Country Report Senegal March 2011

Economic performance: Prices are rising despite governemnt intervention

Another key source of tension, especially in Dakar, is the rising cost of living, especially for some basic necessities like food, household gas and petrol. Until recently inflation had been relatively benign, averaging only 1.2% year on year in 2010. By December, however, annual inflation jumped from 2.8% the previous month to 4.3%, and came in at 4.1% in January, driven by rising food and energy-specifically manifest in utility and transport-prices. It is not simply a question of the prices of some basic goods being significantly higher than a year ago, in terms of what consumers are used to in Senegal. It is also a question of a significant deterioration in the relative purchasing power and the decreasing ability for people to buy even essentials, let alone make more discretionary purchases. According to local media reports and perception surveys by the statistics office, Agence nationale de la statistique et de la démographie (ANSD), current price levels for goods like household gas, petrol, flour, sugar and bread are considered very high with respect to the purchasing power of a large proportion of households in the capital. Food prices in the fourth quarter of 2010 increased by 8.4% annually and by an average of 4% over the year. The main drivers have been vegetables, bread and fish, three basic commodities for most households in urban areas. The almost 43% increase in the price of fresh fish-due to pressure on stocks and higher fuel prices-has been quite remarkable given that it is a mass consumption commodity. A 6kg bottle of gas, another basic necessity, also increased by over 20%, from CFAfr2,993 (US$6.3) to CFAfr3,643 between October and December 2010.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
IMPRINT