A bad start for the New Year: Senegal’s economic growth projection for 2010 was lowered by government analysts. Senegal should achieve 3.4 percent economic growth in 2010, down from an earlier official forecast of 4.6 percent, according to the DPEE.
The agency also revised down slightly its 2009 growth target to 1.2 percent from 1.5 percent, after the global economic slowdown hit demand for exports, along with remittances from abroad and foreign direct investment.
"In 2010, growth is projected at 3.4 percent on the assumption of a continued relatively high level of prices for oil products, and the primary sector holding up well thanks to strength in the agricultural sector," DPEE said in a statement. The global slowdown has been worse than expected for Senegal, according to its officials.
Consumer prices, which DPEE estimated dipped 0.4 percent during the course of 2009, should head upwards again in 2010 with inflation of 2.2 percent.
Wednesday, December 30, 2009
Monday, December 14, 2009
Senegal's first sale of public bonds.
With its fiscal affairs improved by government belt-tightening, Senegal will offer $200 million of five-year bonds yielding about 8.75 percent to finance road building in the West African nation, its first international bond offering. That report is from Bloomberg, which got the news from investors approached to buy the securities.
The relatively small offering is reportedly arranged by Citigroup Inc. With a rally of emerging-market debt since the financial collapse of September 2008, the dollar-denominated debt of developing nations included in JPMorgan Chase & Co.’s EMBI+ Index is trading at 6.595 percent.
Senegal's $13.6 billion economy is rated B+ by Standard & Poor’s, four levels below investment grade.
The relatively small offering is reportedly arranged by Citigroup Inc. With a rally of emerging-market debt since the financial collapse of September 2008, the dollar-denominated debt of developing nations included in JPMorgan Chase & Co.’s EMBI+ Index is trading at 6.595 percent.
Senegal's $13.6 billion economy is rated B+ by Standard & Poor’s, four levels below investment grade.
Saturday, December 5, 2009
Did Dakar help evacuate Camara?
The Times of India reported that wounded Captain Moussa Dadis Camara, head of the military junta ruling neighboring Guinea, was evacuated by Senegalese aircraft. Other news reports have filled in some details of the assasination attempt on Camara. Apparently the chief of his presidential guard insisted on the release of his troops, jailed by Camara as a result of the September massacre of democracy protesters in Conakry. He shot Camara, according to current report, when the matter got heated between them... It gets personal in Guinea.
Sunday, November 29, 2009
Thiès: Iran's Detroit? Or Detroit's future?
In a swing through Dakar on his five-county friendship tour, Iran's President Ahmadinejad reiterated his country's support for Senegal's nascent auto industry in Thiès. The Iranians now promise to set up a tractor production factory in Senegal in the near future. Iran's automobile manufacturer, Iran Khodro Company, is partner in the SenIran factory, making the Samand sedan designed by Khodro. "With completion of the factory in Senegal, this country can export its cars to other regional countries," Ahmadinejad said.
I thought the Thiès plant was fully operational. Maybe not. The Wall Street Journal's recent article reported that the Iranian-Senegal joint venture was having trouble getting cars built. But maybe manufacturing still needs to be constructed.
According to Fars News Agency, Iran Khodro is the largest carmaker in the Middle East, Central Asia and North Africa regions with annual production of more than one million various vehicles including cars, trucks and buses.
Meanwhile... Apparently the Chinese will see if they can do better than the Indians when it comes to making Senbuses. Remember that Tata, the Indian manufacturing giant, also set up a factory in Thiès to build 500 "Senbuses," public conveyance intended to replace the colorful vehicles that served Dakar for so long, and are sure to be missed.
So now King Long, a Chinese outfit, subsidized with a $25 million loan from the Chinese government, has taken over the Tata operation, still in "partnership" with the Senegalese.
"I want to make Thiès the industrial capital of Senegal,” Senegal's President Wade decreed recently during a ceremony there for the new partnership.
Alas, an industrial infrastructure takes more than a government decree. And Senegal has not shown that it has whatever it takes yet. We'll see if the new Chinese-Senegal venture does better than the Iranian-Senegal venture or the Indian-Senegal venture... Maybe what it takes is the entrepreneurial, techno-savy capitalistic hussle that can only be found, where else: Detroit where are you? It's not like you have anything better going on back home.
I thought the Thiès plant was fully operational. Maybe not. The Wall Street Journal's recent article reported that the Iranian-Senegal joint venture was having trouble getting cars built. But maybe manufacturing still needs to be constructed.
According to Fars News Agency, Iran Khodro is the largest carmaker in the Middle East, Central Asia and North Africa regions with annual production of more than one million various vehicles including cars, trucks and buses.
Meanwhile... Apparently the Chinese will see if they can do better than the Indians when it comes to making Senbuses. Remember that Tata, the Indian manufacturing giant, also set up a factory in Thiès to build 500 "Senbuses," public conveyance intended to replace the colorful vehicles that served Dakar for so long, and are sure to be missed.
So now King Long, a Chinese outfit, subsidized with a $25 million loan from the Chinese government, has taken over the Tata operation, still in "partnership" with the Senegalese.
"I want to make Thiès the industrial capital of Senegal,” Senegal's President Wade decreed recently during a ceremony there for the new partnership.
Alas, an industrial infrastructure takes more than a government decree. And Senegal has not shown that it has whatever it takes yet. We'll see if the new Chinese-Senegal venture does better than the Iranian-Senegal venture or the Indian-Senegal venture... Maybe what it takes is the entrepreneurial, techno-savy capitalistic hussle that can only be found, where else: Detroit where are you? It's not like you have anything better going on back home.
Wednesday, November 18, 2009
Big order for Senegal Airlines
Airbus said Wednesday that Senegal Airlines, the new national carrier of the Republic of Senegal, has signed a letter of intent for four A320 aircraft and two A330 aircraft.
Airbus, a wholly owned unit of European Aeronautic Defence & Space Co., didn't give a value for the deal, but it is worth approximately $700 million, according to list prices.
Senegal Airlines will start operating early next year from its hub in Dakar to destinations in Africa. It will replace Air Senegal International, according to a statement released at the Dubai Airshow.
Airbus, a wholly owned unit of European Aeronautic Defence & Space Co., didn't give a value for the deal, but it is worth approximately $700 million, according to list prices.
Senegal Airlines will start operating early next year from its hub in Dakar to destinations in Africa. It will replace Air Senegal International, according to a statement released at the Dubai Airshow.
IMF praises governance, bemoans economy
The International Monetary Fund just released its most recent (November 4-18) report on Senegal. Its assessment of the overall economy is gloomy, reflecting the world's economic doldrums. According to the IMF news release on the assessment:
“The global financial crisis and domestic shocks are affecting Senegal’s economy. Growth is expected to slow to 1¼ percent in 2009 from an already depressed 2½ percent in 2008. Business activity has been weak, remittances have been under pressure, and tax revenues are lower than expected. In the second half of this year the economy has also been undercut by electricity shortages and urban flooding."
The report has hopes for a turnaround in 2010, with growth of 3.5 percent. But its most positive comments were reserved for the Senegal government's fiscal discipline of late:
"All quantitative assessment criteria were met and key structural benchmarks have been completed. The stock of the government’s unpaid bills within the regular expenditure chain has been normalized. The mission welcomed progress with reforms to improve public financial management."
In other words, the public sector is continuing to pay its bills despite tough times. Real improvements will await economic recovery. Preparing fertile ground now would help.
"Measures to improve the business climate could include reducing delays in transferring property rights, better contract enforcement, and the simplification of customs procedures."
“The global financial crisis and domestic shocks are affecting Senegal’s economy. Growth is expected to slow to 1¼ percent in 2009 from an already depressed 2½ percent in 2008. Business activity has been weak, remittances have been under pressure, and tax revenues are lower than expected. In the second half of this year the economy has also been undercut by electricity shortages and urban flooding."
The report has hopes for a turnaround in 2010, with growth of 3.5 percent. But its most positive comments were reserved for the Senegal government's fiscal discipline of late:
"All quantitative assessment criteria were met and key structural benchmarks have been completed. The stock of the government’s unpaid bills within the regular expenditure chain has been normalized. The mission welcomed progress with reforms to improve public financial management."
In other words, the public sector is continuing to pay its bills despite tough times. Real improvements will await economic recovery. Preparing fertile ground now would help.
