Senegal

This page provides an overview of the key characteristics of Senegal along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenised in relationships across crucial global systems. We use 2019 as a standard reference year. The forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union's Agenda 2063 long-term development vision.

Senegal is a lower middle-income country located in West Africa and bounded to the west by the Atlantic Ocean, to the north by Mauritania, to the east by Mali and to the south by Guinea and Guinea-Bissau. In addition, Senegal surrounds The Gambia, except along that country’s western coast. Senegal is a member of the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU/UEMOA). It has the fourth largest economy in ECOWAS after Nigeria, Ghana and Côte d'Ivoire.

Senegal is one of the most stable countries in Africa, having experienced three peaceful political transitions since independence in 1960. President Macky Sall has been in power since 2012 and was elected to a second five-year term in February 2019. Senegal has so far been spared the violence engulfing the region, but terrorist groups’ activities in neighbouring countries and cross-border trafficking could fuel a risk of instability.

The main political challenge relates to implementing reforms that foster sustainable and inclusive growth by investing in human capital, lowering energy costs, and enhancing competitiveness and job creation.

The population of Senegal has been growing at a higher rate than the world average but comparable to other countries in West Africa.

The population of Senegal was 16.3 million in 2019 (it was 7.5 million in 1990), and on the Current Path, it is forecast to be 28.2 million by 2043, an increase of about 73% over the next 24 years.

The total fertility rate (TFR) has declined from 6.7 births per woman in 1990 to 4.7 births per woman in 2020, slightly above the average (4.3) for African lower middle-income countries. On the Current path, TFR will slowly decline to 2.9 births per woman by 2043.

The population is heavily weighted towards the youth, as are most African populations. The median age in 2019 was 18.4 years and it is forecast to rise to 23.8 by 2043. Also, the youth bulge in the country was estimated to be 48% and to decline to 41.7% by 2043. As of 2019, about 42.7% of the population falls in the dependency age group of <15 years, whereas 3.1% are in the age group >65 years. On the Current Path, the share of these two dependency age groups is projected to be 32.7% and 4.7%, respectively, by 2043.

About 54% of the Senegalese population is in the working-age group (15–64 years), which is forecast to increase to 62.6% by 2043.

The working-age group represents the largest share of the population, and this can be a potential source of growth, provided the labour force is well trained and a sufficient number of jobs are created.

In 2019, about half (47.5%) of the population lived in urban areas, up from 38.9% in 1990. This is 1.7 percentage points below the average of 49.2% for lower middle-income countries in Africa. With almost half of its population living in urban areas, Senegal is ahead of sub-Saharan Africa's average urbanisation rate of 40.4%.

On the Current Path development trajectory, the country is projected to achieve a rural–urban parity in settlement by 2025. By 2043, 56.9% of the population will be urban while the rural population will have dropped to 43.1% from 61.1% in 1990 and 52.6% in 2019. If these projections materialise, nearly one out of every two Senegalese citizens will live in a town or city by 2043.

Urban growth has been driven mainly by urban centres (mostly Dakar, Senegal's capital city). Of the 65% of GDP produced in Senegal’s urban centres, 55% comes from Dakar. The Dakar region is home to 50% of the country’s urban population, with more than 80% of registered firms concentrated there, and more than 52% of created jobs. Almost a third (62%) of new businesses opening are in the capital city.

This rapid urbanisation is associated with immense challenges, such as unemployment, poverty, inadequate health, poor sanitation, urban slums and environmental degradation, but also constitutes an opportunity for structural transformation of the Senegalese economy.

Good urban planning could foster an inclusive economy by improving service delivery and reducing urban poverty. In addition, adequate and appropriate urban planning is essential to mitigate the impacts of climate change such as flooding.

Senegal is relatively dry and its shoreline runs along the Atlantic Ocean at the Sahel's westernmost point. Approximately half of the country’s population of 16.3 million is concentrated around Dakar and other urban areas.

The density of Senegalese's population amounted to less than one inhabitant per hectare in 2019, on par with the average for lower middle income countries in Africa. The population density is forecast to increase slightly to about 1.5 inhabitants per hectare in 2043.

The Senegalese economy has traditionally revolved around a single cash crop, namely peanuts. However, the government has worked to diversify both cash crops and subsistence agriculture by expanding into commodities such as cotton and sugarcane, and promoting non-agricultural sectors. Fishing, phosphates and tourism have successfully been turned into major sources of foreign exchange at the beginning of the 21st century. According to the World bank, oil and gas extraction has been delayed owing to the COVID-19 pandemic and is not expected to contribute to revenues and exports before 2035.

In 2019, the size of the Senegalese economy was US$30.6 billion, up from US$9.6 billion in 1990. The economy grew by more than 6% per year between 2014 and 2018. Real GDP growth stood at 0.87% in 2020, down from 4.4% in 2019 and 6.2% in 2018.

