The World Bank Group’s Board of Directors today discussed the Country Partnership Framework (CPF) for Senegal that lays out the World Bank Group program for FY20–FY24 and expressed broad support for the WBG’s engagement in Senegal’s structural reforms to achieve economic transformation and become an emerging economy by 2035.
The WBG will continue and deepen its support to implement Senegal’s ambitious policy reform agenda. The Board acknowledged the transformational reforms to enable private sector driven growth in the energy sector and the digital economy and welcomes the commitment in the CPF to accelerate poverty reduction and address inequities by investing in human capital and enabling jobs and economic transformation.
According to World Bank Country Director Nathan Belete, “Senegal is approaching the third decade of the 21st century with tremendous promise and opportunities. This new partnership strategy will support the country to take advantage of its attributes and overcome persistent challenges to achieve transformational impact and emergence by 2035.”
Senegal’s economic expansion has been accelerating and growing consistently above 6 percent per year since 2014. This high growth trajectory places Senegal among best performers in Sub-Saharan Africa and is reflective of incipient structural transformation, supported by reforms aimed at improving the investment climate, governance and investment in infrastructure, energy and agriculture. The growth outlook is favorable and projected to remain solid at about 6.8 percent in 2020, reflecting higher investment and exports. Growth could exceed 7 percent from 2021 onwards if fiscal vulnerabilities are contained and transformational reforms are implemented to crowd-in private sector investments.
“We are confident that the CPF will fully leverage IFC’s strategy, which foresees an ambitious upstream agenda of reforms to catalyze greater private investment in Senegal,” indicated Aliou Maiga, IFC’s Director for West and Central Africa.
“MIGA will focus on encouraging foreign investment through its political risk insurance instruments, including in the energy, water, and transport sectors, while also leveraging the engagement of IDA and IFC. In addition, MIGA will continue to explore opportunities to support public investments in these sectors through its credit-enhancement product,” said Hoda Atia Moustafa, MIGA’s Africa Regional Head based in Dakar.
Guided by the priorities of the government’s Plan Senegal Emergent and its second Priority Action Plan (2019-2023), and the recent Systematic Country Diagnostic of Senegal. The World Bank Group’s three areas of support are to:
Build human capital to enhance productivity: A child born today will achieve only 42 percent of his or her productivity potential if key health and education outcomes do not improve. Building on the gains of the social safety net and education and health projects, the world Bank will accelerate progress in establishing strong literacy and numeracy skills among primary and lower secondary school children; promoting employability for youth; and empowering adolescent girls and women to have more control over their childbearing and productivity.
Boost competitiveness and job creation: Investment climate in Senegal has improved, with Senegal jumping 35 ranks in its Doing Business ranking from 161 in 2015 to 123 in 2020 by improving access to credit information and streamlining tax administration for Small and Medium Enterprises through the eTax platform. The focus will now be on improving digital and physical connectivity at the national and regional levels; lowering energy costs and carbon footprint and optimizing the energy mix; promoting the service economy, including through financial; and boosting the productivity and competitiveness of agriculture and related value chains.
Building resilient institutions and communities: with the rapid urbanization and spatial inequalities in access to water and sanitation, the World Bank will focus on promoting and protecting, ecosystems, and infrastructure in the face of climate change; ensuring access to water and sanitation in marginal rural and peri-urban areas; and improving the efficiency and transparency of governance institutions and social protection systems.
The strategy will also promote digital technology particularly in education, agriculture, social protection, and finance to support Senegal’s leapfrogging into a modern economy. It also puts gender at the center of the strategy by focusing on girls and women’s empowerment and promotes resilience to climate change across the various areas of focus.
Currently, Senegal the country has 18 projects receiving IDA financing amounting to $1.8 billion, and nine regional IDA projects for $346.5 million. IFC has a portfolio of about $140 million with significant investments in the power sector, financial sector and to local businesses in agro-processing. MIGA’s exposure in Senegal is $306.2 million, its 6th largest in Africa.