"Measures to improve the business climate could include reducing delays in transferring property rights, better contract enforcement, and the simplification of customs procedures."
Wednesday, October 28, 2009
Wall Street Journal on the "Segura Affair"
The most widely read newspaper in the United State, The Wall Street Journal, has an article today on the highly controversial "going away present" to departing IMF country representative Alex Segura... The top-of-the-fold article in the Journal's "World News"section is titled "Gift from Senegal President Spurs IMF Inquiry," and features a picture of President Abdoulaye Wade. The Wade government is sticking to its characterization of the $200,000 cash given Sequra at his going away party as just an example of traditional Senegalese "terranga." An anti-corruption source in the article calls it "outright bribery." Still, we wonder, what is the quid pro quo? Without expecting something in return, it's simply a gift. Presumably that's one of the questions that the investigation by the International Monetary Fund will seek to answer.
Monday, October 26, 2009
The Segura Affair: "reverse Teranga"?
The Senegalese government in statements today seemed to acknowledge giving a pile of cash to outgoing IMF country representative Alex Segura. But it was not a bribe, they say. According to the prime minister Souleymane Ndéné Ndiaye, the cash was simply a (very sizable) going away gift to Segura, in the hospitable tradition of the Senegalese people. He notes that Segura never did any favors for the Senegal government while he was stationed at Dakar, and he was on his way out, unable to do any future favors, so it couldn't be a bribe.
Saturday, October 24, 2009
L'affaire Segura: it's classic Senegal
It has been called bribery, but the real story behind "the Segura Affair" may be more interesting than that. Wittingly or not, the Senegal representative for the International Monetary Fund (IMF) seems to have been what we call in California politics a "bag man," carrying 65 million CFA (about $150,000).
The hapless bagman, Alex Segura, was ending his third tour in Senegal for the IMF. I had spoken to him a couple times by phone (or was it email) in Spring 2008, but was unable to meet him personally because of his travels. It can safely be said that no other foreigner in Senegal was better known--or at least in the media--than Segura (yes, even more than Obama). He was the point man steering the Senegalese economy for the international community.
Segura's role/complicity/whatever is pretty vague. At least that seems to be the picture in the Senegalese press. Some of those reports are supposedly based upon statements from the IMF. But I can't find anything about it on the IMF website and there is virtually no media reports on the "Segura Affair" outside Senegal.
The "real" story, augmented by my informal sources, is that Segura was delivering the money to the Senegalese embassy in Barcelona. He found that he had the money (delivered to him by means uncertain) and let his superiors know. My Senegalese contacts are convinced that he was being used--again wittingly or not--to deliver the money for Senegalese government higher ups. Since the Wade administration does a lot of "cash transactions" their conclusion is that hanky-panky was involved. Maybe it was a bribe. But to who? Segura was exiting his post in Dakar. It doesn't seem to make sense that he was being paid off retrospectively or prospectively.
The IMF is reportedly (by Dakar press) investigating the "Segura Affair." Meanwhile, Senegalese in the U.S. have announced a protest gathering at the IMF headquarters in Washington D.C. to voice their indignation with the Senegalese government and the perception of its corruption galvanized by the "Segura Affair," set for October 31.
The hapless bagman, Alex Segura, was ending his third tour in Senegal for the IMF. I had spoken to him a couple times by phone (or was it email) in Spring 2008, but was unable to meet him personally because of his travels. It can safely be said that no other foreigner in Senegal was better known--or at least in the media--than Segura (yes, even more than Obama). He was the point man steering the Senegalese economy for the international community.
Segura's role/complicity/whatever is pretty vague. At least that seems to be the picture in the Senegalese press. Some of those reports are supposedly based upon statements from the IMF. But I can't find anything about it on the IMF website and there is virtually no media reports on the "Segura Affair" outside Senegal.
The "real" story, augmented by my informal sources, is that Segura was delivering the money to the Senegalese embassy in Barcelona. He found that he had the money (delivered to him by means uncertain) and let his superiors know. My Senegalese contacts are convinced that he was being used--again wittingly or not--to deliver the money for Senegalese government higher ups. Since the Wade administration does a lot of "cash transactions" their conclusion is that hanky-panky was involved. Maybe it was a bribe. But to who? Segura was exiting his post in Dakar. It doesn't seem to make sense that he was being paid off retrospectively or prospectively.
The IMF is reportedly (by Dakar press) investigating the "Segura Affair." Meanwhile, Senegalese in the U.S. have announced a protest gathering at the IMF headquarters in Washington D.C. to voice their indignation with the Senegalese government and the perception of its corruption galvanized by the "Segura Affair," set for October 31.
Monday, September 28, 2009
Slow start for SenIran
The Wall Street Journal today says the joint Senegal-Iran auto venture, SenIran, has fallen far short of it production goals. Last year Dakar decreed the phase out the 25,000-or-so colorful taxi/buses that have been one of Dakar's best known international symbols. They were to be replaced by the shiny new cabs produced by the joint Iranian factory. In today's front-page Journal article, plans to have 2,000 of the SenIran cabs resulted in only 500 on the street... And the $75 millon Theis SenIran factory that opened last year has only produced 20 of the 10,000 cars it had planned to produce this year... Parts, labor and construction delays (the usual) caused the problems according to the Journal's report, which states that sources acknowledge the venture, one of others around the world, has other goals besides profit... The article also mentions that it was Iranians who ran the power lines to Touba recently, including probably those who I met during my Spring, 2008 visit to the Holy City.
Thursday, August 27, 2009
Dakar port gets new cranes
The remodeling of the Dakar port is moving forward. In late August, the installation of several new cranes was finalized. They include two Panamax gantry cranes and Reggian cranes. Two gates to the port were finished also. The improvements come as Dubai World assumed operations of the port in May 2008. Further improvements are planned for the rail and road corridor to Mali.
Tuesday, July 14, 2009
Dakar port improvements touted
Progress on improvements to the Port of Dakar is being made according to its Director General, Bara Sady. Security in particular has improved, he says. Navigation has improved at the entrance, exit and through a functional lighting system. Procedures for access to the port are better controlled. Tariffs and connections with the inland hinterland have been improved, he says. Dakar is a favored port for Mali and other inland areas. The Autonomous Port of Dakar has been modernizing since early 2006 and intends to become "a first-class hub of the maritime routes," according to Mr. Sady.
Monday, July 13, 2009
Positive projections from the IMF
Senegal’s economy will grow about 3.1 percent this year, up from 2.5 percent in 2008, as government management of the economy improves, the International Monetary Fund said.
“Budgetary slippages, which had seriously affected the economy” and put IMF support for Senegal at risk, have been successfully addressed, the Washington-based lender said in an e-mailed statement today. “The government’s unpaid bills have been substantially reduced and far-reaching public financial management reforms launched.”
The IMF expects growth in the west African nation to accelerate to 3.4 percent next year and 4.3 percent in 2011.
Consumer inflation was projected to slow to 3.3 percent this year from 5.8 percent last year, and to 0.8 percent in 2010, as food and fuel price increases slow, the IMF said.
The Wade administration should be credited with helping to effect the fiscal discipline that has got the country straightened out.
“Budgetary slippages, which had seriously affected the economy” and put IMF support for Senegal at risk, have been successfully addressed, the Washington-based lender said in an e-mailed statement today. “The government’s unpaid bills have been substantially reduced and far-reaching public financial management reforms launched.”
The IMF expects growth in the west African nation to accelerate to 3.4 percent next year and 4.3 percent in 2011.
Consumer inflation was projected to slow to 3.3 percent this year from 5.8 percent last year, and to 0.8 percent in 2010, as food and fuel price increases slow, the IMF said.
The Wade administration should be credited with helping to effect the fiscal discipline that has got the country straightened out.
Americafrique?
So which is it? Americafrica? Chinafrica? Francoafrique? France has been the old-school colonial influence over Africa's economy. China has poured billions into its Africa economic stake, with special avarice for its resources. Is America now in the game?
U.S. President Obama's recent visit to Ghana cemented widely held warm feelings toward America held by Africans. Many Africans have long seething resentments toward the French. New found resentments toward the Chinese are growing. Witness recently the backlash of the Mourides to the French television's prejudiced portrayal of Senegalese merchants as akin to black gypsies, worse (to the French), black gypsies with religious faith.
