Our interview with the President of Senegal, Macky Sall, bumped into just a few surprising delays. First, he had a chilly; then he held an impromptu reception for the nationwide under-20 soccer group that had simply returned from Egypt, having simply been topped champions of Africa.
Within the house of 13 quick months, Senegal’s soccer gamers have gained the Africa Cup of Nations, the CAF Seaside Soccer Africa Cup, the Champions League, and now the under-20 Africa Cup of Nations. The success on the soccer area has been attributed to minute planning and loads of effort. Simply as for his or her soccer groups, these are heady occasions for Senegal’s 17m folks. The nation is Africa’s fastest-growing financial system. The dynamism of the capital metropolis, Dakar, is palpable and harking back to many African capital cities just a few years again, on the peak of the Africa Rising narrative.
All through different conferences and conversations in Senegal, quite a few points have been raised. The elections subsequent yr didn’t appear to be the President’s precedence – even when the problem of a 3rd mandate will have to be addressed. For now at the least, the President desires to concentrate on the job at hand, even when operating for a 3rd mandate is constitutionally allowed. We’ll discover out later within the yr.
Like most nations at the moment, Senegal will not be resistant to the rising price of dwelling. A precedence for the nation is to supply extra of what it consumes. As in lots of African nations, the youth subject – offering them with jobs and guaranteeing that they’ll contribute positively to the financial system – can also be central. The overall consensus amongst these we spoke to was that Senegal was on a optimistic path of development and transformation. It’s undoubtedly one of many brighter lights in Africa.
Senegal can also be systemically essential to the area. It is a crucial actor in Francophone Africa, alongside Niger and Côte d’Ivoire. Diplomatically, militarily and politically it offers stability.
Many nations within the Sahel, because the President acknowledges on this interview, are in a precarious state. The success of a rustic like Senegal is crucial in offering hope not only for the nation’s youth however regionally. Double-digit development charges will assist increase the tide for all. Because it seeks to develop into a regional industrial hub, Senegal can develop into a driver of financial development for all its neighbours.
A lot noise has been made concerning the current oil and fuel finds. Senegal is anticipated to be Africa’s fastest-growing financial system over the following two years at the least; it’s straightforward to imagine that this is because of these discoveries. However revenues from the brand new fields will begin trickling in on the finish of this yr on the earliest, and even then the proceeds will at first go to repay the large investments wanted to develop the fields.
Development is actually extra diversified. Overseas direct funding is a contributing issue, however extra essential has been the large funding in infrastructure, a rising center class and a rising non-public sector. A few of these tasks could be credited to Macky Sall’s predecessor, Abdoulaye Wade.
President Sall is emphatic that the non-public sector must play a a lot greater function, and that’s what the present administration is making an attempt to realize – to create a conducive surroundings and promote some key sectors, particularly agriculture and native {industry}.
As he tells us on this interview, the state has an outsized function in that rising part. Because of this Sall known as for a assessment of how the worldwide monetary structure works. It’s at present skewed in favour of the richer nations, which may successfully print cash. When a shock, or a number of exterior shocks, happen – as we now have seen with Covid and the battle in Ukraine – smaller nations are hamstrung.
Sall has had a busy yr following his time as Chair of the African Union. In July 2022 he went to see Russian president Vladimir Putin to current Africa’s place, given the continent’s larger susceptibility to disruptions within the provide of fertilisers and grains. He was additionally significantly vocal on the problem of worldwide credit standing companies unfairly penalising the continent and nations similar to his.
He has mentioned that the worldwide finance structure will not be match for goal, particularly in relation to rising markets and Africa having a seat on the decision-making desk. Nevertheless, he thinks that progress has been made throughout all these points. He acknowledges the help of many, together with French president Emmanuel Macron, who he sees as usually being first to help African initiatives within the world area.
With regard to the way forward for his nation, he’s cautiously upbeat. The oil and fuel {industry} could be the set off for a complete ecosystem of recent industries and jobs – even when, within the quick time period, it won’t present a windfall for the state. Following his yr as Chair of the African Union, Sall additionally believes that Africa should be extra conscious of itself and its potentialities.
African Enterprise: The present world context is difficult. If Senegal appears to be doing effectively, what are the challenges that you simply see as essentially the most urgent?
Macky Sall: In Africa, we’re experiencing a problem: to revitalise the economies resulting from a scarcity of capability for the reason that mechanisms we advocated for are but to be applied. These mechanisms included, for instance, a reallocation of SDRs [Special Drawing Rights] to replenish our economies and stimulate sectors.
