Country Report Senegal April 2011

Economic policy: The governemt exceeds its road fund-raising target

A donor conference was held in Dakar on March 21st-22nd, organised by the Ministry of International Co-operation, Air Transport, Infrastructure and Energy to finance an ambitious programme of road construction, rehabilitation and maintenance, amounting to over CFAfr1.6trn (US$3.3bn) over a five-year period. The minister, Karim Wade, painted a bleak picture of the state of Senegal's roads, saying that 83% of roads were considered to be in a bad state, blaming previous Parti Socialiste (PS) administrations for chronic underinvestment, which has made the current plan particularly challenging. He claimed that between 1993 and 2000 the PS invested only CFAfr131bn (around US$272m at current exchange rates), compared with the CFAfr1.2trn spent during his father's regime, although he neglected to mention that the 1993-2000 period was characterised by a significant structural adjustment-led fiscal squeeze, which thwarted public investment in general.

The government initially sought CFAfr700bn for the programme but raised CFAfr1.6trn, with a further CFAfr450bn to be mobilised domestically. The conference included a wide range of donor agencies and investors, including from Arab countries, China, India and other non-OECD and international financial institution partners. Overall, the response was positive, and most donor agencies committed to contributing to the ambitious programme. Moctar Thiam, the interim country director of the World Bank, while supporting the plan, stressed the need to prioritise road maintenance, which should receive at least 50% of the committed funding to ensure the investments' sustainability. Both KarimWade and Mr Thiam suggested that, should this programme be successfully implemented, Senegal would finally meet the average indicators of road infrastructure for Sub-Saharan Africa. This would require stronger implementation capacity and a significant fiscal effort, amounting to around 4% of GDP in road infrastructure expenditure, an effort that will necessitate disciplined fiscal management in order to avoid the slippages experienced in 2008, which were characterised mainly by arrears to construction companies.

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