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- GDP (PPP):
- $36.7 billion
- 6.5% growth
- 4.2% 5-year compound annual growth
- $2,451 per capita
- Inflation (CPI):
- FDI Inflow:
Senegal has experienced uneven progress in economic freedom. The regulatory framework discourages dynamism and tends to curb development of the private sector. Despite some improvement in streamlining business formation, government bureaucracy and the lack of transparency create a poor entrepreneurial climate, and a lack of commitment to open markets hinders integration into the global marketplace.
Implementation of deeper institutional reforms to improve the foundations of economic freedom is critical to Senegal’s prospects for long-term economic development and greater poverty reduction. Systemic weaknesses persist in the protection of property rights and the effective enforcement of anticorruption measures. The judiciary remains vulnerable to political influence.
President Macky Sall of the Alliance for the Republic–Yakaar party won election in March 2012, defeating two-term incumbent Abdoulaye Wade, whose third-term bid sparked street protests. In March 2016, at Sall’s urging, the country passed a constitutional referendum shortening presidential terms from seven to five years, prohibiting more than two terms, and reducing presidential power in favor of the National Assembly. In April 2014, after more than 30 years of conflict between the government and southern separatists, the leader of the rebel Movement of Democratic Forces of Casamance declared a unilateral cease-fire that remains in force. About 75 percent of the workforce is engaged in agriculture or fishing.
Property titling procedures are uneven across the country. The judiciary is independent but inadequately resourced and subject to external influences. President Sall’s reformist policy agenda includes restoring fiscal responsibility and pursuing former ministers accused of graft, but the public remains frustrated by perceived official corruption and by slow progress on efforts to address popular demand for political and social reform.
The top individual income tax rate is 40 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax and an insurance tax. The overall tax burden equals 20.2 percent of total domestic income. Government spending has amounted to 29.3 percent of total output (GDP) over the past three years, and budget deficits have averaged 5.1 percent of GDP. Public debt is equivalent to 56.8 percent of GDP.
Although the process for establishing a business has become more streamlined, start-up costs remain substantial. The overall regulatory environment is vulnerable to arbitrary decision-making and corruption. A formal urban labor market has been slow to develop. The IMF has advised reductions in unproductive public spending and has appealed for progress in the implementation of energy reform, but the government continues to fund costly subsidies.
Trade is important to Senegal’s economy; the value of exports and imports taken together equals 74 percent of GDP. Foreign investment may be screened. Most sectors of the economy are open to investment, but bureaucratic barriers may impede foreign investment. The underdeveloped financial system is dominated by banking, which is highly concentrated, and the government retains its shares in a number of banks.