Country Report Senegal March 2011

Highlights

Outlook for 2011-12

  • The president, Abdoulaye Wade, has the support of a key committee to run for a third term in 2012 as the candidate of the ruling Parti démocratique sénégalais, neutralising the threat from contenders within the party.
  • With the rebels gaining access to increasingly sophisticated weaponry, violence is intensifying in the breakaway Casamance region, undoing tentative progress a year ago towards resolution of the 30-year insurgency.
  • The Economist Intelligence Unit forecasts that the fiscal deficit will widen to 6% of GDP in 2011, because of aggressive investment plans, before narrowing to 4.9% of GDP in 2012 as economic growth improves.
  • As foreign direct investment inflows, industrial and agricultural output and public works accelerate, we forecast real GDP growth of 4.1% and 4.5% in 2011 and 2012 respectively. Unreliable power supply will remain a key risk.
  • In view of recent inflation data and the expectation of higher global commodity prices, we forecast that inflation will rise from an average of 1.2% in 2010 to 4% in 2011, before easing slightly to 2.9% in 2012.
  • The current-account deficit is forecast to widen to 10.6% of GDP in 2011, mainly on higher global commodity prices, before falling back to 9.4% in 2012.

Monthly review

  • Following the deaths of three soldiers in the troubled region of Casamance, Senegal cut diplomatic relations with Iran on February 22nd, accusing the country of supplying the rebels with increasingly sophisticated weapons.
  • Given the intensification of violence, the government rejected a call from the rebels for a referendum on independence for the region.
  • Social tensions are running high in Dakar, with two people setting themselves on fire, emulating events that sparked a change of government in Tunisia. Given the very different politics, a similar revolution in Senegal is unlikely.
  • Power cuts have worsened in frequency and duration as the electricity utility, Senelec, has struggled to secure sufficient fuel for its generators. A shipment of fuel is being held in harbour for non-payment of an invoice by the utility.
  • A new action plan-Plan Takkal-was launched to address the chronic power problems. Objectives include renting short-term generating capacity, introducing electricity meters and restructuring and recapitalising Senelec.
  • The government has introduced price caps on basic household goods in response to rising prices. Opposed by the main union for private traders and importers, little capacity exists to monitor and ensure compliance.

Outlook for 2011-12: Political stability

Senegal has, since independence, enjoyed one of the most democratically developed and stable polities in Sub-Saharan Africa. However, this is coming under increasing threat from the controversial intention of the president, Abdoulaye Wade, to run for a third term in the 2012 election. Having stated his intention last September, Mr Wade has secured the backing of the steering committee of the Parti démocratique sénégalais (PDS), which dominates the ruling Sopi coalition and the National Assembly. The reshuffle and expansion of the cabinet last June strengthened his position within the party, although the multiplicity of overlapping portfolios will arouse public ire for its wastefulness and will also probably hinder policy development and implementation. Talk of Mr Wade's son and key minister, Karim Wade, running instead has subsided, as, constitutionality notwithstanding, the PDS leadership believes that Mr Wade remains better placed than his unpopular and electorally unsuccessful son to secure the party's dominance. This may, however, be a strategy to lay the ground for Karim to take over after his father's re-election.

Opposition to Mr Wade's candidacy is mounting. His age is a key concern; his personality-driven ruling style has meant that, should he fall ill, there would be no obvious replacement and the party could face a destabilising power struggle. Legality is the bigger objection; the 2001 constitution limits presidents to two terms, but Mr Wade's allies assert his eligibility for a third, as it would be his second under the revised constitution. Appointing a new president of the Constitutional Council is an attempt to head off such legal challenges, while the return of Mr Wade's trusted ally, Ousmane Ngom, to the Ministry of the Interior will help to overcome constitutional and electoral hurdles.

Opposition parties will seek to capitalise on deep popular discontent over long-standing problems such as worsening power shortages, high unemployment and poor social welfare provision, with protests having broken out over recent electricity outages, high telephone charges, poor governance and Mr Wade's electoral intentions. The government will continue to strive to improve energy security, but the state's limited capacity to implement policy and the government's mixed signals regarding fiscal discipline may hinder progress.

