Senegal, an emerging oil and gas producer, is planning to invest around 12.8 trillion CFA francs ($21 billion) in development over the next five years, while aiming to attract an additional 5.7 trillion CFA francs in private sector investment, according to a draft government plan. Public spending on key sectors like education and energy infrastructure is expected to grow by an average of 14.7% annually between 2025 and 2029, based on the plan shared by the finance ministry. However, the document is still under revision and may change, according to a presidency official.
The plan is being developed by President Bassirou Diomaye Faye’s new administration, which took office in April with a commitment to address poverty and unemployment. It highlights that issues such as lack of transparency and poor management of public finances have hindered efforts to improve the living conditions of Senegal’s 18 million citizens. Additionally, the plan notes growing income and wealth disparities between urban and rural populations, and the country’s significant debt burden.
Approximately half of Senegal’s population outside of major cities lives in poverty, with youth unemployment at 22% in 2022, and one in five eligible children not attending school, according to official data.
The government plans to boost revenue from its oil, gas, and mineral resources, while reducing reliance on loans by adopting a “prudent, more controlled debt policy.” It projects the country’s debt-to-GDP ratio will decrease to 61% by 2029, with greater reliance on local and regional markets for financing.
A recent review found Senegal’s debt-to-GDP ratio averaged 76.3% during the final five years of former President Macky Sall’s tenure, higher than the 65.9% previously reported. The budget deficit during that period averaged 10.1% of GDP, almost double the earlier official estimates.
While the plan indicates that mining contracts and the fiscal framework for the oil and gas sector will be reviewed, it stops short of stating that terms will be renegotiated, despite previous announcements by Faye’s government.
Other Key Points:
- The budget deficit is set to be reduced to 3% of GDP from next year and maintained at that level through 2025.
- The current account deficit is expected to average 4.1% of GDP over the next five years, down from 10.3% between 2014 and 2023, thanks in part to increased oil and gas exports and a gradual reduction in food imports.
- Energy subsidies are projected to fall to under 1% of GDP by 2029, down from 4% during 2020-2023, as the increased use of gas for electricity generation reduces costs and lower-priced crude oil becomes more available for refining.
- The tax-to-GDP ratio is expected to rise to 21.7% from the current 18%.
