Standard & Poor’s Ratings Services has affirmed its ‘B+’/’B’ issuer credit ratings on the

  • Republic of Senegal, reflecting gradual progress on structural reforms and cautious domestic macroeconomic management. The outlook is stable.


Prudent fiscal policies, sustained foreign grants, a wider tax base, as well as the improved performance of public enterprises, should limit the general government deficit to about 1% of GDP in 2003 and 2004.

The ratings on Senegal are also supported by membership of the West African Economic and Monetary Union (Waemu), with an independent central bank (Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO) responsible for monetary policy. “These institutional arrangements have contained inflation in Senegal at an estimated 2.3% in 2002 and 2003 and will continue to support monetary and fiscal stability,” says Standard & Poor’s credit analyst Mame-Fatou Diagne.

The ratings on Senegal, however, are constrained by a low level of economic development, as well as high general government debt.

Per capita GDP is US$600, and the economy suffers from deficiencies in its social and physical infrastructure,” says Diagne. “General government debt is high, but declined to 65% of GDP in 2003, which is lower than the ‘B’ median. Moreover, a favorable structure mitigates both the economic burden and liquidity risk posed by government debt, as nearly all of it is concessional.”

The government is expected to adhere to a programme of structural reforms required to receive debt relief under the Highly Indebted Poor Country (HIPC) initiative. Consistent reform implementation leading to higher growth, improved human development indicators, and a reduction of the public sector’s role in the economy would, over the medium term, lead to improvements in Senegal’s creditworthiness.

Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor’s web-based credit analysis system, at