The insurgency in the Casamance region, led by the separatist Mouvement des forces démocratiques de la Casamance (MFDC), has flared up sporadically for nearly three decades, with little progress since talks failed in 2005. Although some military success in early 2010 prompted calls from some MFDC leaders for a ceasefire and negotiation, violence has since intensified, with the government blaming Iran for supplying the rebels' more sophisticated weaponry. That the MFDC remains splintered into rival factions is also an obstacle to the negotiation of a comprehensive peace deal. Furthermore, as rebel groups vie for dominance amid an increasingly unsupportive local population, they are resorting more to banditry to fund their operations. The drug-trafficking that has affected Guinea, Guinea-Bissau and Mauritania is becoming increasingly problematic in Senegal as narcotics seizures increase in size and frequency, despite the US-funded African Maritime Law Enforcement Partnership programme.

Outlook for 2011-12: Election watch

The 2012 presidential election will be held on February 26th, with Mr Wade's candidacy confirmed, having seemingly neutralised internal PDS dissent from the mayor of Thiès, Idrissa Seck. Despite waning popularity in the cities, the president's support remains strong in the countryside, and among religious groups, albeit dented slightly following the government's crackdown on street begging. Turning opposition to Mr Wade into electoral victory will not be easy. Increased jockeying for position among the opposition will be exploited by the president to fragment opposition support. Such rivalry could strain the informal opposition alliances that contributed to the rout of the PDS in local polls in March 2009. Unity may yet be preserved by the coalition around a popular singer and businessman, Youssou Ndour, and his political awareness movement, Fekke ma ci boole, or the Mouvement politique citoyen, led by a former justice minister, Cheikh Tidiane Gadio. Other leading opposition figures include a former prime minister, Macky Sall; the Parti socialiste (PS) leader, Ousmane Tanor Dieng; and Khalifa Sall, the popular PS mayor of the capital, Dakar. Another anti-Wade group, Terminus 2012, was launched in August by a former World Bank consultant, Amadou Guéye. Although the PDS's parliamentary majority grew in 2007 as a result of the opposition's electoral boycott, the party is still likely to remain in power come the 2012 National Assembly elections. Nonetheless, a victory for Mr Wade-currently our core scenario-could provoke widespread protests, although concrete improvements in the power-supply situation may be enough to save him.

Outlook for 2011-12: International relations

Having mediated negotiations that led to the presidential poll in Mauritania, Mr Wade will have a strong relationship with Senegal's northern neighbour. The fragile administration of Guinea-Bissau's president, Malam Bacai Sanhá, may not prove willing-or able-to assist Senegal's campaign against the Casamance separatists, who reportedly draw support from kinsmen over the border. Guinea's return to civilian rule will improve regional stability. Support from Senegal's main trading partners in the EU-notably France-will remain strong. Relations with China have flourished since the start of diplomatic ties in 2005. Burgeoning commercial ties with Iran have been severed following the discovery of an illegal arms shipment to The Gambia and the intensification of Casamance rebel violence using weapons originating from Iran, despite the promise of more investment.

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.

Outlook for 2011-12: Fiscal policy

Despite the IMF's medium-term fiscal deficit target of 4% of GDP and Fund-approved stimulus, Senegal's 2011 budget envisages the deficit widening to 5.9% of GDP, despite earlier expectations that the government would seek to narrow the deficit. Nevertheless, the authorities remain committed to restraining current expenditure, which will grow only marginally; the bulk of this primarily foreign-financed spending will go on infrastructure investment and education, in order to underpin future growth. The immediate fiscal cost of reducing arrears to the private sector and settling remaining extra-budgetary spending and public institution and agency debt should be offset by the economic benefits of improving (slowly) the business environment and encouraging timely private-sector tax payments, supported by a clear tax code and lower taxes. In order to support its infrastructure investment plans, the government is seeking to refinance its 2009 US$200m Eurobond, issuing further project-linked debt of up to US$300m in 2011. The Economist Intelligence Unit sees the budget deficit widening from an estimated 4.9% of GDP in 2010 to 6% in 2011, before narrowing back to 4.9% in 2012 as revenues accelerate.

Outlook for 2011-12: Monetary policy

Monetary policy is determined by the regional central bank, Banque centrale des Etats de l'Afrique de l'ouest (BCEAO), whose priorities are targeting inflation and maintaining the CFA franc's peg to the euro. Policy is therefore heavily influenced by that of the European Central Bank (ECB). The BCEAO last cut its repurchase rate (taux de pension) by 50 basis points to 4.25% in June 2009. With a deteriorating inflationary outlook in the Franc Zone and the ECB hinting that it may raise rates sooner than 2012 on similar concerns despite persistent economic and fiscal weakness, the BCEAO may begin to tighten slightly its relatively loose monetary policy and raise its main policy rate, taux des appels d'offres, in 2011, earlier than originally expected. Liquidity injections will remain the prime policy tool, with the bank having recently introduced two new liquidity offerings as demand picked up.

