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Senegal

Sekondi Accra

The International Monetary Fund (IMF) states that the economic growth of Senegal is increasing. With a rate of 4% in 2010 and 4.4% in 2011, the country hopes to continue its recovery from the 2008-09 economic downturns. Even though these figures are encouraging, they fall short of the double digit growth rates predicted by the government in 2000 and from the 7% growth that economists state is necessary in order to create real change for the majority of Senegalese citizens.

IMF experts who were in Dakar at the end of 2010 stated that Senegal would have to initiate a series of reforms to maintain the current growth rate due to several internal and external threats. The global economic recession affected major sectors of the Senegalese economy, but the foundation remained firm. The rattled international economic environment crippled remittances, foreign investments and tourism receipts.

Favorable weather conditions have helped the agricultural sector, but performance is still slow and hunger remains a notable problem. In late 2010, Actionaid, an NGO, reported that despite increased government spending on agriculture, 51% of the people in rural areas suffered from serious food shortages.

In order to build the economic climate, the governement must institute fiscal reforms along with increased transparency. The 2010 IMF mission delivered a guarded criticism of the recent grands projets enacted by the government of President Abdoulaye Wade, stating that new investments must exhibit a high rate of return in keeping with the country's overall development strategy. Plans for new infrastructure investment must be transparently included in the budgetary framework and should also compliment the development of additional private-sector investments. The government has spent hundreds of billions of CFA francs on large infrastructure projects, but they have not transformed the Senegalese economy.

Mining developments have been hindered by a series of contractual disputes. In August 2010, the government settled its case with South Africa's Kumba Iron Ore after it had awarded the rights to the Faleme iron-ore project to ArcelorMittal although it had previously promised the deposit to Kumba. In October 2010, President Wade announced the government's intention to cancel ArcelorMittal's license, meaning that it will be several years before a new investor can begin work.

The governement stated in June 2010 that it will underwrite a $300 million dollar bond to finance road projects in 2011 following a successful $200 million dollar Eurobond for road construction in December 2009. Even though Standard and Poors gives Senegal a B+ rating, it cautions that the economic forcast is negative because government debt is set to escalate in 2012. The new bond would be used to link Dakar and Thies to a new international airport outside the capital. The government is also considering a new five-year plan to expand road networks and is considering new financing strategies, including toll roads and special taxes.

Large infrastructure deals have led to several financial scandals, including those linked to projects in Thies, the hosting of the Organization of the Islamic Conference in 2008 and road construction programs in the interior of the country. The contracting process has been marked by opaque bidding procedures, poor workmanship and overinflated costs along with severe delays in construction. In late 2010, the government was also investigating a series of scandals related to telecom licenses and contracts involving Sudatel and Global Voice. Good governance was also on the agenda of Senegal's international business associates. In May 2010, US ambassador Marcia Bernicat informed the Dakar government that the $540 million dollars that it received in 2010 from the Millennium Challenge Account was dependent on the government's corruption credentials.

Senegalese government officials are presently negotiating a lease that would provide Saudi corporations with up to a million acres of prime farmland, much of it in the fertile Senegal River valley. One of the major parties in these talks is Foras International Investment Company, a saudi based business partly owned by the Bin Laden Group-a giant construction firm established by Osama bin Laden's father. Foras is seeking to secure 370,000 to 500,000 acres of Senegalese land to cultivate rice, much of it intended for export to Saudi Arabia. As elsewhere, government officials insist that the parcels in question are unoccupied (and thus availible for development by outsiders), by many observers disagree. According to Lamine Ndiaye, the head of economic justice at Oxfam Senegal: "The land is not empty. It is occupied by the community, it's just that they're not recognized as owners of the land." The government is proceeding with the lease anyway.

Daily power outages are a regular occurrence along with additional problems of economic and social importance which will gather momentum in 2011 because national elections are due in early 2012. Tensions are escalating around the 2012 poll because President Wade has already announced his intention to run for a third term. Civil society groups and the political opposition have challenged Wade's decision to seek re-election, stating that a third term would not respect laws on term limits or Wade's earlier promise not to be a candidate. Relations between the government and the opposition are already at an impasse because several of the major parties still refuse to recognize Wade's election victory in 2007.

Battlelines are already being drawn around the management of the electoral bodies and issues related to poll transparency. The government's appointment of a Wade ally, Ousmane Ngom, as interior minister in September 2010 has not reassured the opposition. The opposition have also criticized the appointment of Cheikh Tidiane Sy as justice minister and Cheikh Tidiane Diakhate as president of the Conseil Constitutionnel. Opposition parties state that Diakhate is too close to the party in power and have called for him to be replaced so that someone more impartial can be charged with mediating election disputes.

In the run up to the election, several different groups are struggling assert their agendas: teachers and students are complaining about the lack of educational investment; peanut farmers have been unable to sell all of their production and feel abandoned by the liberal regime; residents of the suburbs, many of whom have spent several years in unsanitary conditions due to recurrent flooding, need better medical facilities; and indigent citizens have been banned from the streets.

Disagreements within the ruling Parti Democratique Senegalais (PDS) have led to several government personnel changes, which in turn have interrupted progress on several projects. A group of PDS politicians have voiced their disapproval of the grooming for the succession of the president's son, Karim Wade, who many oppositionists assume will try to takeover from his father. President Wade has made it clear that he intends to give his son all the chances he needs to prove himself. In October 2010, Wade dismissed Energy Minister Samuel Sarr and replaced him with Karim, who is already in charge of air transport, international cooperation and infrastructure.

Idrissa Seck the former prime minister who had joined the opposition only to rejoin the PDS, stated in October 2010 that he was using his networks within the ruling party to build support for 2012 polls. Seck states that he has reconciled with President Wade, but competition for the party nomination is likely to cause casualties in 2011. Polling data from late 2010 showed that the most likely result would bring Wade and former Prime Minister Macky Sall into a second round because Wade does not have enough support to win conclusively in the first round.

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Senegal maintains an embassy in the United States at 2112 Wyoming Avenue, NW, Washington, DC 20008 (temporary tel. 202-450-1659), and a Mission to the United Nations at 392 Fifth Avenue, 9th floor, New York, NY 10018 (tel. 212-517-9030).
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