2021 Index of Economic Freedom

Senegal

OVERALL SCORE58.0
WORLD RANK111
Rule of Law

Property Rights50.3

Judicial Effectiveness37.8

Government Integrity43.6

Government Size

Tax Burden72.4

Government Spending84.2

Fiscal Health72.2

Regulatory Efficiency

Business Freedom53.5

Labor Freedom36.6

Monetary Freedom79.0

Open Markets

Trade Freedom66.4

Investment Freedom60.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 16.3 million
  • GDP (PPP):
    • $64.1 billion
    • 5.3% growth
    • 6.4% 5-year compound annual growth
    • $3,536 per capita
  • Unemployment:
    • 6.6%
  • Inflation (CPI):
    • 1.0%
  • FDI Inflow:
    • $983.3 million

Senegal’s economic freedom score is 58.0, making its economy the 111th freest in the 2021 Index. Its overall score is unchanged, with gains in business freedom and government integrity offset by declines in fiscal health and other scores. Senegal is ranked 16th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

The Senegalese economy has been mostly unfree for more than two decades. Economic freedom continues to be obstructed by weak rule of law, including deficient protection of property rights, a defective judicial system, and widespread government corruption. The government also intervenes too heavily in the labor market. Rectifying these problems would improve the business and investment climates.

IMPACT OF COVID-19: As of December 1, 2020, 333 deaths had been attributed to the pandemic in Senegal, and the economy was forecast to contract by 0.7 percent for the year.

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Background

Senegal is a former French colony that achieved its current form only in 1989 after several decades of failed confederations with neighboring countries. President Macky Sall was reelected to a five-year term in 2019 in accordance with a 2016 constitutional referendum that shortened presidential terms from seven to five years, prohibited the president from serving more than two terms, and reduced presidential power in favor of the legislature. Sall’s two primary competitors were excluded from the election based on what the opposition claims were trumped-up charges of corruption. Phosphate mining, fertilizer production, construction, tourism, fisheries, and agriculture propel Senegal’s economy. Major offshore oil and gas fields are also being developed.

Rule of LawView Methodology

Property Rights 50.3 Create a Graph using this measurement

Judicial Effectiveness 37.8 Create a Graph using this measurement

Government Integrity 43.6 Create a Graph using this measurement

Senegal maintains a property title and land registration system, but application is uneven outside of urban areas. Establishing ownership rights to real estate can be difficult. Settling contractual disputes is often cumbersome and slow. The judiciary is independent but inadequately resourced and subject to external influences. Although the government has prioritized efforts to fight it, corruption remains a serious problem.

Government SizeView Methodology

The top individual income tax rate is 40 percent, and the top corporate tax rate is 30 percent. Other taxes include value-added and insurance taxes. The overall tax burden equals 16.2 percent of total domestic income. Government spending has amounted to 23.0 percent of total output (GDP) over the past three years, and budget deficits have averaged 3.5 percent of GDP. Public debt is equivalent to 64.2 percent of GDP.

Regulatory EfficiencyView Methodology

The paid-in minimum capital requirement to start a business has been reduced. Business entry costs and the costs of dealing with construction permits are also down. Getting electricity is cheaper. Most workers are informally employed and not covered by labor rules. The government has been working with the IMF to reduce subsidies for fuel, electricity, and agriculture, which have contributed to budget deficits.

Open MarketsView Methodology

Senegal has two preferential trade agreements in force. The trade-weighted average tariff rate is 9.3 percent, and three nontariff measures are in effect. Further streamlining of the regulatory framework is needed to ensure greater openness to trade and investment. Most sectors of the economy are open to foreign investment, but bureaucratic barriers impede investment activity. About 45 percent of adult Senegalese have access to an account with a formal banking institution.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
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