Outlook for 2011-12: International assumptions

International assumptions summary
(% unless otherwise indicated)
 2009201020112012
Real GDP growth
World-0.84.84.14.1
OECD-3.52.92.32.1
EU27-4.21.81.61.7
Exchange rates
¥:US$93.787.982.081.0
US$:€1.3931.3261.2651.200
SDR:US$0.6460.6520.6560.668
Financial indicators
€ 3-month interbank rate1.230.841.031.88
US$ 3-month commercial paper rate0.260.260.340.70
Commodity prices
Oil (Brent; US$/b)61.979.690.082.3
Rice (US$/tonne)566.3507.8521.3497.5
Food, feedstuffs & beverages (% change in US$ terms)-20.411.727.0-9.9
Industrial raw materials (% change in US$ terms)-25.644.922.3-8.8
Note. Regional GDP growth rates weighted using purchasing power parity exchange rates.

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Outlook for 2011-12: Economic growth

Real growth should continue to accelerate in 2011, to 4.1%, from an estimated 3.9% in 2010. However, despite a recovery in agriculture, construction, services and exports, worsening power cuts and higher imports have led us to lower our forecast from 4.3%. Stronger agricultural output will be driven by increased government investment in the horticultural subsector, despite the withdrawal of some government marketing subsidies. Industrial production should rise in 2011-12 despite power supply problems, and phosphates output continues to recover. Services should grow well, led by banking and the mobile-phone subsector. Domestic demand will improve in 2011 as private consumption accelerates and government spending rises ahead of the 2012 elections, supporting real GDP growth of 4.5% in 2012. Deepening ties with China will also boost growth and investment.

Chronic power shortages are the key risk to growth potential in the commercial and industrial sectors. Despite stronger policy direction from the government, progress on increasing power-generation and oil-refining capacity will be slow. Improving the perceptions of corruption and streamlining the bureaucratic business environment will be fundamental to encouraging foreign direct investment.

Outlook for 2011-12: Inflation

In June 2010 the consumer price index basket was rebased to 2008 and reweighted. Food's weighting has shrunk from 40.3% to 32.9% but remains overwhelmingly responsible for the acceleration in the rate of price growth. Rising global food prices are the key driver, and will also be felt through an enlarged weighting of the restaurants sub-index. Higher domestic food production, government subsidies and new price caps on several essential goods may still help to anchor local food prices but could be undermined by sustained weakness of the CFA franc and rocketing global commodity prices. The government's withdrawal of some groundnut sector subsidies will put pressure on industrial-but not consumer-prices. Average inflation is set to accelerate from 1.2% in 2010 to an estimated 4% in 2011, easing to 2.9% in 2012.

Outlook for 2011-12: Exchange rates

The CFA franc-pegged to the euro at CFAfr655.96:EUR1-will fluctuate against the US dollar in line with the euro:dollar exchange rate. With the US dollar firming on improving growth there and renewed fiscal and sovereign debt concerns in the euro zone, we expect the euro to continue its downward trajectory, although we have moderated our forecasts slightly. The euro-pegged franc will continue to slide, from an average of CFAfr495:US$1 in 2010 to CFAfr519:US$1 in 2011 and to CFAfr547:US$1 in 2012.

Outlook for 2011-12: External sector

Stronger export volumes will be undermined by a weaker currency. Nevertheless, led by firming output in key sectors, notably phosphates and agriculture, as well as the boosting effect of higher oil prices on Senegal's refined exports, total exports in US-dollar terms rose in 2010, to US$2.1bn, and are forecast to edge up slightly in 2011-12. Higher prices may restrain import demand, but increased global oil and food prices in 2011 and mounting capital imports on the back of the government's investment programme should see the import bill reach US$4.7bn in 2011, easing to US$4.5bn in 2012 as prices fall slightly. Non-food imports may still increase in 2011-12, but improving agricultural output will help to reduce the food component. Tourism receipts are expected to increase modestly from a depressed base but will remain vulnerable to economic weakness in Western Europe from where they primarily originate. Senegal receives little in donor transfers, but remittances should continue to hold up relatively well despite the moribund labour markets in the US and the euro zone. The current-account deficit is expected to widen in 2011 to 10.6% of GDP, from an estimated 9.9% in 2010, before narrowing to 9.4% in 2012, despite higher capital imports, because of energy prices easing slightly, food import requirements falling and transfer inflows receiving a boost from additional Millennium Challenge Corporation disbursements. The benefits of the stalled Faleme iron ore project will not be felt until after the forecast period.