The COVID-19 pandemic has significantly changed the country's economic outlook, setting back services such as tourism and transport, as well as exports. Economic recovery will likely be gradual.

By 2043, the economy is projected to grow to US$124.2 billion, making it the 17th largest economy in Africa under the Current Path assumptions for other countries.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of Senegal.

The GDP per capita (PPP) was US$3 746 in 2019 and is forecast to increase to US$6 995 in 2043 on the Current Path. This is about 31% lower than the projected average for lower middle-income countries in Africa in the same year. Owing to the COVID-19 pandemic and its associated economic crisis, Senegal’s GDP per capita shrank by 3.3% in 2020 compared with its level in 2019.

The informal sector is a lifeline for many people in Senegal. According to a 2020 ILO report, nine out of ten workers in Senegal are in informal employment and 97% of non-agricultural economic units operate in the informal economy. The informal economy consists mainly of poor workers and those who earn a daily wage. Many do not have a contract and do not benefit from any form of social protection.

In 2019, the size of the informal economy represented about 32.7% of the country's GDP. It is projected to decline modestly to 26.5% by 2043, on par with the projected average of 26.4% of GDP for lower middle-income countries in Africa. This projected reduction in the size of the informal economy augurs well for government revenue.

Although the informal economy provides a safety net for a large and growing working-age population in the country, it impedes economic growth. Reducing informality will allow more people to benefit from better wages and redistributive measures. Therefore authorities need to take measures to reduce the size of the informal economy by reducing the hurdles to registering a business, tackling corruption and improving access to finance.

The IFs platform uses data from the Global Trade and Analysis Project (GTAP) to classify economic activity into six sectors: agriculture, energy, materials (including mining), manufactures, services and information and communications technology (ICT). Most other sources use a threefold distinction between only agriculture, industry and services, with the result that data may differ.

The services sector remains the main contributor to GDP in Senegal, while agriculture is the most dynamic engine of economic growth.

In 2019, the services sector accounted for 55.6% of GDP (US$17 billion). On the Current Path, the share of the services sector to GDP will slightly increase to 58.7% (US$72.9 billion) by 2043.

The services sector is followed by the manufacturing sector, and accounted for 22.9% of GDP (US$7 billion) in 2019. It is estimated to increase to 26.2% of GDP (US$32.5 billion) by 2043. Manufacturing production in Senegal is more developed than in most West African countries. Both food processing and handicraft industries are well established. Senegal has also been the leading producer of peanut oil in French-speaking sub-Saharan Africa for many years.

At 13.4% (US$4.1 billion) in 2019, the agriculture sector, which occupies about two-thirds of the economically active population, had the third largest contribution to GDP. Its contribution is projected to steadily decline to 4.4% (US$5.5 billion) by 2043, indicating the structural transformation of the economy.

The share of ICT in GDP was 5.5% in 2019 and it is projected to increase slightly to 6.9% by 2043. Materials contributed 2.5% in 2019, and its contribution to GDP is forecast to be 3.8% (US$4.6 billion) in 2043.

The data on agricultural production and demand in the IFs forecasting platform initialises from data provided on food balances by the Food and Agriculture Organization (FAO). IFs contains data on numerous types of agriculture, but aggregates its forecast into crops, meat and fish, presented in million metric tons. Chart 9 shows agricultural production and demand as a total of all three categories.Agriculture is one of the dominant sectors of the Senegalese economy, despite the country being in the drought-prone Sahel region. Most farmers produce for subsistence needs, although a relatively wide variety of agricultural products. Millet, rice, corn and sorghum are the primary food crops grown in Senegal. Production is subject to drought and pests such as locusts, birds, fruit flies and white flies. Moreover, the effects of climate change, such as extreme weather patterns leading to drought and increased temperatures, are expected to harm Senegal’s agricultural economy severely.

Senegal is a net food importer, particularly for rice. Peanuts, sugarcane and cotton are important cash crops, and a wide variety of fruits and vegetables are grown for local and export markets.

Inadequate or irregular rainfall, soil degradation, lack of good-quality seeds and fertilisers, use of traditional agricultural techniques and a lack of technical support services, a lack of access to finance, poor infrastructure that limits access to markets or water, and unsuitable land tenure structures are holding back farms' productivity.

Crop production in 2019 stood at 7.5 million metric tons, up from 3.3 million metric tons in 1990. This is significantly lower than the demand of 10.9 million metric tons in 2019. Across the forecast horizon, the excess demand will continue to increase. In 2043, agricultural crop production and demand are forecast to be 10.5 million metric tons and 22.6 million metric tons, respectively. This is equivalent to excess demand for crops of roughly 12 million metric tons, which will likely be met through imports.

Ecological problems and the exploitation and mismanagement of natural resources hamper progress towards reducing import dependence. The annual rainfall in Senegal is declining, forests are shrinking and the land is vulnerable to poor soil quality and desertification. Careful management of the environment is therefore essential to improve agricultural production.