Over the previous yr, each oil and meals costs have risen. This fuels inflation in all nations and governments have been pressured to subsidise [essential goods], resulting in a lack of income and larger deficits.
Regardless of this unfavourable surroundings, Senegal has shortly resumed its pre-crisis development targets. From 1.5% in 2020, development reached 6% in 2022, and we expect 10% in 2023.
We anticipate our oil and fuel investments to come back on-stream within the fourth quarter of this yr, and that is along with our efforts to accentuate exercise in agriculture and {industry}.
Certainly, the World Financial institution predicts that Senegal would be the best-performing financial system in Africa in 2023 and 2024. Does this imply extra infrastructure and funding in your authorities?
To begin with, it merely implies that the financial system can be strong. It is going to generate extra earnings and, naturally, extra funding. We should keep away from falling right into a lure of considering that these new oil and fuel discoveries will rework our fortunes in a single day. We have to proceed working as we now have at all times carried out.
These new sources will strengthen the productive and social sectors. By productive sectors, I refer, particularly, to agriculture and animal husbandry, which we should modernise and intensify. I additionally point out fishing; we should strengthen aquaculture and forestry. After all, repeatedly, we should additionally work to boost social security nets.
The oil sources won’t be as important as you recommend through the first 4 or 5 years. Throughout this era, the share going to the state won’t be substantial as a result of a lot of the unique investments have to be repaid.
An important facet of the oil discover is the enterprise exercise that it brings to the nation, particularly when it comes to the companies sector. This may then profit different sectors too.
By way of the oil sources we now have a framework in place, voted in by parliament, that can safeguard it – avoiding errors made up to now by different nations. A sure proportion can be allotted to FONSIS [the sovereign wealth fund] and we will be unable to mortgage future earnings for present spending wants.
In different areas, we’re enhancing our ports and logistics amenities, as a result of the nation can not depend on a mono-industry however must succeed due to the entire ecosystem.
You talked about SDRs. Are you asking for extra assist from G20 nations and worldwide organisations for African nations?
I’d not say extra assist, however extra optimistic partnerships. That is what we are saying to our companions within the North: through the Covid disaster, they have been in a position to develop, on their very own, mechanisms to cushion the shock, which is commendable. These resilience schemes have been financed with a whole lot of billions of {dollars} or euros. However the economies of the South can not do that as a result of our central banks don’t have the identical sources.
SDRs have been mobilised, however even then sub-Saharan Africa’s share was $23bn of a complete of $650bn. Senegal acquired $450m. It’s one thing, however little or no given our wants.
There may be speak of a brand new allocation of SDRs to the tune of $100bn, to all creating nations, not simply Africa. Utilizing leverage, this might doubtlessly unlock $400bn at low rates of interest, round 0.5%.
This may give nations the sources to actually breathe and get issues shifting once more. A number of massive nations had dedicated themselves to this, notably the Europeans and China, however that is now caught within the American Congress.
Progress on these points is just too gradual. We proceed to plead to the world to offer us the instruments to re-energise our economies. It will be good for all of humanity. And that is our mind-set at the moment in Africa: to construct win-win partnerships primarily based on mutual pursuits.
There may be plenty of speak of African sovereign funds having over-borrowed. Are you comfy along with your present finances deficit and debt ranges?
We observe the WAEMU [West African Economic and Monetary Union] convergence standards: debt should be lower than 70% of GDP – which appears low when the large nations have handed the 100% debt mark. My want is to lift this debt ceiling throughout the Union. Why to not 90% of GDP? This may give extra budgetary house.
Our degree of improvement is such that the state does all the pieces, and offers many public items: water, electrical energy… We can not have such a scheme and put a cap on the indebtedness of states.
As regards the finances, the framework offers for a 3% deficit, which once more provides little or no room for manoeuvre to finance social improvements, colleges, universities and roads – to not point out defence and safety. My opinion is that this stringent framework is an excessive amount of to ask from our nations.
Following the Covid disaster, we’re discussing all these debt-related metrics: ought to Africa respect the Maastricht standards determined by the European Union on the time of the euro’s creation? Ought to the German deficit on the time [following reunification] develop into a world normal?
Even when we now have to manage deficits, I’m not in opposition to sure flexibility, significantly when it comes to debt.
This brings us to financing for improvement: what sources and what mechanisms [do we have at our disposal]? I’ve additionally engaged in plenty of discussions with the OECD on the necessity to reform the principles [and non-tariff barriers] to permit larger commerce between the North and the South.
