Senegal - Economic development

Senegal's development program addresses the basic problems encountered by Senegal's economy: lack of diversified output, the inefficiency of investments, the role of state in economic activity, and the excessive expansion of domestic consumer demand. These problems have been partly addressed by programs focusing on food self-sufficiency, fishing, and tourism, and by strengthening high-return activities. Projects such as the Manantali irrigation project, the phosphate-to-fertilizer recovery project, and the trawler modernization program are examples of what Senegal is doing within this policy framework. In the area of manufacturing, capacity utilization improvement, equipment modernization, and low-capital production are emphasized. Since 1994, the government has made progress in privatizing state-owned enterprises, reducing labor costs to improve competitiveness in the manufacturing sector, and liberalizing trade by eliminating export subsidies and removing restrictions on certain strategic imports. Private economic revenues accounted for roughly 82% of gross domestic product (GDP) in 1999, but trade liberalization had not progressed as much as planned.

In 2000, Senegal became eligible for around $800 million in debt service relief under the International Monetary Fund (IMF)/World Bank Heavily Indebted Poor Countries (HIPC) initiative. In 2003, the IMF approved a $33 million three-year Poverty Reduction and Growth Facility (PRGF) Arrangement for Senegal, to support the government's economic reform program. Senegal's Agency for the Promotion of Investment (APIX) aims to promote foreign investment.