There are numerous methodologies and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$1.90 per person a day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017:

• US$3.20 for lower middle-income countries
• US$5.50 for upper middle-income countries
• US$22.70 for high-income countries.

Senegal's high illiteracy rate, high unemployment rate and low human development index contribute to its widespread poverty.

Using the US$3.20 threshold for lower middle-income countries, more than half (60.4%) of Senegal’s population were living in extreme poverty in 2019, translating to 9.9 million people. This is about 10 percentage points above the average for lower middle-income countries in Africa. The poverty rate increased to 63.2% in 2020 owing to the COVID-19 pandemic and its associated economic slowdown.

The extreme poverty level (based on US$3.20 as threshold) is forecast to decline to 27.4% (7.7 million people) by 2043, below the average for lower middle-income countries in Africa, which will then be at 38.3%.

To combat high poverty rates, the Senegalese Government initiated the National Programme of Family Security Grants, which aims to build up the resilience of the most vulnerable citizens to chronic poverty and economic shocks.

To sustain economic growth over the long term, it must be inclusive. Policymakers in Senegal should make growth more inclusive by integrating the most vulnerable segment of the population, including women, into the economy and enhancing the human capital formation to meet the needs of the labour market and hence create more gainful jobs and accelerate poverty reduction.

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydro, nuclear and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent. The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBTUs) or 1 700 kilowatt-hours (kWh) of energy.

Energy shortage is one of the main constraints to development in Senegal. In 2019, hydropower was the sole form of energy produced in the country and this trend is forecast to continue until 2024.

From 2025 to 2031, gas will represent about 83.3% of total energy production in Senegal while the share of hydro will drop to 16.7% over this period.

From 2032 to 2040, gas and renewable energies will each account for 45.5% of energy produced in the country. Betwee 2041 and 2043, gas will account for 62.5% of total energy production, while other renewable energies and hydropower will account for 31.3% and 6.3%, respectively.

Senegal has huge potential for producing solar and wind energy. The government has exempted all solar power kits for lighting, water pumps and water heating from customs, taxes to promote renewable energy.

Carbon is released in many ways, but the three most important contributors to greenhouse gases are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4). Since each has a different molecular weight, IFs uses carbon. Many other sites and calculations use CO2 equivalent.

Carbon emissions increased from 0.9 million tons in 1990 to 3.6 million tons in 2019 and are forecast to reach 13 million tons by 2043. This represents an increase of 261% (from a very low base) between 2019 and 2043. The increased emissions are due to the increased economic activities in the country in recent years. However, this will only constitute about 0.13% of global carbon emissions.

Developed economies must help Senegal (and other developing countries) deal with the impact of climate change, which will disproportionately affect them.

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development and this would encourage inflows of foreign direct investment (FDI) and improve business confidence. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained in here in the thematic part of the website.

Senegal is one of the most stable countries in Africa and has experienced three peaceful political transitions since independence in 1960. President Macky Sall has been in power since 2012 and was elected to a second five-year term in February 2019. So far, the country has been spared the violence engulfing the region, but terrorist groups’ activities in neighbouring countries and cross-border trafficking may fuel the risk of instability.

The IFs governance security index ranges from 0 (low security) to 1 (high security). The Current Path forecast shows higher stability in Senegal than the average for lower middle-income Africa. Specifically, the score of 0.74 for Senegal on the index was 2.8% higher than the average of 0.72 for lower middle-income Africa in 2019. The scenario further improves security and stability in Senegal. By 2043, the score in the Stability scenario is 0.89, which is 9.8% higher than the Current Path forecast and 17% higher than the projected average of 0.76 for African lower middle-income countries.

The war in Ethiopia has shown how instability can imperil an impressive economic growth record. Ethiopia's case demonstrates that a state's capacity to maintain order is one of the most important conditions for development. The Senegalese government and policymakers should take proactive measures to preserve the social and political stability the country has been enjoying so far.

By 2033, Senegal's GDP per capita is expected to be US$59 higher in the Stability scenario compared with the Current Path forecast for that year. In 2043, the difference would increase to about US$201. Hence, by 2043, Senegal would record a GDP per capita of US$7 196, 3% above the Current Path forecast at US$6 995. Under the Current Path assumptions for other countries, the GDP per capita of Senegal in the Stability scenario is US$1 946 below the projected average of US$9 142 for lower middle-income countries in Africa in 2043.

Stability in a country is an important condition for economic growth and poverty reduction, as it encourages greater domestic and foreign investment, which positively affects growth and poverty reduction. Using the threshold of US$3.20 for extreme poverty in lower middle-income countries, 9.9 million Senegalese (60.4% of the population) were considered to be extremely poor in 2019. The number of poor people will stand at 7.3 million (25.8%) by 2043 in the Stability scenario, compared with 7.7 million (27.4%) in the Current Path forecast for that year, a difference of 400 000. The poverty rate in the Stability scenario (at $3.20 per day) in 2043 is 12.5 percentage points below the projected average of 38.3% for lower middle-income countries in Africa.

