The country Senegal or formally known as the Republic of Senegal is located in the western part of Africa. The people residing in Senegal are known as the Senegalese. Dakar is the capital city of Senegal and it is surrounded by countries like Mauritania, Mali, Guinea, and Guinea-Bissau and is also connected with the banks of the Gambia river (Sarr, 2012). The climate of Senegal is typically known as Sahelian, which implies that the country is very dry and usually receives a precipitation level that is essentially below the normal percentage. The language spoken in Senegal is French, mainly because of the presence of the French colony and it is their national language as well. Apart from French, Arabic and Wolof dialect are the other languages that are spoken in Senegal (Sarr, 2012).
The President holds the highest position in the political structure of Senegal. In every 5-years, people vote for electing their president. Abdoulaye Wade remained as a president from 2000-2012, while Macky Sall remained President from 2012 to the present. The current political situation of Senegal follows the culture of quasi-democratic structure, which is said to be successful in terms of the transition from democratic Africa. The political structure of Senegal got influenced by several administrative bodies like the Marabouts, which is the group of people who lead the Muslim Brotherhood group in Senegal. However, corruption persists within the political system of the country, because it was found that the country had several ties with Iran, who smuggled weapons to the rebels who are responsible for the death of several Senegalese troops (Sarr, 2012).
Senegal faced an economic crisis in 1993 when the economy reduced by 2.1%, which forced the country to take help from foreign institutions (Global Edge, 2019). This did help the country to revive the situation and allowed the employment opportunity to increase as the industries started to grow. Also, the inflation percentage went down, which attracted the investors to invest in the industrial sector, leading to the growth of the domestic sector of Senegal by 5%. The main industries that are operating are food processing, chemicals, textiles, petroleum, tourism, etc. and about 26.8% of the goods are exported to India. Currently, the private activity of the country is around 82% of overall GDP and the country also experienced an average growth of 1.94 percent (Trading Economics, 2019). However, the economy of Senegal still suffers from unemployment, drug addiction and disease-ridden society.
Social and cultural information
Senegal is known for following the tradition set by West African griots and they were successful in maintaining the West African tradition through the words they speak and music they sing. Senegal is primarily known as the heritage city of African music. Mbalax, which is a percussive instrument and is the most popular percussive instrument in Africa. The country is also known for playing varieties of sports and football, wrestling and basketball are the most popular sports in the country. In fact, according to the National Basketball Association (NBA) (2018), an elite basketball training center is opening in Saly, Senegal. The new facility will be the primary training location for NBA Academy Africa with prospects from across the continent. In addition, The SEED (Sport for Education and Economic Development) Project is an international non-government organization based in Senegal that uses basketball as a mechanism to identify, cultivate and educate leaders. SEED works to maximize student potential and serves 2000 youth per year. Next, among cuisine, fish is the staple for Senegalese people along with chicken, eggs, beef, lamb, etc. Coffee and tea are also consumed in several parts of the country (Central Intelligence Agency, 2019).
Customs Duty and other taxes
World Trade Organization (WTO) (2019) reports that most of Senegal’s revenue comes local taxes from alcohol, automobiles, etc. In addition, international transactions are one of the major sources of government tax revenue in Senegal. In 2016, the revenue collected by the customs administration was estimated to be 32.8% of the fiscal revenue. Value-added tax (VAT) subject to certain exclusions, most commercial operations are subject to an 18% VAT and VAT on tourism activities is 10%. VAT accounts for 38% of fiscal revenue in 2014, with imports yielding 57.8% of the VAT collected. In the case of import goods, Senegal has notified WTO (2019) that it does not have an import licensing regime. To import prohibitions decided at the community level or under multilateral agreements it has signed, Senegal applies prohibitions for reasons of public order, security and to safeguard competition to list a few. Since January 2017, exit duty has been imposed on exports of groundnuts in the shell and on shelled groundnuts (WTO, 2019). This measure is intended to boost local processing, to guarantee sufficient raw materials for local oil mill, and prevent diversion of the subsidies for inputs granted for production upstream. Zero VAT applies to the export of goods and services.
