Election campaigns in Senegal focus on reviving the country's economy

A road in the Senegalese capital, Dakar, showing a picture of one of the candidates (French)

Economic challenges represent the most important obstacle facing the future president of Senegal, in a country whose economy ranks fourth in West Africa.

Although there was a narrow margin of time for electoral campaigns, due to the unrest that accompanied the decision to postpone them and then return to postponement by judicial decision, both parties, the ruling coalition and the opposition, played on unemployment, sources of wealth, inflation, and the decline of the currency, to attract voters’ votes.

The administration of President Mekki Sall has developed a development vision, “Agenda Senegal Emerging”.

The plan is based on medium and long-term stages ending by the year 2035, and is based on creating a structural transformation in the economy by strengthening the growth engines of import and export and expanding the labor market, in addition to enhancing human capital by improving living conditions, achieving social equality, consolidating good governance and the rule of law, strengthening security and stability, and protecting rights. And freedoms.

Obstacles that slow down the economy

Several factors played a role in delaying the implementation of McKissal's strategy, starting with the Corona pandemic, which raised unemployment rates and reduced growth to record levels.

The economy then recorded a recovery that the World Bank and International Monetary Fund described as “amazing,” but the Russian war on Ukraine came and thwarted the rise.

However, the indicators play in Senegal's favor, as the IMF says that its economy has "strong prospects based on the oil and gas sectors."

An election advertisement for presidential candidate Amadou Ba on a street in Dakar (French)

oil and gas

Senegal is about to join the major countries producing and exporting natural gas, and the government has included in its economic forecasts the production of approximately 100,000 barrels of oil per day from the Singomar field through the Australian company Woodside, supported by a floating production storage and offloading unit bearing the name of the country’s first president, Leopold Sédar Senghor, which is moored off the shores of Dakar is about 100 km away.

The government also expects an annual production of gas estimated at about 2.5 million tons, despite the disruption in contracts, as the British “BP” exited the market due to a dispute with the government over the uses of production from the Yakar Taraniga field.

The Senegalese Minister of Oil and Energy attributed the dispute to the company's attempt to export gas, contrary to the government's desire to use it locally to operate power stations.

Unemployment and the labor market

But the more subtle difficulties are not limited to macroeconomic indicators, as unemployment is one of the most pressing issues, with a rate reaching about 19.5% in the third quarter of last year, according to official figures, and nearly 40% of the population lives in rural areas where the poverty rate is 57.3%. This is double the number in cities, especially the capital, according to 2019 statistics.

Illegal immigration

Together, these factors led to the number of irregular Senegalese trans-Atlantic migrants nearly doubling last year compared to 2022. This increase comes despite the existence of a national strategy to reduce it.

The current candidate, Amadou Ba, announced an initiative whose strategy is based on providing incentives for young people to stay, controlling border management, pursuing human smugglers, and facilitating the return and reintegration of irregular migrants.

One of Dakar's markets, which reflects the modest state of life of the residents (Al Jazeera)

Improve wages

The government's first response to the living crisis was to raise public sector wages by about 20% and private sector wages by 10%.

However, inflation, high prices, and shortages in food supplies are factors that contributed to the erosion of wage increases without the citizen achieving a direct benefit. Food prices rose and import levels decreased, in parallel with a global recession witnessed by even the most powerful industrial economies, in Europe and Asia alike.

Borrowing

Despite the difficult reality, the IMF estimates that economic growth in Senegal will stabilize by next year at 7.4%, provided that what it calls “stable structural reforms” are implemented, which are based on controlling public finances by increasing revenues, gradually eliminating energy subsidies, and rationalizing public sector spending.

The Fund provided a loan worth $1.5 billion to Senegal to support it in restructuring the economy.

International monetary institutions link high growth rates to an increase in the volume of investment in the private sector, but business expansion indicators do not tend towards borrowing, primarily for fear of delayed payment, according to a study by the CGAB organization.

The organization estimates that 17% of companies in the formal sector receive financing from commercial banks, compared to a rate not exceeding 6% for private institutions.

The reluctance to enter the structure of the banking system is not limited to private companies, as the CGAB organization estimates, according to a field survey, that 36% of Senegalese save irregularly and about 16% save every two months, but both groups save outside banks.

The organization attributes this to the complex banking system in addition to the fact that the majority of the population are Muslims who reject the banking interest system.

The IMF estimates that growth in Senegal will stabilize by next year at 7.4% (French)

Programs of the opposition and the ruling coalition

From the point of monetary policy, the leader of the opposition coalition, Othman Sonoko, promises to seek to reform the currency of the West African Monetary Union, or to search for alternatives.

In his promise, Sonoko tried to soften the words of candidate Basiro Diomai Fay, who believes that restoring monetary sovereignty is the gateway to political sovereignty, and by that he means the African franc, which is a reflection of French influence.

As for the most prominent ruling coalition candidate, Amadou Ba, he approached the individual economy in his election campaign.

With inflation fluctuating between 5% and 9%, Amadou Ba promises to work to achieve "shared prosperity", drawing on some features of Sal's development strategy.

Source: Al Jazeera