This section presents the impact of a Demographic scenario that aims to hasten and increase the demographic dividend through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception.

The intervention is explained in here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the first dividend, namely the contribution of the size and quality of the labour force to incomes. It refers to a window of opportunity that opens when the ratio of the working-age population (between 15 and 64 years of age) to dependants (children and the elderly) reaches 1.7.

In 2019, the ratio of the working-age population to dependants stood at 1.2, meaning that there are 1.2 people of working age for each dependant. On the Current Path, it is forecast to be 1.67 by 2043. In the Demographic scenario, the ratio of working-age population to dependants will be 1.85 by 2043, which will be higher than the minimum ratio of 1.7 required for the demographic dividend to materialise.
The increasing size of the working-age population in Senegal can be a catalyst for growth if they are educated and employment opportunities are generated to successfully harness their productive power. If not, it could turn into a demographic 'bomb', as many people of working age may remain unemployed and in poverty, potentially creating frustration, social tension and conflict.

The infant mortality rate is the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

As of 2019, the infant mortality rate in Senegal was 30.5 deaths per 1 000 live births, below the average of 46 for lower middle-income countries in Africa. In the Demographic scenario, the infant mortality rate is expected to be 9.8 by 2043, compared to 11.8 in the Current Path forecast.

In 2043, the infant mortality rate in the Demographic scenario is expected to be 19.9 percentage points below the average for lower middle-income countries in Africa, at which point the average would be at 29.7 deaths per 1 000 live births.

The Demographic scenario's impact on per capita income is marginal: approximately US$39 more than in the Current Path forecast (US$5 125) for 2033. By 2043, the difference more than quadruples, so that the average Senegalese will have about US$171 more in income than in the Current Path forecast (US$6 995), representing a 2.4% in that year.

However, this would be about 27.6% lower than the projected average of US$9 142 for lower middle-income countries in Africa by 2043.

When using the threshold for extreme poverty in lower middle-income countries (US$3.20), 9.8 million Senegalese (60.4% of the population) were considered to be extremely poor in 2019. The number of poor people will stand at about 7 million (25.8% of the population) by 2043 in the Demographic scenario compared with 7.7 million people, which translates to a poverty rate of 27.4% in the Current Path forecast for that year; this represents 0.7 million fewer people living in extreme poverty. The poverty rate in the Demographic scenario in 2043 is about 12 percentage points below the projected average for lower middle-income countries in Africa. Senegalese authorities should make efforts to accelerate the demographic transition, which can be another source of growth and poverty reduction.

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which include reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained in here in the thematic part of the website.

The quality of a nation's health system can be gauged through indicators such as life expectancy, maternal mortality, and infant mortality, among others.

Senegal faces major human resources challenges for its health system, including a critical shortage of health workers in remote areas.

However, the government is making a concerted effort to improve the health system by creating tools, policies and processes to ensure that quality health services are delivered.

As of 2019, life expectancy in Senegal was about 67.9 years. The Health/WaSH scenario improves life expectancy at birth to 74.6 years by 2043 compared with 74.5 years in the Current Path forecast. In this scenario, life expectancy in Senegal is 1.3 years above the average for lower middle-income countries in Africa (73.3 years) in 2043.

On average, women had a higher life expectancy at birth (69.6 years) than men (66.3 years) in 2019.

In the Health/WaSH scenario, women’s life expectancy at birth is projected to be 76.9 years by 2043 compared with 72.5 years for men.

The Health/WaSH scenario reduces infant mortality to 16.6 per 1 000 live births by 2033 compared with 17.1 in the Current Path forecast. By 2043, the infant mortality rate is expected to be 11.5 per 1 000 live births, compared with 11.8 in the Current Path forecast.

The infant mortality rate in the scenario is below the average for lower middle-income countries in Africa, which would be at 29.6 deaths per 1 000 live births by 2043.

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertiliser technology), increased land under irrigation and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained in here in the thematic part of the website.

The data on yields per hectare (in metric tons) is for crops but does not distinguish between different categories of crops.

About 90% of agricultural land in Senegal is worked by small-scale, family-based farms engaged in subsistence agriculture and farming systems are mostly rain fed. This situation, along with a lack of good-quality seeds and fertilisers, use of traditional techniques and a lack of technical support services, severely limits agricultural productivity in Senegal.

In the Agriculture scenario, average crop yields improve from a measly 2.2 tons per hectare in 2019 to 6 tons per hectare in 2043, compared with 2.8 tons in the Current Path forecast in the same year. In 2043, the average crop yields in the Agriculture scenario is almost on par with the projected average of 6.1 tons per hectare for lower middle-income countries in Africa.

