Senegal - The economy (Vol. 1 of 5) : The main report

DOCUMENT OF INTERNATIONAL BANK: FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DE,VELOPMENT ASSOCIATION Not IFor Public Use Report No. 212-SE THE ECONOMY OF SENEGAL (in !Five volumes) lolume I The Main Report August 15, 1973 Western Africa Regional Office This report was prepared for official use onl,y by the Bank Group. It may not be published, quoted or cited without Bank Group authorizatiork. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVAIENTS Currency Unit: CFA Franc (CFAF) Before August 11, 1969: US$ 1.00 = CFAF 246.85 CFAF 1,000 US$ 4.05 August 1969 - December 1971: US$ 1.00. = CFAF 277.71 CFAF 1,000 = US$ 3.60 December 1971 - March 1973: US$ 1.00 = CFAF 255.79 CFAF 1,000 US$ 3.91 WEIGHTS AND MEASURES 1 Metric Ton (t) = 2,205 lbs. 1 Kilogram (kg) = 2.2 lbs. 1 Kilometer (km) 0.62 mile 1 Meter (m) 3.28 feet GOVERNMENT OF SENEGAL FISCAL YEAR July 1 to June 30  THE ECCNOMY OF SEN-GAL Volume I Sunmnary and Conclusion Main Report Volume II Annex One: Public Finances, Present Situation and Outlook Annex Two: Working Rales of the BCEAO Annex Three: Agriculture Annex Four: Manufacturing Industries Volume III The Tax System of Senegal Volume IV Planning Methods and Plan Implementation Volume V Statistical Appendix This Report is based on a mission in February/March 1972 to Senegal composed of: Heinz B. Bachrnann Chief of Mission Jacqueline Noifil General Economist Louis Currat General Economist Cynthia Miller Statistician Georges Delhore Industry (Consultant) Uberto Fontana Agronomist (PMWA) Joseph Gholl Demographer Mohamed EL Moghazi Agricultural Economist (PIMWA) Prof. Sylvain Plasschaert Fiscal (Consultant) Nimrod Raphae:Li Plan Organizer Marie-Therese Bellot Secretary It takes into account the comments given by the Government of Senegal in December 1972 and in March :L973.   THE ECONOMY OF SENEGAL Volume I: MAIN REPORT Table of Contents COUNTRY DATA MAPS LIST OF ABBREVIATIONS SUMMARY AND CONCLUSIONS ...... . ............................. - xiv PART ONE: PAST DEVELOPMENTS AND PRESENT SITUATION ..CX................. 1 A. The Country and the People .1 B. Growth Experience 1960-1971. 6 C. Government Response to Senegal's Growth Problems 1960-1971 ........................................... 20 1. IntroductiorL ............... .. ................. . . . 20 2. The framework of Government's intervention in the economy ......,.-.......... 21 3. Assessment of Government policies 23 (a) Public development efforts ................ . 23 (b) Public finance management (current operat- ions) ...................... 27 (c) Financing of public development outlays . 31 (d) Public enterprises .32 D. Money and Credit ...35 1. Institutions ..35 2. Determinants of the money supply. . 36 3. Sectoialdistribution of credit . . .37 4. Credit financing . . .42 5. Interest rates .. . ...42 E. Human Resources.. 45 1. Population ....... ........ . 45 (a) Family planning . ..46 (b) Urban clevelopment . 46 2. Enployment . ... .. . . .... . . . 47 3. Education * . . . .52 4. Health condi.tions ....... o....ooo .. .............. 57  PART TWO: MAJOR ECONOMIC SECTORS, PAST DEVELOPMENTS AND OUTLOOK 58 A. Rural Sector . . .58 1. Introduction ..50 2. Agriculture ..59 (a) Past development and future outlook ! ........ 59 (b) Projects and development possibilities 63 3. Livestock ..65 4. Fisheries .................... 69 (a) Traditional fishing .70 (b) Industrial fishing .71 (c) Past public development efforts .72 (d) Future public development efforts and pro- jection of production. 74 B. Modern Sector ............ *.. .... ....... ..... 75 1. Industry .. ... 2. Power and Water ..... . .. .. ... 79 3. Tourism . . ................ ... 80 (a) Tourism assets ........................... 80 (b) Recent developments ...................... 81 (c) Prospects ................................ 82 (d) Economic effects of tourism .............. 85 (e) -Fi.nancing of touristic investments ....... 87 PART THREE: PROSPECTS AND CREDITWORTHINESS ..... ..................... 89 A. Overall Economic Growth 89 1. Introduction and main conclusions . . .89 2. Detailed projection of economic growth 91 (a) Rural sector. .. . . . 