Country Report Senegal November 2009

Outlook for 2010-11

• As the next presidential election is due in 2012, the political scene in the outlook period will be dominated by rivalries between potential candidates and their supporters.
• Allies of the incumbent, Abdoulaye Wade, will promote his candidacy for a third term in office in the face of fierce opposition from both rivals and the electorate.
• There is little prospect of a negotiated deal to end the 30-year insurgency in Casamance, as the increasingly divided rebels lack a unified leadership with which the government could negotiate.
• The Economist Intelligence Unit forecasts that the fiscal deficit will narrow slightly on the back of slowly rising tax revenue, to 4.1% of GDP in 2010 and 2.6% of GDP in 2011.
• Assuming that both the electricity supply and foreign direct investment increase, higher industrial output and large public works projects will lead to real GDP growth of 2.7% in 2010 and 2.8% in 2011.
• In line with the rise in prices of imported commodities and public works spending, which will boost household demand, consumer price inflation is set to accelerate to 2.7% in 2010 and 3% in 2011.
• Owing to a narrowing trade deficit as well as increased tourism receipts and remittances from expatriate Senegalese, the current-account deficit is expected to narrow from 11.9% of GDP in 2009 to an average of 10% in 2010-11.

Monthly review

• On October 14th the president again changed the ministerial line-up, notably replacing the interior minister, Cheikh Tidiane Sy. Mr Sy ostensibly left on health grounds, but political rivalry may have contributed.
• Two Casamancais have been appointed to key government posts: Becaye Diop has taken over as interior minister and Abdoulaye Balde as defence minister. This may facilitate negotiations with the rebels in Casamance.
• A scandal has erupted over a "gift" of nearly US$200,000 in cash given to the departing IMF representative in Senegal, Alex Segura, at a dinner held in his honour at the presidential palace.
• The government has announced that it will hold the official farmgate price of groundnuts steady at CFAfr165 (37 US cents)/kg. However, the amount budgeted to support this price is likely to prove inadequate.
• According to recent data, Asian car manufacturers have taken an increasing share of the Senegalese vehicle market.

This report covers the following industry codes:
SIC Code: 37
NAICS Code: 336