The use of higher-quality seeds, fertiliser and agricultural machinery generally remains low for staple crop production in Senegal. Owing to low yields, population growth and diet preferences, Senegal's import bill for foodstuffs is increasing. Improvements in the agriculture sector would help to reverse this trend.

On the Current Path, food import dependence will continue to increase — from 30.7% of total food demand in 2019 to 54% by 2043. However, in the Agriculture scenario, the food import dependence significantly declines: it is forecast to be about 11% of total food demand in 2043, lower than the projected average of 36.8% for lower middle-income African countries.

If the Agriculture scenario materialises, it would lead to a reduction in imports and release funds for other productive investments in the economy. It would also improve the country's current account balance and make it less vulnerable to international food price shocks.

The agriculture sector is one of the main pillars of the Senegalese economy. More than half of the total labour force in Senegal is employed in the agriculture sector, and about 80% of people in rural areas work in this sector.
Given the importance of agriculture to the Senegalese economy, improvements in this sector would promote growth and raise income levels.

The Agriculture scenario significantly impacts GDP per capita in the country. By 2043, the Agriculture scenario improves GDP per capita by US$529 above the Current Path forecast, so that Senegalese will be earning, on average, US$7 524 per year. However, this is US$1 618 lower than the average for lower middle-income countries in Africa.

Using the threshold of US$3.20 per person per day for extreme poverty, the poverty rate in the Agriculture scenario will be about 22.3% by 2043, compared with 27.4% in the Current Path forecast. This equates to 1.47 million fewer people living in extreme poverty.

As more than 50% of the Senegalese labour force relies on crops to feed their families and earn an income, further development in the agriculture sector is a viable option to reduce poverty in the country.

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained in here in the thematic part of the website.

Historically, Senegal has struggled with the prospect of developing human capital. The high influx of youth, coupled with widespread poverty, has left more than 40% of the total population illiterate in recent years. Education in Senegal is free and compulsory until the age of 16.

The average duration of education in the adult population (aged 15 years and older) is a good indicator of the stock of education in a country. In 2019, adults aged 15 years or older had received, on average, 4 years of education, and on the Current Path, it is projected to improve to 6.2 years by 2043. This is 2.3 years below the average for lower middle-income countries in Africa. Technically, this means that most Senegalese will have at least primary education by 2043.

In the Education scenario, the duration of education improves by about 6 months over the Current Path forecast by 2043.

In 2019, the mean duration of education among men was 4.5 years, one year more than the average for women (3.5 years). In the Education scenario, the mean duration of education for men is forecast to be 6.8 years by 2043, compared with 6.6 years for women. This means that if the Education scenario materialises, the gender gap in education in the country would reduce.

According to Robert Lucas, a Nobel Prize winner in Economics, and Paul Romer, former chief economist at the World Bank, economic development depends, above all, on a country's ability to value its human capital. It allows the country not only to increase its current added value but also to create tomorrow's technological innovations. In the Education scenario, the score for the quality of primary education improves from 26.1 out of a possible 100 in 2019 to 35.2 in 2043, a 16% increase compared with the Current Path forecast. In addition, the score for the quality of secondary education goes from 34.6 in 2019 to 44.7 in 2043 in this scenario, an 18% improvement compared to the Current Path. These findings also reveal that the education quality at secondary level is better than that of primary level in Senegal.

Quality education is crucial for economic development. Countries such as South Korea and Malaysia have succeeded in transitioning to emerging market economies as a result of investing in building some of the best education systems in the World.

By 2043, the Education scenario will increase GDP per capita by US$277 from the US$6 995 in the Current Path forecast. In other words, in 2043, the GDP per capita in the Education scenario will be 3.9% larger than in the Current Path forecast.

Investment in education significantly impacts economic growth, but it takes time to materialise. It will take more than a decade for a child enrolled in primary school to contribute meaningfully to the economy. Investment in human capital affects labour productivity with a long lag, so it can take more than 15 years until output surpasses its counterpart in a programme that invests mainly in infrastructure.

Using the US$3.20 threshold for extreme poverty in lower middle-income countries, a poverty rate of 24.1% (6.8 million people) is expected in the Education scenario in 2043, compared with a rate of 27.4% (7.7 million people) in the Current Path forecast.

Education is an important tool to reduce poverty. It improves the jobs and income prospects of the poor segment of society. The Senegalese government's ambitious policies for the education sector, such as the provision of free education until the age of 16, is a great opportunity for children from poor households to receive education, with a potential positive effect on poverty reduction in the country.

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues.

The intervention is explained in here in the thematic part of the website.

Chart 30 should be read with Chart 8, which presents a stacked area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

In the Manufacturing/Transfers scenario, the share of manufacturing in GDP (%) records the highest improvement compared with the Current Path. In 2043, its share in GDP is 0.6 percentage points above the Current Path forecast in 2043. However, the share of the agriculture sector in GDP in the Manufacturing/Transfers scenario is 0.44 percentage points lower than the Current Path forecast in 2043.