Obama's good will is but a further step in the vigorous march of American presidents to Africa. Clinton's drum performance at the Meridian in Dakar was followed by President Bush's successes against AIDS and malaria, as well as aggressive trade initiatives.
But for all that, America's trade with Africa still pales compared to that of France and China. The United State is making no strong plays for natural resources there. We send some Caterpillar tractors, maybe export a few cars, import some clothes. But that's it.
Nor was Obama's visit a foundation for deeper economic connections. Continued foreign aid perhaps. Continued good will for diplomatic partnership. But why, with all the good will, can't the U.S. turn the Africans into Chevy-driving, Ipod-listening Mac users? Lord knows the Africans would want to. Why can't American oil interests build a refinery in Dakar, or craft mining deals?
U.S. President Obama's recent visit to Ghana cemented widely held warm feelings toward America held by Africans. Many Africans have long seething resentments toward the French. New found resentments toward the Chinese are growing. Witness recently the backlash of the Mourides to the French television's prejudiced portrayal of Senegalese merchants as akin to black gypsies, worse (to the French), black gypsies with religious faith.
Obama's good will is but a further step in the vigorous march of American presidents to Africa. Clinton's drum performance at the Meridian in Dakar was followed by President Bush's successes against AIDS and malaria, as well as aggressive trade initiatives.
But for all that, America's trade with Africa still pales compared to that of France and China. The United State is making no strong plays for natural resources there. We send some Caterpillar tractors, maybe export a few cars, import some clothes. But that's it.
Nor was Obama's visit a foundation for deeper economic connections. Continued foreign aid perhaps. Continued good will for diplomatic partnership. But why, with all the good will, can't the U.S. turn the Africans into Chevy-driving, Ipod-listening Mac users? Lord knows the Africans would want to. Why can't American oil interests build a refinery in Dakar, or craft mining deals?
Friday, July 3, 2009
Iron ore mining setback
ArcelorMittal, the world largest steel producer, has suspended development of its iron ore project in Faleme, Senegal, due to the global economic recession, according to news reports from company sources.
The proposed $2.2 billion (1.6 billion euros) project in the south-east of the country was to start producing iron ore for the steel industry in 2011 and ultimately reach a production capacity estimated at 25 million tonnes per year. The project, with a new port and railway line, would create 10,000 jobs in Senegal.
The proposed $2.2 billion (1.6 billion euros) project in the south-east of the country was to start producing iron ore for the steel industry in 2011 and ultimately reach a production capacity estimated at 25 million tonnes per year. The project, with a new port and railway line, would create 10,000 jobs in Senegal.
Friday, June 19, 2009
IMF boosts aid by $186 million, longer terms
The International Monetary Fund (IMF) boosted financial support for Senegal under the Exogenous Shocks Facility (ESF) by $186 million today and extended the ESF arrangement by six months, to 18 months to help finance the balance-of-payments impact of the global economic crisis. Senegal can draw $50 million immediately.
"Exogenous shocks" are the food prices and other impacts of the high oil prices that buffetted Senegal in the last year. Some questionable government budgeting resulted including failure to pay private contractors for infrastructure. The IMF says those practices have been reformed, but wants to make sure they stay that way.
The IMF says the financial and budget reforms will help gain investment for Senegal while it weathers the international economic slowdown that has started to hit the country.
"Exogenous shocks" are the food prices and other impacts of the high oil prices that buffetted Senegal in the last year. Some questionable government budgeting resulted including failure to pay private contractors for infrastructure. The IMF says those practices have been reformed, but wants to make sure they stay that way.
The IMF says the financial and budget reforms will help gain investment for Senegal while it weathers the international economic slowdown that has started to hit the country.
Friday, June 12, 2009
Chinese knockoffs hurting Senegal's merchants
Flooded with cheap Chinese clothes and other consumer goods, Senegal's merchants say that even quality goods are taking a hit from cheap imitation Chinese products. Chinese goods have been flooding Senegal in recent years, pushing out locally produced products. Chinese merchants have also displaced Senegalese merchants, according to Senegalese shopkeepers.
Now Chinese products are imitating higher quality imports and local craft goods, causing buyers to dispute whether goods are genuine, or refusing to pay higher prices. The market in general is becoming saturated due to the Chinese floods of imports.
Senegalese peddlers, also known for their international presence, are calling for import embargoes and tariffs; others want the Chinese deported. They say that Senegalese manufacture is too fragile and will be crushed by the cheap imported Chinese goods.
Now Chinese products are imitating higher quality imports and local craft goods, causing buyers to dispute whether goods are genuine, or refusing to pay higher prices. The market in general is becoming saturated due to the Chinese floods of imports.
Senegalese peddlers, also known for their international presence, are calling for import embargoes and tariffs; others want the Chinese deported. They say that Senegalese manufacture is too fragile and will be crushed by the cheap imported Chinese goods.
Saturday, May 30, 2009
Air Phoenix for Senegal?
The fate of Air Senegal is still up in the air according to new sources. After the withdrawal of Royal Moroccan from the airline, Karim Wade, the new infrastructure minister, says that a deal has been struck where Royal Moroccan will provide "operational support" while Senegal's government goes it alone.
But despite the optimism expressed by Karim Wade after the deal, the news reports say that major obstacles stand in the way of any liftoff for Air Senegal, including payments for two airplanes and the approval of the new operations by international air regulators.
But despite the optimism expressed by Karim Wade after the deal, the news reports say that major obstacles stand in the way of any liftoff for Air Senegal, including payments for two airplanes and the approval of the new operations by international air regulators.
Friday, May 29, 2009
More roads but less maintenance
Transportation spending in Senegal has increased much in recent years with road projects like the Cornice and toll roads around Dakar. But keeping up roads across Senegal is underfunded by 50 percent, according to a recent meeting of Senegal business school and government leaders.
Transportation is a key economic development infrastructure. Administrative chief of the Directorate of Land Transport, Papa Souleymane Faye, one of the organizers of the conference, fears new road construction comes at the cost of overall system maintenance. Aging roads and bottlenecks are a growing feature.
One wonders whether Senegal has a capital maintenance program for its roads, adopted by most municipalities in the United States. Many American cities and counties have sophisticated computerized road maintenance programs. But regardless of the sophistication, it ultimately takes money to get it done...
Transportation is a key economic development infrastructure. Administrative chief of the Directorate of Land Transport, Papa Souleymane Faye, one of the organizers of the conference, fears new road construction comes at the cost of overall system maintenance. Aging roads and bottlenecks are a growing feature.
One wonders whether Senegal has a capital maintenance program for its roads, adopted by most municipalities in the United States. Many American cities and counties have sophisticated computerized road maintenance programs. But regardless of the sophistication, it ultimately takes money to get it done...
Tuesday, May 26, 2009
Senegal's fiscal discipline paying off
Senegal's government is starting to see some real benefits for the reforms it has made over the last year to its fiscal policies. Now, Standard & Poor's ratings have improved for Senegal's debt rating, now "B+" in the short-term and "B" for long-term notes. The outlook for government notes changed from "negative" from "stable".
According to the rating agency, the revision reflects "improving the management of public finances," such as progress made in establishing procedures for expenditures, more rigorous budget execution and the ban on cash advances. These improvements are added by statutory payment of arrears (3 percent of GDP in 2008) to suppliers and reducing the budget deficit on the basis of a target of 4 percent in 2009 (including grants) against 7 percent in 2008 (including arrears ). These two measures will help to maintain debt at sustainable levels.
Such discipline now will put Senegal in a strong position when the world economy revives.
According to the rating agency, the revision reflects "improving the management of public finances," such as progress made in establishing procedures for expenditures, more rigorous budget execution and the ban on cash advances. These improvements are added by statutory payment of arrears (3 percent of GDP in 2008) to suppliers and reducing the budget deficit on the basis of a target of 4 percent in 2009 (including grants) against 7 percent in 2008 (including arrears ). These two measures will help to maintain debt at sustainable levels.
Such discipline now will put Senegal in a strong position when the world economy revives.
Friday, May 1, 2009
Karim Wade takes critical infrastructure ministry
Karim Wade has been appointed the "go to" guy for infrastructure in the Wade government. With the appointment by President Wade, he and his son appear to have shaken off the defeats of last month's local elections.
The junior Wade takes the title of Minister for Transportation and Infrastructure. The appointment is a natural fit for the front man of Senegal's "Concrete Generation" movement. The eager-beaver apparatchiks of the Generation de concrete have pushed modern world infrastructure in Senegal.
