SENEGAL

RISK RATING
Elevated
Default High Risk Score 4.50
Normal Average 2.86
Weighted Average 2.46
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

The International Monetary Fund will play a crucial role in supporting Senegal during the coronavirus pandemic. In April 2020, the Fund released USD 442 million in emergency funding. President Macky Sall is determined on a campaign of strict controls to get a grip on the pandemic and is sending out a strong message enforced by the police. Sall gained an emphatic re-election victory in February 2019. During Sall’s first term, Senegal’s economy grew more than six percent per year as a modernisation programme produced a new airport, more highways, and a city built from scratch adjoining the capital Dakar. Despite growing intolerance of dissent and some concern over the electoral process, donors and investment partners remain focussed on Senegal’s record economic growth. In the financial markets, the restrictions in the political sphere have yet to have a discernible impact on the country’s foreign-denominated debt.

  • President Sall‚Äôs perceived authoritarianism will undermine stability following the contested 2019 elections. Heavy-handed crackdowns by security forces on some protests have also prompted accusations that President Sall has an authoritarian streak. Moreover, perceptions that the judicial branch of Senegal‚Äôs government is under the influence of President Sall ‚Äď and is consequently biased in arbitrating on political matters ‚Äď has served to reduce faith in the country‚Äôs courts, at least on the part of the political opposition and civil society. Sall launched an ambitious development and reform programme aimed at transforming Senegal into an emerging economy by 2035. The plan includes an array of big ticket infrastructure projects.
  • Islamist militant groups are building up capability to stage attacks, despite local security force preparedness. The risk of an attack on Senegal has increased, driven by Islamist groups‚Äô strong intent to attack major West African cities, especially those with a substantial French and US presence. The most likely targets for such attacks will follow the current pattern of attacks seen in other major regional cities, focussing on hotels and other entertainment venues, especially those frequented by expatriates and tourists in Dakar, St Louis, and seaside resorts. While Senegal‚Äôs aggressive counterterrorism policies and proximity to militant strongholds put it at an elevated threat of a terrorist attack, that vulnerability is being counterbalanced by the competence of its security forces and its ongoing commitment to moderate Islam.
  • Anticipated economic resilience against the impact of the coronavirus bodes well for many sectors, although aviation, tourism, and LNG are suffering from reduced demand. The economy may grow by less than 3 percent in 2020, which does show relative resilience to the global crisis. The prospect for continued pro-business reforms will attract investment into a number of areas including other infrastructure projects, the oil and gas sector and a Special Economic Zone situated near to the airport and planned port. The ambitious ‚ÄėPlan S√©n√©gal Emergent‚Äô (PES), which will drive structural transformation and aims to cement the country‚Äôs status as a leading regional hub for business and trade in West Africa. The plan includes broad infrastructure improvements.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
2.0
Expropriation, Nationalisation, Confiscation & Deprivation
2.0
Contract Frustration & Breach
2.5
Taxation
2.0
Bribery & Corruption
2.0
Regulatory Burden
3.0
Strikes, Riots & Civil Commotion
3.0
Security
3.8
Sovereign Default
3.8
Economic Volatiliy
4.5

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