We have to acquire longer maturities on export credit, with inexpensive ensures; this raises the ranking subject as a result of it is dependent upon the notion of threat and, subsequently, the worth of the requested insurance coverage. The whole lot is linked! This can be a dialogue that we will need to have, at all times within the spirit of a win-win partnership. All of us have one thing to realize from this OECD reform, in order that our nations can entry longer phrases with fewer ensures.
However aren’t you involved concerning the debt ranges of another African nations? Many are on the fringe of the precipice…
Some debt ranges are certainly excessive with regard to the targets we simply talked about. And a few nations are having points servicing their money owed. They have to be supported. It’s the IMF’s mission to take care of this type of disaster, which may occur to any nation; we should help them and assist them to hold out the required reforms, however I don’t see how a rustic can develop with out taking over debt.
After all, we should management that debt, which should be used correctly, for productive investments, and to not cowl operational prices. I consider that, total, the quantity of African debt could be described as acceptable. It’s not extreme.
You say that the general public sector performs an outsized function in Senegal…
In every single place in Africa – it’s not particular to Senegal. As a result of state of improvement, we now have but to achieve a degree the place the non-public sector can take over.
Some European nations have gone a yr with no recognised authorities. In Africa, that is unthinkable. The state basically oversees the most important infrastructure tasks and pays a big proportion of salaries; and most of the bigger contracts are additionally these of the state. The non-public sector can take over however solely as soon as we now have constructed the fundamental infrastructure – roads, railroads and ports.
Once you examine the Senegal of 2012 to the Senegal of at the moment, how do you see its improvement?
In all objectivity, it’s past comparability, no matter metric you wish to examine. By way of financial capability, the financial system and [government] budgets have tripled, from 2,400bn CFA francs ($4bn) to six,500bn CFA francs ($11bn) in ten years.
Concerning infrastructure, it’s incomparable. Take a look at what we now have constructed when it comes to highways, roads, and universities; in agriculture, manufacturing has been multiplied by two, typically by three for sure crops. The financial system is way more highly effective, and we now have progressed in all sectors, together with water and electrical energy.
Now we have made progress; however there’s nonetheless way more to realize the aims we now have set ourselves. We nonetheless have loads of improvement work forward of us.
As Chair of the African Union, you tried to deal with a number of points, together with the meals disaster in relation to fertilisers and the import of grains. Have you ever seen any progress for the reason that outbreak of the conflict in Ukraine?
We obtained some beneficial developments. I went to Sochi in June 2022 to report on these issues – and in July agreements with the United Nations, Turkey, Russia and Ukraine have allowed the export of grain from the Black Sea, and we now have seen some order restored to the worldwide market.
Since December, we now have been creating a standard technique to import from the US, a rustic that has seven years’ value of [grain] reserves. It may possibly subsequently provide the market to keep away from worth hikes pushed by speculators. Progressively, the obstacles that hindered maritime commerce have been lifted.
In 2023, we may have fewer issues at this degree; and already, costs have fallen in comparison with 2022, so we are able to transfer ahead. As well as, we’re working with the European Union, France, and Germany to facilitate commerce. These are all efforts to seek out options, within the quick time period, within the grain and fertiliser markets.
Within the medium time period, it’s a matter of creating African agriculture capabilities in order that we’re meals safe. On the Dakar 2 summit on meals safety that we hosted with the African Growth Financial institution in January, the AfDB was in a position to mobilise greater than $36bn in investments in agricultural programmes for the following 5 years. That is one thing very elementary and really new to offer Africa the capability to make sure its meals self-sufficiency.
So you might be assured within the capacities of the agricultural sector in Senegal?
Sure, it’s already altering. Mechanisation and the usage of know-how is on the rise. Our goal of meals sovereignty implies that we’re reinjecting sources into our agricultural program, amounting to 1,600bn CFA francs ($2.6bn) over three years. Now we have by no means invested a lot in agriculture. This interprets into extra land being cultivated, larger mechanisation, higher use of seeds, extra fertilisers. Briefly, extra productiveness and manufacturing, to not point out our efforts to maneuver up the worth chain: processing and advertising.
This logic is kind of the identical in all places in Africa. Relying on the agro-ecological context, everyone seems to be conscious that we are able to solely transfer ahead with agriculture and agricultural processing.
Senegal operates in a considerably turbulent neighbourhood, with an more and more fragile Sahel. How do you take care of this?
As Africans, we favour knowledge in our actions. And knowledge requires that the neighbourhood be handled with important consideration. As chair of the African Union, I visited Mali and Chad, two nations in transition.
