Country Report Senegal October 2009

Outlook for 2010-11

• As the next presidential election is due in 2012, the political scene will be dominated by rivalries between potential candidates and their supporters in? 2010-11.
• 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 the Casamance, as the increasingly divided rebels lack a unified leadership with whom 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 4.7% 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 real GDP to grow by 2.7% in 2010 and 3.3% in 2011.
• In line with the rise in prices of imported commodities and public works spending, consumer price inflation is set to accelerate to 2.7% in 2010 and 3.5% 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 11.8% of GDP in 2009 to an average of 10.1% in 2010-11.

Monthly review

• Renewed clashes between the Casamance rebels and the army in August-September indicate that a peace settlement is unlikely in the near term.
• Mr Wade has recently declared that, health permitting, he is prepared to run for a third term in office at the next presidential election, due in 2012. However, opposition parties have decried the move as unconstitutional.
• The minister of foreign affairs, Cheikh Tidiane Gadio, has been replaced in a recent reshuffle, apparently owing to disagreements with the president over relations with the military junta in Guinea.
• The US Millennium Challenge Corporation (MCC) has announced the approval of a five-year, US$540m compact grant to Senegal to reduce poverty through boosting economic growth.
• A recent report from the Ministry of Economy and Finance revealed serious technical inefficiencies in many industrial subsectors, particularly energy.

This report covers the following industry codes:
SIC Code: 49;1
NAICS Code: 22;11