The newly minted minister's top priority is sure to be the flightless Air Senegal, its crumbled partnership with Royal Air Morac threatening to ground the national airline permanently, even as the new Dakar airport gets going.
Karim's new job is arguably the most significant in Senegal government. Karim Wade's success or failure will impact on Senegal's quest to be the capital of West Africa.
The junior Wade takes the title of Minister for Transportation and Infrastructure. The appointment is a natural fit for the front man of Senegal's "Concrete Generation" movement. The eager-beaver apparatchiks of the Generation de concrete have pushed modern world infrastructure in Senegal.
The newly minted minister's top priority is sure to be the flightless Air Senegal, its crumbled partnership with Royal Air Morac threatening to ground the national airline permanently, even as the new Dakar airport gets going.
Karim's new job is arguably the most significant in Senegal government. Karim Wade's success or failure will impact on Senegal's quest to be the capital of West Africa.
Saturday, April 25, 2009
Air Senegal grounded
Air Senegal International (ASI) has stopped operations as a row between the Senegalese state and majority shareholder Royal Air Maroc (RAM) has grounded all remaining flights, the Moroccan airline said on Friday.
RAM, which owns 51 percent of ASI and had provided several aircraft, recalled its last plane from the airline's fleet earlier this month, leaving ASI, one of West Africa's few reliable carriers, with just two operating planes.
RAM criticised Senegal for the country's unilateral decision in 2007 to take majority control of the airline, a move that has not yet materialised. RAM also says Senegal owes the company about 4 million euros.
RAM has taken a "you want it, you can have it" posture lately, adopting an orderly but insistent withdrawal from the company.
RAM, which owns 51 percent of ASI and had provided several aircraft, recalled its last plane from the airline's fleet earlier this month, leaving ASI, one of West Africa's few reliable carriers, with just two operating planes.
RAM criticised Senegal for the country's unilateral decision in 2007 to take majority control of the airline, a move that has not yet materialised. RAM also says Senegal owes the company about 4 million euros.
RAM has taken a "you want it, you can have it" posture lately, adopting an orderly but insistent withdrawal from the company.
Sunday, April 19, 2009
Iran and Senegal agree to expanded ties
Iran continues to expand its economic links with Senegal. A memorandum of understanding was reportedly executed today obliging the Islamic Republic of Iran to cooperate with Senegal in producing auto diesel, undertaking mine exploration, producing machinery and constructing power plants.
Iran has made good on its intentions to expand economic and cultural ties with Senegal. Trade ministers inking todays agreement pointed to the construction of the giant auto manufacturer Iran Khodro's assembly plant in Senegal. The agreement appears to build on that venture.
Iran has made good on its intentions to expand economic and cultural ties with Senegal. Trade ministers inking todays agreement pointed to the construction of the giant auto manufacturer Iran Khodro's assembly plant in Senegal. The agreement appears to build on that venture.
Offshore oil exploration not the first time for Senegal
The recent spike in oil prices has revived interest in exploration off the Senegal's coast. Here's a good overview of past exploration activities:
In the last 48 years, more than 144 hydrocarbon exploration wells have been drilled in Senegalese territory. At least 49 of these drilled offshore, with 23 of these being located in the Casamance Offshore. The other area of interest that has been drilled is onshore in the vicinity of the Cape Vert Peninsula. The rest of the Senegal Basin outside these areas remains under-explored.
In addition, modern analysis indicates that many of the boreholes drilled, particularly those based on seismic information acquired before 1962, were poorly located in prospects and many were limited to exploration of the Tertiary to Senonian intervals.
The upstream oil industry is becoming increasingly important to the Senegalese economy. In 1981, PETROSEN, the national oil company, was created by the government of Senegal and is responsible for all hydrocarbon exploration activities.
During the 1950s petroleum prospecting started and in the 1960s and 1970s a number of small fields were discovered, but found uneconomical not exploited. In the late 1970s, offshore exploration started again and a field of heavy crude oil of 1 billion barrels was discovered. So far only one gas field (Diam Niadio 14) has been discovered. The gas is exported by pipeline to the Societe Nationale d'Electricite for its gas power stations. Current gas reserves are estimated to be 3 billion cubic metres. According to the US Department of Energy, Senegal produced and consumed 1.4 billion barrels of dry gas.
The offshore border area containing the Dome Flore and Gea fields became the subject of dispute between Senegal and Guinea-Bissau. In 1993, the Agence de Gestion et de Cooperation entre la Guinea-Bissau et le Senegal (AGC) was established as a joint commission to oversee oil and gas exploration and fishing in the disputed area between the Senegal and Guinea-Bissau.
In July 2004 Hunt Oil Company, through its wholly owned subsidiary Senegal Hunt Oil Company, signed an agreement with Petrosen (Petroleum Company of Senegal), giving Hunt the exclusive right to carry out petroleum exploration and production operations in Sangomar-Rufisque Offshore Area of Senegal (approximately 3,701,805 square acres).
Energy Africa acquired the St. Louis exploration licence with Petrosen in late 2003. Tullow operates the licence with a 60 percent interest. Dana acquired a 30 percent interest from Tullow in the fourth quarter of 2004. Petrosen holds the remaining 10 percent.
In March 2005 Sterling signed a farm-out deal with Markmore Energy (L) Ltd, a private oil and gas company wholly owned by investor Tan Sri Halim Saad for the Dome Flore offshore petroleum license held by Sterling. The Dome Flore block offshore Senegal and Guinea Bissau, contains an estimated 800 million barrels of heavy oil in place. The discoveries lie in 50 metres of water, approximately 70 km offshore.
In the last 48 years, more than 144 hydrocarbon exploration wells have been drilled in Senegalese territory. At least 49 of these drilled offshore, with 23 of these being located in the Casamance Offshore. The other area of interest that has been drilled is onshore in the vicinity of the Cape Vert Peninsula. The rest of the Senegal Basin outside these areas remains under-explored.
In addition, modern analysis indicates that many of the boreholes drilled, particularly those based on seismic information acquired before 1962, were poorly located in prospects and many were limited to exploration of the Tertiary to Senonian intervals.
The upstream oil industry is becoming increasingly important to the Senegalese economy. In 1981, PETROSEN, the national oil company, was created by the government of Senegal and is responsible for all hydrocarbon exploration activities.
During the 1950s petroleum prospecting started and in the 1960s and 1970s a number of small fields were discovered, but found uneconomical not exploited. In the late 1970s, offshore exploration started again and a field of heavy crude oil of 1 billion barrels was discovered. So far only one gas field (Diam Niadio 14) has been discovered. The gas is exported by pipeline to the Societe Nationale d'Electricite for its gas power stations. Current gas reserves are estimated to be 3 billion cubic metres. According to the US Department of Energy, Senegal produced and consumed 1.4 billion barrels of dry gas.
The offshore border area containing the Dome Flore and Gea fields became the subject of dispute between Senegal and Guinea-Bissau. In 1993, the Agence de Gestion et de Cooperation entre la Guinea-Bissau et le Senegal (AGC) was established as a joint commission to oversee oil and gas exploration and fishing in the disputed area between the Senegal and Guinea-Bissau.
In July 2004 Hunt Oil Company, through its wholly owned subsidiary Senegal Hunt Oil Company, signed an agreement with Petrosen (Petroleum Company of Senegal), giving Hunt the exclusive right to carry out petroleum exploration and production operations in Sangomar-Rufisque Offshore Area of Senegal (approximately 3,701,805 square acres).
Energy Africa acquired the St. Louis exploration licence with Petrosen in late 2003. Tullow operates the licence with a 60 percent interest. Dana acquired a 30 percent interest from Tullow in the fourth quarter of 2004. Petrosen holds the remaining 10 percent.
In March 2005 Sterling signed a farm-out deal with Markmore Energy (L) Ltd, a private oil and gas company wholly owned by investor Tan Sri Halim Saad for the Dome Flore offshore petroleum license held by Sterling. The Dome Flore block offshore Senegal and Guinea Bissau, contains an estimated 800 million barrels of heavy oil in place. The discoveries lie in 50 metres of water, approximately 70 km offshore.
