Sall’s exit announcement sparks Senegal uncertainty

Six months remain before the presidential elections in Senegal. “Rarely has a Senegalese presidential contest been so open,” said Alioune Tine, founder of the Dakar-based political think tank, Afrikajom Center, in an interview with the French TV channel TV5 Monde, following President Macky Sall’s announcement that he will not run for a third term.

Sall’s decision, which leaves the country without an obvious leader-in-waiting, came after months of uncertainty about his willingness to run for a third term, which the opposition deemed “unconstitutional”. 

Sall had argued that a vote would be legally valid; but his ambivalence towards the question of whether he would run again fuelled serious political instability. Violence escalated in March 2021 when opposition leader Ousmane Sonko was arrested over rape allegations, and exploded again this June when Sonko was cleared of rape charges but sentenced to two years in prison for “corrupting youth,” disqualifying him from participating in the presidential election.

That sparked protests resulting in 16 deaths, according to the government; the opposition put the figure at 30. Anger among Sonko’s supporters stemmed from the belief that he was unjustly sentenced to prevent him standing in the 2024 presidential election.

On 29 July the public prosecutor announced that Sonko would be facing further charges, including “insurrection, criminal conspiracy, undermining state security, plotting against state authority, acts and manoeuvres to compromise public security.” The following day he announced from custody that he would be starting a hunger strike and invited “all political detainees” to join him in it.

Reports suggest that other candidates likely to run include Idrissa Seck, the runner-up in 2019’s presidential vote, whose Rewmi party had joined Sall’s Benno Bokk Yaakaar ruling coalition (“United in Hope”) after parliamentary elections in 2022. Another is Aminata Touré, Sall’s former prime minister. Candidates from within the ruling coalition could include current prime minister Amadou Ba and Abdoulaye Daouda Diallo, president of the Economic, Social and Environmental Council. 

Legal changes proposed

In June a political commission proposed changing electoral law to allow opposition figures struck from the voter roll to run despite their convictions. That could open the way to candidates Karim Wade, a former minister and son of former president Abdoulaye Wade, and Khalifa Sall, a former mayor of Dakar, who were sentenced to jail in 2018 and 2015 for corruption and embezzlement respectively.

The unpredictable contest could have dramatic implications for an economy that has registered strong growth recently. Total private investment rose from $272m in 2010 to $2.6bn in 2022, as investors piled into new projects to exploit the country’s reserves of natural gas. 

But investment has not been exclusively resource-based. Earlier this year, UAE-based logistics company DP World committed $1.1bn to port construction in the country. Planned greenfield projects valued at $1.4bn in 2022 have been launched to close the infrastructure gap. 

But the uncertain political climate has weighed on investors. Mor Gassama, an economist and professor at Cheikh Anta Diop University in Senegal’s capital city Dakar, argues that recent demonstrations have tarnished the country’s image and created investor uncertainty. “This legal-political [Sonko] trial has tarnished our country’s image and created uncertainty for those who would like to come and settle here, as well as those who are already here. This is not a good thing for the business climate,” he says.

Businesses struggle

Businesses suffered during the political turmoil, especially the tourism sector. Some hotels in the tourist region of “la Petite Côte,” 80km from Dakar, reported 50% to 60% less custom than usual during the June violence.

Supermarkets owned by French multinationals were also targeted during the June protests. Malick Niang, the CEO of supermarket Supeco, a joint venture between French company Carrefour and Paris-headquartered CFAO Retail, reported that one of his supermarkets was looted and destroyed during the June protests.

 “It is naturally a feeling of disgust that drives us today, as we strive to bring investment to Senegal, to create jobs for young people and to establish ourselves in working-class neighbourhoods,” he told a local TV channel.

Auchan, another French supermarket brand operating in Dakar, had to lay off hundreds of workers while waiting for its stores to be refurbished. While damage from the June protests could not be quantified, Auchan’s directors estimated the cost of the March 2021 protest at 15bn CFA Francs (approximately $25.4m). 

“Insurance companies have been slow to respond to compensation claims, which doesn’t make their task any easier either,” says Gassam.

Last but not least, the government imposed an internet blackout for a week following the June protest, causing substantial losses for businesses which rely on connectivity for their everyday activities. According to Netblocks’ Cost of Shutdown Tool, a nationwide internet shutdown in Senegal is estimated to result in an approximate GDP impact of $8m per day.

A cost-of-living crisis further exacerbated the situation, adding to public discontent. Inflation reached its highest level in decades in 2022 at 9.7%, mainly due to soaring food prices, which accounted for almost half of Senegal’s Consumer Price Index basket. It has since eased to around 9% and is expected to fall to around 5% by the end of the year, “but could rise again if commodity prices remain high,” said Edward Gemayel, the IMF mission chief for Senegal.

Will Sall really step down?

Sall’s decision not to run for a third term was praised by many, including UN secretary general António Guterres, who noted Sall’s “statesmanship”, and Ernest Bai Koroma, former president of Sierra Leone, who called it a “proud moment for West Africa”.

“It’s a decision to be welcomed at face value. It helps to calm the situation, because people were worried about the reaction of young people if he had declared his candidacy,” says Gassam.

Souleymane Keita, an economist at Cheikh Anta Diop University, told the magazine La Tribune Afrique that Sall’s decision was “a strong signal to national and international investors and backers that they can have confidence in the Senegalese economy”.

But opposition party PASTEF, which nominated Ousmane Sonko as its candidate on 14 July despite his conviction, doubts Sall’s sincerity.

Sonko stated in an interview with the French TV channel France 24 that Sall renounced a third candidacy “not because he is a democrat,” but due to “popular and international pressure”. Sonko said that there would be no elections in the country if his candidacy was barred through judicial manipulation.

For Gassam, even if Sall has renounced a third term, Senegal’s democracy has taken a clear step backward. “The President’s posture of wanting to control everything still risks leading us into an uncertain future. 

“And that doesn’t reassure investors and other partners of our businessmen,” he says.

But despite Sall’s contested legacy, and the rising uncertainties surrounding the upcoming elections, Senegal’s economy retains significant promise.

Although there was a slight 0.8% slowdown in GDP growth in the first quarter of 2023 compared to the last quarter of 2022, the IMF’s note on 12 July, one month after the June protests and one week after Sall’s announcement, stated that “Senegal’s growth prospects are strong.”

After slowing to 4.7% in 2022, growth in Senegal is projected to rebound to over 5.3% this year, supported by the emerging oil and gas industry. 

“We encourage all stakeholders to resolve political differences in a peaceful manner,” mission chief Gemayel told IMF Country Focus. “This will be key to ensure that Senegal can implement its ambitious reform agenda and achieve its full economic potential.”