Growth and Development A Level Macroeconomics Profile: Senegal (2020) • +8.2% South Sudan • +8.1% Rwanda • +7.3% Côte d'Ivoire Fast growing • +7.2% Ethiopia African • +6.8% Senegal countries in • +6.7% Benin 2020 • +6.4% The Gambia • +6.2% Uganda • +6.0% Burkina Faso • +6.0% Djibouti • +6.0% Guinea Leading players of Senegal at the 2018 FIFA World Cup, by market value (in million euros) Diafra Sakho 5 Alfred N'Diaye 5 Moussa Konaté 6 Kara 7 Youssouf Sabaly 7 Mame Diouf 7 M'Baye Niang 10 Cheikhou Kouyaté 12 Ismaïla Sarr 14 Badou Ndiaye 15 Salif Sané 18 Idrissa Gueye 20 Keita Baldé 30 Kalidou Koulibaly 60 Sadio Mané 70 0 10 20 30 40 50 60 70 80 Indicators for Senegal GNI per capita (PPP) in US$s $3,256 Latest HDI ranking 166th Malnutrition data for children under 5yrs 16% (Stunting (moderate or severe)) Child labour (% of children ages 5-17 years) 23% Healthy Life Expectancy at birth (years) 59 years Gini coefficient (measure of inequality) 0.4 Inward Foreign Direct Investment (% of 2.8% GDP) 5-year average FDI inward flow Remittances (net, % of GDP) 9% Overseas aid (net, % of GDP) 4.4% Labour force participation rate 46% Value of remittance inflows to Senegal from 2010 to 2018 (in million U.S. dollars) 2,500 2,213 2,000 1,929 1,929 1,929 1,929 1,777 1,614 1,576 1,478 1,500 1,000 500 0 2010 2011 2012 2013 2014 2015 2016 2017 2018* 10.0 12.0 0.0 2.0 4.0 6.0 8.0 1996 Remittance Inflows to GDP for Senegal, Percent, 1997 1998 1999 Annual, Not Seasonally Adjusted 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Indicators for Senegal Indicators for Senegal GNI per capita (PPP) in US$s $3,256 Health spending as a share of GDP 5.5% Latest HDI ranking 166th Income share of the bottom 40% 16% Malnutrition data for children under 5yrs 16% Income share of the richest 10% 41% (Stunting (moderate or severe)) Population of females with at least some 11% Child labour (% of children ages 5-17 years) 23% secondary education Population in severe multidimensional 33% Healthy Life Expectancy at birth (years) 59 years poverty (per cent) Gini coefficient (measure of inequality) 0.4 Median age (years) 18.5 years Inward Foreign Direct Investment (% of Government tax revenue (total tax revenue 2.8% 15% GDP) 5-year average FDI inward flow as a per cent of GDP) Trade as a share of GDP (exports and 60% Remittances (net, % of GDP) 9% imports) Overseas aid (net, % of GDP) 4.4% Youth unemployment rate (per cent) 8% Renewable energy consumption (% of total Labour force participation rate 46% 43% final energy consumption) Age structure in Senegal 2007-2017, percent of the population 100. 90. 80. 70. 53.38 53.48 53.57 53.66 53.69 53.74 53.79 53.86 53.94 54.01 54.11 60. 50. 40. 30. 20. 43.45 43.37 43.3 43.24 43.23 43.21 43.18 43.13 43.06 43 42.88 10. 0. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0-14 years 15-64 years 65 years and older Growth of real GDP per capita for Senegal 5.0 4.2 4.0 3.7 3.8 3.5 3.3 3.4 3.1 3.1 3.0 2.9 2.1 2.0 2.0 Growth of real 1.2 1.0 GDP per capita 0.6 0.0 -0.2 -0.2 -1.0 -0.7 -1.5 -2.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Key Recent Macro Data for Senegal Average annual real GDP growth, 2010–20 (%) 6.5% Inflation rate (%) 1.5% Key Unemployment rate (% of labour force) 6.5% macroeconomic indicators for Fiscal balance (% of GDP) -3.0% Senegal Current account balance (% of GDP) -6.9% External debt (external debt to GDP ratio) 46% Investment spending (% of GDP) 31% Gross national savings (% of GDP) 21% Senegal has experienced strong growth and low inflation It is rare for fast-growing lower income countries to maintain low inflation – this might have something to do with the fixed exchange rate of the West African Franc against the Euro. Dissecting the Senegal External Deficit Current transfers are positive – reflecting remittances and overseas aid Negative services balance – how can Senegal improve this part of their trade accounts? Key Background Information for Senegal Currency unit West African CFA franc Currency system Pegged to the Euro Monetary policy interest rate (%) 4.5% Senegal is a member of Other Member of a Regional Trade Agreement? the Economic Community of West African States Background Main corporate tax rate (Per Cent) 30% Competitiveness Ranking (World 114th /144 countries Economic Forum) Corruption Perception Ranking 66th / 180 countries (Transparency International) Ease of Doing Business Ranking (World 141st / 167 countries Bank) Emerging Senegal Plan Oil and gas discoveries Senegal is inside a single market and a single currency system Senegal is inside a single market and a single currency system • Central Bank of West African States (BCEAO) maintains a West African fixed exchange rate of the Economic CFA franc with the euro Monetary • But most countries now want Union to form their own currency – the Eco (which initially would remain pegged to the Euro) The West African Currency Debate Key barriers to sustained growth in Senegal Low access to and high cost of energy - electricity production currently relies on expensive heavy fuel oil and diesel, putting Senegal at a competitive disadvantage Insufficient workforce skills due to a deficient education and vocational training system Low-income informal economy less than 10 percent of workforce is formally employed Lack of access to credit – the majority of population has no access to financial services Lack of competition in some product markets which raises prices for consumers • Assessing benefits & costs of membership of single market and a single currency with fixed exchange rate to the Euro • Impact of high & growing dependency on remittances • Can Senegal avoid the natural resource curse post oil discoveries? • Evaluating the contribution that tourism might make to growth and human development outcomes • HDI ranking is 12 places below Applying Senegal to your A their GNI per capita ranking – why? What pro-poor policies level economics might help to address this? Growth and Development A Level Macroeconomics Profile: Senegal (2020).