Friday, April 17, 2009
A new Senegal energy source: openness
A unique solution to Senegal's energy dilemma was recommended recently by Alex Segura, the IMF's resident representative. The solution is two part: cash and transparency. And the two go together. Senegal's utilities are stuck in a spot market rut: they buy fuel oil one tanker at a time, in cash, frequently borrowed cash, from who-knows-where... Instead Segura urges transparent bidding. International finance experts have always pushed open bidding in African economies, with little progress. In the energy sector it makes sense, but is no easier than other sectors such as infrastructure. Oil powers Senegal's feeble generation capacity. That's imported, refined oil--especially subject to the world extaction, refining and transportation market, and its very evident vagaries, especially recently... It will take some real arm twisting for Senegal's utility sector (hardly deserving the name) to institute the discipline, and smarts, necessary for a successful open bidding program. But the payoffs would seem great: the consequent tools of hedge and option trading of supplies could create a buffer in hard economic times as these... Segura's recent comments were larded with praise for the progress being made by Senegal's establishment in the area of budget reform and accountability, setting the foundation for sophistication in its energy policies and practices...
Friday, April 10, 2009
IMF: backpayments being squared, but tough times ahead
The International Monetary Fund (IMF) concluded recent reviews of Senegal's finances with (for Senegal) high marks for catching up with payments to private contractors. But the April 2 report stressed tough times ahead as the world economy comes to bear.
“Senegal is beginning to experience the effects of the global economic crisis. Main channels of transmission are declining remittances, commodity prices, external demand, and foreign direct investment," according to a statement by Johannes Mueller, IMF Mission Chief for Senegal. He notes positive signs on the horizon: "Declining fuel and food prices are projected to lower inflation to about 1 percent in 2009 and limit Senegal’s import bill, thereby helping contain the external current account deficit."
Despite budget and accounting reforms, falling tax revenues will require deficit spending to continue infrastructure improvments and private contracting, according to the IMF report.
No mention is made of the recent local elections and whether they would chill President Abdoulaye Wade's promotion of intrastructure and private projects. Recently the president reportedly stated his pleas to God that he be allowed to complete infrastucture such as the coastal highway...
“Senegal is beginning to experience the effects of the global economic crisis. Main channels of transmission are declining remittances, commodity prices, external demand, and foreign direct investment," according to a statement by Johannes Mueller, IMF Mission Chief for Senegal. He notes positive signs on the horizon: "Declining fuel and food prices are projected to lower inflation to about 1 percent in 2009 and limit Senegal’s import bill, thereby helping contain the external current account deficit."
Despite budget and accounting reforms, falling tax revenues will require deficit spending to continue infrastructure improvments and private contracting, according to the IMF report.
No mention is made of the recent local elections and whether they would chill President Abdoulaye Wade's promotion of intrastructure and private projects. Recently the president reportedly stated his pleas to God that he be allowed to complete infrastucture such as the coastal highway...
France gains Senegal's telecommunications
According to news reports, the government of Senegal has sold its interest in the national telecommunications company Sonatel to France Telecom, making it the majority shareholder with 52.2 percent of Sonatel shares.
The government says it makes Sonatel a better value, but its workers don't think so. They've promised to strike.
Senegal will remain the second largest shareholder in Sonatel with 17.28 percent of the capital. Current Sonatel shareholders gain a premium of 32 percent over the stock price as of April 7, 2009. Thus the government gains 200 billion CFA francs (305 million Euros) without cutting Sonatel's budget.
The government says it makes Sonatel a better value, but its workers don't think so. They've promised to strike.
Senegal will remain the second largest shareholder in Sonatel with 17.28 percent of the capital. Current Sonatel shareholders gain a premium of 32 percent over the stock price as of April 7, 2009. Thus the government gains 200 billion CFA francs (305 million Euros) without cutting Sonatel's budget.
Thursday, April 2, 2009
How to do it right: German solar engineering in Casamance
In May 2007, the German Ministry of Economics and Technology (BMWi) offered German companies an opportunity to exchange thoughts and ideas with Senegalese partners and institutions. In addition to establishing contacts there, they were also encouraged to present initial business ideas and to develop them further with their partners.
In October 2008, Schott Solar in co-operation with its partners officially began the operation of a solar emergency power system installed with the village inhabitants for a hospital clinic in Baïla, located in Casamance province in southern Senegal.
The clinic in Baïla has an emergency room, a delivery room, 10 beds, a pharmacy and accommodation for family members. Previously, during power outages (not uncommon in Senegal), the staff had to make do with petroleum lamps and candles and, if there was any extra diesel available, the clinic was sometimes able to run a power generator until they were back on the grid.
In this first project, Schott Solar and SMA joined forces with Kaito Energie AG, which had been developing and investing in business-oriented projects in Casamance for several years.
The local electricity network is often overloaded and can sometimes cut off its service several times a day. A five-kilowatt solar power system was installed to supply the clinic with power when the regular network is down. The power from the solar modules is initially stored in batteries. If there is a power outage, the system switches over to a so-called mini-grid with virtually no interruption to maintain stable power, vital to the clinic.
To guarantee the energy supply, Schott Solar donated photovoltaic modules and inverter company SMA donated a ‘Sunny’ back-up system to the clinic in Baïla.
In addition to the solar modules, Schott Solar also provided the system technology and supported the assembly. The installation was completed by the company and its employees. Meanwhile, Kaito Energie AG took responsibility for project management on location and dealt with the local authorities. The village community built the building extension on which the system was installed.
On the roof of the clinic, 102 Schott Solar modules produce approximately eight kilowatt a year--any surplus is stored in batteries.
The modules were transported by ship via Dakar to the regional harbour in Ziguinchor in Casamance, and then taken overland to Baïla. In Casamance, located on the edge of the topical rainforest, climatic conditions are extreme with a great deal of rain.
Following the dry season from November to June, hot monsoon winds herald the rainy season and humid weather from the south. In order to maintain performance, special double-glazed modules were used, based on stainless steel frames which have stood up in Indonesia and Thailand since the late 1980s.
Schott Solar claims its modules meet standards twice that of the IEC 61215 standard: the modules are subjected to temperatures of +85°C and a humidity of 85 percent. During the so-called temperature change test, they have to hold their own against temperature cycles ranging from -40°C up to +85°C. In addition to the solar modules themselves, the power inverter also plays a major role for the operating efficiency and the performance of a solar energy system.
People living in Baïla were also directly involved in the installation of the system. The village community built the extension on which the employees of the project partners mounted the system in May. Trainees from the neighbouring technical college worked with experts from Germany and helped to install the modules on the roof.
German engineering, always awesome to see...
In October 2008, Schott Solar in co-operation with its partners officially began the operation of a solar emergency power system installed with the village inhabitants for a hospital clinic in Baïla, located in Casamance province in southern Senegal.
The clinic in Baïla has an emergency room, a delivery room, 10 beds, a pharmacy and accommodation for family members. Previously, during power outages (not uncommon in Senegal), the staff had to make do with petroleum lamps and candles and, if there was any extra diesel available, the clinic was sometimes able to run a power generator until they were back on the grid.
In this first project, Schott Solar and SMA joined forces with Kaito Energie AG, which had been developing and investing in business-oriented projects in Casamance for several years.
The local electricity network is often overloaded and can sometimes cut off its service several times a day. A five-kilowatt solar power system was installed to supply the clinic with power when the regular network is down. The power from the solar modules is initially stored in batteries. If there is a power outage, the system switches over to a so-called mini-grid with virtually no interruption to maintain stable power, vital to the clinic.
To guarantee the energy supply, Schott Solar donated photovoltaic modules and inverter company SMA donated a ‘Sunny’ back-up system to the clinic in Baïla.
In addition to the solar modules, Schott Solar also provided the system technology and supported the assembly. The installation was completed by the company and its employees. Meanwhile, Kaito Energie AG took responsibility for project management on location and dealt with the local authorities. The village community built the building extension on which the system was installed.
On the roof of the clinic, 102 Schott Solar modules produce approximately eight kilowatt a year--any surplus is stored in batteries.
The modules were transported by ship via Dakar to the regional harbour in Ziguinchor in Casamance, and then taken overland to Baïla. In Casamance, located on the edge of the topical rainforest, climatic conditions are extreme with a great deal of rain.
Following the dry season from November to June, hot monsoon winds herald the rainy season and humid weather from the south. In order to maintain performance, special double-glazed modules were used, based on stainless steel frames which have stood up in Indonesia and Thailand since the late 1980s.
