Senegal Unveils 25-Year Development Plan Focused on Economic Sovereignty

Senegal's Newly elected President Bassirou Diomaye Faye addresses the audience after he took the oath of office as president during the inauguration ceremony in Dakar, Senegal April 2, 2024. REUTERS/Zohra Bensemra
Spread the love

DIAMNIADIO, Senegal, – Senegal’s government has announced a 25-year development plan aimed at establishing economic sovereignty through enhanced competitiveness, sustainable resource management, and improved governance. This initiative comes seven months after President Bassirou Diomaye Faye’s sweeping election victory, which was based on a promise to uplift living standards in the West African nation.

“Our goal is to build a diversified and resilient economy,” President Faye stated during the launch ceremony. The announcement comes just weeks ahead of a snap legislative election set for November 17. He acknowledged the challenges Senegal faces, emphasizing that the economy has been constrained by a reliance on raw material exports without substantial local processing, which has left the domestic private sector weak and young talent seeking opportunities abroad.

Since becoming an oil producer in June, Senegal has seen new economic prospects emerge. Production began at the Sangomar oil and gas field, operated by Australia’s Woodside Energy, while gas production is expected to start by the end of the year at the Greater Tortue Ahmeyim LNG project, managed by BP.

In the early months of his presidency, Faye initiated an audit of the nation’s oil and mining contracts, though details on its progress remain undisclosed.

The first phase of the new economic plan, costing $30.1 billion and spanning 2025 to 2029, aims to bring the budget deficit down to 3% of GDP, from its current 4.9%. The plan will be financed through a combination of public, private, and public-private partnerships, targeting an average growth rate of 6.5% and increasing the tax burden to 21.7%.

Despite these ambitions, the International Monetary Fund (IMF) recently revised Senegal’s growth forecast, lowering it to 6.0% from the 7.1% predicted in June, due to slower-than-expected economic growth in the first half of the year.

Among the government’s key targets is achieving 100% access to electricity, up from the current 84%, as well as making Senegal self-sufficient in energy. Additionally, the administration plans to adjust the country’s deficit financing structure to better manage national debt.

President Faye faces mounting pressure to fulfill his campaign promises, particularly from urban youth whose support was pivotal in his rise to power. His government has also faced opposition in the national assembly, leading to the dissolution of parliament last month and setting the stage for the upcoming elections. The now-dissolved assembly had seen his Pastef party holding only 26 of the 165 seats.

Compounding the challenges, the IMF reported a significant drop in government revenue in the first eight months of the year, raising concerns that the upcoming elections could potentially delay IMF financing for the country.

Source: Reuters