ECONOMY
The former capital of French West Africa, Senegal is a semi-arid country located on the westernmost point of Africa. Predominantly rural and with limited natural resources, the country earns foreign exchange from fish, phosphates, peanuts, tourism, and services. Its economy is highly vulnerable to variations in rainfall and changes in world commodity prices. Senegal depends heavily on foreign assistance, which in 2007 represented about 23% of overall government spending--including both current expenditures and capital investments--or African Financial Community (CFA) 315 billion (U.S.$630 million).
The fishing sector has replaced the groundnut sector as Senegal's export leader. Its export earnings reached $249 million in 2005. The industrial fishing operations struggle with high costs, and Senegalese tuna is rapidly losing the French market to more efficient Asian competitors.
Phosphate production, the second major foreign exchange earner, has been steady at about $230 million (around 1500 tons). Exports of peanut products reached $63 million in 2003. Peanut production has decreased by 30%, one of its lowest levels. Receipts from tourism, the fourth major foreign exchange earner, have picked up since the January 1994 devaluation. Today, tourism constitute between 5 and 6% of national income. Senegal has about 250 tourist class hotels and the sector employs about 100.000 people.
Senegal’s Agency for the Promotion of Investment (APIX) plays an important role in the government’s foreign investment program. Its objective is to increase the investment rate from its current level of 20.6% to 30%. Currently, there are no restrictions on the transfer or repatriation of capital and income earned, or investment financed with convertible foreign exchange. Direct U.S. investment in Senegal remains about $38 million, mainly in petroleum marketing, pharmaceuticals manufacturing, chemicals, and banking. Economic assistance comes largely from France, the IMF, the World Bank, and the United States. The European Union, the African Development bank, China, Canada, Spain, Japan, and Germany also provide fund significant aid programs.
Senegal has well-developed though costly port facilities, an international airport serving 28 international airlines that serves as a regional hub, and a reasonable telecommunications infrastructure, including a fiber optics backbone and cellular phone penetration approaching 15% of the population.
GDP (2006): $10.6 billion.
Real annual growth rate: 4.6% (2007 estimate).
Per capita GDP (2006): $700 - in terms of purchasing power parity (PPP) $1,936 (2007).
Natural resources: Fish, peanuts, phosphate, iron ore, gold, titanium, oil and gas, cotton.
Primary sector: Agriculture represents 15% of GDP. Products--peanuts, millet, sorghum, manioc, rice, cotton, vegetables and flowers, fruit.
Secondary sector: 21.4% of GDP, of which industry and mining represent 22%. Types--fishing; agricultural product processing; light manufacturing; mining including energy, oil mining, and construction.
Tertiary sector: 63% of GDP, of which services represent 40% of GDP and trade 22% of GDP.
Trade (2006): Exports--$1.407 billion (fish products, peanut products, phosphate products). Major markets--France, other European Union, West African CFA zone. Imports--$3.040 billion (food, consumer goods, petroleum, machinery, transport equipment, petroleum products, computer equipment). Major suppliers--France, Nigeria, Cameroon, United States.
Exchange rate: Fixed to the euro. African Financial Community (CFA) 656 CFA =1 euro.
Economic aid received: In October 2007, major donors pledged approximately $4 billion in assistance for the next four years; U.S. assistance was around $55 million in 2007.
