Country Report Senegal March 2011

Outlook for 2011-12: Policy trends

Senegal maintains IMF approval for its ongoing reform programme, despite continuing to miss some fiscal targets, with the Fund approving a new three-year policy support instrument in December 2010 to support economic reform through reducing the fiscal deficit, increasing transparency, encouraging the private sector and strengthening the financial sector. The government will continue to reduce private-sector arrears, at the expense of a wider deficit. The government's accelerated growth strategy targets real GDP growth of 7% a year-an overambitious medium-term target given the economy's structural constraints and global economic conditions. Nonetheless, higher investment in the key areas of energy, infrastructure, agriculture, fisheries, tourism, textiles and information technology will encourage growth. Despite ongoing business environment reform, Senegal continues to slip down the World Bank's Doing Business survey of global competitiveness, dropping one place in the 2011 rankings to 152nd out of 183 countries. A review of Senegal's customs and tax codes, which was revealed in December, should improve things.

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