Outlook for 2011-12: Forecast summary

Forecast summary
(% unless otherwise indicated)
 2009a2010a2011b2012b
Real GDP growth1.83.94.14.5
Industrial production growth1.53.84.14.9
Gross agricultural production growth1.13.64.34.3
Consumer price inflation (av)-1.1c1.2c4.02.9
Lending rate14.5c14.815.015.5
Government balance (% of GDP)-5.2-4.9-6.0-4.9
Exports of goods fob (US$ m)1,891c2,062c2,1622,131
Imports of goods fob (US$ m)-4,542c-4,444c-4,722-4,549
Current-account balance (US$ m)-1,421-1,209-1,319-1,179
Current-account balance (% of GDP)-11.6-9.9-10.6-9.4
External debt (year-end; US$ m)3,2913,4783,7343,950
Exchange rate CFAfr:US$ (av)470.9c494.8c518.5546.6
Exchange rate CFAfr:¥100 (av)502.5c563.0c632.4674.9
Exchange rate CFAfr:€ (end-period)656.0656.0656.0656.0
Exchange rate CFAfr:SDR (end-period)721.7c760.3c811.1824.6
a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts. c Actual.

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The political scene: Senegal cuts diplomatic ties with Iran

Undoing a recent rapprochement between the two countries (February 2011, The political scene), Senegal cut diplomatic relations with Iran on February 22nd following the deaths of three soldiers in the troubled region of Casamance, a result of the use of weapons allegedly linked to Iran. The government claims that ballistic analysis has confirmed the Iranian source of ammunition, supported by army sources noting that recent rebel attacks have been carried out with more sophisticated weaponry than hitherto available. In the last two months 19 Senegalese soldiers have died in such attacks, increasing the death toll significantly in comparison with last year. The army is under pressure and the administration could no longer avoid a bold response. Despite the recent efforts to normalise relations with Iran and deny any serious friction following the discovery in Nigeria of an arms cargo destined for The Gambia (December 2010, The political scene), the government opted to sacrifice its relations with Iran, despite the latter being an important source of investment in recent years. Although the minister of foreign affairs, Madické Niang, has said that existing projects will continue, it is unlikely that the US$200m promised by Iran in January (February 2011, The political scene) to restore ties will now materialise.

Although Iran predictably blamed the US and Israel for what it describes as an "illogical" decision, Senegal is prioritising the opportunity to improve relations with The Gambia-which severed its long-standing ties with Iran in January-in order to more effectively isolate the Mouvement des forces démocratiques de la Casamance (MFDC) rebels. Alienating the embarrassed Gambian regime would possibly reinforce the capacity of MFDC rebel factions to take bases and strike from the neighbouring territory, making the Senegalese army's task of hunting down the rebels even more difficult. Indeed, Senegal and The Gambia are strengthening co-operation in security matters and have organised joint border patrols and army manoevres.

The political scene: Government rejects the idea of a referendum in Casamance

Both the government and the Collectif des cadres casamançais, a coalition of Casamance civic and business leaders, have categorically rejected the idea of a referendum on Casamance's status, as proposed by leaders of the MFDC. Ansoumane Badji, the secretary-general of the MFDC, wrote to Jean Ping, the chairman of the African Union, in mid-February, asking for mediation to help to organise and monitor a referendum for the region's independence. Similar proposals have come from MFDC leaders in recent months, but the government resolutely rejects the idea. The latest proposal comes weeks after Southern Sudan voted for independence, with secession set for July. MFDC leaders argue that this would be the most effective tool to end decades of conflict, but parallels between the two cases are tenuous; the government insists that a negotiated settlement can come only once violence has totally ended.

