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- GDP (PPP):
- $33.6 billion
- 4.5% growth
- 3.4% 5-year compound annual growth
- $2,311 per capita
- Inflation (CPI):
- FDI Inflow:
Senegal’s economy has expanded at an average rate of about 3.5 percent over the past five years, but the volatility of economic growth has undermined progress on economic and social development and poverty reduction. The weakness of the overall regulatory and legal framework hinders the emergence of a more vibrant private sector.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 58.1 (up 0.3 point)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 111th
- Regional Ranking: 18th in Sub-Saharan Africa
- Notable Successes: Monetary Freedom and Trade Freedom
- Concerns: Property Rights, Corruption, and Labor Freedom
- Overall Score Change Since 2012: +2.7
President Macky Sall was elected in March 2012, defeating two-term incumbent Abdoulaye Wade, whose third-term bid sparked street protests. In September 2012, lawmakers voted to abolish the Senate and vice presidency to save money for disaster management. Sall appointed Mohammed Dionne prime minister in 2014. After more than 30 years of conflict between the government and southern separatists, the leader of the rebel Movement of Democratic Forces of Casamance declared a unilateral cease-fire in April 2014. Implementation of Sall’s Emerging Senegal Plan has proceeded slowly. About 75 percent of the workforce is engaged in agriculture or fishing. High unemployment is a major factor in high rates of emigration to Europe. Senegal remains heavily dependent on foreign aid but has recently had several successful Eurobond issues. Offshore oil fields discovered in 2014 are being developed.
Despite initial international praise for President Macky Sall’s anti-corruption crackdown, the selection of cases is not always viewed as objective. More even-handed implementation of reforms, audits of government projects and institutions, and pursuit of individuals for corruption and abuse of office are needed. The judiciary is independent but underresourced and subject to external influences. Property titling procedures are uneven across the country.
The top individual income tax rate is 40 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax and an insurance tax. The overall tax burden equals 18.4 percent of GDP. Government spending amounts to 28.2 percent of total domestic output. The budget is in deficit, and public debt equals about 50 percent of GDP. Road and electrical infrastructure projects have caused borrowing to increase.
The process for establishing a business is more streamlined but still costly. The large agricultural sector employs about 70 percent of the working population, and a formal urban labor market has been slow to emerge. The government says it seeks to minimize the impact of any supply-side shocks by maintaining subsidies and price caps on essential goods, but deficits have grown as a result.
Senegal’s average tariff rate is 8.1 percent. There are no limits on foreign ownership in most sectors of the economy. New foreign investment may be screened by the government. Domestic and foreign investors are otherwise generally treated equally under the law. Outmoded regulation, high credit costs, and scarce access to financing continue to constrain the small private sector.