Country risk reference rating: 7 (7/9)
Country Risk Outlook: Stable
Economic and trade risks
In 2012, Senegal’s nominal GDP was US$12.51 billion, per capita GDP was US$955, and the real economic growth rate was 3.3%. Agriculture accounts for 15.2% of GDP, industry accounts for 22.6%, and the service industry accounts for 62.2%.
Senegal’s political situation is stable, and the government attaches great importance to economic development. Although endogenous economic power is still insufficient, under a relatively stable domestic political environment, the country’s agriculture, industry, and infrastructure construction are expected to continue to achieve healthy development. However, Senegal has a heavy long-term foreign debt burden and the investment environment is still not ideal, which has become a major obstacle to the further development of Senegal’s economy. The economic and trade relations between China and Serbia have developed smoothly, but factors such as trade imbalance, inconvenient transportation and cultural differences between the two countries have hindered the development of economic and trade cooperation to a certain extent.
Bilateral economy and trade
After 1985, China and Senegal began mutually beneficial cooperation, and bilateral trade developed rapidly. China mainly exports mechanical and electrical products, textiles and clothing, and tea to Senegal; it mainly imports peanuts, cotton, fishery products, etc. from Senegal. From 2008 to 2012, the average annual growth rate of China’s exports to Senegal reached 20%. In 2012, the bilateral trade volume was US$840 million, a year-on-year increase of 12.9%. Among them, China exported US$790 million.
Since Senegal exports a small variety of goods to China, China has been experiencing a large trade surplus for a long time. In the long run, imbalanced bilateral trade is not conducive to the healthy development of trade between the two sides and is the main potential risk in current bilateral economic and trade cooperation. In addition, Senegal has always classified China as a visa category C country, that is, Chinese nationals must obtain a dual visa from the Senegalese Embassy in China and its internal affairs before entering. Therefore, the visa issue is also a prominent issue in China-Serbia relations, bringing a lot of inconvenience to bilateral economic and trade exchanges.
Business environment
Senegal is known as the trade center in West Africa. In recent years, the country has made efforts to improve the business environment. For example, the government has concentrated the general procedures for starting a business into a one-stop service center. In 2011, it also established a trade chamber. Supervise all parties to perform the contract. But even so, its business environment is still poor. Senegal’s measures to protect investors’ interests and register all rights are extremely weak. In addition, labor management has stipulated a series of relatively harsh conditions for employers. Senegal’s infrastructure is seriously insufficient, especially the lack of electricity. Senegalese enterprises have a heavy tax burden, and the government is currently working hard to expand the tax base, strengthen tax collection, and increase direct and indirect taxes.
Overall evaluation
The Senegalese government attaches great importance to economic development, and its government is mainly composed of technocrats. Although Senegal’s endogenous economic power is still insufficient and the unemployment rate remains high, under a relatively stable domestic political environment, the country’s agriculture, industry, and infrastructure construction are expected to achieve healthy development, creating an environment for the country’s relatively stable economic development. favorable conditions. In addition, major developed countries such as France and the United States are optimistic about Senegal’s future development and have increased their assistance and economic cooperation with Senegal.
The investment environment in Senegal is still not ideal. Problems such as insufficient power supply, corruption, low government and judicial efficiency, and harsh labor conditions will remain the main obstacles for Senegal to attract foreign investment and future economic development.
(Issuing agency: China Export and Credit Insurance Corporation)