Schott Solar claims its modules meet standards twice that of the IEC 61215 standard: the modules are subjected to temperatures of +85°C and a humidity of 85 percent. During the so-called temperature change test, they have to hold their own against temperature cycles ranging from -40°C up to +85°C. In addition to the solar modules themselves, the power inverter also plays a major role for the operating efficiency and the performance of a solar energy system.
People living in Baïla were also directly involved in the installation of the system. The village community built the extension on which the employees of the project partners mounted the system in May. Trainees from the neighbouring technical college worked with experts from Germany and helped to install the modules on the roof.
German engineering, always awesome to see...
Friday, March 27, 2009
U.S. provides Senegal food assistance
The U.S. Agency for International Development's (USAID) Office of U.S. Foreign Disaster Assistance (OFDA) is providing more than $3.7 million in assistance to lower rates of malnutrition and increase food security of families in Senegal.
Of this $3.7 million, USAID is providing $2.7 million to improve community-based nutrition efforts and agriculture production in the regions of Ziguinchor, Sedhiou and Kolda in Senegal. The program, implemented by USAID partners Catholic Relief Services and Christian Children's Fund, will provide community-based nutrition programs for malnourished children; build community awareness for the importance of good nutrition and how to prevent malnutrition; educate farmers on the benefits of improved seed varieties; organize seed fairs that will make improved seed varieties available; and provide microloans to community-based groups.
Of this $3.7 million, USAID is providing $2.7 million to improve community-based nutrition efforts and agriculture production in the regions of Ziguinchor, Sedhiou and Kolda in Senegal. The program, implemented by USAID partners Catholic Relief Services and Christian Children's Fund, will provide community-based nutrition programs for malnourished children; build community awareness for the importance of good nutrition and how to prevent malnutrition; educate farmers on the benefits of improved seed varieties; organize seed fairs that will make improved seed varieties available; and provide microloans to community-based groups.
Wednesday, March 25, 2009
Shell advances Senegal offshore oil exploration
First Australian Resources (FAR) has signed an agreement with Shell Exploration Company to conduct petroleum exploration of Sangomar Offshore, Rufisque Offshore and Sangomar Deep Offshore blocks off the coast of Senegal,where a number of drilling prospects have already been identified by FAR and its Senegalese partner Petrosen.
The objective of the program is designed to enable Shell to determine whether or not to exercise an option to acquire greater interest in the block and enter the second renewal period that includes a well commitment.
Shell will fund a controlled source electro magnetic (CSEM) data acquisition and geophysical evaluation programme over part of the licence area where a number of drilling prospects have already been identified by FAR. The work gets underway soon.
The objective of the program is designed to enable Shell to determine whether or not to exercise an option to acquire greater interest in the block and enter the second renewal period that includes a well commitment.
Shell will fund a controlled source electro magnetic (CSEM) data acquisition and geophysical evaluation programme over part of the licence area where a number of drilling prospects have already been identified by FAR. The work gets underway soon.
A more industrious Senegal of late
Senegal produced more finished goods last month over a year ago, according to a recent government report. Construction material production grew, but also textiles and leather.
The National Agency of Statistics and Demography (ANSD) index of industrial production was 105.3 after 101.5 in December 2008, an increase of 3.8 percent, largely upon a surge of industrial production of textiles and leather.
The agency said that production of textiles and leather grew considerably in January2009, a result attributable to an upturn in cotton ginning, in conjunction with the production cycle of the sub-sector.
The National Agency of Statistics and Demography (ANSD) index of industrial production was 105.3 after 101.5 in December 2008, an increase of 3.8 percent, largely upon a surge of industrial production of textiles and leather.
The agency said that production of textiles and leather grew considerably in January2009, a result attributable to an upturn in cotton ginning, in conjunction with the production cycle of the sub-sector.
Sunday, March 22, 2009
Post-election: Whither Wades' world view?
In America the saying is: "all politics are local." But Senegal's elections today, should early results bear out, could also alter the international connections fostered by the damaged President Abdoulaye Wade.
President Wade invested greatly in recent years to make Senegal a player on the world scene, fostering the image of Senegal as the Athens of West Africa, gateway to the region, and a favorite investment of international development. Vis the shine the president put to Dakar for the 2007 conference of the Organization of Islamic States, the port and coastal highway developments, the image of rational African governance as coups and assassinations toppled nearby African governments.
Were today's local election result--largely a drubbing for the Wade SOPI coalition--a repudiation of the president's international marketing efforts? Opposition criticisms focused more on Wade's heavy-handed political tactics, such as the impeachment of legislative leader Macky Sall. His intimidation of journalists could only bring backlash from that estate. (The administration's barely disguised election-day threat to shut down broadcast stations doesn't help there.) Graft, corruption and a bad economy are always a receipe for polling booth rejection.
But other than affront taken in some quarters over the austentious roads and statutes pressed by the Wade regime, the organized opposition hasn't made an issue of Wade's internationalism.
Let's hope that any changing of Senegal's poltiical guard doesn't reverse the world ties that Wade and the country have forged. Senegal's people will benefit through tourism, economic guidance (yes, the IMF does some good), promotion of exports and other international exchange.
In the end, today's election may have little impact on the country's growing world ties. Once again, Senegal's greatest natural resource was displayed by democratic elections with a decent turnout. A people and a government that handle change peaceably, fairly and openly will always find friends and partners around the world.
President Wade invested greatly in recent years to make Senegal a player on the world scene, fostering the image of Senegal as the Athens of West Africa, gateway to the region, and a favorite investment of international development. Vis the shine the president put to Dakar for the 2007 conference of the Organization of Islamic States, the port and coastal highway developments, the image of rational African governance as coups and assassinations toppled nearby African governments.
Were today's local election result--largely a drubbing for the Wade SOPI coalition--a repudiation of the president's international marketing efforts? Opposition criticisms focused more on Wade's heavy-handed political tactics, such as the impeachment of legislative leader Macky Sall. His intimidation of journalists could only bring backlash from that estate. (The administration's barely disguised election-day threat to shut down broadcast stations doesn't help there.) Graft, corruption and a bad economy are always a receipe for polling booth rejection.
But other than affront taken in some quarters over the austentious roads and statutes pressed by the Wade regime, the organized opposition hasn't made an issue of Wade's internationalism.
Let's hope that any changing of Senegal's poltiical guard doesn't reverse the world ties that Wade and the country have forged. Senegal's people will benefit through tourism, economic guidance (yes, the IMF does some good), promotion of exports and other international exchange.
In the end, today's election may have little impact on the country's growing world ties. Once again, Senegal's greatest natural resource was displayed by democratic elections with a decent turnout. A people and a government that handle change peaceably, fairly and openly will always find friends and partners around the world.
Saturday, March 21, 2009
Election eve: the Wades "double down."
Now it's a sporting game. Thanks to the Wade father-son team, tomorrow's local elections in Senegal take on a transcendent importance. After spending the last two weeks on separate electioneering tours of the county, President Abdoulaye Wade and son, Karim, have turned the election into a referendum for their party, their coalition and their own political futures. They have bet, double-down, on a popular endorsement to obtain a legitimate mandate.
President Wade's full ahead infrastructure agenda is given a populist gestalt by his son's "Concrete Generation" movement. They have met their political opponents head-on during the last weeks. The president toured the high road, focused on economic issues. Karim hit the ground with "mobilizations" of the Génération du Concret, clad in blue jeans and baseball cap, pushing support for the SOPI coalition forged by the Wades' PDS party.
The stops on their journeys met with a tough, organized opposition, deriding the perceived autocratic tendancies of the Wades. The president was greeted at times by rocks and jeers from those in opposition red armbands, and chased out of some parts of the country according to reports.
Various media have called the election crutial for the political future of Karim Wade, seen as promoted to succeed his father.
Controversy regarding the legitimacy of the elections was heightened by the disqualifation of SOPI's slate in the Djiorbel area and subsequent court challenges to that process. Opponents will be keenly on the lookout for election fraud, having sat out the last local election because of its perception.
President Wade's full ahead infrastructure agenda is given a populist gestalt by his son's "Concrete Generation" movement. They have met their political opponents head-on during the last weeks. The president toured the high road, focused on economic issues. Karim hit the ground with "mobilizations" of the Génération du Concret, clad in blue jeans and baseball cap, pushing support for the SOPI coalition forged by the Wades' PDS party.