Although the nature and the intensity of the conflict is indeed different, the lack of progress towards a resolution of the situation in Casamance has nevertheless called for renewed efforts and more creative negotiation initiatives. Pierre Goudiaby, the leader of the Collectif des cadres casamançais has lobbied the president, Abdoulaye Wade, to take up the MFDC's offer of dialogue launched after more than three-quarters of members of the group's political wing voted in favour of such a move. In a highly symbolic gesture, the head of the Catholic Church in Senegal, Cardinal Théodore Adrien Sarr, made an unplanned visit to Ziguinchor to meet MFDC leaders and local authorities in an initiative to support the renewal of the negotiating process. At the moment, Mr Wade seems more interested in punishing the recent attacks while avoiding a return to the negotiating table, which has proven ineffective in previous attempts. After the deaths of the three soldiers in the latest clash-which happened after the letter was revealed-the army stepped up the offensive in the department of Bignona on February 26th-27th, killing an undetermined number of rebels, at the cost of three more soldiers. The government therefore now seems further away from making concessions to the MFDC.

The political scene: Social tensions are running high in Dakar

Social tension has been running high in the capital, Dakar, since the start of the year. Two men set themselves on fire in front of the presidential palace, emulating the example of the Tunisian protestor whose self-immolation sparked protest and revolutions across North Africa. The first protestor, on February 18th, died, but the life of the second, a week later, was eventually saved. These two apparently isolated but unprecedented events reflect the climate of growing social tension in the country. Demonstrations, spontaneous barricades and the burning of tyres and cars in the streets are becoming common practice in parts of Dakar, and especially in its suburbs. One of the houses of the president's family in central Dakar was even stoned by a mob. Reasons for the protests are varied but include the growing frequency and duration of power cuts, rising living costs in the capital and the president's creative interpretation of the constitution. The worsening of power cuts everywhere comes despite insistent (but unfulfilled) government promises to redress the situation. The problem is exacerbated by the fact that some areas of the capital, notably poorer suburbs, are more severely affected than more affluent quarters. Local commentators wonder whether the examples set by spontaneous rebellions in North Africa may serve as an example for more serious mobilisations in Senegal, given that social conditions are not very different. Although this possibility cannot be dismissed absolutely if the situation worsens in the coming months, the Economist Intelligence Unit believes that such an outcome remains unlikely given the very different-ostensibly democratic and non-authoritarian-political context.

Economic policy: Power cuts worsen in February

Since Karim Wade took control of the energy portfolio the frequency and duration of power cuts and load-shedding has actually worsened, according to most local reports. There are both structural and cyclical reasons for this. The electricity utility, Senelec, has struggled to secure sufficient fuel in the past two months to keep all its production units running. One of the triggers of the most recent energy crisis has been a stand-off between Senelec and one of its fuel providers, a local oil trader, International Trading Oil and Commodities (Itoc), which is holding 33,000 tonnes of petrol until an invoice of CFAfr2.8bn (US$5.4m) is paid by Senelec. The trading company demands a guarantee of payment before delivering and, as a result, the tanker is being held at the port of Dakar. Karim Wade and his father, the president, have tried to mediate and appease Itoc but without success, as the government is unable to free cash to allow Senelec to pay its arrears. The chronic cashflow problem facing Senelec is having a greater impact on electricity production now that the company is forced to look for alternative providers, given that, owing to capacity constraints, the recently privatised oil refiner, Société africain de raffinage (SAR), is unable to deliver all the necessary fuel. The structural dependency on petrol-generated electricity is one of the major constraints on power availability in Senegal.

Economic policy: "Plan Takkal" is launched to restructure the power sector

Karim Wade, the minister of international co-operation, air transport, infrastructure and energy, launched in January an action plan-Plan Takkal-to redress the power problems. The plan, presented to the cabinet and expected to be discussed at the Senate and the National Assembly, consists of five elements:

  • in order to boost short-term supply, the government will rent 50 mw of generating capacity in April and a futher 100 mw in August, allowing the company to mothball more expensive generators;
  • improvements in energy demand management will be made through energy efficiency, such as new legislation that came into effect on March 1st that bans the use of incandescent lightbulbs in order to conserve around 70 mw of electricity nationwide;
  • in response to complaints that bills have not fallen despite the power shortages, domestic pre-paid meters are to be introduced to align costs with use, helping the company to re-establish credibility in its billing and reduce the illegal siphoning of power, which also reduces company revenues;
  • security of fuel supply is to be ensured through the establishment of a special fund, Fonds spécial de soutien à l'énergie (FSE), to be managed directly by the presidency; and
  • Senelec is to be restructured and recapitalised to help it to meet its obligations, which stood at an estimated CFA286bn (US$552m) by February.

