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Systematic Country Diagnostic of Senegal

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Public Disclosure Authorized SYSTEMATIC COUNTRY DIAGNOSTIC OF SENEGAL WORLD BANK GROUP Public Disclosure Authorized Public Disclosure Authorized Dakar, Senegal October 4, 2018 Public Disclosure Authorized P a g e | ii ACKNOWLEDGEMENTS This Systematic Country Diagnostic (SCD) has been produced by a World Bank Group (WBG) team co-led by Paolo Zacchia (EFI Program Leader), Federica Marzo (Senior Poverty Economist), and Aneliya Muller (Private Sector Development Consultant). It also included Bronwyn Grieve (Senior Public Sector Management Specialist), Fiseha Haile Gebregziabher (Macroeconomist), Anne Bastin (IFC Consultant), and Ma Shouka BA (Private Sector Consultant). The core team relied on inputs from an extended team, listed in the table below, with Sophie Naudeau (HD Program Leader) and Eric Lancelot (SD Program Leader) acting as focal points coordinating inputs from the extended team members. Several thematic groups, which provided inputs and organized consultations, were led by Aifa Fatimata Ndoye Niane (Senior Agricultural Economist), Esther Haftendorn (Consultant, Transport), Julio Loayza (Senior Country Economist), Isabelle Kane (Senior Disaster Risk Management Specialist) and Solene Rougeaux (Social Protection Specialist). Significant guidance and comments have been provided by Lars Christian Moller (Practice Manager, MFM) and Chiara Bronchi (Practice Manager, Governance). The SCD was prepared under the supervision of Louise Cord (Country Director), Andrew Dabalen (Practice Manager, Poverty), and Faheen Allibhoy (IFC Country Manager). Valuable comments and advice were received from the following peer reviewers at the concept and decision stages: Ali Zafar (Senior Economist); Samuel Freije-Rodriguez (Lead Poverty Economist), Helene Grandvoinnet (Senior Public Sector Specialist), and Verena Maria Fritz (Senior Public Sector Specialist). The core team also received extensive feedback on preliminary findings and messages throughout multiple consultations. Many thanks to various stakeholders and partners in Senegal who participated in those meetings and provided their inputs and suggestions on the storyline and proposed priorities. Finally, the team benefited from the guidance and insights of a technical counterpart working group at the Ministry of Economy and Finance, headed by Pierre Ndiaye, Director General of Planning and Economic Policies. GLOBAL PRACTICE EXTENDED TEAM MEMBERS Agriculture and Fisheries El Hadj Adama Toure, Aifa Fatimata Niane Ndoye CMU Sophie Naudeau, Eric Lancelot Climate Change Julie Rosenberg, Radhika Goyal, Amelia Midglay Education Hamoud Abdel Wedoud Kamil, Mouhamadou Moustapha Lo Energy and Extractives Manuel Berlengiero Finance and Markets Cedric Mousset Fragility, Conflict, and Gender Mame Safietou Djamil Gueye, Fatou Fall Health, Nutrition and Population Moussa Dieng, Menno Mulder-Sibanda Julio Ricardo Loayza, Fiseha Haile Gebregziabher, Faya Hayati, Macroeconomic and Fiscal Management Mahugnon Stanislas Cedric Deguenonvo Poverty Djibril Ndoye, Kiyomi Cadena, Ana Abras Social Protection and Labor Aline Coudouel, Solene Rougeaux Andre Teyssier, Awa Seck, Salamata Bal, Salim Rouhana, Isabelle Social, Urban, Rural and Resilience Celine Kane Taxes Jan Loeprick Trade and Competitiveness Laurent Corthay, Ma Soukha Ba Transport and ICT Aiga Strokenberga, Arthur Foch Water Oumar Diallo IFC Anne Marie Bastin, Abdellatif Kabbaj, Vincent Floreani MIGA Hoda Atia Moustafa, Gero Verheyen P a g e | iii ABBREVIATIONS AND ACRONYMS Youth Employment Promotion Agency (Agence National Pour la Promotion de l’Emploi ANPEJ des Jeunes) ASER Senegalese Agency for Rural Electrification (Agence Sénégalaise d'Electrification Rurale) BCEAO Central Bank of West African States (Banque Centrale des Etats de l'Afrique de l'Ouest) CCT Conditional Cash Transfer Medium Term Sector Expenditure Framework (Cadre de Dépenses Sectoriel a Moyen CDSMT Terme) National Center for Women Assistance and Training (Centre National d’Assistance et de CENAF Formation pour la Femme) CEQ Commitment for Equity CMU Universal Health Insurance (Couverture Maladie Universelle) CNCAS National Fund for Agricultural Credit (Caisse Nationale de Crédit Agricole du Sénégal) CoDB Cost of Doing Business CPIA Country Policy and Institutional Assessment DD Demographic Dividend General Directorate of Taxes and Government Property (Direction Générale des Impôts et DGID des Domaines) DSA Debt Sustainability Analysis DTP Diphtheria, Pertussis, Tetanus ECD Early Childhood Development ECOWAS Economic Community of West African States ESPS Senegal National Survey of Poverty (Enquête de suivi de la pauvreté au Sénégal) FCFA Franc of the African Financial Community (Franc de la Communauté Financière Africaine) FDI Foreign Direct Investment GDP Gross