Senegal - Economic trends and prospects (Vol. 1 of 4) : The main report

FILECOPY Report NMo. 1720a-SE The- Economic T-rends and Prospects of Senegal (In Foiur Volumes) Volume 1. The Main Report Decemoer 1979 Westerii Africa Regional Office FOR iDFFICIAL USE ONLY Documient ot the World Bank This dotiJument has a restricted distritution and may te used by recipierjts oily in the perforimiance of their official cluties. Its contents may noliother"ise be disclosed without.World Bank authorization.  CURRENCY EQUIVALENTS (as of May 1979) US$1.00 = CFAF 220.37 CFAF 100 = US$0.454 WEIGHTS AND MEASURES 1 kilogram (kg) = 2.20 lbs 1 millimeter (mm) = 0.04 inch 1 meter (m) = 3.28 ft 1 kilometer (km) = 0.62 miles 1 hectare (ha) 2.47 acres ABBREVIATIONS BNDS Banque Nationale de Developpement du.Senegal CAA Caisse Autonome d'Amortissement CEAO Communaute Economique de l'Afrique de l'Ouest CPSP Caisse de Perequation et de Stabilisation des Prix EEC European Economic Community OMVS Organisation pour la Mise en Valeur du Fleuve S6n6gal ONCAD Office National de Cooperation et d'Assistance pour le Developpement OPEC Organization of Petroleum Exporting Countries SAED Societe d'Am6nagement et d'Exploitation des terres du Delta SONACOS Societe Nationale de Commercialisation des Oleagineux du Senegal SONED Societe Nationale des Etudes de Developpement SONEPI Societe Nationale d'Etudes et de Promotion Industrielle TCR Taxe de Cooperation Regionale UMOA Union Mon6taire Ouest Africaine GOVERNMENT OF SENEGAL FISCAL YEAR July 1 - June 30  FOR OFFICIAL USE ONLY THE ECONOMIC TRENDS AND PROSPECTS OF SENEGAL Volume I Summary and Conclusions The Main Report Statistical Annex Volume II The Agricultural Sector Volume III The Industrial Sector Volume IV Human Resources This report is based on an economic mission which visited Senegal in Noirember 1976 composed oi- Messrs. J. de Leede (Chief), J.C. Brown (para-public ent:erprises), B. Horton (industry), Ms. K.M. Larrecq (balance of payments), H. Lubell (human resources),, J.D. Shilling (economic modeling), D.R. Steeds (agriculture), and M.P. van Dijk (informal sector), and complemented with findings of the Bank's regular sector work and more recent economic missions. Working Papers on the balance of payments, public finance, and the informal sector are available in West Africa Programs Department II, Division C. The Para-Public Sector Report No. 1619a-SE can be obtained from the Reports Desk. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contenst may not otherwise be disclosed without World Bank authorization.   THE ECONOMIC TRENDS AND PROSPECTS OF SENEGAL Volume I. The Main Report Table of Contents Page No. SID9MARY AND CONCLUSIONS ....................................... i - xii Chapter I. PROFILE OF DEVELOPMENT ........................... 1 A. Introcluction ........... ..................... HistoI y ............................................................. Politi.cal Framework ....... . . ....................... . 2 B. Economic Performance ........................ 3 Urban-Oriented Strategy ..................... 4 C. Changing Economic Institutions .... .......... 7 Institutions for Agriculture .... ........... 8 Institutions for Modern Enterprises . ....... 10 Institutions for Small-Scale Enterprises and Informal Sector Producers .............. .. 14 D. Social Developments ..... .................... 17 Income Distribution ..... .................... 17 Health Care ................................. 22 Housing .. ................................... 23 Education ...... ............................. 25 E. Foreign Relationships .......... . ............ 27 Monetary Cooperation ............ . ............ 27 Economic Integration ........................ 28 Other International Cooperation ...... ....... 29 Chapter II. DEVELOPMENT POTENTIAL ................. ........... 31 Groundnut Sector ............................. 31 Cereals ...................................... 35 Other Agricultural Potential . ................. 