In absolute value, the contribution of the services sector experiences the largest improvement compared with the Current Path forecast across the forecast horizon. In the Manufacturing/Transfers scenario, its contribution is expected to be US$8.5 billion larger in 2043 than in the Current Path forecast. The services sector is followed by the manufacturing industry, with its value in the scenario being US$4.8 billion larger than the value forecast on the Current Path in 2043.

The respective contributions of the ICT, materials, agriculture and energy sectors to GDP in the Manufacturing/Transfers scenario are US$1.1 billion, US$620 million, US$50 million and US$10 million larger than the Current Path forecast in 2043. Going forward, the services sector will continue to be the dominant sector of the Senegalese economy.

Compared with the Current Path, the Manufacturing/Transfers scenario increases household transfers and welfare by 49% in 2043. This represents US$4.3 billion more than on the Current Path, forecast to be US$8.8 billion.

To make the social safety net programmes more effective at reducing poverty, better targeting and efficient approaches are critical.

According to the economist Nicolas Kaldor, manufacturing is the engine of economic growth (Kaldor's engine of growth hypothesis). It has backward and forward linkages with other sectors and transforms the productivity structures across the economy. Thus, a robust manufacturing sector is crucial to achieve sustained growth and significantly improve the population's living standard.

In the Manufacturing/Transfers scenario, GDP per capita will be US$220 more than in the Current Path’s US$5 5125 in 2033. By 2043, the GDP per capita is expected to increase to US$7 565 in this scenario, compared with US$6 995 in the Current Path forecast. This is an increase of 8.1% (US$570) above the Current Path forecast for that year.

Based on the poverty threshold for lower middle-income countries (US$3.20), 9.8 million Senegalese (60.4% of the population) were considered to be extremely poor in 2019. The number of poor people will stand at 23% of the population (6.5 million people) by 2043 in the Manufacturing/Transfers scenario, compared with 27.4% (7.7 million) in the Current Path forecast for that year, representing a difference of 1.2 million people. The poverty rate in the Manufacturing/Transfers scenario in 2043 is about 15 percentage points below the projected average for lower middle-income countries in Africa.

The Leapfrogging scenario represents a reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained in here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

The fixed broadband subscription is very low in Senegal. In 2019, there were 1.7 subscriptions per 100 people compared with the average of 3.7 for lower middle-income countries in Africa. In the Leapfrogging scenario, fixed broadband subscriptions increase to 50 subscriptions per 100 people by 2043, which is 104% higher than the Current Path’s forecast of 24.4 in that year.

Mobile broadband refers to wireless Internet access delivered through cellular towers to computers and other digital devices.

The use of mobile broadband has grown rapidly in Senegal compared with fixed broadband. In 2019, mobile broadband subscriptions per 100 people in Senegal stood at 35.4, significantly lower than the average for lower middle-income Africa (49 subscriptions per 100 people).
In the Leapfrogging scenario, mobile broadband subscriptions per 100 people in Senegal converge with the Current Path forecast (153.1) by 2043, slightly above the average of 147.6 for lower middle-income countries in Africa.

Widespread access to high-speed Internet can improve a country's socio-economic outcomes. Broadband can increase productivity, reduce transaction costs and optimise supply chains, positively affecting economic growth. Senegalese authorities should focus on reforms to increase broadband penetration.

 In 2019, 10.9 million Senegalese had access to electricity, representing 66.9% of the total population. This is on par with the average for lower middle-income countries in Africa.

However, access to electricity is skewed towards urban areas. In 2019, about 89.5% of the urban population had access to electricity, compared with only 46.8% in rural areas. In the Leapfrogging scenario, about 99% of the Senegalese population (27.9 million people) will have access to electricity by 2043. This is above the projected average of 81.7% for lower middle-income African countries. It is also roughly 10 percentage points higher than the Current Path’s forecast of 89.5% (25.2 million people).

By 2043, all people residing in urban centres will have access to electricity in the Leapfrogging scenario, compared with 98.3% in the Current Path forecast.

In addition, 98.6% of the rural population is expected to have access to electricity by 2043 in the Leapfrogging scenario, compared with 78% on the Current Path in that year.

By 2033, GDP per capita will be US$5 327 in the Leapfrogging scenario, compared with US$5 125 in the Current Path forecast (a difference of US$202).

In 2043, this difference increase slightly to US$449 above the Current Path forecast of US$6 995. The GDP per capita in the scenario is US$1 698 lower than the average for lower middle-income countries in Africa.

In the Leapfrogging scenario, 6.8 million people are expected to live in extreme poverty in 2043, representing 24% of the population. This is 0.9 million fewer people than the Current Path’s forecast in that year. In the Leapfrogging scenario, the poverty rate is 14 percentage points lower than the average for lower middle-income African countries in 2043.

