WHAT SECTORS FOR WHICH ECONOMIC GROWTH IN SENEGAL?

 By Mouhamadou Bamba DIOP DPEE

Executive Summary

This work is an attempt to understand the factors explaining the economic backwardness of Senegal. The economic model used so far has not focused on the most productive sectors that generate economic growth and create jobs. Diagnosis of productivity and analysis of structural transformation and the degree of export sophistication have allowed us to propose a new business model built around horticulture, tourism, chemical, telecommunications and finance services. However, its success depends on the support policies including the consolidation of the macroeconomic framework, the reform of the labor market, the erection of appropriate institutions to facilitate the accumulation of capital, the overhaul of the education system and finally deepening the financial market. Keywords: Productivity, structural transformation, space-product, economic growth, economic development. JEL Classification: O10, O11, O4. Introduction More than fifty years after independence, Senegal still faces many challenges including the eradication of poverty.

During this period, the average growth rate of real GDP and real GDP per capita have been low and are valued at 2.72% and -0.12% respectively. GDP per capita was $ 615 in 1960 (in constant 2000 dollars) fell to $ 560 in 2010. The performance of the Senegalese economy measured against the standard of living of the population remains far insufficient compared with real potential of the country and that of other countries that have been at the same level of development as Senegal in 1960.

Tunisia and Botswana are a good illustration these countries were able to significantly improve the living conditions of their populations thanks to rapid and continuous economic growth. This poor performance challenges governments that have the ultimate goals of improving the living standards and social welfare of the population. Whatever the policies of the past and the future, the fact remains that these objectives will not be achieved without sustained and sustainable economic growth.

For all these reasons, the understanding of growth, its mechanisms, its determinants and its sources is to be included in the center of the action of economic policy makers. Given that growth is neither inevitable nor dependent on natural resources that a country has but mainly depends on the policies and choices made by the countries, the willingness and determination of the citizens.

And the economic literature in its attempt to understand this situation has issued several concepts including dual economy and Lewis' unemployment surplus , the human capital of Schultz, the stages of development theory and takeoff and remedial by Gerschenkron and Rostow and structuralism by Seer, Prebisch and Hirschmann. The importance of an answer to this crucial question lies not only in understanding the past, but also in the identification of tracks that would allow it to catch up and to raise the country at the same level of development as his fellow.

The rest of the article is organized as follows. After examining the sources of economic growth and limits of the current economic model in Section 1, the analysis of the level of sophistication and diversification of the basket of goods exported.

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KEY INDICATORS

  • Quarterly GDP: + 3.6% (Q2)
  • Harmonised Index: + 0.8% (Oct.)
  • National Index: + 0.4% (Sep.)
  • Export: -33.6% (August)
  • Import: -11.0% (August)
  • Export prices: -2.7% (August)
  • Import prices: -0.6% (August)
  • Inflation: -0.7% (S1)
  • Competitiveness: +0.2
  • Current account balance: -10% of GDP
  • Budget balance: -5.1% of GDP
  • Growth rate: +4.9%

MAP -MEFP

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