Located in the westernmost part of the African continent, Senegal is bordered by Mauritania, Mali, Guinea and Guinea-Bissau. It surrounds The Gambia, a small Anglophone country. Senegal enjoys a tropical dry climate and has a population of 16.7 million inhabitants, a quarter of whom live in the Dakar region (0.3% of the territory).
Senegal’s economy grew by more than 6% per year between 2014 and 2018. Real GDP growth stood at 4.4% in 2019, down from 6.2% in 2017. The services sector is the main engine of GDP growth, while on the demand side, investment and exports are the main drivers of growth.
The pandemic has significantly changed the country’s economic outlook. It is estimated that growth fell by -0.7% in 2020, setting back services (tourism and transport) and exports. Senegal has responded with a number of containment measures and has implemented an Economic and Social Resilience Program (Programme de Résilience Économique et Sociale, PRES). Nevertheless, limited fiscal buffers and safety nets, a vulnerable health care system, and a large informal sector pose challenges.
Economic recovery will likely be gradual, driven by a return of private consumption and investment. Reforms envisaged under the Emerging Senegal Plan (Plan Sénégal Émergent, PSE) need to be deepened for growth to resume its pre-pandemic trajectory. The significant crowding in of private investment is central to increasing Senegal’s productive capacity and supporting export growth. Services remain the main contributor to GDP, and the primary sector (agriculture, in particular) the most dynamic engine of growth. Oil and gas developments have been delayed due to the health crisis and are not expected to contribute to revenues and exports before 2035.
Senegal’s key development challenge is to mitigate the socio-economic impact of the pandemic while enabling sustainable and inclusive growth. This will require:
- Improving resilience to macro-fiscal, environmental, and social risks in order to safeguard investments in human capital and household livelihoods;
- Boosting and protecting human capital for productivity growth;
- Enhancing competitiveness and job creation by improving digital and physical connectivity at the national and regional levels, and increasing the efficiency of labor markets;
- Lowering energy costs, reducing the carbon footprint, and optimizing the energy mix;
- Promoting the services economy, and boosting the productivity and competitiveness of agriculture and related value chains.
HOW TO EXPAND YOUR BUSINESS IN SENEGAL THE SMART WAY
Africa HR Solutions offers HR outsourcing services in Senegal to facilitate your workforce management on the African continent:
- Hire people on the African continent without a registered entity
- Complete payroll rundown and management
- A central point of contact for all your queries
- Guaranteed compliance to local laws
- Professional indemnity and employer liability
As always, Africa HR Solutions guarantees 100% compliance for your business operations in Africa.