12.8 Trillion CFA francs ($21 billion) to be Expended Senegal towards Development over the coming Five Years

By Abdul Rahman Bangura-

President Ousmane Sonko & President Elect Bassirou Diomaye Faye
Photo Credit: universinfo.net

NEW AFRICA BUSINESS NEWS (NABN) Freetown, Sierra Leone- Apparently, this slates to bring another 5.7 trillion CFA francs in private investment, a draft government plan illustrates. Public investment in education, energy infrastructure and a range of other projects is seen increasing by an average of 14.7% yearly between 2025 and 2029, according to the plan, which was shared by the Finance Ministry. The document is however, a work in progress and could still have a paradigm shift, according to a presidency official.

The plan is being established by the new administration of President Bassirou Diomaye Faye, who took office in April and has pledged to curb high levels of poverty and unemployment. It states that, a lack of transparency and bad management of public finances has delayed efforts to uplift Senegal’s 18 million people, that wealth and income differences between those living in the capital and the countryside have expanded and that Senegal is too highly indebted.

About half of the West African nation’s people who don’t resident in the main cities live below the poverty line, official youth unemployment stood at 22% in 2022 and one fifth of eligible children aren’t in school, official data shows. The Administration of Faye gears to navigate more revenue from its oil, gas, gold and other natural resources going forward, while curtailing its dependence on loans under a “prudent, better and more-controlled debt policy,” the plan states. It redirects Senegal’s debt-to-gross domestic product ratio falling to 61% in 2029, and that the government will rely more heavily on local and regional markets for financing.

A current review illustrated the debt-to-GDP ratio averaged 76.3% during erstwhile President Macky Sall’s last five years in power — higher than the 65.9% his administration had reported. The budget deficit meanwhile averaged 10.1% of GDP, almost double what had been previously stated, according to the review.

While the plan says that mining contracts and a fiscal framework for the oil and gas industry will be reviewed, it stops short of specifying that the terms will be renegotiated as Faye’s government had previously announced. The budget deficit will be cut to 3% of GDP from next year and maintained at that level through 2025. The average current account deficit is anticipated to drop 4.1% of GDP over the next five years, from 10.3% listed between 2014 and 2023, in part due to an increase in oil and gas exports and a gradual fall in food imports.

Energy subsidies are expected to fall to less than 1% of GDP by 2029, from 4% over the 2020-2023 period, as the increased use of gas to generate electricity helps contain costs and more lower-cost crude oil becomes available for refining.

For New Africa Business News (NABN) Abdul Rahman Bangura Reports, Africa Correspondent