A month before snap parliamentary elections, Senegalese President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko on October 14 unveiled an ambitious plan for the country’s development over the next 25 years.
For his part, Prime Minister Ousmane Sonko considers that there is an urgent need to rebuild economic structures because “the development models that have been presented to us or applied to us so far will never be able to develop our country.”
“So this is the end of the era of reckless indebtedness used to invest in projects that have nothing to do with building endogenous and sovereign development,” the Prime Minister concluded and suggested that Senegal should orient itself to the mineral-poor Japan as a compelling example of successful development for all African nations.
“Senegal 2050”
Presented under the title “Senegal 2050,” the plan envisions putting an end to foreign dependency and debt within 25 years and achieving economic sovereignty through better utilization of natural resources, especially oil and gas, the development of human capital and improved governance. The aim is to reduce the country’s dependence on the export of raw materials by organizing deeper mineral processing within the country, thus boosting the development of Senegal’s private sector.
According to planning estimates, by 2050, economic growth is expected to average 6 percent per year, through the development of the oil and gas sector, and other industries, while per capita income is expected to triple. During the implementation period of the plan, it is envisaged that 100 percent of the population will gain access to electricity, from the current 68 percent.
Based on the fact that the discovered hydrocarbon reserves in Senegal’s offshore waters are estimated at 1 billion barrels of oil and 40 trillion cubic feet of gas, the new authorities expect the oil and gas sector to be the main driver of the Senegalese economy in the coming years.
Senegal’s state-owned oil company Petrosen has estimated that revenues from the oil and gas sector will total more than $1 billion a year over the next three decades. Senegal plans to achieve this target by renegotiating contracts with foreign oil and gas producers.
President Bassirou Diomaye Faye, in his inaugural address to the nation in April this year, declared that “The exploitation of our natural resources, which according to the constitution belong to the people, will receive particular attention from my government.”
The predatory nature of foreign companies
But it turned out that Senegal’s natural wealth, while belonging to the people, was actually largely under the control of foreign capital. Thus the share of the Australian company Woodside Energy in the project to develop the Sangomar oil field, which it put into operation in June this year, is 82 percent, while the Senegalese state-owned Petrosen owns just 18 percent. In other fields, which are being prepared by the same company for development, the gap is even higher, with 90 percent foreign ownership.
A similar situation can be observed in the activities of US companies. After British BP withdrew from the Yakaar-Teranga offshore gas project, which has about 25 trillion cubic feet of gas reserves, Texas-based Kosmos Energy took a 90 percent stake in the venture, and will begin operations later this year.
BP and Kosmos Energy are expected to commission a 2.5 million-ton-per-year LNG liquefaction facility at the giant offshore Greater Tortue Ahmeyim field, located on the maritime boundary between Senegal and Mauritania. The shares in this project are distributed as follows: BP—56 percent, Kosmos Energy—27 percent, Petrosen—10 percent and Mauritania’s oil company SMNPM—7 percent.
Thus, Senegal, which is on the verge of becoming a major oil and gas producer, is now faced with the problem of the inequitable distribution of revenues from the exploration of its natural resources, as a result of agreements which are essentially exploitative in nature.
To address this issue, Prime Minister Ousmane Sonko set up a commission to review contracts with foreign oil and gas companies in order to, as the US publication Maritime Executive quotes him as saying, “re-examine them and work to rebalance them, obviously in the national interest.”
As for the near-term outlook of this 25-year plan, annual GDP growth of between 6.5 and 7 percent is projected between 2025 and 2029, and government debt is projected to fall from 83.7 percent in 2023 to 70 percent in 2029. Over that five-year period, per capita income is expected to increase by about 50 percent, from the current $1,660 to $2,468 in 2029.
Will the socio-economic reform program lead to electoral victory?
This five-year project is projected to cost $30 billion, and will be funded in part by raising private capital. In this regard, former Trade Minister Mamadou Diop Decroix, in an interview with French RFI radio, advised the government to fight corruption more effectively and expand the tax base by taxing high incomes more heavily in order to avoid disruptions in budget financing.
The main drivers of economic growth, as proposed in the plan, will be eight regional centers connected by road, rail and river corridors.
In order to reduce unemployment among the younger generation of the country, the majority of whom voted for the current president in March this year, it is planned that over the next five years 700,000 skilled workers and professionals will be trained.
Assessing the activities of the new Senegalese government, in particular the development of a 25-year plan for economic and social development, the French television channel France 24 called it all “part of the radical break with the past which President Bassirou Diomaye Faye promised after he took office in April this year.”
This is not unexpected in a country that served as a bastion of French influence on the continent for decades after its independence. In this regard, for example, the American news agency The Associated Press quotes Professor Adjarat Sall of the University of Dakar as saying that “Wolof is on the rise because Senegalese people want to be seen. They want to detach themselves from the colonial heritage and reclaim their own cultural identity.”
And this shift in the minds of Senegalese, the agency notes, comes amid a review by many West African countries of their relations with France. Some, like Burkina Faso and Mali, have abandoned French as an official language and banned many French media outlets.
As for Senegal, President Faye sent his Foreign Minister, Yassine Fall, in his place to the annual Francophonie summit held on October 4–5 of this year, which took place in Paris and at the Château de Villers-Cotterêts, eighty kilometers from the capital, and was attended by many world leaders, including Armenian Prime Minister Nikol Pashinyan.
But even these purely symbolic manifestations of independence and autonomy by the new Senegalese authorities are opposed by the former ruling elite.
If a coalition of opposition parties wins the upcoming elections, Bassirou Diomaye Faye’s promises to introduce fundamental reforms in the country to improve the economic situation of ordinary people will remain unfulfilled and, as Reuters notes, this could lead to a serious destabilization of the situation and cause a new wave of internal political turmoil in the country, as was seen during former President Macky Sall’s last term in power.
Viktor Goncharov, African expert, PhD in Economics, exclusively for the online magazine “New Eastern Outlook”
