An
open economy Economic activity, assessed through Gross Domestic Product
(GDP) growth, after serious downturns between 1990 and 1994, started to
register steady growth that was indeed higher than that of the demographics.
The 1994 monetary adjustment, combined with a certain number of measures
relating to the stabilisation of public finances and structural and sectoral
reforms, partly enabled the economy to register an average annual growth
rate of over 5%, between 1995 and 2000. The GDP growth rate for 2001 is
expected to be 5.7%.
Details of the open economy are provided below under the following headings:
Preamble
Since the CFA franc was devalued in January 1994, the Senegalese economy
found itself in a situation of unprecedented competitiveness. Thus, in
1999, the nominal Gross Domestic Product (GDP) was estimated at close
to 3000 billion CFA francs, i.e. an increase of over 7% compared to the
level reached in 1998. In 2001, the GDP growth rate was 5.6%. The projections
predicted a GDP growth rate of about 5.7% in 2001 based on the contribution
of the three sectors, namely primary, secondary and tertiary respectively.
The investment rate increased from 17.0 % in 1994 to 20.1% in 1999. The portion realised by the State essentially relates to the building of basic infrastructure (hospital, schools, roads , etc.). Private investments increased appreciably in 1997 to 23.2 % and 18.6 % in 1998.
For 2001, price stability
was confirmed with an inflation rate of less than 2%. Since the late 1980s,
inflation rate has been marked by price stability, except during the 1994-95
period which was directly influenced by the devaluation of the CFA franc
in
January 1994.
Primary
Sector
The level of activities in the Primary Sector is, to a large extent, influenced
by the results of activities in the agricultural sub-sector. The low productivity
brought about by lack of water, insufficient product diversity and the
nature of production tools, led to negative performances in the agricultural
sub-sector.
From 1990 to 1998, the mean annual agricultural value added increased only by 3.9% in real terms with several drops of nearly 10% in 1991, 1993, 1997 and 1998. Following a good rainfall, the last three agricultural seasons were satisfactory with an average 13% increase of agricultural production and trends herald a 10.6% increase in 2001.
Growth of the animal rearing sub-sector remained positive with an annual average of 3.0% throughout the period under review. Sectoral reforms and programme, already initiated in the sub-sector, should be finalised and improved to adjust this rate and increase the contribution of animal rearing in the GDP. The latter presently fluctuates around 6%.
As regards the Fisheries sub-sector, following the weakening of its dynamism between 1990 and 1993 (an annual average -0.6%) and the effects of the 1994 monetary adjustment on the growth of the sub-sector, a loss of impetus was observed as from 1998 with an average rate of hardly 1%, which is expected to stagnate in 2001. These results are partly due to the constraints related to the run-down-state of the equipment, production factors, lack of resource renewal and access to credit.
Activities in the
Forestry sector, from 1990 to 1994, was marked by an annual decline of
10.0%. However, policies implemented under environmental protection pressure
made it possible to reach an average annual growth rate of 0.7% between
1995 and 2000, which is expected to rise to 1.5% in 2001.
Sector
Secondary
The level of activities in the Primary Sector is, to a large extent, influenced
by the results of activities in the agricultural sub-sector. The low productivity
brought about by lack of water, insufficient product diversity and the
nature of production tools, led to negative performances in the agricultural
sub-sector.
From 1990 to 1998, the mean annual agricultural value added increased only by 3.9% in real terms with several drops of nearly 10% in 1991, 1993, 1997 and 1998. Following a good rainfall, the last three agricultural seasons were satisfactory with an average 13% increase of agricultural production and trends herald a 10.6% increase in 2001.
Growth of the animal rearing sub-sector remained positive with an annual average of 3.0% throughout the period under review. Sectoral reforms and programme, already initiated in the sub-sector, should be finalised and improved to adjust this rate and increase the contribution of animal rearing in the GDP. The latter presently fluctuates around 6%.
As regards the Fisheries sub-sector, following the weakening of its dynamism between 1990 and 1993 (an annual average -0.6%) and the effects of the 1994 monetary adjustment on the growth of the sub-sector, a loss of impetus was observed as from 1998 with an average rate of hardly 1%, which is expected to stagnate in 2001. These results are partly due to the constraints related to the run-down-state of the equipment, production factors, lack of resource renewal and access to credit.
Activities in the
Forestry sector, from 1990 to 1994, was marked by an annual decline of
10.0%. However, policies implemented under environmental protection pressure
made it possible to reach an average annual growth rate of 0.7% between
1995 and 2000, which is expected to rise to 1.5% in 2001.
Tertiary
Sector
For the entire period under review, the Tertiary Sector activates registered
only a single drop (- 2.1% in 1993). Between 1995 and 1998, the economy
relied on this sector to absorb the impact of the poor performance of
agriculture. This partly explains why the high growth rates obtained,
over the past few years, are not reflected in the employment market. In
fact, the engines of growth within this sector, do not generally generate
employment.
The Transport and Telecommunications sub-sector is the most dynamic despite
the
weaknesses observed these past three years in the land and railway transportation
sectors. As regards Telecommunications and related services, the introduction
of the mobile telephone, followed later on by the rural telephone and
the tele-service activities slightly boosted the level of activities,
with an 4.8 % increase of the average annual added value between 1996
and 2000. The increase is expeceted to reach 5.5% in 2001.
In the field of Commercial
activities, after the low rate (2.8%) observed between 1990 and 1994,
registered a 7% average annual rise up to 1999. In 2000, the application
of the Common External Tariff (TEC) partly led to the contraction of the
Import Duties and Taxes (DTI) and a slowdown in the development pace of
global trade (2%). However, it is expected to increase by 5.6% in 2001.
Other services comprising support services for productive systems, such
as banking services improved slightly during the 1994 - 2000 period, increasing
from an annual 2.5% between 1990 and 1994 to 5.1%. This sub-sector is
expected to register a 4.2% growth in 2001.
In relation to boosting economic activity, non-commercial services registered
an annual average growth of about 2.5 % during the 1995-2000 period as
against 1.1 % between 1990 and 1994. These developments essentially reflect
those of salaries paid by administration. In 2001, the growth of non-commercial
services is projected at 6.1 %.
GDP utilisation
Following the drop observed in 1993 and 1994, final consumption increased
by 5.8% and 4.7% in 1995 and 1996 respectively. It later improved with
effect from 1997 showing a mean growth of 3.1%.
The Formation of Gross Fixed Capital (FBCF) registered a slight 2.3% increase between 1990 and 1994. However, an average annual increase of close to 12.5% was observed since 1995. Thus, the investment rate reached 18.8% in 2000 and 19.0% in 2001.
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