94 (b) Industry. 96 (c) Construction and services . 97 3. Growth at current prices and growth of per capita revenues ..e.s........ ...... . B. Expenditures and Savings .100 C. Balance of Payments and Foreign Trade. 104 D. Planning and Public Investments .11( 1. The Third Plan .110 2. Future development planning 112 (a) Projection of total Plan outlays .113 (b) Sectorial allocation of Plan outlays 115 3. Financing of future development outlays . .118 (a) Local resources . 119 (b) Foreign aid .............. 125 E. Terms of Foreign Financing and Creditworthiness 127  LIST OF TEXT TABLES Summary & Conclusions Page Table I Sectorial Composition of Public Development Outlays ii Table II Financing of Public Development Outlays xii Main Report Table 1 Major Growth Parameter's 7 Table 2 Groundnuts, Prices, Production and Proceeds 11 Table 3 GDP at Current Market Prices 12 T.ble 4 Per Capita GNP at 1971 Prices 13 Table 5 Major Foreign Trade Indicators 16 Table 6 Balance of Payments Estimates 18 Thble 7 Breakdown of Public acpenditures 24 Table 8 Central Government Revenues, Expenditures, and Savings 29 Table 9 Financing of Public Development Outlays 31 Table 10 Financing of Public Enterprises Investments 33 TTble 11 Public Enterprises, Savings Net of Current Subsidies 34 Table 12 Monetary Developments 37 Table 13 Sectorial Distribution of Short Term Credit 40 Table 14 Sectorial Distribution of Medium and Long Term Credit 41 Table 15 Interest Structure Before and After the January 1973 changes 43 Table 16 Modern Sector Manpower: Estimated Breakdown by Qualification, 1970 49 Table 17 Breakdown of the Modern Sector Manpower by Origin and Qualification, 1970 50 Table 18 Mission Projection of :'Enployment in the Modern Sector by Nationality 51 Table 19 Approximate Mission Projection of Total Enployment 51 Table 20 Growth of School Enrol:Lment 53 Table 21 Projected Growth of Major Agricultural Products 62 Table 22 Rates of Growth of Agr:iculture and Livestock 65 Table 23 Livestock Production Targets, 1971-1980 68 Table 24 Mission Projections ofL Fisheries Production 75 Table 25 Manufacturing Industries 76 Table 26 Air Arrivals in SenegaL by Country of Origin 83 Table 27 Investments per Job Created 86 Table 28 Hotel Financing 87 Table 29 Mission Projection of GDP at 1971 Prices 92 Table 30 Groundnuts: World Market Prices and Producer Prices 94 Table 31 Manufactured Consumer G;oods: Average Annual Growth Rates at Constant Prices 97 Table 32 Mission Projection of GDP at Current Prices 99 T.sble 33 Mission Projection of Per Capita Revenues 100 Table 34 Private Savings and Investments 101 Table 35 Expenditures and Savings 103 Table 36 Balance of Payments Projection 105 Table 37 Mission Projections of Foreign Trade 107 Table 38 Third Development Plan, 1969/70-1972/73: Public Outlays 111 Table 39 Mission Proposals for Public Development Programs Beyond the Third Devellopment Plan 113  2. Thble 40 Public and Private Gross Fixed Capital Formation 114 Table 41 Financing of the Proposed Public Development Programs 119 Table 42 Mission Projection of Public Savings 120 Table 43 Mission Projection of Central Governmentts Current Revenues and Expenditures 121 Table 44 Projection of Gross Foreign Aid Inflow 126 Tqble 45 Long Term Mission Projections of Public Savings, Foreign Aid and Debt Service 128 Table 46 Foreign Debt Service Ratios Under Different Blends of Foreign Loan Aid and Different Growth Rates of Exports of Goods and Services 130 Table 47 Impact of Different Future Foreign Borrowing Conditions on Net Public Savings 132 Table 48 Long Term Mission Projection of Terms of Foreign Aid Inflow 133  Page i COUNTRY DATA - SENEGAL AREA POPULATION DENSITY W,700 km 4n 2 mllion (mid-1972) per km2 20 Rate of Crovth: 2.2 < (frm 1965-i!72) per kir2 of ar&be land 34 P3PIfLATION CHIAACTERISTICS HEALTH rndn Nirrh Rate .ner 1,000) 44.0 (1970) gtion per physician 17,500 (1970) Crude heath R,t.e (per 1,000) 22.0 (1970) Population per hospital bed 710 (1970) Tnrfnt Mortality (per 1,000 live births) 156 (1968) INCOME DISTRlBIBTION DISTRIBUTION OF LAND OWNERSHIP , of national incocte, lo-est 75 percent (rural population): 27 % owned by top 10% of owners, middle ?b