Senegal’s economy is expected to grow 4.8 percent this year, against 6.1 percent last year, the World Bank announced in its “Senegal Economic Situation Report” published here Wednesday.
Senegal’s GDP in 2020 stood at $24.9 billion in current terms. It’s per capita gross national income (GNI) was $1,430 in 2020, making it a lower-middle-income country, according to the report.
Senegal’s economy grew by more than 6% per year between 2014 and 2018. Real GDP growth stood at 0.87% in 2020, down from 4.4% in 2019, and 6.2% in 2018.
This growth rate will be driven by “the performance of the agricultural and mining sectors and to a lesser extent by the continued rebound in the services sector,” the World Bank said.
However, the recovery is being undermined by the conflict in Ukraine, the World Bank said.
Real growth is expected to slow from 6.1% in 2021 to 5% in 2022 as private consumption and investment are declining owing to higher food and energy prices and greater uncertainty. Average inflation is expected to peak at 5.5% in 2022, as a result of trade disruptions exacerbated by the conflict in Ukraine, with energy and food prices rising the most.
The pandemic has significantly altered the country’s economic outlook, affecting services such as tourism and transport, and exports. Senegal has responded with several containment measures and has implemented an Economic and Social Resilience Program (Programme de Résilience Économique et Sociale, PRES). Nevertheless, limited fiscal buffers and safety nets, a vulnerable health care system, and a large informal sector pose challenges.
Development Challenges
According to the World Bank, Senegal’s key development challenge is to mitigate the socioeconomic impact of the pandemic while enabling sustainable and inclusive growth. This will require:
– Improving resilience to macro-fiscal, environmental, climate change, and social risks to safeguard investments in human capital and household livelihoods.
– Boosting and protecting human capital for productivity growth; Enhancing competitiveness and job creation by improving digital and physical connectivity at the national and regional levels and increasing the efficiency of labor markets.
– Lowering energy costs, reducing the carbon footprint, and optimizing the energy mix.
– Promoting the services economy and boosting the productivity and competitiveness of agriculture and related value chains.
Social Context
The COVID-19 pandemic risks jeopardizing the socioeconomic gains achieved through improved access to key services. This could generate severe losses for households through shortfalls in labor and non-labor income, domestic price inflation, and disruptions in basic services.
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