So far as potential, we are attempting to perform these transitions in conformity with regional and sub-regional establishments. These African nations aren’t going anyplace, and so they want our help and understanding. In the end, [a positive outcome] is dependent upon them – however I’m in favour of accompanying these transitions in order that they arrive to a profitable conclusion.
Do you concern the unfold of jihadism?
Terrorism spares no nation. Admittedly, we now have suffered only a few actions in Senegal, however we must always not relaxation on our laurels. The unfold is unavoidable, insofar as jihadism operates inside a cultural, spiritual, and social continuum. We work each day to manage the environment and territory.
Does the continent appear united in its aims? It seems to be extra fragmented than in previous times…
Africa has an awesome consciousness of itself, of what it represents and of what it desires to be. All that is clear within the heads of the leaders and the heads of Africans, regardless of the degree of illustration. We had the need to talk with one voice. This was the case earlier than my presidency, and it’ll nonetheless be legitimate after.
We additionally realise that we should work extra collectively on African points and conflicts, to elaborate options. After all, Africa is huge: 30m sq. kilometres, greater than China, the US and the EU mixed. The continent is numerous, from Arab Africa to Southern Africa… there’s plenty of cultural, ethnic, and non secular variety and political techniques too. Added to this are the colonial legacies. All this must be made coherent. Subsequently, Africans must be pleased with the efforts undertaken to protect this joint organisation known as the African Union, that tries, regardless of the crises and tensions, to hold the voice of Africa on the important questions.
That’s the reason we should take note of what we’re doing. We should refuse the view that Africa is doing nothing, that Africa will not be shifting ahead, that there are too many issues in Africa. This view doesn’t correspond to actuality.
For those who combination the efforts being made in every African nation, you will note that a lot work is being carried out on the continent at the moment, together with work on infrastructure, universities, investments… Africans will need to have confidence in themselves, their leaders and their actions; it’s as much as them to construct their continent.
On their facet, Western nations, China and Russia are placing stress on African nations to take sides of their divisions. How ought to African leaders react?
The world is in a everlasting state of competitors, so it’s regular that everybody tries to have extra affect. It’s as much as Africans to make selections. In Senegal, we companion with everybody. Now we have conventional friendships with the Western bloc. I’ve at all times assumed that.
Since independence, we now have maintained diplomacy primarily based on shared values and opened our horizons. That’s the reason we’re open to China and the remainder of Asia, Russia, Turkey – with out denying our previous friendships with the Western bloc.
However, in fact, we attempt to profit from our partnerships on this difficult world. We don’t enter right into a Manichean logic of blocs in opposition to blocs. On this world kaleidoscope, Africa should play its function; the continent has weight and sources and should rely within the live performance of countries. We want to make this contribution with out being within the wake of any explicit group.
You might be deemed near French President Emmanuel Macron. However the African avenue, the African youth, appear to be more and more suspicious of France. Is it flawed?
Let’s inform it like it’s: in African struggles, President Macron has at all times been on our facet and has usually been among the many first leaders to talk out for Africa. One other matter is whether or not the African avenue, the youth, has a distinct notion.
The fact is, as I’ve described to you with the method of the African Union coming into the G20 and on different points similar to vaccines and the reform of the UN Safety Council: we’re working intently and responsibly with President Macron with out being subservient to him. If we disagree, we categorical it very clearly. The French President helps Africa’s progress; I expertise this each day in my dealings with him.
To conclude, let’s return to my first query: the numerous challenges dealing with Senegal within the coming years. What are they: lowering inequalities, coaching younger folks, or investing in infrastructure? I’ll first point out the problem of demography, which we should management. Then we should give a perspective to youth relating to employability, which suggests offering coaching. This implies altering the paradigms of the training system. Given the large quantity approaching to the job market every year, the present system can not operate or present employment alternatives for younger folks.
Subsequently we have to develop vocational coaching additional, and orient ourselves much more in the direction of the professions of the longer term, these of the digital financial system, coding, science, technical abilities and innovation. These new-economy jobs will enable us to create many roles. Then, to soak up these flows, we should develop the infrastructure, roads, and colleges and proceed the development efforts. This requires huge sources.
And we should develop the idea of entrepreneurship, so that everybody is educated to develop their exercise. We can assist them with financing and accompany them, reasonably than making them consider that the state can present work to everybody. The state will do its half, however options are wanted. These will come from the non-public sector, which should be developed; that’s the reason we would like an open financial system. And there are additionally essential sectors similar to modernised agriculture and livestock. The numerous problem is centred round creating these jobs.
Would you say you’re on the correct path?
Completely, indisputably!
Learn extra about Senegal’s booming financial system in our Senegal File.
Supply: african.business
