2018 Index of Economic Freedom

Senegal

overall score55.7
world rank126
Rule of Law

Property Rights41.3

Government Integrity42.6

Judicial Effectiveness40.4

Government Size

Government Spending72.7

Tax Burden68.5

Fiscal Health58.4

Regulatory Efficiency

Business Freedom51.5

Labor Freedom41.4

Monetary Freedom84.7

Open Markets

Trade Freedom66.7

Investment Freedom60.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 15.4 million
  • GDP (PPP):
    • $39.7 billion
    • 6.5% growth
    • 5.1% 5-year compound annual growth
    • $2,577 per capita
  • Unemployment:
    • 9.5%
  • Inflation (CPI):
    • 0.9%
  • FDI Inflow:
    • $392.8 million
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Senegal’s economic freedom score is 55.7, making its economy the 126th freest in the 2018 Index. Its overall score has decreased by 0.2 point, with lower scores for the trade freedom and property rights indicators outweighing improvements in fiscal health and labor freedom. Senegal is ranked 21st among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

The government has pledged reforms to counter high energy costs, a challenging business environment, and a culture of overspending. Plans include yet more spending on investment projects, but the government promises to preserve macroeconomic stability. Senegal needs a streamlined regulatory framework, greater openness to trade and investment, more effective enforcement of anticorruption measures, and other institutional reforms to improve its entrepreneurial climate. Systemic weaknesses persist in the rule of law, and the judiciary remains vulnerable to political influence.

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Background

A low-level separatist insurgency by the rebel Movement of Democratic Forces of Casamance in the South of this former French colony ended with a cease-fire in 2014. Macky Sall of the Alliance for the Republic–Yakaar party was elected president in 2012. His coalition won 75 percent of the National Assembly’s seats in July 2017 elections that were protested by the opposition. In 2016, the constitution was changed to shorten presidential terms from seven to five years, prohibit more than two terms, and reduce presidential power in favor of the legislature. Senegal’s economy is driven by phosphate mining, fertilizer production, construction, tourism, fisheries, and agriculture. Major offshore oil and gas fields are also being developed.

Rule of LawView Methodology

Property Rights 41.3 Create a Graph using this measurement

Government Integrity 42.6 Create a Graph using this measurement

Judicial Effectiveness 40.4 Create a Graph using this measurement

The Senegalese Civil Code provides a framework, based on French law, for enforcing private property rights. Application of property title procedures and a land registration system is uneven outside of urban areas. The judiciary is independent but inadequately resourced and subject to external influences. The public remains frustrated by the ability of officials to engage in corrupt practices with impunity.

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 25.5 percent of total domestic income. Over the past three years, government spending has amounted to 30.2 percent of total output (GDP), and budget deficits have averaged 4.7 percent of GDP. Public debt is equivalent to 57.4 percent of GDP.

Regulatory EfficiencyView Methodology

In 2016, Senegal implemented some changes that increase business freedom, but implementation of these changes is subject to bureaucratic bottlenecks. The labor code is relatively inflexible, and a lack of suitable job opportunities in Senegal leads many to leave the country in seek of employment. The government continues to fund costly subsidies.

Open MarketsView Methodology

Trade is significant for Senegal’s economy; the combined value of exports and imports equals 74 percent of GDP. The average applied tariff rate is 11.6 percent. Nontariff barriers impede some trade. Government openness to foreign investment is above average. The underdeveloped financial system is dominated by a highly concentrated banking sector in which three banks hold about two-thirds of deposits. Bank supervision has gradually been strengthened.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius75.10.4
2Botswana69.9-0.2
3Rwanda69.11.5
4South Africa630.7
5Uganda621.1
6Côte d'Ivoire 62-1.0
7Seychelles61.6-0.2
8Burkina Faso600.4
9Cabo Verde603.1
10Tanzania59.91.3
11Namibia58.5-4.0
12Nigeria58.51.4
13Gabon58-0.6
14Mali57.6-1.0
15Guinea-Bissau56.90.8
16Madagascar56.8-0.6
17Benin56.7-2.5
18Comoros56.20.4
19Ghana56-0.2
20Swaziland55.9-5.2
21Senegal55.7-0.2
22Kenya54.71.2
23Zambia54.3-1.5
24Mauritania54-0.4
25Lesotho53.90.0
26São Tomé and Príncipe 53.6-1.8
27Ethiopia52.80.1
28The Gambia52.3-1.1
29Guinea52.24.6
30Democratic Republic of Congo52.1-4.3
31Malawi52-0.2
32Cameroon51.90.1
33Sierra Leone51.8-0.8
34Burundi50.9-2.3
35Liberia50.91.8
36Niger49.5-1.3
37Sudan49.40.6
38Chad49.30.3
39Central African Republic49.2-2.6
40Angola48.60.1
41Togo47.8-5.4
42Mozambique 46.3-3.6
43Djibouti45.1-1.6
44Zimbabwe440.0
45Equatorial Guinea42-3.0
46Eritrea41.7-0.5
47Republic of Congo 38.9-1.1
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