The stops on their journeys met with a tough, organized opposition, deriding the perceived autocratic tendancies of the Wades. The president was greeted at times by rocks and jeers from those in opposition red armbands, and chased out of some parts of the country according to reports.
Various media have called the election crutial for the political future of Karim Wade, seen as promoted to succeed his father.
Controversy regarding the legitimacy of the elections was heightened by the disqualifation of SOPI's slate in the Djiorbel area and subsequent court challenges to that process. Opponents will be keenly on the lookout for election fraud, having sat out the last local election because of its perception.
Thursday, March 12, 2009
Tourism prospects dim near term.
Senegal's tourist industry is suffering even as West Africa has worked so hard to build its visitor industry, according to a pessimistic BBC World News report.
According to BBC, bad press in French newspapers over a reported increase in child prostitution at the country's most popular beach resort, the Petit Cote, has not helped but the real hammer blow has been the global recession.
Luxury holidays are one of the first things cut when money is tight and, though the decline this year has been gentle, the figures for next year look dire.
Salif Badiane is the executive director of Africa Connection Tours says: "At this time of the year we should have had orders for 30 to 35 percent of our turnover. Now we are under 5 percent of our turnover and that's why we are so concerned."
Looking at the positive, however, we would note that the hard work of building service infrastructure--everything from good roads to reliable internet-- and buffing up the outstanding natural attractions of Senegal will create long-term opportunities, as the economy revives and news scandals fade...
According to BBC, bad press in French newspapers over a reported increase in child prostitution at the country's most popular beach resort, the Petit Cote, has not helped but the real hammer blow has been the global recession.
Luxury holidays are one of the first things cut when money is tight and, though the decline this year has been gentle, the figures for next year look dire.
Salif Badiane is the executive director of Africa Connection Tours says: "At this time of the year we should have had orders for 30 to 35 percent of our turnover. Now we are under 5 percent of our turnover and that's why we are so concerned."
Looking at the positive, however, we would note that the hard work of building service infrastructure--everything from good roads to reliable internet-- and buffing up the outstanding natural attractions of Senegal will create long-term opportunities, as the economy revives and news scandals fade...
How bad is it? Senegal's building blues.
The world financial crunch hit Senegal's building industry hard in January. Senegal's Directorate of Forecasting and Economic Studies (Dpee), in its latest monthly economic note reveals that "the level of buildings and public works, half of the companies interviewed leaders discussed the issue of collection of receivables that still weighed on their activities in January 2009. The same source believes that acute financing difficulties are felt by 33.3 percent of respondents. The Dpee also reveals that 16.7 percent of managers say the business environment has deteriorated due to the lengthening of procedures for public procurement and the lack of markets, resulting in a decrease of profitability.
For services, the Dpee notes that the business environment remains a major concern for 46.2 percent of business leaders surveyed. According to them, the same source continues, "the length of procedures for procurement and land issues have been detrimental to businesses."
The survey concludes that many Senegalese business owners are being hit by cash flow problems that would continue through February.
For services, the Dpee notes that the business environment remains a major concern for 46.2 percent of business leaders surveyed. According to them, the same source continues, "the length of procedures for procurement and land issues have been detrimental to businesses."
The survey concludes that many Senegalese business owners are being hit by cash flow problems that would continue through February.
Sunday, March 8, 2009
The Economist's mixed view of today's Senegal
A recent Economist article gives a snapshot of Senegal's political scene with a focus on President Wade... Objectively Senegal is doing pretty good, with credit going to President Wade for positive economic signs such as the Corniche expressway from the airport to downtown and decent communications infrastructure, according to the February 26 article, datelined Dakar without byline.
But the article points to troubling signs from Senegal's political society, much of which it also attributes to the President. Last year's food riots (see our previous posts), and allegations of corruption have generated "rage and frustration" among many Senegalese, according to the article.
The Economist's short article injects some heavy hyperbole: the teaser cites "authoritarian" President Wade and the article's subhead states ominously that: "President Wade will ignore domestic discontent at his peril." This should hardly be news to any politician.
And the article's "taxi-driver" level of analysis misses relevant developments: fortuitous rains and consequent good harvests combined with easing import costs (lower fuel costs) and pending IMF aid will help the country's economic discontent.
Better to sort out the political grumbling after the local elections on March 22. Institutional politics take a backseat in Senegal where personal political ties are more pronounced. That level of political dynamic is beyond the grasp of most observers (including us). And local political elections, as these upcoming, are even more parochial. The losers and disaffected factions from the local elections will make their views known sooner or later. It will take a while to sort out. We intend to be there to get a first hand sense...
But the article points to troubling signs from Senegal's political society, much of which it also attributes to the President. Last year's food riots (see our previous posts), and allegations of corruption have generated "rage and frustration" among many Senegalese, according to the article.
The Economist's short article injects some heavy hyperbole: the teaser cites "authoritarian" President Wade and the article's subhead states ominously that: "President Wade will ignore domestic discontent at his peril." This should hardly be news to any politician.
And the article's "taxi-driver" level of analysis misses relevant developments: fortuitous rains and consequent good harvests combined with easing import costs (lower fuel costs) and pending IMF aid will help the country's economic discontent.
Better to sort out the political grumbling after the local elections on March 22. Institutional politics take a backseat in Senegal where personal political ties are more pronounced. That level of political dynamic is beyond the grasp of most observers (including us). And local political elections, as these upcoming, are even more parochial. The losers and disaffected factions from the local elections will make their views known sooner or later. It will take a while to sort out. We intend to be there to get a first hand sense...
Saturday, February 21, 2009
Garbage strike hits Dakar
Garbage workers--les ramasseurs d'ordure--in Dakar are on strike, and according to one news source, facing arrests. The workers, employed by the community association of CADAKAR and the French multinational firm Viola, want more pay and better health conditions. Apparently tuberculosis is widespread among the workers and the vaccinations that they receive have not been effective... We noted last year that the demise of the large-scale AMA waste management contract may have been doomed by labor unrest. Since the Italian AMA left town, the French Viola has moved in, at least to the central parts of Dakar. Now apparently it is also running into trouble... Do the garbage workers have a valid grievance? We're told that pay runs only around a couple (U.S.) dollars a day. Of course,the work is hard around the world, good pay or bad... Our sources also tell us that the Dakar labor force is subject to manipulation by political power brokers. The current strike is organized by Le Front unitaire des syndicats du nettoiement. They promise that garbage will pile in the streets if their demands are not met. They want to meet with President Wade to voice their complaints... Senegal's garbage problems have many causes...
Wednesday, February 18, 2009
Senegal economy dropped big in 2008; better this year?
The growth of gross domestic product (GDP) of Senegal in 2008 registered a sharp drop, from 4.7 percent in 2007 to only 2.5 percent, according to the Senegal representative of the International Monetary Fund (IMF), Alex Segura. (Who recently had his Dakar apartment burlarized, by the way.)
"Between 1995 and 2005, Senegal has had a growth rate around 5 percent. In 2007 it was 4.7 percent," Segura told Radio France Internationale (RFI).
But "the effect of domestic debt on economic activity was very negative and led to a slowdown in activity in 2008 with a growth rate estimated at 2.5 percent, which is a sharp drop," he said. In 2006, the GDP of Senegal had already been a bad year with 2.4 percent.
In 2008, the secondary sector was severely affected, providers of the state have not been paid on time. Many companies were forced to reduce their activities," he added. According to Segura, the growth of non-agricultural GDP was only 1.5 percent in 2008.
For 2009, the IMF's estimated growth for Senegal is 4 percent.
Regarding the heavy domestic debt, "a third had been paid a week ago. The stock of 225 billion CFA francs (342 million) registered with the authorities, there were still around 150 billion CFA francs," Segura said.
"The Minister of Finance (Abdoulaye Diop) is working to find resources to pay the rest. In the coming weeks, if not all, much will be paid," said the IMF representative.
Good credit means paying your debts. The slow pay policy of Senegal's central government could continue to drag down the economy.
"Between 1995 and 2005, Senegal has had a growth rate around 5 percent. In 2007 it was 4.7 percent," Segura told Radio France Internationale (RFI).
But "the effect of domestic debt on economic activity was very negative and led to a slowdown in activity in 2008 with a growth rate estimated at 2.5 percent, which is a sharp drop," he said. In 2006, the GDP of Senegal had already been a bad year with 2.4 percent.
