Senegal’s Faye rows back from campaign rhetoric with cautious economic hires

The new president of Senegal, Bassirou Diomaye Faye, has appointed orthodox figures to key economic posts following an election campaign that pledged to take the West African country in a radical new direction.

Cheikh Diba, a former tax official, will take up the role of finance minister while Abdourahamane Sarr, who previously served as a senior economist at the International Monetary Fund (IMF) as a monetary policy expert, will be Senegal’s new economy minister.

The appointments are likely to reassure international investors that Senegal, which was largely seen as a business-friendly hub under predecessor Macky Sall, will remain a safe destination for investment.

Faye said during the election that he would renegotiate Senegal’s oil and gas contracts with international firms and promote national companies, to give the country greater control of its own resources and avoid what his Pastef party called “economic enslavement.”

He also initially said that Senegal should adopt a new currency, but then backtracked slightly to argue instead that Dakar should reform the existing CFA franc within the Ecowas bloc.

Many political analysts at the time were unconvinced that Faye’s rhetoric on the campaign trail would become official policy when in government. Alex Vines, director of the Africa programme at the Chatham House think-tank in London, previously told African Business that “Faye is a lot more pragmatic in private and attract further investment.”

Nonetheless, Faye’s rhetoric, combined with uncertainty as to whether the new government planned to follow through on these plans, caused global credit ratings agency S&P to note that “the new government has yet to communicate many of its key fiscal and economic policy proposals, which could affect Senegal’s creditworthiness.”

However, Signal Risk, a risk management firm based in Cape Town, say that “the political landscape has stabilised following the 24^th March presidential election” and that Faye’s initial appointments suggest that “policymaking is likely to be more moderate than his rhetoric might suggest.”

They add that “while Faye campaigned on a somewhat radical platform, his policymaking as president is unlikely to be as unorthodox as his pre-electoral rhetoric.”

“Although Faye has sought to capitalise on disaffection with the Sall administration, he is unlikely to be willing to alienate key economic partners, such as oil majors and the IMF. This is in cognisance of the fact that these arrangements are central to the country’s creditworthiness, economic stability, and the fulfilment of Faye’s own developmental aspirations.”

Markets have reacted positively to the result of the Senegalese elections and its aftermath. Yields on Senegal’s $4bn worth of international bonds have fallen, indicating greater investor confidence in the country’s economy. Fitch Ratings have also said that “the return to political and social stability puts Senegal back on track to meet the IMF’s expectation of 8.3% GDP growth in 2024.”