Senegal: Economy

The former capital of French West Africa, Senegal is a semi-arid country located on the westernmost point of Africa. Predominantly rural and with limited natural resources, the country earns foreign exchange from fish, phosphates, peanuts, tourism, and services. Its economy is highly vulnerable to variations in rainfall and changes in world commodity prices. Senegal depends heavily on foreign assistance, which in 2007 represented about 23% of overall government spending--including both current expenditures and capital investments--or African Financial Community franc (CFA) 315 billion (U.S. $630 million).

The fishing sector is Senegal's export leader. In 2007, fishery products contributed 22% of Senegal’s export earnings and employed about 15% of the population. Industrial fishing operations struggle with high costs, more efficient Asian and European Union (EU) competitors, and ineffective patrolling of the country's territorial waters against poachers. Receipts from tourism, the second major foreign exchange earner, contribute between 4.6%-6.8% of GDP annually. Senegal has about 320 tourist-class hotels, and the sector employs about 100,000 people serving over 700,000 tourists annually. Agriculture employs 77% of the economically active populace, while groundnut cultivation (which in 1960 had provided 80% of Senegal’s export earnings) engages about 10% of the population and is done on 50% of sown land in rotation with millet and sorghum. Mining, especially of phosphates, employs about 33,000 people and provides about 15% of export value.

Senegal’s Agency for the Promotion of Investment (APIX) plays an important role in the government’s foreign investment program. Its objective is to increase the investment rate from its current level of 20.6% to 30%. Currently, there are no restrictions on the transfer or repatriation of capital and income earned, or investment financed with convertible foreign exchange. Economic assistance comes largely from France, the International Monetary Fund (IMF), the World Bank, and the United States. The European Union, the African Development Bank, China, Canada, Spain, Japan, and Germany also fund significant aid programs.

Senegal has well-developed though costly port facilities, an international airport serving 28 international airlines that serves as a regional hub, and a reasonable telecommunications infrastructure, including a fiber optics backbone. Cellular phone penetration exceeds 50% of the population, and there are 1.818 million Internet users.

As of 2008, U.S. foreign direct investment stock in Senegal totaled $18 million. Total bilateral trade in 2009 was $183 million, with the United States exporting $176 million in goods and importing $7 million of goods.

Remittances in 2010 reached $1.4 billion and were worth 10% of Senegal’s GDP.

Sources:
CIA World Factbook (September 2009)
U.S. Dept. of State Country Background Notes (August 2011)