Association for Free Research and International Cooperation

Economic growth: now Senegal records a rate of over 7%

With a rate expected to reach 7.2% in 2017, Senegal has distinguished itself on the financial markets thanks to the confidence that investors have granted it. The sale of Eurobonds issued by the country has exceeded all expectations, thanks to an economy and a more and more stable currency.

Financial stability is a major issue for an emerging economy. Today, the signals that Senegal is moving in this direction are accumulating, like foreigner’s investments are more and more numerous.

A stable economy with promise for the future

Stable political perspectives and the fast expansion are all factors predicting the health of the Senegalese economy. The World Bank has also designated Senegalese growth as the fourth fastest in sub-Saharan Africa. Indeed, it has gone from 2.9% in 2009 to 7% today with a budget deficit that remains under control.

The 15 billion cubic meters of natural gas discovered by Kosmos Energy 95 km northwest of Dakar and the announcement by FAR of a potential of 1.5 billion barrels of crude oil at the beginning of this year reinforce the idea that Senegal is a country endowed with many natural resources. The Cairn Company has also discovered a new oil field. Finally, the gas field discovered in January 2016 is considered the most important in West Africa.

The richness and diversity of Senegalese soils are major assets for Senegal and its development because they constitute a major source of income.

… Which has real consequences for the country

 This good health has repercussions on the economy but especially on the attractiveness of Senegal. Senegal thus gained 31 places in 3 years in the Doing Business ranking published by the World Bank. The country now occupies the 147th place in the ranking. It is also the 9th most attractive economy for investors in 2016 among 46 African countries.

 This economic dynamism is reflected in private investment. The latter has exceeded the threshold of 1,500 billion CFA Francs in 2016. The volume of Foreign Direct Investment (FDI) has also increased by 12% in annual value and now stands at 210.4 billion CFA francs.

Good financial health, another engine for the country’s economy

 Senegal has also introduced new bonds (Eurobonds) which have been very favorably received by the markets. $ 1.1 billion from Eurobond has been offered for sale to finance infrastructure development and power generation projects. Investors responded with enthusiasm. The sale generated $ 9.3 billion, resulting in a decrease in the interest rate to particularly low levels: 6.25% against 9.25% in 2009.

This fall in the interest rate payable to investors over the 16-years term is a direct result of Senegal’s good economic performance and GDP figures in this recent years.

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