Senegal

Senegal is located in the western part of Africa, with a coastline along the Atlantic Ocean to the west, covering an area of 196,722 km². Senegal’s population is estimated at 18 million (as of 2023), with 25% residing in the capital, Dakar, which has 3.5 million inhabitants in the metropolitan area. Other major cities include Thiès, Touba, and Saint-Louis.

Economic Overview

In 2023, Senegal’s gross domestic product (GDP) was estimated at $29 billion (World Bank), with economic growth at 4.5%, marking a significant recovery from the slowdown caused by the COVID-19 pandemic. GDP per capita stands at $1,600.

Senegal’s economy is dominated by sectors such as agriculture, fishing, and mining, and in recent years, the country has begun developing its hydrocarbons sector thanks to new offshore gas and oil discoveries. Senegal’s trade balance has a structural deficit, as the country imports more than it exports, but recent gas discoveries may reduce this imbalance over the next decade.

Public debt reached 65% of GDP in 2023, remaining relatively high but sustainable thanks to international assistance and funding programs managed by the International Monetary Fund (IMF). Inflation reached 7% by the end of 2023, driven by rising food and energy prices. The unemployment rate is at 15%, with youth unemployment at a concerning 25%.

Forecasts

Projections for 2024 indicate an economic growth rate of 6%, driven by the development of the hydrocarbons sector and sustained infrastructure investment. A moderate reduction in inflation to 5% is expected, owing to the stabilization of global commodity prices. However, Senegal will face significant challenges, such as improving education and vocational training to address high youth unemployment.

Country Risk

Senegal is considered a moderate-risk country. Internal political stability, marked by a relatively strong democracy, is a positive factor for international investors. However, its economy’s reliance on commodities and external assistance exposes the country to risks from natural resource price fluctuations and climate change impacts on agriculture.

Foreign Direct Investments

Foreign investment in Senegal has grown in strategic sectors such as infrastructure, energy, and agriculture. The country is becoming a hub for renewable energy investments, with expanding solar and wind projects. Its main trade partners include France, China, and EU member states.

Geopolitical Analysis

Senegal enjoys a strategic geographical position in West Africa and faces the Atlantic, making it a natural transit point for regional and international trade routes. The country stands out for its political stability in the region, with regular elections and a solid democratic system. This stability makes it a valuable ally for Western partners, especially France, the United States, and the European Union, and a focal point for regional economic cooperation.

Role in West Africa and Relations with ECOWAS

Senegal is a founding member of the Economic Community of West African States (ECOWAS), a regional organization that promotes economic and political integration among its members. Dakar frequently hosts international and regional summits, leveraging its reputation as a mediator in regional conflicts. Senegal’s leadership within ECOWAS is further strengthened by its active participation in peacekeeping missions and conflict resolution efforts, such as in Mali.

Relations with China

In recent years, Senegal has strengthened ties with **China**, a major investor in infrastructure and telecommunications. China has financed important infrastructure projects, such as Dakar’s international airport, and has promoted trade with Senegal. However, this growing relationship has raised concerns, especially regarding the country’s foreign debt and dependence on China for infrastructure financing.

Post-COVID Challenges and New Opportunities in the Energy Sector

Like many African countries, Senegal was impacted by the COVID-19 pandemic, which disrupted trade and tourism and slowed the economy. However, Senegal showed resilience, with rapid GDP recovery in 2022 and 2023. The country’s future economic development will depend on the management of new energy resources, particularly offshore natural gas, which could transform Senegal into a key energy exporter in Africa.

Migration Policy and Security

Senegal has adopted moderate migration policies. Many Senegalese migrate to Europe in search of better economic opportunities, but the country itself also receives migrants from neighboring countries for work. In terms of security, Senegal is considered a stable country, although it remains vulnerable to threats related to Islamist terrorism in the Sahel region and drug trafficking along its Atlantic coast.