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Senegal & Gambia Country Risk Report Q1 2018

Senegal & Gambia Country Risk Report Q1 2018

Core Views

The Gambia's economic recovery is underway and growth will accelerateduring the final months of 2017 and into 2018. However,the pace of the recovery will be constrained by a need for the newgovernment to address the misdeeds of the past, which will absorbgovernment time and resources while political uncertainty will keepforeign investors cautious.

While a significant proportion of the Gambian military remains loyalto former President Yayha Jammeh, an unconstitutional transfer ofpower is fairly unlikely given the ongoing ECOWAS presence in thecountry. That said, protests are fairly likely to occur in the comingquarters, as the administration of President Adama Barrow strugglesto keep both its supporters and those of Jammeh happy in itsattempts to address past wrongdoings.

Agriculture will remain the dominant sector in The Gambia, thoughinvestment into other industries, such as tourism, will help drive realGDP growth.

Core Views Private sector investment will increasingly drive economic growth in Senegal as the government pares back spending in a bid to ease the country's debt burden. Private investors will be attracted by political stability and an improving business environment. The victory of President Macky Sall's governing alliance in July's parliamentary election is a boon for the continuation of the president's reform policies, which will underpin strong economic growth over the coming years. The result also suggests that President Sall is highly likely to secure a second presidential term in 2019. While more stable than most other Sub-Saharan African states, Senegal is a high-risk target for attack by Islamist terrorists, and any major incident would jeopardise growth in the country's tourism sector. Sall will continue to focus efforts on combating the threat of terrorism over the coming years, recognising the salient danger the issue presents to the economy. Inflationary pressures will be benign, in part thanks to the West African Franc (XOF)'s peg to the euro.


BMI Indices – Brief Methodology
BMI Risk Index – Senegal
BMI Risk Index – The Gambia
BMI Index League Tables
Executive Summary – The Gambia
Core Views
Chapter 1.1: Economic Outlook – The Gambia
SWOT Analysis
Economic Growth Outlook
Economy Will Recover Only Slowly
Gambia's economic recovery is underway and growth will accelerate during the final months of 2017 and into 2018. However, the pace
of recovery will be constrained by the need for the new government to address the misdeeds of the past, which will absorb government
time and resources while political uncertainty will keep foreign investors cautious.
Chapter 1.2: 10-Year Forecast – The Gambia
The Gambian Economy To 2026
Robust Growth Dependent On Jammeh's Departure
Following President Yahya Jammeh's departure from office in 2017, we expect that The Gambia will enjoy relatively robust real GDP
growth over the next decade. A pick-up in foreign aid and a return of skilled workers would support growth, but as a small, open
economy, the country will remain susceptible to external shocks, whether from weather events or global economic headwinds.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 1.3: Political Outlook – The Gambia
SWOT Analysis
Domestic Politics
Coup Unlikely, But Popular Protests Probable
While a significant proportion of the Gambian military remains loyal to former President Yayha Jammeh, an unconstitutional transfer
of power is unlikely given the ongoing ECOWAS presence in the country. That said, protests are fairly likely to occur in the coming
quarters, as the administration of President Adama Barrow struggles to keep both its supporters and those of Jammeh happy in its
attempts to address past wrongdoings.
Long-Term Political Outlook
New President Will Entail Greater Stability
The departure of President Yahya Jammeh will be positive for The Gambia's international and domestic political trajectory, with less
uncertainty regarding foreign policy and greater emphasis on human rights at home as the victorious opposition candidate Adama
Barrow takes office.
Executive Summary – Senegal
Core Views
Chapter 2.1: Economic Outlook – Senegal
SWOT Analysis
Economic Growth Outlook
Private Sector Investment Will Drive Strong Economic Growth
Private sector investment will increasingly drive economic growth in Senegal as the government pares back spending in a bid to ease
the country's debt burden. Private investors will be attracted by political stability and an improving business environment.
Contents
Chapter 2.2: 10-Year Forecast – Senegal
The Senegalese Economy To 2026
Growth To Outpace Previous Decade
Senegal will enjoy strong real GDP growth over the next decade, averaging 7.1% annually, an improvement on the 4.2% recorded
over the previous 10 years. Growth will be driven by private consumption, though the country's poor infrastructure will impede
development.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 2.3: Political Outlook – Senegal
SWOT Analysis
Domestic Politics
BBY Victory Bodes Well For Continued Reform
The victory of President Macky Sall's governing alliance in July's parliamentary election is a boon for the continuation of the president's
reform policies, which will underpin strong economic growth over coming years. The result also suggests that President Sall is highly
likely to secure a second presidential term in 2019.
Long-Term Political Outlook
Bastion Of Regional Stability To Flourish Politically
Senegal will continue to develop politically over the next decade, cementing its reputation as one of the most stable democracies in
Africa. There are challenges to this stability, not least from poverty and unemployment, but we believe that accelerating economic
development will help Senegal overcome these.
Chapter 3: BMI Global Macro Outlook
DM Growth Peaking, But EMs Have Room To Run
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: THE GAMBIA – MACROECONOMIC DATA & FORECASTS
TABLE: SENEGAL – MACROECONOMIC DATA & FORECASTS

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