percent (urban population): 60 % owned by mallest 10% of owners highest 1 percent (foreigners) 13 ACCESS TO PIPED WATER ACCESS TO ELECTRICITY t of population - urben . % of population - urbTan - rural - rural NlrrRlITION EDUlCATON 1971 Caor-ifeintake as % of renuirements 2,300 /day /capita Adult literacy rate % 5-10 (1970) Per capita protein intake estimted high compated to other african countriess * Primary school enrollment % 4; ;1970) GNP PER CAPITA in 1971 B: UJ$ 250 ItRS DOMSTTC PROIDICT IN 1969/71 ANNlUAL RATE OF OWaTH (%. constant prices) US $ min. 1960-65' 1965-70 1971 CDP sat Market Pricea 863 100 2% - 10.4% Cross Domestic Investment 165 19.1 4% L2 11% L2 2% L2 Cross National Saving 96 11.2 -5% L3 3.3% 42% urr-nt. Account Balance - 69 8.0 - 8%/ 230% Exports of Goods, NFS 202 ?3.4 ,, 9% _ 18% Ttprtn of roode, NFS 257 29.8 , Ali OUTPUT, LAPOR FORCE AND PRODUCTIVTTY IN 1970 Value Added OP fctor costs) Labor Force V.A. Per Worker Agriculture 232 31.0 1.2 73 19L 42 industry 130 17.3 0.1 6 1,h40 314 Services 387 51.7 0.2 14 1,t117 360 Unemployed , , 0.1 7 -- -- Total/Average 't-I 100 0 'T&0 o/"'RNNM4WT FINANCE Genotral Government Central Government cO 7nn ) ODP (CFAF billion) S of GDP LCFAF billicn) I of ODP wnR Ln ~~~~~~~~~~~~~~~~~~~~~~~~1?670/7 f 1967/7i ,? -p- cui reni Receipts 4oI 7 18.4 18.5 1h.7 18.4 38.4 1 K5 Current Expenditure 38.0 17.2 17.1 38.C 17.2 35 14 17.1 Current Surplus .1i L5 2 3 Ls 1.8 L5 '. 3.5 1.' Capital Expenditures 11 1 6 14 7.2 10 ' 4.- 1C.7 External Assistance (net) 8.6 3.9 4.0 Tj The Per Capita ONP estimate is at 1970 arket prices, nalculata4 by the same conversion technique as the 1972 World Atlas All other conversions to dollara in this table re at the average exchangLe rate prevailing during the period covered. 2/ ExcI udinF, stocks. *il961-~5 2/ 1968-70 T Including surpluses cf special funds and savings of public enterprises. not available not applicable  Page 2 COUNTRY DATA - SENEGAL MoNEY, CREDIT AND PRICES 1965 1971 (Billions o FAF 12 mon average) Money and Quasi Money 30.5 32.0 34 37-9 Bank Credit to Public Sector - 8 ' -1.4 -0. - 0.5 Bank Credit to Private Sector 35.6 38.6 39.0 (Percentages o rniex Numbers) Money and Quasi Money as % of 'DP 12.9 15.0 14.7 14.6 .eneral Price Index (1963 . 100) 105.7 119.0 123.6 131.4 Annual P.rcentag,e changes in: ';eneral Price Inde % 2.1 4.4 3.9 6.3 ,overnrent Depositi .. - 57 I - 33.5 an-k credit to Private Sector 4.8 -0.6 . 8.3 c 1.0 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AvERArE 1968-fl) 1969 1970 jl US $ Mln. m (Millionn US ) Groundnuts and Groundnut Fxports of' 'oods, NFS 188 240 204 Products 66.7 40.9 T-notr, of Coods, NFS 236 253 281 Moscellaneous Manufactured Products 17.4 22.0 frade deficit -.75 , 13 -r Food,bever-ges, tobacco 24.8 15.3 c,est Payment. (net) - 11 - i4 - 14 All other comsodities 34.1 20.9 Wr-k-rn' Remittances ) TOTAL 163.o 0i.O - .r Factor Payments (net) ) 17 17 19 N4. -n-fera ) EXTERNAL DEBT. DECEMbER 31. 1971 ftt.2n.e on Current Account - 42 - 10 - 72 (tnclu ding transfers) US $ Mln PrivaLe lotv term capital (net) 9 5 7 "rivate short term capital (net) - 2 - 4 ) Medium and long-term Credits, Puhlic 167.8 fCi.il Grants 13 17 ) Non-Guaranteed Private MLT Loans 22 9 ) 41 Total Outstanding and Disbursed Anortication - 4 - 3 D Other (net) 1 2 DEBT SERVICE RATIO for 1971 5.4 rt-,Ca and Onissions - 14 _ 22 25 31 70 case in reserves (-increase) 27 _ 21 70 Icoss Reserves June 30 25 30 40 t.fs Rene-ves 7 - 14 't OF EXCHANGE IRD/IDA LENDING. July 31, 1975 (Million US $ br-gh Decemsber 71 1.0 - CFAF 277.7 IBRD IDA -Y75 1.0 * $5$ 0.0036 Outstanding & Disbursed 3.3 i6. Undisbursed 1.5.65 220 Iecer-cr 71 through Janj!a1Octan-g InciL. Udndnbbrrsed 19.95 s6.o (O ftT 1. CFA 257.79 CMAF 1.0 - US $ 0.0039 F.oru-ry 73 '0 2 1.0 - CFAF 230.2 uAF 1.0 . US $ 0.0043 .. out available . tct applicable Western Africa Regional Offics Agust 15, 1973  ~~~~~~~~~~~~~~TRANSP RT7ATIONr r I1RR Lu., O t'GH i, Rvu PAVeD ROAD = < < , , + - G~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~RAVtL ROAD 51 .OU15ta_ ' t v F - F~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IERRIE5 / Jl ' \ ' > 8'@ ~~~~~~~~~~~~~~~~~~~~~~~~ITRNATIONAL AIRPORT J'