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Agreement (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained in here in the thematic part of the website.

A trade balance is the difference between a country's exports and the value of its imports at a given time. A country that imports more goods and services than it exports (in terms of value) has a trade deficit, whereas a country that exports more goods and services than it imports has a trade surplus. 

Senegal’s trade deficit constituted 12.1% of GDP in 2019, 5.5 percentage points higher than the average for lower middle-income countries in Africa in the same year. In the Free Trade scenario, the country's trade deficit as a percentage of GDP will be lower between 2024 and 2037 than in the Current Path forecast.

However, the trade deficit in the scenario deteriorates from 2038 onwards. Thus, in 2043, the trade deficit in the scenario is expected to be 9.6% of GDP compared with 7.4% in the Current Path forecast. When the AfCFTA is fully implemented, the trade deficit recorded in the Free Trade scenario is higher than in the Current Path forecast, because, with the removal of trade restrictions, it becomes easier to import while Senegalese firms face intense competition on export markets. However, this is not a viable indicator to conclude that Senegal will be a loser if the AfCFTA is fully implemented.

In the Current Path forecast, GDP per capita increases from US$3 746 in 2019 to US$6 995 in 2043. However, it is expected to be US$7 904 in the Free Trade scenario, an increase of US$909 from the Current Path forecast for that year. This shows that the full implementation of AfCFTA will significantly enhance economic growth in Senegal. Trade openness generally increases technology diffusion and competition, with a positive effect on productivity.

In 2043, the poverty rate (at the $3.20 threshold used for lower middle-income countries) is 20.6% in the Free Trade scenario, compared with 27.4% in the Current Path forecast and the average of 38.3% for lower middle-income countries in Africa. This translates to 1.9 million fewer people living in poverty than on the Current Path. The full implementation of AfCFTA will improve economic growth and incomes and reduce poverty in Senegal. 

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows to middle-income countries. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained in here in the thematic part of the website.

Many countries in sub-Saharan Africa are still heavily dependent on foreign aid to provide basic services such as education and health. In Senegal, aid constituted 5% of GDP in 2019, above the average of 2.4% for Africa and the average of 1.7% for lower middle-income African countries. In the Financial Flows scenario, foreign aid flows to Senegal increase slightly above the Current Path forecast between 2024 and 2040, before converging with the Current Path forecast at 1.7% of GDP; this is higher than the average of 0.5% for lower middle-income countries in Africa. In both this scenario and the Current Path forecast, aid (as a percentage of GDP) is lower in 2043 than in 2019. This is because donors prioritise low-income countries.

FDI can act as a catalyst for economic development as it brings much-needed capital and technology to recipient countries. Senegal offers a stable political environment, a favourable geographic position and strong institutions with growing opportunities for foreign investment. The Senegalese government welcomes foreign investment and has prioritised efforts to improve the business climate.

FDI flows to Senegal represented about 2.6% of GDP in 2019 (on par with the average for lower middle-income countries in Africa), before dropping to 1.4% in 2020 because of the COVID-19 pandemic and its associated economic crisis. In the Financial Flows scenario, FDI flows to Senegal represent 3.1% of GDP in 2043, compared with 2.7% in the Current Path forecast.

In Senegal, remittances are one of the main resources of the country and were estimated at 5.6% of GDP (US$1.7 billion) in 2019, meaning that Senegal is one of the largest recipients of remittances in sub-Saharan Africa.

Across the forecast horizon, Senegal remains a net recipient of remittances. In this scenario, the total net remittances to Senegal are forecast to be US$5.9 billion (4.6% of GDP) by 2043, compared with US$5.2 billion (4.2%) in the Current Path forecast.

In the Financial Flows scenario, GDP per capita increases from US$3 746 in 2019 to US$7 154 in 2043, which represents a 91% increase over this period, compared with 86.7% on the Current Path.

Overall, the Financial Flows scenario has a modest impact on GDP per capita in Senegal, with it being US$159 higher in 2043 than on the Current Path.

In contrast to FDI, external financial flows (such as remittances and aid) do not have a clear relationship with economic growth. FDI, which can boost growth and development through capital accumulation and technology transfer, has not yet reached the level that would make it a game-changer in the country.

The Financial Flows scenario reduces the number of extremely poor Senegalese by about 0.5 million in 2043, compared with the Current Path forecast (using the US$3.20 poverty threshold). Remittances improve the economic conditions of the recipient households and also contribute to investments in education and improving the job and income prospects of poor people.

In 2019, 60.4% of the Senegalese population lived in extreme poverty. This is expected to decline to 25.8% by 2043 in the Financial Flows scenario, compared with 27.4% in the Current Path forecast. The rate of extreme poverty rate in this scenario will also be 12.5 percentage points below the average for lower middle-income countries in Africa.

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in low-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries.