The strategy will be overseen and evaluated by the new Conseil national de l'énergie (CNE), directly under the direction of the president, as well as a new permanent energy secretariat through which the CNE will operate. The secretariat will be co-chaired by the ministers of finance and energy-Abdoulaye Diop and Karim Wade respectively-and will also include, among others, the prime minister, Souleymane Ndéné Ndiaye, and the directors of Senelec and SAR.

Technical assistance will be provided by a French utility, EDF, with whom the government signed an agreement in December 2010. An audit conducted by the company found that deteriorating equipment had slashed production capacity to only 350 mw, compared with a potential of 584 mw. Furthermore, the country is over-reliant on oil-based power generation. By 2014 the government and Senelec plan to have installed coal-fired power stations that will significantly reduce costs, especially given the prospects for continued elevation and volatility in global oil prices. Senegal currently produces 90% of its electricity from oil-generated plants. The question is whether by 2014 the company will have found the funds to finance this big investment. Indeed, plans to build coal-fired power stations are already significantly delayed.

Economic policy: Price controls are introduced

In response to rising prices and the growing social tension in more volatile areas of Dakar, the government has introduced controls on the prices of basic necessities and established new reference prices for some basic goods by decree. Thus, on February 2nd, new reference prices for 15 products, including rice, sugar, vegetable oil, onions, soap and milk, were announced by the director of internal trade, El Hadji Alioune Diouffor. The new prices implied reductions of between 8% and 15% with respect to market prices at the end of January. The effectiveness of this measure depends much on the capacity of the government to monitor what traders charge in local markets. In fact, the main union for private traders and importers, Union nationale des commerçants et industriels du Sénégal (Unacois), condemned the measure, asking instead for taxes on consumer goods to be lowered, as this would be less market distortive. Although Unacois has not openly disobeyed the measures, there are reports that the new prices are not being consistently passed on to consumers. The Ministry of Trade is sending inspection teams to verify the application of the new ceiling prices by private traders, but this is not likely to be particularly effective given the ministry's meagre resources, especially if Unacois does not fully buy into the new measures.

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.

Data and charts: Annual data and forecast

 2006a2007a2008a2009b2010b2011c2012c
GDP       
Nominal GDP (US$ m)9,378.411,319.612,452.212,295.412,160.712,386.912,577.2
Nominal GDP (CFAfr bn)4,8995,4255,5575,7906,0176,4236,875
Real GDP growth (%)2.54.93.31.83.94.14.5
Expenditure on GDP (% real change)       
Private consumption5.17.04.33.22.83.04.3
Government consumption-21.37.83.32.62.43.24.0
Gross fixed investment29.219.45.4-7.44.03.84.5
Exports of goods & services4.18.16.22.93.43.34.3
Imports of goods & services9.620.46.90.64.14.04.4
Origin of GDP (% real change)       
Agriculture-7.9-6.019.61.13.64.34.3
Industry1.45.6-3.21.53.84.14.9
Services8.88.55.61.84.04.14.4
Population and income       
Population (m)11.611.912.212.5a12.913.213.6
GDP per head (US$ at PPP)1,6651,7501,7991,8021,8331,8891,968
Fiscal indicators (% of GDP)       
Central government revenue21.123.323.322.523.023.723.9
Central government expenditure27.127.228.427.727.929.728.8
Central government balance-6.0-3.9-5.1-5.2-4.9-6.0-4.9
Net public debt24.423.925.528.930.331.332.1
Prices and financial indicators       
Exchange rate CFAfr:US$ (av)522.40479.27446.23470.90a494.78a518.54546.63
Exchange rate CFAfr:€ (av)655.96655.96655.96655.96656.96656.96656.96
Consumer prices (end-period; %)4.06.14.3-2.8a4.3a2.63.5
Stock of money M1 (% change)14.115.3-1.19.1a5.38.09.5
Stock of money M2 (% change)12.513.01.811.4a5.48.69.9
Lending interest rate (av; %)15.015.015.014.5a14.815.015.5
Current account (US$ m)       
Trade balance-1,600-2,490-3,400-2,651a-2,382a-2,560-2,418
 Goods: exports fob1,5941,6742,2061,891a2,062a2,1622,131
 Goods: imports fob-3,194-4,164-5,606-4,542a-4,444a-4,722-4,549
Services balance-35-38-120-29-31-33-35
Income balance-63-74-48-66-71-67-77
Current transfers balance8371,2901,6851,3251,2751,3401,351
Current-account balance-861-1,312-1,884-1,421-1,209-1,319-1,179
External debt (US$ m)       
Debt stock1,9232,5892,8613,2913,4783,7343,950
Debt service paid338173180195a215233243
 Principal repayments267120126169a138151153
 Interest72535563a778290
International reserves (US$ m)       
Total international reserves1,3341,6601,6022,123a2,2002,3452,490
a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.
Source: IMF, International Financial Statistics.

