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.

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.

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.

No wonder the Chinese aren't getting paid

The Khalif was in Dakar recently wondering where all the money from Touba disappeared to. Chinese contractors aren't going to get paid if revenues disappear after being sent to Dakar and the President Wade's central government. So now there is this revelation, from today on Independent Online:

"Dakar - Senegalese President Abdoulaye Wade has sacked Budget Minister Ibrahima Sarr for allowing government departments to overspend by 109-billion CFA francs ($252-million), a Finance Ministry official said late on Friday.

Wade sacked a quarter of his ministers last year in a bid to cut costs in the face of a ballooning food import bill, but has been criticised by opponents for funding prestige projects such as a planned 50-metre bronze "African Renaissance" statue.

The octogenarian president signed a decree sacking Sarr late on Thursday.

The decree gave no reason for Sarr's sacking, which came just hours after Wade met resident International Monetary Fund representative Alex Segura. Details of their discussions were not made public."

A busy day of business

Monday, April 14, 2008
Started with coffee in the shop downstairs at the President. Had the luck to be invited to sit with Heinz Leuenberger, director of the environmental management branch of the United Nations Industrial Development Organization, based now in Vienna. We had, for me, a very fascinating discussion of international developments, from the changes in Vienna since the opening of East Europe (and the amazing speed with which it has reassumed its role as a cultural capital—Hapsburgs redux), to the looming clash between Russia and China over Eastern Russia, where energy resources, space and cultural affinities may be too great for China to resist. Heinz is here for the big renewable energy conference being held at the hotel all this week…

Mustafa, our driver, was there to take me just as I finished coffee. I made the mistake of leaving my jacket which made Mamemor very unhappy with me, because we were going to meet bankers with some other prospective Senegalese associates. Specifically we met with the charming Oumy Bar Diouf, a “chef d’agence” of Ecobank. The bank, active throughout West Africa, is very interested in expanding its portfolio in the works that we are planning. I believe that I effectively conveyed the applicable principles of non-recourse project financing and available American guarantees. I think she was jazzed. We discussed their loan approval process and possible strategic alliance; I promised to get back to speak with her after doing my informal field analysis and before returning home… We then visited the factory of our associate Mr. Ndiaye, near the oil refinery. I was somewhat disturbed by the lack of worker safety assurance. Mamemor and I later talked at length about how to assure improvements in that aspect for our projects…

Afterwards we met with M. Libasse Niang at his bureau to prepare for our meeting with the minister of agricultural development downtown. The government has an aggressive policy to expand agriculture, recognizing the opportunity to relieve urban overcrowding and promote the economy and welfare of the people at the same time. The downtown this afternoon was busy and active, but we had to cool our heels for a good couple hours before the minister and two of his staff could see us. The minister himself had to beg off early for a meeting with an important Saudi… We all agreed that in the end the meeting was productive; the staff people promising full support for the Cap International project. But it took them a while to understand that this was a private project (which they say they never see) which would ultimately get private, albeit guaranteed, financing—not a handout, not a “gift” from the Saudis or any others, rather a plan to put agriculture in place. Fortunately we had the redoubtable M. Libasse to convey our plans. I have seen many a smooth lobbyist in my day—they are born not made: an engineering contractor by training, M. Libasse is a born lobbyist…

After dropping everybody back at M. Libasse’s bureau, Mamemor and I headed back toward the hotel. We stopped on the way to the restaurant we had been to on Saturday for breakfast; they wouldn’t let Mamemor bring in his own bottled water, so he insisting on leaving. On the way out there were soldiers along the road by the car and the road, usually crowded, was suddenly deserted. Mamemor called it: “the President is probably coming.” And indeed he did with motorcycle cops, sirens, SUVs and limos screaming by. Maybe going to the airport I said. Maybe the President was going to the President hotel, said Mamemor and again he called it exactly. By the time we got to the hotel they were all there, with the presidential guard. I got myself in a picture with one of them—very good uniforms. President Wade ducked out very shortly before we could see him, but Mamemor spotted Dr. Cheikh Tidiane Gadio, the minister of foreign affairs (our Secretary of State). He is very important—Mamemor and I had just been speaking on the way to the hotel of the Senegalese government’s growing importance on the world stage, as not just the broker of West African development (witness the assumption of the trial of the ex-Congo president), but even in matters as paramount as Iranian-American relations (vis President Wade’s meeting with Ahmadinejad this weekend. That said, Dr. Gadio was very accessible and friendly; he had studied in America and spoke English fluently, and as clear evidence of his civility—he let me have a picture with him. Afterwards with Mamemor, I found the restaurant down by the waterfront that I didn’t know about—incredible setting, pricey but worth-it buffet. In the elevator up to the room, I saw Heinz again; he says the President and Senegalese top officials will be speaking at the conference this week… All-in-all a fantastic day and productive day…