Strengths of Senegal
The education system in Senegal has developed since the economic crisis that the country faced in 1993 and about 40% of the national budget goes towards education (Lo, 2014). The government prioritizes education more than anything else, and it was mainly to remove unemployment from the economy. Also, with the increase in the employment percentage of the country, Senegal will experience more output such that the economy will see an upward trend. This is the reason that education was made compulsory for every child till the age of 16 and most of the children will receive free education, which the government will sponsor. Currently, the economy of Senegal is well supported by the growth of industries like fisheries, textile, petroleum, tourism, etc. and the export rate to the countries like the USA and India is very high as well (The World Bank, 2019). The availability of natural resources like petroleum, frozen fish, phosphoric acid, gold, etc. makes this country very rich in terms of availability of minerals. Following the Scarcity and Abundance theory presented by Heckscher-Ohlin (Pugel, 2016), it can be seen Senegal has absolute advantage in the supply of these natural resources because of the abundant availability of these minerals, which is the reason they engage in trade with countries like USA or India for petroleum, machineries, cars, etc. Senegal realizes that their people have the capability to utilize fishery or mineral industries and obtain a high percentage of output, without exhausting a high percentage of their resources and that is why Senegal has absolute advantage in producing minerals over countries like USA or India. This is the reason that Senegal uses all its resources to produce all the labor-intensive goods and trade it for capital intensive goods such as the IT tools and other technologies. So, the IT industry is slowly growing in Senegal. It is to be noted that the political system of the country has been good and the Presidents over the years have done a good job to ensure that the Senegal economy does not face any sort of crisis like it faced back in 1993 (The World Bank, 2019).
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The presence of cultural diversity is another one of the major strengths of the country. There are about 50000 of Europeans residing in Senegal with most of them being French along with a few Mauritians and Morocco people residing in the country. This is the reason that various types of industries are growing leading to the growth of GDP as well. Business is developing as well, owing to the location of the country. As the country is located on the extreme west of Africa, it provides an opportunity for the traders to grow their business quite easily as well (Central Intelligence Agency, 2019). Also, the location of the country attracts a lot of investors because it gives an opportunity for a business to grow as well. It has been reflected on the constant growth of the GDP over the years and the country has been successful in maintaining the GDP rate of around 1.94 percent from the year 2010 to 2018. With the growth in education, people now have the basic idea about utilizing their resources in the correct manner, which has been the reason for slow but steady growth of the GDP of the country (The World Bank, 2019). (See Appendix A additional economic overview)
Even though Senegal has been improving in all the aspects, there have been a few setbacks that it has experienced in the past. The operational activity of the country is still controlled by the French colonies. This has led to a terrorist attack due to the caricature posted in the French Journal Charlie Hebdo in the year 2015, which did hurt the sentiments of local people. This shows that the country demands freedom from the French dominance and there have been differences of opinion that existed between the local Muslims and Europeans. So, political tension does exist in the country, which can be destructive if not taken care of properly (The World Bank, 2019). Media, magazines and other public forums were not supportive either and frequent posts of caricatures of the respected person of each group, which ignite the rivalry even more. The rising political tension is one of the major weaknesses of the country, which can lead to major economic drawback in the future (Central Intelligence Agency, 2019).
Corruption within the political system is quite frequent in the Senegal political structure. Although fishing is one of the major industries in the country, few corrupt businessmen use this strength to their advantage. Even though the country has experienced growth in its trade and market, the growth has been quite slow compared to its potential (Sarr, 2012). Owing to the currency growth in Senegal, the profits earned through export and import is low. Also, the growth of trade was restricted due to internal operations. If the internal operations costs are high, it becomes difficult for the industries to export goods to other countries owing to financial troubles (The World Bank, 2019). Another major problem that the country has been facing is the growth in the usage of infrastructures, which is very slow. This problem has been faced by the country, mainly because all the infrastructure is being imported to the country and they do not have any facilities of their own to develop the industry (The World Bank, 2019). This is the reason that the output of the fishing or the textile industry has been slow as well. Tools and technologies are developing each day and it helps in industries to double the amount of production they make. Also, the local employees gain very little knowledge about the technologies and the production level will remain low for a significant amount of time (Sarr, 2012). So, without advanced technologies, it is impossible for the country to compete with the world market in the future.
