A vote of confidence: Senegal on track for economic success
It is a quarter past seven on a weekday morning, and the rush hour crowd has descended upon the newly refurbished Dakar Railway Station, an 18th-century architectural icon in the heart of Senegal’s capital.
Droves of passengers wait in line to board the high-speed Dakar Regional Express Train (TER) which travels at 160 kilometers per hour, whizzing past landmarks across Senegal’s countryside and city center.
This vision of the TER — of which the first phase was completed in June 2019 — epitomizes the speed and progress Senegal hopes to achieve under the stewardship of the incumbent president Macky Sall.
But the impressive rail project, which will be fully operational in 2020, also belies the harsh reality that much of Senegal’s population is still mired in poverty.
Still, the country’s economy has steadily expanded over the past five years, recording one of the fastest growth rates on the African continent.
The reason for its success? Senegal returned to the basics — by sorting out its politics, fixing its infrastructure, and partnering the private sector.
An oasis of calm
Since gaining independence from French rule in 1960, Senegal has enjoyed its status as the region’s oldest and most stable democracy, thanks to peaceful transitions of power.
But in 2012, its reputation as Africa’s strongest democracy came under global scrutiny when the former head of state Abdoulaye Wade refused to step down from his post.
Did you know?
Senegal remains the only country in West Africa to have never experienced a military coup or civil war. It has not been affected by regional security shocks, but increasing activism by terrorist groups in neighboring countries and the higher number of radicals entering the country are factors that risk fueling instability.
Source: World Bank
Frustrated by his power-hungry ways and the soaring levels of poverty and unemployment, voters decided to rewrite destiny at the March 2012 presidential elections after a string of violent clashes across the country.
They rallied their support for Sall, then a rising political star who was also Wade’s ex-apprentice and closest competitor. Sall went on to win the election by a landslide and even secured a second term with 58 percent of the votes at the recent 2019 elections.
Through the decades, despite its stable political environment, Senegal still struggled with one problem: patchy growth.
For one thing, much of the country’s economy — dominated by mining, agriculture, and forestry — has been poorly developed. Likewise, its infrastructure was lacking and underdeveloped.
The lack of development has left large swathes of the population stuck in poverty. An estimated 40 percent of Senegal’s 15 million people still live under the poverty line, on wages of less than US$1.90 (€1.68) a day.
These were some of the critical problems that Sall moved to address as soon as he took office. He launched the US$20 billion Emergent Senegal plan (PSE), an ambitious 20-year strategy to modernize and transform Senegal’s economy by 2035.
And at the heart of the PSE was a string of infrastructure projects aimed at fueling growth.
“Senegal is trying to bet on an infrastructure, public investment-led growth [and] the plan mostly makes sense,” Amadou Sy, an advisor with the International Monetary Fund, observed in a Financial Times report.
The country set to work at once. More than 221 kilometers of multi-lane motorways were constructed to boost connectivity within the country, while government reforms doubled the country’s energy production, providing more Senegalese homes with access to basic electricity.
In January this year, the 1.9 kilometer-long Senegambia bridge to Gambia — one of the longest bridges in Africa — was opened to lift trade and commerce between the neighbors. It was complemented by the US$459 million TER and the Dakar toll road, both aimed at strengthening transportation links throughout the country.
The improved road infrastructure has already “put Senegal at the forefront of regional logistics,” noted Galaye Ndaw, Country Manager of DHL Global Forwarding Senegal, who pointed to landlocked neighbor Mali, which relies heavily on road connectivity to import and export their goods through Dakar.
The result of the country’s infrastructure drive has been tremendous.
Senegal grew at an average rate of about six percent over the past five years, almost doubling the pace in the five years before.
Foreign direct investment into the country also ballooned from US$276 million in 2012 to US$532 million in 2017.
The bright lights of Diamniadio
For its next leg of economic development, Senegal will have to focus on sustaining this growth, said the World Bank.
“This means more reforms to resolve bottlenecks in productivity and competitiveness; sustaining a credible fiscal policy and avoiding currency overvaluation, and putting the country in a position to reap the benefits of a positive international environment,” said the global lender in its report on the country.
A big part of Sall’s answer to sustainable growth lies in the new, futuristic city of Diamniadio, just 40 kilometers away from the capital city of Dakar. It is expected to ease overcrowding and traffic congestion, emerging as a smart city and an economic hub.
To build the new hub, DHL Global Forwarding Senegal has been involved in the transportation of massive amounts of raw materials including steel and other construction equipment, Ndaw shared.
He believes logistics has and will continue to play a central role in shaping the country’s growth story.
“As one of the key logistics providers in the country, we are driven by the fact that we have a direct impact on the future of this country. It is exciting to be in Senegal today,” he added.