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Senegal
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Situation and Cooperation
Almost two thirds of Senegal's population lives on less than two dollars a day; some 20 per cent of the population is undernourished. Incomes are distributed very unequally, with poverty especially pronounced in the rural areas. The 2009 Human Development Index (HDI) ranks the Republic of Senegal 166th out of 182 countries. In 2001 it was classified by the United Nations as a least developed country (LDC).
Senegal's economy was able to achieve growth rates of between four and five per cent over many years. Since 2006, however, growth has not been sufficient to continue to reduce poverty in the country. The international financial crisis has made the situation since 2008 even more acute.
Many barriers have still to be overcome if private investment is to be encouraged These include an antiquated infrastructure – especially in the areas of transport and energy – along with a lack of transparency in decision making, an unappealing system of taxation, outdated land rights and complex conditions imposed by the authorities. In its report 'Doing Business 2009' the World Bank counts Senegal among the ten countries in the world most eager to implement reforms. Its business climate, however, is assessed as poor: Senegal is ranked 149th out of 181 economies as an investment destination.
More than 70 per cent of the economically active population work in agriculture. However, the productivity of the country's agricultural sector is very low. The main problems are poor soil quality and irregular rainfall along with overgrazing and deforestation, all of which bring about advancing desertification. Although the coastal waters are rich in fish, they suffer from overfishing. Because agriculture can no longer support the population, many people are migrating to urban areas. This is causing major problems in the cities, especially in terms of drinking water supply, sanitation and solid waste management. Social conflicts are also worsening as urban labour markets are unable to absorb the incoming population. Young people in particular are affected by the high level of unemployment.
High population growth, poor health care and the low level of education among the populace – the rate of illiteracy is around 60 per cent – combined with corruption all constrain Senegal's development prospects. Tourism is a major foreign exchange earner: in 2007 some 800,000 tourists visited the country. However, the poor infrastructure along with administrative obstacles hampers expansion in this sector.
The situation of women in Senegal is largely determined by traditional ways of life. In some ethnic groups, female genital mutilation continues to be widespread.
One part of Senegal – the Casamance region – is largely cut off from the rest of the country's national territory geographically, as well as being culturally distinct. For more than 25 years the region has been subject to repeated armed conflict as various rebel groups struggle for greater regional autonomy there. More than 800,000 people have been affected by the conflict so far. Tens of thousands have become refugees. Landmines repeatedly claim victims and force farmers to give up agricultural land. The infrastructure is collapsing and economic exchange is severely hampered. Casamance has major natural resources and therefore the greatest potential for economic development in the country. The conflict prevents this potential from being tapped.
Development potential
Senegal offers stable political conditions. Since the country's independence in 1960 it has enjoyed uninterrupted civilian rule and has a written constitution in line with the rule of law. Basic democratic freedoms, such as freedom of expression and a free press, are generally respected; Senegal's economic order is based on the free market. The country's growth industries include building and construction, telecommunications, forestry, tourism, and fruit and vegetable growing for export.
From the mid-1990s onwards, this previously strictly centralised nation transferred key powers to elected local authorities. At present, however, these administrative entities are still having problems fulfilling their responsibilities effectively. Among other things, they lack the relevant experience and do not have adequate financial resources.
The government is considered to be pro-reform and pro-development.
Priority areas of German cooperation with Senegal
Cooperation with Senegal aims to support implementation of the government's Poverty Reduction Strategy Paper (Document de Stratégie pour la Croissance et la Réduction de la Pauvreté, DSRP). Government negotiations between Germany and Senegal were last held in September 2009, when the latter was pledged funds of 57 million euros for the period 2009 to 2011, 41 million euros of which are for Financial and 16 million euros for Technical Cooperation. Germany is one of Senegal's biggest bilateral donors. The priority areas of cooperation are:
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Sustainable economic development
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Support for decentralisation and local development,
with particular attention to peace-building in Casamance -
Renewable energies and energy efficiency.
Projects and programmes in the spheres of combating HIV/AIDS and elementary education are also being supported.
Sustainable economic development
An estimated 80 per cent of working people in Senegal are employed in the informal sector. The number of very small and small enterprises is growing rapidly, as many poor people are making themselves self-employed. However, these individual companies are not in a position to grow or to compete effectively: they lack the resources to purchase machinery, for example, and to employ staff. The country's large business banks do not offer the poor sections of the population appropriate financial services. The situation is particularly difficult for young people: there are neither any established training curricula for them nor sufficient jobs.