Despite the growth of education in the country, a significant portion of the population still remains unemployed in the country. The condition of the people living in the outskirts of the urban region is not at all similar to that of people living in the urban region. The condition has been poor which increases corrupted practice (Sarr, 2012). This leads to several questions regarding the political practices of the country and their capability of managing the society and businesses across the border. Thus, it can be said that Senegal is experiencing economic growth, but the rate of growth is not enough to compete with the markets in the global economy.
- Lo, A. (2014). Senegal higher learning and elections. D+C 12, 458. Retrieved from https://www.dandc.eu/en/article/why-senegal-small-country-good-providing-international-organisations-leaders
- Central Intelligence Agency. (2019). The World Factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/sg.html.
- Global Edge. (2019). Senegal: Risk Assessment. Retrieved from https://globaledge.msu.edu/countries/senegal/risk.
NBA. (2018). The NBA Academy Africa opens new facility in Saly, Senegal. Retrieved from https://pr.nba.com/nba-academy-africa-new-facility-senegal/
- Pugel, T. (2016). International Economics. 16: McGraw Hill Irwin.
- Sarr, F. (2012). Senegal 2012 and Beyond: Economic and Political Challenges. Retrieved from https://www.e-ir.info/2012/09/26/senegal-2012-and-beyond-economic-and-political-challenges/.
- The World Bank. (2019). The World Bank in Senegal. Retrieved from https://www.worldbank.org/en/country/senegal/overview.
- Trading Economics. (2019). Senegal GDP Growth Rate. Retrieved from https://tradingeconomics.com/senegal/gdp-growth.
- World Trade Organization. (2019). Senegal and the WTO. Retrieved from https://www.wto.org/english/thewto_e/countries_e/senegal_e.htm
|GDP (purchasing power parity):||GDP (official exchange rate):|
|54.8 billion (2017 est.)||21.11 billion (2017 est.)|
|Country comparison to the world: 107|
|GDP real growth rate:||GDP -per capita (PPP):|
|7.2% billion (2017 est.)||#3,500 (2017 est.)|
|Country comparison to the world: 18||Country comparison to the world: 188|
|Gross national saving:|
|21.2% (2017 est.)|
|Country comparison to the world: 86|
|GDP – composition, by end use:|
|Household consumption: 71.9% (2017 est.)|
|Government consumption: 15.2 % (2017 est.)|
|Investment in fixed capital: 25.1% (2017 est.)|
|Investment in inventories: 3.4% (2017 est.)|
|Exports of good and services: 27% (2017 est.)|
|Imports of good and services: -4.2% (2017 est.)|
|GDP – composition by sector of origin:|
|Agriculture: 16.9% (2017 est.)|
|Industry: 24.3% (2017 est.)|
|Services: 58.8% (2017 est.)|
|GDP – composition, by end use:|
|Industrial production growth rate: 7.7% (2017 est.)
Country comparison to the world: 26
|Labour force: 6.966 million (2017 est.)
Country comparison to the world: 67
|Labour force – by occupation:
Industry and services: 22.5% (2007 est.)
|Unemployment rate: 48% (2007 est.)
Country comparison to the world: 216
|Population below poverty line: 46.7% (2011 est.)|
|Taxes and revenues: 19.6 % (of GDP) (2017 est.)
Country comparison to the world: 155
|Budget surplus (+) or deficit (-): -3.6% (of GDP) (2017 est.)
Country comparison to the world: 151
|Inflation rate: 1.3% (2017 est.)
Country comparison to the world: 73
|Imports: $5.217 billion (2017 est.)
Country comparison to the world: 125
Communaute Financiere Aficaine francs (XOF) per US dollar
617.4 (2017 est.)
(Central Intelligence Agency, 2019).