Sénégal’s economic slowdown: why political truce is essential now

Three years after Senegal’s political upheavals and the historic 2024 presidential election, citizens are still waiting for the economic rebound they were promised. The launch of Senegal’s 2050 Agenda and the Economic and Social Recovery Plan (PRES) in 2024 and 2025 raised hopes, but today, frustration is growing as political squabbles overshadow economic progress.

From hope to stagnation: what went wrong?

The initial optimism surrounding the new administration has faded. Instead of economic reforms, the country is trapped in a cycle of political polarization. The 2029 election is already casting its shadow, with political camps consolidating their positions rather than focusing on development. The divide between the presidency and the former prime minister once blamed for policy paralysis continues, despite changes in leadership.

Meanwhile, Senegal’s economic performance has slipped dramatically. According to the latest BCEAO monetary policy report, Senegal’s real GDP growth fell to 4.7% in early 2026—well below regional peers. Countries like the Niger, Mali, Bénin, and Côte d’Ivoire all outpaced Senegal, with growth rates ranging from 6.1% to 6.4%. This marks a sharp decline from Senegal’s 7.8% growth in 2025, the largest drop among West African economies.

The situation is compounded by a steep decline in foreign direct investment, plummeting from $3.3 billion in 2024 to just $37 million in 2025. These figures underscore the urgent need for decisive action.

Three priorities to revive Senegal’s economy

1. Restoring investor confidence

Rebuilding trust with international partners and financial markets is critical. Negotiating a new program with the International Monetary Fund (IMF) would not only unlock funding but also signal stability to investors and rating agencies. Senegal currently faces high borrowing costs due to perceived risks, making such an agreement a strategic priority.

A strong nation branding strategy is also needed to highlight Senegal’s economic strengths, improve its global image, and attract foreign capital. This includes promoting key sectors like energy, infrastructure, and agriculture while addressing bureaucratic hurdles that deter investors.

2. Unlocking the private sector

The private sector must become the engine of growth. To achieve this, the government should:

• Simplify administrative procedures and improve the business environment.
• Expand access to financing for local businesses.
• Strengthen public-private partnerships (PPPs) in critical sectors such as infrastructure, transport, and digital innovation.

The focus should be on high-impact industries that can drive broader economic transformation, ensuring sustainable job creation and industrial growth.

3. Rationalizing public spending

With limited fiscal space, the government must optimize resource allocation. Promised reforms—such as merging redundant agencies—have stalled, delaying cost savings and efficiency gains. Urgent steps are needed to curb excessive state spending, a key pledge of the PRES, while ensuring funds are directed toward productive investments.

A political truce is the missing link

Senegal cannot afford to let politics derail its economic future. The next three years leading up to the 2029 elections must be used to lay the groundwork for long-term prosperity. A temporary truce among political factions would allow policymakers to refocus on structural reforms, restore investor confidence, and reignite growth.

Without this, Senegal risks falling further behind its West African neighbors, undermining its ambition to become a model of sustainable and inclusive development.

Dr Abdou Diaw
CEO & Founder, Le Marché Economic & Financial Magazine