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Data and charts: Quarterly data

 2009   2010   
 1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr
Prices        
Consumer prices (2005=100)113.9112.1112.8113.6113.2112.1115.7117.2
Consumer prices (% change, year on year)2.3-0.2-3.1-2.9-0.70.02.53.1
Financial indicators        
Exchange rate CFAfr:US$ (av)503.9482.2458.6444.0473.9516.3508.0482.9
Exchange rate CFAfr:US$ (end-period)492.9464.1448.0455.3486.7534.6480.6490.9
Deposit rate (av; %)3.53.53.53.53.53.53.53.5
Bank rate (end-period; %)4.84.34.34.34.34.34.34.3
Money market rate (av; %)3.83.63.33.33.33.33.33.4
M1 (end-period; CFAfr bn)1,2671,2961,3001,3671,3811,4251,429n/a
M1 (% change, year on year)5.26.610.39.18.910.09.9n/a
M2 (end-period; CFAfr bn)2,0192,1102,1272,2342,2912,3372,399n/a
M2 (% change, year on year)6.110.410.711.413.410.812.8n/a
Foreign trade (CFAfr bn)        
Exports fob216214228238244510762n/a
Imports cif-528-533-558-523-547-1,0841,681n/a
Trade balance-312-319-329-286-302-5742,443n/a
Foreign reserves (US$ m)        
Reserves excl gold (end-period)1,3921,8601,9072,1232,0311,9212,016n/a
Sources: IMF, International Financial Statistics; Ministry of Economy and Finance.

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Data and charts: Monthly data

 JanFebMarAprMayJunJulAugSepOctNovDec
Exchange rate CFAfr:US$ (av)
2008445.7444.8422.6416.5421.7421.8416.0438.2456.6493.0515.3481.5
2009495.4513.1503.1497.4481.3468.0465.7459.8450.5442.8439.8449.3
2010459.7479.4482.6489.2522.3537.4513.3508.9501.9472.0480.4496.2
Exchange rate CFAfr:US$ (end-period)
2008441.1432.5414.9422.1423.0416.1420.2445.2458.6514.2515.4471.3
2009511.8518.8492.9494.1465.3464.1464.0459.6448.0443.2436.6455.3
2010469.7483.4486.7492.7533.0534.6503.5517.3480.6473.4504.7490.9
M1 (% change, year on year)
200815.010.08.09.44.00.52.14.32.5-2.20.5-1.1
20091.78.55.24.13.46.68.46.810.38.710.69.1
20109.57.58.910.715.810.09.17.29.915.213.9n/a
M2 (% change, year on year)
200811.07.76.67.83.92.85.45.85.72.02.21.8
20094.38.26.15.010.010.47.27.410.713.012.111.4
201012.813.913.414.713.110.813.912.312.813.314.0n/a
Deposit rate (av; %)
20083.53.53.53.53.53.53.53.53.53.53.53.5
20093.53.53.53.53.53.53.53.53.53.53.53.5
20103.53.53.53.53.53.53.53.53.53.53.53.5
Money market rate (av; %)
20083.02.84.04.23.54.04.23.84.54.73.94.7
20093.83.83.83.83.83.33.33.33.33.33.33.3
20103.33.33.33.33.33.33.33.43.33.43.53.3
Discount rate (end-period; %)
20084.34.34.34.34.34.34.34.84.84.84.84.8
20094.84.84.84.84.84.34.34.34.34.34.34.3
20104.34.34.34.34.34.34.34.34.34.34.34.3
Consumer prices (av; % change, year on year)
20086.15.54.35.26.15.94.87.47.97.54.14.3
20092.72.21.90.9-0.1-1.3-1.8-3.0-4.6-3.8-2.2-2.8
2010-0.7-0.6-0.7-1.1-0.41.32.42.23.02.32.84.3
Foreign-exchange reserves excl gold (US$ m)
20081,5821,4831,6181,5851,5621,8451,6261,4591,4151,1631,3451,602
20091,3431,4361,3921,4541,5931,8601,5951,8871,9071,8751,9142,123
20102,1542,0352,0312,0831,9251,9212,0471,8942,0161,9111,945n/a
Sources: Agence nationale de la statistique et de la démographie; IMF, International Financial Statistics; Haver Analytics.