36 Fisheries ...... .............................. 37 Phosphate Rock ..... .......................... 38 Other Minerals ..... .......................... 39 Light Industry .......................... ..... 40 Services ...... ............................... 44  Table of Contents (Cont.) Page No. Chapter III. CONSTRAINTS ......... ............................... ...... 48 Human Resource Constraint ................. .... 48 Macroeconomic Constraints ..................... 49 The Monetary Constraint ....................... 49 Absorptive Capacity ..... ...................... 52 Savings Constraint . ........................... * * * 54 Private Savings . .......................... ... . 56 Public Savings . ........................... ... 57 Savings and Participation Policy .............. 64 Public Savings Compared to Public Investments . ............................ ... . 65 Balance of Payments . ....... . .............. .....*.. 67 Chapter IV. INVESTMENT STRATEGIES AND PRIORITIES ............. 71 The Big Projects ....... ...................... .. ..... 71 Large Industrial Projects ..................... 73 Irrigation .................................................. ... 76 Sector Priorities ............ .. ............... 80 Chapter V. PLANNING AND PROJECTIONS ................83 Investment Planning 84 The Bank Mission's GDP Projection 90 National Accounts Projections. 92 Investment Projections 95 Savings Projections 97 Public Savings Projections . . 98 Foreign Trade and Services Projections ........ 102 Exports ........... ..... ........................ 102 Imports ................ *....................... 104 Resource Gap Analysis ......................... 108 Balance of Payments Projections .............. . 110 Capital Flows ..................................... ill Creditworthiness ....... . ...................... . 115 Conclusion .... ................................. 118 STATISTICAL ANNEX . ...................... ............. .......... 120  List of Tables No. Title Page No. 1 Growth of GDP 1960-1977. 3 2 Fixed Capital Formation 1960-64 - 1970-75 ................. 6 3 Comparison of Consumer Prices 1971-1978 .11 4 Comparison of Income Distribution in African Countries 18 5 Transfers within the Stabilization Fund 1970/71-1976/77 20 6 Savings Deficits by Sector 1959-1975 ........... .............. 55 7 Central Government Finance 1967-1978 ........ ................ 58 8 Public Savings 1972/73-1977/78 .............................. 62 9 Public Capital Expenditures and Savings 1972/73-1977/78 66 10 Balance of Payments 1972-1977 . ............................. 68 11 Monetary Survey 1972-1978 ...... ............................. 70 12 List of Investment Costs of Large Projects .73 13 Planned and Realized Investments .85 14 Realization of Adjusted Fourth Plan (1972/73-1976/77) ....... 89 15 Gross Domestic Product Projection 1960-1990 .... ............. 93 16 Irrigation Assumptions 1980-90 .............................. 95 17 Projection of Investments 1966-1990 ......................... 96 18 Savings Projections 1975-1985 ...... ......................... 98 19 Alternative Scenarios for the Fifth Plan .... 100 20 Projection of Public Finances 1973-85 .101 21 Export Projections 1965-1990 ..... .104 22 Import Projections in Constant Prices 1962-1990 .106 23 Composition of Imports 1970-1990 .107 24 Projections of Uses and Resources in Constant Prices 1973-1990 .......109 25 Balance of Payments 1973-1985 ............................... 110 26 Projection of Foreign Aid Commitments 1969-1985 ............. 112 27 Projection of Disbursements 1973-1986 . ...................... 114 28 Public Debt Service 1973-1985 ...... ......................... 114 29 Sensitivity Analysis 1981-1990 ................... ........... 