In 2008, the secondary sector was severely affected, providers of the state have not been paid on time. Many companies were forced to reduce their activities," he added. According to Segura, the growth of non-agricultural GDP was only 1.5 percent in 2008.
For 2009, the IMF's estimated growth for Senegal is 4 percent.
Regarding the heavy domestic debt, "a third had been paid a week ago. The stock of 225 billion CFA francs (342 million) registered with the authorities, there were still around 150 billion CFA francs," Segura said.
"The Minister of Finance (Abdoulaye Diop) is working to find resources to pay the rest. In the coming weeks, if not all, much will be paid," said the IMF representative.
Good credit means paying your debts. The slow pay policy of Senegal's central government could continue to drag down the economy.
Saturday, February 14, 2009
China and Senegal: sweethearts hook up
They've known each other for about three years. "Mais c’est le grand amour" between China and Senegal. Thus on Saint Valentine's Day it is appropriate that the president of the Republic of China, Hu Jintao, rendezvoused with Abdoulaye Wade, the president of Senegal. According to the L'Observateur the visit marked the growing relationship between the two since Senegal recognized communist China only three years ago. China suspended diplomatic relations with Senegal in 1996 when Senegal had the audacity to formally recognize the democratic Chinese government of Taiwan. Then in 2005, under Wade, Senegal switched to recognizing the communist regime over the democratic, furthering the communists' efforts to freeze the democratic Chinese out of international, and United Nations, recognition... Now the relationship has flowered into "a great love" according to the news reports of Hu's Valentine's Day visit to Dakar... That great love was testified according to sources from both countries by the extensive couplings expected in areas such as the development of Senegal's airlines and other transportation systems, as well as exploitation of hard-to-develop oil reserves in Casamance... The Chinese are already involved in major infrastructure projects in Senegal, particularly in Touba, as we have posted here often. The oil exploitation move is interesting, but not surprising considering China's clear program of developing its own oil sources... Will this "great love" last? One wonders, considering the cultural differences of the pair, especially the religious. Senegal is a land of great faith and the Muslim morality of its people is one of its greatest strengths. China is atheist. One wonders if the relationship is really just one of convenience, or even meretricious...
Wednesday, January 28, 2009
Iran to open Dakar trade center
Iran's presence in Senegal is growing, following on the SenIran plant. This in Tehran Times:
"SHIRAZ – The governor general of Iran’s Fars Province, Mohammadreza Rezazadeh and Senegalese Commerce Minister Mamadou Diop signed a memorandum of understanding on late Monday in which Iran agreed to build a trade center in Dakar.
"According to Mehr News Agency, Rezazadeh called Senegal an entrance gate to Africa’s markets.
"He added that during his last visit to Senegal, Shiraz’s private sector successfully formed a trade consortium in the African country that would help promote trade between Senegal and the Iranian province.
"Diop welcomed the promotion of bilateral trade ties, saying that Senegal lacks modern industries and is in need of the latest technology."
"SHIRAZ – The governor general of Iran’s Fars Province, Mohammadreza Rezazadeh and Senegalese Commerce Minister Mamadou Diop signed a memorandum of understanding on late Monday in which Iran agreed to build a trade center in Dakar.
"According to Mehr News Agency, Rezazadeh called Senegal an entrance gate to Africa’s markets.
"He added that during his last visit to Senegal, Shiraz’s private sector successfully formed a trade consortium in the African country that would help promote trade between Senegal and the Iranian province.
"Diop welcomed the promotion of bilateral trade ties, saying that Senegal lacks modern industries and is in need of the latest technology."
Wednesday, January 14, 2009
Tough love: IMF spanks Dakar budgeting but promises "exogenous shocks" relief
In a report issued yesterday, the International Monetary Fund revealed much about Senegal's fiscal problems over the last year. But, after hard work over the last six months or so, the IMF concludes that Senegal has tackled "extrabudgetary expendi-tures" and nonpayment of its bills, so much so that the IMF approved relief from the IMF's "Exogenous Shocks Fund." Indeed "exogenous shocks"-- the high oil prices and food shortages-- were evidently a big reason for the government's "off-budget" spending, to the detriment of contractors, such as those in Touba that we have posted about before.
The actual report is titled:
"Senegal: Second Review Under the Policy Support Instrument, Request for a Twelve-Month Arrangement Under the Exogenous Shocks Facility, and Request for Waivers and Modification of Assessment Criteria—Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Senegal" and dated January 2009.
Nestled in the economists' jargon are many revelations of what has been happening with Senegal's budget. We'll try to post further, but meanwhile here is one of the conditions the IMF is putting on "exogenous shock" relief, pertaining to an audit of the government's actual indebtedness to its private contractors:
“No payments will be made to the private sector for any extrabudgetary expenditure before the audit has established the nature of claims and specified the goods and services that were provided and their unit cost. To prevent a recurrence of such spending, the government will impose sanctions on employees found to be at fault and apply a discount factor to the claims of private firms that agreed to provide goods or services on unlawful terms. The government will pay claims recognized on the basis of the audit only after authorization by a budget law providing for simultaneous reductions of appropriations for other expenditure items.” (IMF report, page 46, item 26.)
In other words: contractors who do work on the promise of money that hasn't been legally authorized will take their chances.
The actual report is titled:
"Senegal: Second Review Under the Policy Support Instrument, Request for a Twelve-Month Arrangement Under the Exogenous Shocks Facility, and Request for Waivers and Modification of Assessment Criteria—Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Senegal" and dated January 2009.
Nestled in the economists' jargon are many revelations of what has been happening with Senegal's budget. We'll try to post further, but meanwhile here is one of the conditions the IMF is putting on "exogenous shock" relief, pertaining to an audit of the government's actual indebtedness to its private contractors:
“No payments will be made to the private sector for any extrabudgetary expenditure before the audit has established the nature of claims and specified the goods and services that were provided and their unit cost. To prevent a recurrence of such spending, the government will impose sanctions on employees found to be at fault and apply a discount factor to the claims of private firms that agreed to provide goods or services on unlawful terms. The government will pay claims recognized on the basis of the audit only after authorization by a budget law providing for simultaneous reductions of appropriations for other expenditure items.” (IMF report, page 46, item 26.)
In other words: contractors who do work on the promise of money that hasn't been legally authorized will take their chances.
Thursday, January 1, 2009
President Wade: "Happy economic new year!!"
Senegal's President Abdoulaye Wade used his New Year's Eve message to the county to highlight bold economic initiatives out of the daunting climate of the last year. Noting the "off budget" expenditures that the World Bank found fault with, President Wade still claimed that Senegal was the World Bank's highest rated economy.
The president pointed to the launching of Air Teranga, a Senegalese airline, new universities at St. Louis and Kedougou, and the regional port facilities with free market zones and surface connections to Mali and elsewhere in the region. Other infrastructure lurches fitfully ahead at the turn of the year. "If I were to list these projects, it would take much time, I gave instructions to ministers to publish a table with a list of infrastructure to be carried out in 2009" he said. Of course, the World Bank in its requirements to put Senegal back on its approved list required that the country list all such major projects--necessary to get a grip on the off-budget spending and commitments...
It was a detailed speech with a certain Senegalese optimism throughout. The president didn't shy from most of the nation's problems: high gas prices, energy outages, food insecurity. But he was able to point to activities to deal with the problems, especially in the area of agriculture. Fortuitous good harvests help, too. But so do tractors from India and increasing sophistication in the country's animal husbandry... Recent riots in the hinterlands were largely ignored however...
The president pointed to the launching of Air Teranga, a Senegalese airline, new universities at St. Louis and Kedougou, and the regional port facilities with free market zones and surface connections to Mali and elsewhere in the region. Other infrastructure lurches fitfully ahead at the turn of the year. "If I were to list these projects, it would take much time, I gave instructions to ministers to publish a table with a list of infrastructure to be carried out in 2009" he said. Of course, the World Bank in its requirements to put Senegal back on its approved list required that the country list all such major projects--necessary to get a grip on the off-budget spending and commitments...
It was a detailed speech with a certain Senegalese optimism throughout. The president didn't shy from most of the nation's problems: high gas prices, energy outages, food insecurity. But he was able to point to activities to deal with the problems, especially in the area of agriculture. Fortuitous good harvests help, too. But so do tractors from India and increasing sophistication in the country's animal husbandry... Recent riots in the hinterlands were largely ignored however...
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