Since small and medium-sized enterprises (SMEs) constitute a considerable potential for the economic development of the country, Germany will be focusing in future on improving the institutional, administrative and legal setting for SMEs. At the heart of Germany's commitment is the development of the financial system. First, support is being given to establishing new micro-finance institutions – including, for the first time, an institution geared specifically towards the rural population. Second, existing micro-finance institutions are being assisted in expanding their range of services and including medium and long-term loans in their provision to small enterprises.
Support for decentralisation and local development,
with particular attention to peace-building in Casamance
Decentralisation is one of the priory areas of Senegalese government policy. The legal foundations for the division of labour between the central government and the local authorities have existed since 1996. However, important steps towards reform have yet to be taken, especially with regard to the public financial administration and the establishment of an efficient local municipal finance system. The local authorities lack the resources and knowledge to be able to fulfil their responsibilities effectively. Weaknesses also remain in the coordination between public, private and civil society actors at the various levels. The Senegalese government has established a national programme aimed at implementing decentralisation, the PNDL (Programme National de Développement Local). German involvement is closely aligned with this programme, the aim being to improve the living conditions of the rural poor.
To this end, German experts provide consultancy services to the ministers and specialists in Dakar responsible for decentralisation. At municipal level Germany supports the local authorities in fulfilling their responsibilities. In consultation with Senegal, the regions of Kaolack, Fatick, Kaffrine and Casamance have been selected for these concrete implementation measures. Communities here are assisted in drawing up and implementing development plans, expanding the local infrastructure and establishing local municipal support for business. Specific procedures provide an opportunity for gaining experience in citizen participation as well as administrative efficiency and transparency.
Thanks to German involvement people's access to water, education and health care has been improved. The construction of market halls and bus stations, for example, is one means by which additional economic stimuli are being provided.
One special priority for German engagement is the conflict region of Casamance, where Germany is contributing successfully to the stabilisation process. At the end of 2004 a peace agreement was signed by the government and the rebels struggling for greater autonomy. The Senegalese government has devised a national programme for reconstruction in Casamance, in which German support is also embedded.
The German government supports local peace initiatives and measures aimed at reintegrating returnees. In addition, support is being provided for the reconstruction of the basic social and economic infrastructure (health care, education, drinking water) as well as for agricultural production and other sources of income as an alternative to the 'war economy'.
One of the projects receiving support, for example, is the reintroduction of the ferry link between Casamance and the Senegalese capital Dakar. This link had been out of service for a number of years after the sinking of a previous vessel. The new ferry Aline Sitoe Diatta now connects the region better with the northern part of the country.
Renewable energies and energy efficiency
A shortage of energy is one of the main hindrances to development in Senegal. In view of the high prices of crude oil on the world market, the government is showing considerable interest in reducing its dependence on oil imports and using more solar and wind energy.
Germany has already been active for some years now in the sectors of renewal energy, domestic energy use and rural access to electricity in the West African country. Recent government negotiations included an agreement to make this involvement one of the priority areas of cooperation between the two countries. The aim of this cooperation is to make a lasting improvement to energy supply in the country, to make it more efficient and environmentally friendly, and thus to make a contribution to poverty reduction.
A variety of potential locations are currently being considered in terms of their suitability for setting up and operating a wind or solar farm.
Debt relief
Measured in relation to the size of Senegal's economy, its national indebtedness is very high. Consequently, Senegal falls under the enhanced Heavily Indebted Poor Country Initiative (HIPC II).
In June 2000, Senegal reached the decision point, whereupon it was included in the debt relief programme of the World Bank and the International Monetary Fund (IMF). A total of 1.9 billion US dollars debt was cancelled. Senegal reached the completion point for HIPC II in April 2004. The country has thus also qualified for the Multilateral Debt Relief Initiative (MDRI), as agreed by the G8 Finance Ministers in June 2005 in Gleneagles. Countries like Senegal that have reached their completion point under the HIPC Initiative qualify for the cancellation of all their debts to the IMF, the World Bank's International Development Association (IDA) and the African Development Fund (AfDF). To date, debts totalling 3.348 billion US dollars (nominal value) have been cancelled.
Information
Publications
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"Pro-Poor Growth" – a focal point of development policy
Special 146
(PDF 807 KB) -
In partnership for a strong Africa: Cooperation in the field of sustainable economic development
Topics 167
(PDF 2.4 MB, accessible) -
Decentralisation and local self-government
Leaflet
(PDF 372 KB, accessible) -
Sustainable Energy for Development
Strategies 154
(PDF 549 KB, accessible)
