Why energy production may be Senegal’s economic saviour

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Oil and gas exports from Senegal are scheduled to begin in earnest in 2023, spelling a new dawn for the economy of the West African country, popularly renowned as the ‘Gateway to Africa,’ located in the western most  point of the continent. The Grand Tortue Ahmeyim (GTA) LNG gas project, will be a game changer for the country, radically transforming its economy, which  is projected to register robust growth in 2023, outshining other countries in the Sub-Saharan Africa. According to the recent World Economic Outlook forecast by the International Monetary Fund (IMF); Senegal’s economy will grow by 8.1 per cent in 2023, against the projected Sub-Saharan African growth of 3.7 percent.

In reiteration, the Africa Economic Outlook (AEO) published by the Africa Development Bank (AfDB), indicates that Senegal’s economy has decelerated in 2022 to 4.6 percent, but is estimated to accelerate to 8.2 percent, due to public and private investments together with oil and gas exploitation. Currently, Senegal’s debt-to GDP ratio stands at 71.9 percent.

The Covid-19 pandemic and the Russia-Ukraine war have both punctured the country’s economy. However, Senegal’s recovery from the pandemic shocks began in 2021, in part due to the Adjusted and Accelerated Priority Action Plan, with 6.1 percent growth against 1.3 percent in 2020.The AEO highlights that this was led by the resumption of the extractive sector, construction, and commercial activity connected to strong demand, as well as transport services. Agriculture which largely contributes to the economy, slowed to 4.6 percent growth in 2021, after a soaring rise of 23.4 percent in 2020.

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