Thursday, August 30, 2012

Economy of Senegal

The table we are using is taken from the World Bank for 2003, Table-3; National Average Per Capoita income using Atlas Method;
Rank of Senegal from the top is 159 and from the bottom is 47th. with per capita income as 550 (India 530).
GDP nominal per capita income (nominal);
Rank.... IMF............Rank.......WB.........Rank .........CIA
137......915           130...........130.........898......140.........888
The GDP per capita of Senegal shrank by 1.30% in the 60s. However, it registered a peak growth of 158% in the 70s, and still expanded 43% in the turbulent 1980s. However, this proved unsustainable and the economy consequently shrank by 40% in the 90s
Predominantly rural and with limited natural resources, the Economy of Senegal gains most of its foreign exchange from fish, phosphates, groundnuts, tourism, and services. Its agricultural sector is highly vulnerable to variations in rainfall and changes in world commodity prices. Dakar, as the former capital of French West Africa, is also home to banks and other institutions which serve all of Francophone West Africa, and is a hub for shipping and transport in the region. It also boasts one of the best developed tourist industries in Africa. Senegal still depends heavily on foreign assistance, which in 2000 represented about 32% of overall government spending—including both current expenditures and capital investments—or CFA 270.8 billion (U.S.$ 361.0 million). Senegal is a member of the World Trade Organization.

 IMF and 1990s economic reforms

Since the January 1994 CFA franc devaluation, the International Monetary Fund (IMF), the World Bank, and other multilateral and creditors have been supporting the Government of Senegal’s structural and sectoral adjustment programs. The broad objectives of the program have been to facilitate growth and development by reducing the role of government in the economy, improving public sector management, enhancing incentives for the private sector, and reducing poverty.
In January 1994, Senegal undertook a bold and ambitious economic reform program with the support of the international donor community. This reform began with a 50% devaluation of Senegal's currency, the CFA franc, which was linked at a fixed rate to the French franc. Government price controls and subsidies have been steadily dismantled as another economic reform. However, this devaluation had severe social consequences, because most of the essentials goods were imported. Overnight, the price of goods such as milk, rice, fertilizer and machinery doubled. As a result, the country suffered a large exodus, with many of the most educated people and those who could afford it choosing to leave the country. After an economic contraction of 2.1% in 1993, Senegal made an important turnaround, thanks to the reform program, with a growth in GDP averaging over 5% annually during 1995-2004. Annual inflation had been pushed down to the low single digits. As a member of the West African Economic and Monetary Union (WAEMU), Senegal is working toward greater regional integration with a unified external tariff and a more stable monetary policy. Senegal still relies heavily upon outside donor assistance, however. Under the IMF's Highly Indebted Poor Countries debt relief program, Senegal will benefit from eradication of two-thirds of its bilateral, multilateral, and private sector debt, contingent on the completion of privatization program proposed by the government and approved by the IMF.