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Data and charts: Annual trends charts

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Data and charts: Monthly trends charts

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Data and charts: Comparative economic indicators

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Basic data

Total area

197,161 sq km

Population

12.9m (mid-2010 UN estimate)

Main towns

Population in '000 (World Gazetteer estimates, 2009)

Dakar (capital): 2,583

Thiès: 274

Mbour: 216

Kaolack: 180

Climate

Tropical

Weather in Dakar (altitude 40 metres)

Hottest months, September-October, 24-32°C; coldest month, January, 18-26°C; driest months, April-May, 1 mm average rainfall; wettest month, August, 254 mm average rainfall

Languages

French, Wolof, other local languages

Measures

Metric system

Currency

CFA franc (CFAfr), fixed to the euro, backed by a guarantee from the Banque de France; it was devalued from CFAfr50:FFr1 to CFAfr100:FFr1 in 1994 and has been pegged at CFAfr655.96:EUR1 since France adopted the euro in 1999

Time

GMT

Public holidays

January 1st; April 4th (Independence Day); May 1st; Christian holidays of Christmas, All Saints' Day, Assumption and variable dates for Easter Monday and Ascension Day; all Islamic holidays are observed in accordance with the lunar calendar, which may mean that the following dates are approximate: Mawlid al-Nabi (the birthday of the Prophet, February 15th 2011); Eid al-Fitr (end of Ramadan, August 30th); Eid al-Adha (Feast of the Sacrifice, November 6th); Islamic New Year (November 26th)

Political structure

Official name

République du Sénégal

Form of state

Unitary republic

Legal system

Based on the Napoleonic Code and the constitution of January 2001

National legislature

National Assembly, with 150 members elected for five years by universal suffrage in a mixed system of first-past-the-post and proportional representation

Head of state

President, elected by universal suffrage, currently serves a five-year term of office and may stand for re-election once

National elections

February 2007 (presidential); June 2007 (legislative); next elections due in 2012

National government

The president and his Council of Ministers

Main political parties

Parti démocratique sénégalais (PDS, the dominant party in the National Assembly); Alliance des forces de progrès (AFP); Parti socialiste (PS); Union pour le renouveau démocratique (URD); And-Jëf/Parti africain pour la démocratie et le socialisme (AJ/PADS); Parti de l'indépendance et du travail (PIT); Ligue démocratique (LD); Rewmi; Alliance pour la République-Yaakaar (Alliance for the Republic-Hope)

President: Abdoulaye Wade

Prime minister: Souleymane Ndéné Ndiaye

Ministers of state

Armed forces: Bécaye Diop

Civil service & employment: Habib Sy

Economy & finance: Abdoulaye Diop

Environment: Djibo Leïty Kâ

Family, women's organisations & early childhood: Ndèye Khady Diop

Foreign affairs: Madické Niang

Housing, construction & sanitation: Oumar Sarr

Interior: Ousmane Ngom

International co-operation, air transport, infrastructure & energy: Karim Wade

Justice: Cheikh Tidiane Sy

Labour & professional organisations: Innocence Ntap

Mines, industry, agribusiness & SMEs: Abdoulaye Baldé

Key ministers

Agriculture: Khadim Guèye

Crafts, tourism & the private & informal sectors: Thierno Lô

Communications & telecommunications: Moustapha Guirassy

Fishing & maritime economy: Khouraïssi Thiam

Health & prevention: Modou Diagne Fada

Land & rail transport & territorial development: Nafy Diouf Ngom

Livestock: Oumou Khairy Guèye Seck

Pre-school & primary education: Kalidou Diallo

Renewable energy: Louis Seck

Secondary education, universities & research: Amadou Tidiane Bâ

Technology, information & communication: Fatou Blondin Ndiaye Diop

Trade: Amadou Niang

Governor of the regional central bank (BCEAO)

Jean-Baptiste Compaoré (interim)

© 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
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