Country Report Senegal January 2009

Summary

The political scene in 2009-10 will be dominated by rivalries over who will succeed the elderly president, Abdoulaye Wade, when his term expires in 2012 (or earlier, in the event of his death or incapacitation by illness).
Tension between the government and the opposition, which was exacerbated by the postponement of local elections due in May 2008, is expected to increase further when the delayed polls take place in March 2009.
In view of a downward revision to world economic growth prospects in 2009-10, real GDP growth has been revised down in tandem with foreign investment for infrastructure development, to 3.4% in 2009 and 3.6% in 2010.
Tight monetary policy will help to contain inflation over the forecast period, although inflation, forecast at 3.5% in 2009 and 4.5% in 2010, will continue to be heavily influenced by world prices and domestic production of food.
The current-account deficit is expected to narrow to 12.9% of GDP in 2009, when the drop in imports will be larger than that in exports, and 10.3% of GDP in 2010, when economic growth is forecast to accelerate.

In December a series of consultations involving the opposition and civil society groups, assises nationales, concluded. The assises stimulated debate about the major challenges facing the country and galvanised the opposition.
Mr Wade has given his support to the new military junta in Guinea, which took power in a coup on December 23rd.
Riots have erupted in the capital, Dakar, and Kedougou, in the south-east. The respective causes of the unrest were frequent power cuts and a lack of jobs.
In December the IMF approved a one-year financial support arrangement worth US$76m to support Senegals balance of payments.
The Fund also gave a positive assessment of economic policy in its second review of the countrys policy support instrument (PSI), despite the recent discovery of substantial off-budget spending.
Following the IMFs positive review, several loans from other development partners were announced, including US$46m from the African Development Bank and 125m (US$163m) from France.
The energy minister has announced that the failing state-owned electricity utility, Societe nationale delectricite du Senegal (Senelec), will be broken up into three divisions, responsible for production, transmission and distribution.
Recent data indicate that formal remittances by expatriate Senegalese rose in both 2007 and 2008.

This report covers the following industry codes:
SIC Code: 49;10
NAICS Code: 22;212