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Senegalese economy - Finding the path to growth, the great challenge of 2021

31/12/2020
Source : AllAfrica
Categories: Economy/Forex

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2020 has been an economically difficult year for the whole world. Due to the Covid-19 pandemic. In Senegal, all sectors have suffered the full impact of the coronavirus, from the hotel industry to tourism and the informal sector. The country is recording a drastic drop in the growth rate which, according to IMF forecasts, will be at -0.7%. Whereas, for 6 years, the rate was always above 5%. Restarting the virtuous cycle of this growth which has fallen is the main challenge for the government of Senegal for this year 2021.

The Covid-19 pandemic has had a considerable impact on the Senegalese economy. Indeed, the numerous measures intended to stem the exponential spread of the virus in the country have had catastrophic consequences on economic activity.

Sectors such as hotels, restaurants and transport found themselves on the edge of the abyss, thus causing several job losses. Suddenly, Senegal goes from a forecast growth rate of 6.8% to a virtual recession. To minimize these effects, the Head of State, Macky Sall, decided to release an envelope of 1000 billion, or a quarter (¼) of the country's budget to support the affected sectors and vulnerable groups.

Thus, 200 billion were intended to clear debts to companies and other suppliers, with priority given to construction, tourism, transport, agriculture, health, education. In order to cope with this harsh context for the Senegalese economy, the government has also initiated an economic recovery policy through the Adjusted and Accelerated Priority Action Plan (PAP 2A) endowed with 14,000 billion for the period 2021 - 2023.

The objective is to rely on agriculture, energy, the pharmaceutical industry, among other sectors, to straighten the slope and bring the growth rate down to 6 points, in 2021.

With PAP 2A, the challenge is for growth to be driven, this time, not by the State through major projects, but by the private sector, with a national preference called local content. The main challenge for the State is to return to the path of growth, from 2021.

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