Domestic Products GER Gross Enrollment Rate GTA Grand Tortue Ahmeyin HAZ Height-For-Age Z-Scores HIPC Heavily Indebted Poor Countries ICA International Competitiveness Assessment ICT Information and Communication Technologies IMF International Monetary Fund Senegalese Institute for Agricultural Research ((Institut Sénégalais de Recherches ISRA Agricoles) IQ Intelligence Quotient LFPR Labor Force Participation Rate LG Local Government LMIC Lower-Middle Income Country P a g e | iv LOLF Organic Law on Public Finance (Loi Organique Relative aux Lois de Finances) MDG Millennium Development Goals NAPA National Action Plan for Adaptation to Climate Change NER Net Enrollment Rate NGO Non-governmental Organization OECD Organization of Economic Cooperation and Development OFNAC Anti-corruption Commission (Office National de Lutte Contre la Fraude et Corruption) Program for Quality, Equity, and Transparency Improvements in Education (Programme PAQUET d’Amélioration de la Qualité de l’Équité e de la Transparence Dans L’Éducation) Program for the Analysis of the CONFEMEN Education Systems (Programme d’Analyse PASEC des Systèmes Educatifs de la CONFEMEN) PDEF Ten-Year Plan for Education and Training (Plan Décennal de l’Éducation et Formation) PFM Public Financial Management National Program of Family Security Assistance (Programme National de Bourses de PNBSF Sécurité Familiale) PPP Purchasing Power Parity PSE Plan for Emerging Senegal (Plan Sénégal Émergent) R&D Research and Development SCD Systematic Country Diagnostic SENELEC National Electricity Company of Senegal (Société National d'Electricité du Sénégal) SOE State-owned Enterprises SSA Sub-Saharan Africa TFP Total Factor Productivity ToT Terms of Trade TVET Technical and Vocational Education and Training US$ US Dollar VAT Value-added Tax WAEMU West African Economic and Monetary Union WAZ Weight-For-Age Z-Scores WBG World Bank Group WDI World Development Indicators WGI Worldwide Governance Indicators P a g e | v Vice Presidents: Hafez M. H. Ghanem, Sergio Pimenta World Bank Country Director: Louise Cord IFC Director: Cheikh O. Seydi ADM / Practice Managers: Louise Cord, Faheen Allibhoy, Andrew Dabalen Task Team Leaders: Paolo Zacchia and Federica Marzo P a g e | vi CONTENTS EXECUTIVE SUMMARY ........................................................................................................................ 1 INTRODUCTION ....................................................................................................................................... 9 PART I. STOCKTAKING ...................................................................................................................... 13 A. ECONOMIC GROWTH ........................................................................................................................ 13 Aggregate Growth Trends ...................................................................................................................... 13 Key Features of Senegal’s Long-term Growth Performance ................................................................. 16 Drivers of Growth and Its Sustainability ................................................................................................ 19 Conclusion .............................................................................................................................................. 22 B. POVERTY AND SHARED PROSPERITY .......................................................................................... 23 Levels and Trends in Poverty, Shared Prosperity and Vulnerability ..................................................... 23 Evolution of Non-Monetary Dimensions of Welfare and Human Capital Indicators ............................ 27 Evolution and Drivers of Poverty ........................................................................................................... 31 Poverty Profile ........................................................................................................................................ 34 Charting a Course Towards Inclusion ................................................................................................... 37 C. GOVERNANCE AND INSTITUTIONS .............................................................................................. 39 Political Economy Background .............................................................................................................. 41 Government Effectiveness ....................................................................................................................... 42 Judicial and Regulatory Enforcement .................................................................................................... 43 Citizens’ Engagement and Decentralization .........................................................................................
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