enegal has experienced uneven progress in economic free- S dom. The regulatory framework discourages dynamism and tends to curb development of the private sector. Despite some
WORLD RANK: REGIONAL RANK: improvement in streamlining business formation, government bureaucracy and the lack of transparency create a poor entre- 120 21 preneurial climate, and a lack of commitment to open markets hinders integration into the global marketplace. ECONOMIC FREEDOM STATUS: MOSTLY UNFREE Implementation of deeper institutional reforms to improve the foundations of economic freedom is critical to Senegal’s pros- pects for long-term economic development and greater poverty reduction. Systemic weaknesses persist in the protection of property rights and the effective enforcement of anticorruption measures. The judiciary remains vulnerable to political influence.
ECONOMIC FREEDOM SCORE
55.9( ▼ DOWN 2.2 POINTS )
55.0 60.9 REGIONAL AVERAGE WORLD AVERAGE (SUB-SAHARAN AFRICA REGION)
NOTABLE SUCCESSES: CONCERNS: OVERALL SCORE CHANGE Monetary Stability and Rule of Law, Financial Freedom, and SINCE 2013: Trade Freedom Labor Freedom +0.4
FREEDOM TREND QUICK FACTS
POPULATION: UNEMPLOYMENT: 15.0 million 9.3% GDP (PPP): INFLATION (CPI): $36.7 billion 0.1% 6.5% growth in 2015
5-year compound FDI INFLOW: $345.2 million annual growth 4.2% $2,451 per capita PUBLIC DEBT: 56.8% of GDP
2015 data unless otherwise noted. Data compiled as of September 2016
BACKGROUND: President Macky Sall of the Alliance for the Republic–Yakaar party won election in March 2012, defeating two-term incumbent Abdoulaye Wade, whose third-term bid sparked street protests. In March 2016, at Sall’s urging, the country passed a constitutional referendum shortening presidential terms from seven to five years, prohibiting more than two terms, and reducing presidential power in favor of the National Assembly. In April 2014, after more than 30 years of conflict between the government and south- ern separatists, the leader of the rebel Movement of Democratic Forces of Casamance declared a unilateral cease-fire that remains in force. About 75 percent of the workforce is engaged in agriculture or fishing.
422 2017 Index of Economic Freedom KEY: WORLD AVERAGE 12 ECONOMIC FREEDOMS | SENEGAL
RULE OF LAW GOVERNMENT SIZE
114th 103rd 64th 135th 70th 134th Rank
44.0 39.3 42.1 70.9 74.3 51.8 Property Judicial Government Tax Government Fiscal Rights E ectiveness Integrity Burden Spending Health
Property titling procedures are uneven across the The top individual income tax rate is 40 percent, country. The judiciary is independent but inadequately and the top corporate tax rate is 30 percent. Other resourced and subject to external influences. President taxes include a value-added tax and an insurance tax. Sall’s reformist policy agenda includes restoring fiscal The overall tax burden equals 20.2 percent of total responsibility and pursuing former ministers accused domestic income. Government spending has amounted of graft, but the public remains frustrated by perceived to 29.3 percent of total output (GDP) over the past official corruption and by slow progress on efforts to three years, and budget deficits have averaged 5.1 address popular demand for political and social reform. percent of GDP. Public debt is equivalent to 56.8 percent of GDP.
REGULATORY EFFICIENCY OPEN MARKETS
157th 171st 12th 118th 89th 106th Rank
50.8 38.9 86.0 73.1 60.0 40.0 Business Labor Monetary Trade Investment Financial Freedom Freedom Freedom Freedom Freedom Freedom
Although the process for establishing a business Trade is important to Senegal’s economy; the has become more streamlined, start-up costs remain value of exports and imports taken together equals 74 substantial. The overall regulatory environment is percent of GDP. Foreign investment may be screened. SENEGAL vulnerable to arbitrary decision-making and corruption. Most sectors of the economy are open to invest- A formal urban labor market has been slow to develop. ment, but bureaucratic barriers may impede foreign The IMF has advised reductions in unproductive investment. The underdeveloped financial system is public spending and has appealed for progress in the dominated by banking, which is highly concentrated, implementation of energy reform, but the government and the government retains its shares in a number continues to fund costly subsidies. of banks.
The Heritage Foundation | heritage.org/Index 423