium Development Goals will not be achieved. 

    To promote the welfare and human capital of the poorest, President Sall has committed to accelerating the roll out of the National Family Security Transfer Program (Programme National de Bourses de Sécurité Familial) to include 200,000 households before the end of 2015.

    This requires a strong financial commitment, and more importantly, significant efforts to consolidate the program along the lines identified in a recent process evaluation. This includes improving the targeting methodology, implementing the program’s communication and promotion measures, and improving the payment mechanism. The International Development Association supported Safety Nets Program ($40.5 million) will be instrumental in supporting the government’s efforts in this area.

    Last Updated: May 07, 2015

    LENDING
    Senegal: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    World Bank Group Engagement in Senegal

    A new International Development Association (IDA), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA) joint Country Partnership Strategy (CPS) for the period of 2013-2017 was discussed by the World Bank Board of Executive Directors on February 19, 2013. The new CPS is fully aligned with the new government’s strategy and priorities. Under the new CPS, the World Bank Group’s support will be anchored on one foundation: building resilience through a strengthened governance framework that aims to accelerate inclusive growth and employment, and improve service delivery.

    The total commitments for IDA, IFC, and MIGA are: $1.1 billion ($800 million in national IDA funds plus $300 million in regional IDA funds), $143 million, and $140 million respectively. Trust funds amount to $185.9 million. The World Bank Group portfolio is comprised of 16 national IDA projects and seven regional IDA projects. The largest shares of the portfolio are dedicated to agriculture (21%), education (21%), health/social protection (15%), transportation (15%), and energy (10%).

    International Finance Corporation (IFC)

    The IFC's current committed portfolio in Senegal, as of February 2015, is $143 million. In order to further promote private sector development as part of the new CPS agenda, IFC seeks to: (i) increase access to finance for small and medium enterprises (SME) and microenterprise through financial intermediaries and the provision of investment and advisory services; (ii) support the private provision of infrastructure with a focus on power and transportation; (iii) support the agribusiness value chain directly and through financial intermediaries, and (iv) help the government improve Senegal’s business environment.

    Multilateral Investment Guarantee Agency (MIGA)

    Over the years, MIGA has supported both inward and outward foreign direct investment (FDI) in favor of Senegal. As of February 2015, MIGA’s gross exposure in Senegal was $140 million.

    Last Updated: May 07, 2015

    LENDING
    Senegal: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    The World Bank Group has contributed to Senegal’s development performance in the following sectors:

    Water and Sanitation

    The World Bank has supported Senegal for nearly two decades in the water and sanitation sector through three successive projects: the Water Sector Project (PSE), the Long Term Water Sector Project (PELT), and the on-going Water and Sanitation Millennium Project (PEPAM). A follow-up operation is planned under the new Country Partnership Strategy.

    The World Bank’s intervention to-date has yielded the following results:

    • A successful urban water reform, based on a strong public-private partnership (PPP), has enabled people living in towns to have universal access to water at a nearly 100% access rate, mainly through private connections.
    • Senegal is one of the few countries in Sub-Saharan Africa possessing significant sanitation infrastructures (collective sewage, condominium systems, waste water and sludge treatment plants) and a dedicated national body in charge of developing and operating the urban sanitation infrastructures.
    • More recent World Bank intervention in the rural sector has contributed to reaching a water access rate of 84.1% and has made a shift in the management of rural water supply schemes through progressive and effective engagement of the local private sector. Senegal has exceeded the Millennium Development target of 82%.

    Dakar-Diamniadio Toll Highway

    The Dakar-Diamniadio Toll Road, the first of its kind in the region, has reduced travel times between downtown Dakar and Diamniadio from about 90 to 30 minutes along with the cost of such congestion to the Senegalese economy, which is estimated at 4.6% of Senegal’s GDP. As the project progresses, it will also improve access to existing and planned major infrastructure projects concerning Dakar’s port, the regional transportation of goods, a proposed special economic zone, Dakar’s new airport, and a new conference center.

    The project has leveraged about $122 million from the private sector through SENAC S.A., a project company established to build, equip for tolling, operate and maintain this 24 km-long toll road on a 30-year Build and Operate (BOT) concession. Thanks to the upgrades made in Pikine Irrégulier Sud, the project will also improve the living conditions of about 200,000 people as it provides better urban roads, community facilities, and drainage mechanisms to prevent flooding a critical problem in Dakar’s suburbs.

    Education

    The World Bank is a strong supporter of the Senegalese education system. The current World Bank support to the sector consists of a global amount of $214 million.

    Since 2000, Senegal’s education sector has made significant progress in terms of access. The Growth Enrollment Rate (GER) at the primary level, which was 81% in 2005, has increased to 94% in 2013. The secondary level enrollment rate is expanding as well, reflecting the growth in the size of incoming cohorts.  In 2011, youth between the ages of 15 to 19 were twice as likely to have attended middle school as youth of the same age five years earlier. Inequity in school enrollment has also been reduced at the primary level. With an efficient policy and expenditure drive over the past few years, the GER for girls now exceeds that of boys. Senegal has also been successful in improving the learning environment by reducing class size and achieving a pupil to teacher ratio of 37, which is one of the lowest in the region. 

    Reforms in higher education have been carried out in order to help universities generate their own sources of income and increase the transparency of their management. An action plan for a balanced budget for universities has also been put in place. The University of Dakar (UCAD) and the University of Saint-Louis (UGB) were selected to host a Center of Excellence (receiving $8 million in funds from the World Bank) specializing in maternal and child health and mathematics and ITC respectively.

    Last Updated: May 07, 2015

    LENDING
    Senegal: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Partners

    Most bilateral and multilateral development agencies have an active presence in Senegal. Considerable progress has been made in recent years in order to streamline development assistance in Senegal, as consistent with the principles articulated in the Paris Declaration and the Accra Agenda. 

    Last Updated: May 07, 2015

Country Office Contacts
Main Office Contact:
(221) 33-859-41-00

In Senegal:
Mademba Ndiaye (221)
33-859-4140

Bureau de la Banque mondiale
Corniche Ouest X Rue Léon Gontran Damas
Dakar, Senegal

mademba@worldbank.org
In Washington:
Marie-Chantal Uwanyiligira
Country Program Coordinator
+1-202-473-4596

1818 H Street NW
Washington, DC 20433

muwanyiligira@worldbank.org