116 List of Diagrams Following Page Diagram of Financial Flows in Groundnut Sector ..........10 (wB 21207)   P&se ' of 2 COUNTRY DATA - SENEGAL AREA POPULATION DENSITY (1979) 196,20C sq km 5.5 million (mid 1979) 28.0 per sq km Rate of Growth: 2.7% (in 1979) POPULAIION CHARACTERISTICS (1979) HEALTH (1976) Crude Birth Rate (per 1,000) 48.5 Population per Physician 16,450 *Crude Death Rate (per 1,000) 22.3 Population per Hospital Bed 730 INCOME DISTRIBUTION (1960) DISTRIBUTION OF LAND OWNERSHIP % of National Income Highest 30% 62.5 not available Lowest 30% 3.2 ACCESS TO PIPED WATER (1960) ACCESS TO ELECTRICITY (1977) Occupied dwellings without safe water (%) 63.0 % of population total 17.8 rural (negligible) NUTRITION (1974) EDUCATION (1975) Caloric intake as % of requirements 97.0 Adult literacy rate % 10.0 Per capita protein intake (grams/day) 20.8 Primary school enrollment % 45.0 GNP PER CAPITA IN 1977: US$380 /1 GROSS NATIONAL PRODUCT IN 1977 ANNUAL RATE OF GROWTH (constant prices) US$ Mln % 1960-70 1970-75 1975-79 GNP at market prices 1906 100.0 2.7 2.8 2.0 Gross domestic investment 315 16.5 1.9 0.5 4.7 Gross national savings 220 11.5 2.1 -1.3 3.9 Current account balance -95 -5.0 - 20.9 1.4 Exports of goods, NFS 750 39.3 0.0 1.4 4.8 Imports of goods, NFS 880 46.2 2.9 0.2 4.4 OUTPUT EMPLOYMENT AND PRODUCTIVITY AVERAGE 1970-73 Value Added Labor Force V.A. per Worker US$ Illn % thousands % US$ 7. Agriculture 221.5 24 812 70 273 34 Industry 202.B 21 71 6 2857 355 Services 517.9 55 287 24 1805 224 Total Average 941.4 100 1170 100 805 100 GOVERNKENT FINANCE General Government Central Government (Cr.$ Mln) % of GDP (Cr.$ Mln) % of GDP 1977/78 1977/78 1972/73 1977/78 1977/78 1972/73 Current receipts - - - 487.4 24.2 20.0 Current expenditures - - - 453.9 22.5 18.4 Current surplus 49.1 2.4 2.4 33.5 1.7 1.6 Capital Expenditures 206.1 10.2 7.5 53.9 2.7 3.5 LI 1979 World Bank Atlas  Page 2 of 2 COUNTRY DATA - SENEGAL MONEY, CREDIT AND PRICES 1973 1974 1975 1976 1977 1978 (Millions of Cr. $ outstanding end period) Money Supply 198 282 351 397 444 561 Bank Credit to Public Sector 10 4 9 59 68 71 Bank Credit to Private Sector 285 373 499 515 594 875 (Percentages or Index Numbers) Money as % of GDP 15.9 20.0 18.5 20.8 23.0 28.0 General Price Index 119 137 167 177 188 202 Annual Percentage changes in: General Price Index 6.3 15.1 21.9 6.0 6.2 7.4 Bank Credit to Public Sector L/ - -53.0 81.6 74.9 19.0 -4.0 Bank Credit to Private Sector Li 34.3 41.2 19.3 15.0 18.8 35.1 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1975-78) 1972 1975 1976 1977 1978 US$ Mln % (Millions US$) Groundnuts 210.9 47.4 Exports - Goods + NFS 333 693 706 750 623 Phosphates 61.6 13.9 Imports - Goods + NFS -373 -793 -852 -880 -950 Petroleum Products 31.4 7.0 Resource Gap (-) -40 -100 -146 -130 -327 Fish and Fish Products 53.8 12.1 Other Goods 87.0 19.6 Interest (net) -2 -22 -21 -25 -35 Total 444.7 100.0 Other Services (net) -21 -33 -4 - 2 Transfers (net) 50 67 73 60 80 EXTERNAL DEBT, DECEMBER 31. 1978 L Current Account -13 -88 -98 -95 -280 US$ Mln Disbursed 587.1 Private Capital 2 12 13 11 10 Including Undisbursed 1119.2 Capital Grants 8 22 23 24 27 Public MLT Capital Disbursements 19 77 83 114 246 NET DEBT SERVICE RATIO FOR 1978 /3 Amortization -8 -22 -25 -37 -75 % Subtotal 11 55 58 77 171 Public Debt, incl. guaranteed 17.0 Other Capital (net) -5 -11 -6 -26 -19 Payment on other foreign capital 21.1 Increase in Reserves +3 -10 -10 -9 -91 Total payment on foreign capital 38.1 Net Foreign Assets /2 23 -48 -45 -53 -144 IBRD/IDA LENDING, (Dec. 31. 1978) (million US$) RATE OF EXCHANGE IBRD IDA Averages May Outstanding and Disbursed 32.1 71.9 1977 1978 1979 Undisbursed 50.3 50.6 US$1.00 CFAF 245.7 225.6 220.4 Outstanding incl. 82.4 122.5 CFAF 100 US$ 4.07 4.43 4.54 Undisbursed L1 Calculated on values in local currency. /2 End period. /3 Debt Service net of interest earned on foreign exchange reserves as a percentage of Exports and Non-Factor Services. /4 Pre-financing arrangements not included.  8 6 A A d,/A/ Co F N..~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o " AGRA IY M A U R I T A N I A (F, - A LGERIA n UBYA S E N E G A L MAURITANIAi - Internet enel boundorles t1 Do-on _ ---Reg.o.l bc ndnnes . 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