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables are part of the Leapfrogging scenario. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including that supporting health, sanitation and ICT.

The intervention is explained in here in the thematic part of the website.

In 2019, the total number of people with access to electricity in Senegal was about 10.9 million, representing 66.9% of the population. This increases to 25.7 million in the Infrastructure scenario in 2043, constituting 91.4% of the population. This is slightly above the projected 25.2 million people, representing 89.5% of the population in the Current Path forecast in 2043.

By 2043, 98.9% of the urban population in Senegal is projected to have access to electricity in this scenario, compared with 98.3% in the Current Path forecast. However, only 81.6% (9.9 million people) and 77.9% of rural population (9.5 million people) will have access to electricity in 2043 in the Infrastructure scenario and the Current Path forecast, respectively, indicating a disparity in access to electricity between urban and rural population in both the Current Path and the Infrastructure scenario.

Indicator 9.1.1 of the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

Accessibility to rural areas is important in spurring the soci-economic development of a country and improving the living standards of the rural population. Better rural roads facilitate trade between rural and urban areas. For example, better roads enable the rural population to enjoy amenities from nearby urban areas while allowing the urban population to benefit more easily from the agricultural products supplied by rural areas.

In 2019, 33% of the rural population in Senegal resided within 2 km of all-weather roads, below the average of 61.4% for lower middle-income African countries. In the Infrastructure scenario, it is projected to increase to 47.8% by 2043, slightly above the Current Path forecast of 45.7% and the average of 67.8% for lower middle-income countries in Africa.

Senegal's GDP per capita is forecast to rise to US$7 257 by 2043 in the Infrastructure scenario. This is US$262 more than in the Current Path forecast in the same year, but below the average of US$9 142 for lower middle-income African countries. Increased investment in infrastructure improves connectivity and reduces transaction costs, positively affecting productivity and economic growth.

In the infrastructure scenario, the extreme poverty rate (based on the threshold of $3.20) is projected to decline from 60.4% in 2019 to 25.5% in 2043. This is equivalent to 7.2 million poor people in 2043, compared with 7.7 million in the Current Path forecast. This represents half a million fewer poor people in the Infrastructure scenario than in the Current Path forecast for that year.

The extreme poverty rate by 2043 (25.5%) in this scenario is about 13 percentage points lower than the projected average of 38.3% for lower middle-income countries in Africa.
Infrastructure development facilitates business and industrial development and increases efficiency in the delivery of social services. Important basic infrastructure, such as roads and electricity, plays a vital role in achieving sustainable and inclusive economic growth and development.

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption, and hence improves the quality of service delivery by Government.

The intervention is explained in here in the thematic part of the website.

As defined by the World Bank, government effectiveness 'captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies'.

The government effectiveness score for Senegal is projected to increase across the forecast horizon in both the Current Path forecast and the Governance scenario.

By 2043, the score in the Governance scenario is projected to be 2.7 (out of a maximum of 5). This is 2.6% higher than the projected score in the Current Path forecast in the same year. Also, Senegal has a higher government effectiveness score than the projected average of 2.3 for lower middle-income countries in Africa in 2043.

In the Governance scenario, Senegal's GDP per capita is projected to increase to US$7 202 in 2043, which is US$207 more than the Current Path forecast in the same year. However, in the Governance scenario GDP per capita in 2043 is lower than the projected average of US$9 142 for lower middle-income countries in Africa in the same year.

Critical determinants of growth depend on governance and institutional setting in a country. Authorities in Senegal should improve governance to enhance economic growth and income levels.

Using the threshold of US$3.20 for lower middle-income countries, the poverty rate in Senegal is projected to decline to 25.7% in 2043 in the Governance scenario, which is lower than the average of 38.3% for lower middle-income countries in Africa. The poverty rate of 25.7% in 2043 equates to 500 000 fewer poor people than the 7.7 million poor people in the Current Path forecast for 2043.

This section presents projections for carbon emissions in the Current Path for Senegal and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

In 2019, Senegal released about 3.4 million tons of carbon. The country is expected to release 13 million tons by 2043 in the Current Path forecast, an increase of 282.4% from 2019. Although carbon emissions are set to increase with increased economic activity, Senegal's carbon emissions come from a very low base. Like many developing countries, Senegal will disproportionately suffer the impact of climate change, which it has contributed very little to. Nonetheless, the country must reduce its carbon emissions and move towards renewable energy for sustainable growth and mitigate climate change.

The Free Trade scenario has the most significant impact on carbon emissions, followed by the Manufacturing/Transfers scenario. The Demographic scenario has the lowest carbon emissions. Slower population growth reduces population pressure on the utilisation of resources and hence minimises environmental degradation. A higher amount of carbon emissions than what is forecast on the Current Path will be seen in all scenarios except the Demographic scenario by 2043, ranging from 12.8 million tons of carbon (Demographic scenario) to 14.4 million tons (Free Trade scenario).