Walking the pristine streets of Diamniadio, a recently-minted city situated a mere 30km outside of the hustling capital of Senegal, Dakar, one is struck by a sense of amazement.
This metropolis, touted as the flagship project of Senegal’s president, Macky Sall, who was inaugurated in 2012 with a grandiose vision to revolutionise his country, flaunts a sparkling airport, opulent hotels, a modern convention centre, and a colossal football stadium, inaugurated just a few weeks after Senegal’s national football team won the Africa Cup of Nations for the first time in 2022. But amid the towering edifices and buildings in progress, it is the prominent billboards displaying Sall’s portrait and the phrase “This is my legacy for the future generation” that catch the eye.
The slogan raises a burning question – will Sall’s ambitious initiatives truly deliver on this promise? At present it is unclear whether he will run for office again in 2024 – he has recently argued that the constitution allows him to run for a third term, although the opposition contest this interpretation.
But if he steps down next year he will leave the country in the midst of vast transformational projects that he has undertaken over the past 12 years.
Sall’s international aura
Since taking office in 2012, Sall has pursued an international strategy aimed at positioning Senegal as a leading destination for foreign investment. With gas exports set to begin in late 2023, Sall aims to use the revenues to drive growth in other sectors of the economy.
As well as boosting the country’s GDP growth – projected at 8% and 10.5% in 2023 and 2024 respectively – the energy sector is also intended to boost employment through youth training programmes.
In the past decade, foreign direct investment in Senegal has skyrocketed, from $272m in 2010 to $2.23bn in 2021, a 720% increase that reflects international interest in the country’s prospects (see chart below).
The “Plan for an Emerging Senegal”, Sall’s policy road map to make the country a middle-income economy by 2035, was initially launched in 2014 and has received support from international organisations such as the OECD and the African Development. Sall’s biggest achievement is surely that he has put Senegal on the radar of foreign investors.
Over the course of his presidency, the country has forged important partnerships with a diverse range of actors. Among these is China, which has now surpassed France as Senegal’s primary bilateral trade partner. In addition, Senegal has established crucial investment partnerships with a variety of key players, including Morocco, Saudi Arabia, and several Gulf states, as well as with the European Union.
While Sall’s international profile has grown, his domestic popularity has followed a different trajectory.
On 15 March, about 5,000 Senegalese gathered in Dakar for a three-day protest to show support for aspiring presidential candidate Ousmane Sonko and express their opposition to a third Sall presidential term.
This happened exactly one year after the country experienced mass protests leading to the worst episode of violence in years.
But the fact that the opposition was able to challenge the incumbent party in the 2022 legislative election is a positive sign for Senegal’s democracy, which is considered one of the strongest in Africa, with a history of successful democratic transitions.
Sall’s Benno Bokk Yakaar (“United by Hope”) coalition won a slim majority of only one seat in the National Assembly after former Dakar mayor Pape Diop joined forces with the ruling party.
Nevertheless, Senegal remains politically divided, with critics arguing that Sall’s economic and social policies have not met the immediate needs of the population, despite his focus on market-oriented and internationalist strategies.
Criticism of Sall’s policies has undoubtedly been exacerbated by the various crises he has faced in his second term of office, which began in 2019. These include a food crisis triggered by the Ukraine war – at the outbreak of the conflict Senegal imported 66% of its wheat from Russia and Ukraine.
In June 2022, Sall negotiated directly with Vladimir Putin to ease the blockade of Ukrainian ports and enable the export of grain, acting in his capacity as the rotating chair of the African Union.
The debt issue
Although Sall’s efforts to attract foreign capital may have long-term benefits for Senegal, there are concerns about his high-spending economic policy. The country’s debt-to-GDP ratio has risen significantly in recent years, reaching 73% in 2021, up from 31.6% in 2015, according to the Central Bank of West African States.
While the government argues that the expenditure is necessary to finance infrastructure and energy needs, debt growth could result in balance of payment problems. Projects such as Diamniadio and subsidies to the oil and gas sector – which nearly quadrupled last year – may weigh on government spending and contribute to this debt burden.
Despite some uncertainties, the government maintains a positive outlook on the prospects of Senegal and Sall is not alone in his optimism, as credit rating agencies have also expressed confidence in the country’s future. Moody’s, for example, revised Senegal’s outlook from negative to stable last year.
This shift was based on the agency’s belief that there was an “increased likelihood” that the government’s debt burden will stabilise and, barring any major unforeseen events, should begin to decrease in the years ahead.
Balancing mega projects and public needs
Is Sall’s ambitious vision for Senegal in touch with the reality on the ground? That is the question raised by Sina Schlimmer, a researcher at the French Institute of International Relations (IFRI), who visited Diamniadio. While the development was designed to relieve Dakar’s traffic congestion and improve living standards for the capital’s poorest residents, the transfer of ministries and international agencies to the new city has made Dakar a “bedroom” for public officials who work in Diamniadio, she argues.
Even the newly built toll road, managed by French engineering firm Eiffage, has “created an economic divide between those who could afford [tolls] and others who have to endure long hours in traffic jams,” the Senegalese economist Ndongo Sylla told Al-Jazeera last year.
The start of Senegal’s oil and gas industry is also raising concerns about inflated expectations and the need for cautious management. The Natural Resource Governance Institute has warned of the dangers of over-optimism and unrealistic demands for financial returns from the sector, which could lead to later discontent if hopes go unrealised.
Forecasts about the potential contribution of energy exports to Senegal’s GDP hinge on a variety of factors, including unpredictable oil and gas prices. In addition, the world’s shift towards renewable energy sources may pose challenges to the economic viability of hydrocarbon extraction.
In the meantime, Senegal still has an opportunity to capitalise on its resource-extraction strategy. However, good management of resource revenues will be crucial, argues the Natural Resource Governance Institute (NRGI). To achieve this, Senegal should prioritise transparency, strengthen macroeconomic policies for oil and gas revenue management, and improve the governance of both its intergenerational fund and the national oil company, Petrosen, says the NRGI. By taking these measures, Senegal can maximise the benefits of its oil and gas industry while avoiding the pitfalls of over-optimism and unsustainable practices.
- Macky Sall shakes up investment in Senegal
- Senegal: On track for world-beating growth in 2023
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- Senegal seeks to cash in on global dash for gas
Read more about Senegal’s booming economy in our Senegal Dossier.
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