Identifier
Created
Classification
Origin
07SECTON03OF04DAKAR269
2007-02-02 11:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Dakar
Cable title:
SENEGAL: SENESETTER FOR GENERAL WARD
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UNCLAS SECTON 03 OF 04 DAKAR 000269
SIPDIS
SIPDIS
SENSITIVE
TATE FOR AF/W, AF/RSA AND INR/AA
ABIDJAN, ABUJA AD LONDON ALSO FOR USDAO
PARIS FOR POL ? D?ELIA AD USDAO
E.O. 12958: N/A
TAGS: OVIP PGOV ECO PHUM EAID MASS PREL SG
SUBJECT: SENEGAL: SENESETTER FOR GENERAL WARD
6. (SBU) There is general economic stability, and GDP
growth had averaged five percent annually for the last
ten years, but is estimated to have fallen to three
percent in 2006. More than half the population lives in
poverty; one-third to one-half have no reliable
employment; the agricultural sector, which employs 60
percent of the population, is weak and unreliable; and
most youth see emigration as a panacea, as shown by the
recent flight of thousands of Senegalese to the Canary
Islands. On a more positive note, Senegal graduated from
the Highly Indebted Poor Countries program. In 2005 and
2006, the IMF and the World Bank forgave over USD 1
billion in multilateral debt, potentially freeing up over
USD 80 million per year for poverty reduction. Despite
these successes, the business environment remains
difficult. Corruption is an issue, and while Wade has
said the right things about combating it, members of his
own inner circle are often rumored to demand bribes and
percentages of investments.
7. (SBU) Senegal's manufacturing and services sectors
are hampered by major infrastructure weaknesses that
prevent Senegal from taking advantage of its favorable
geographic location. Senegal's underdeveloped road and
dilapidated railway systems do not provide adequate links
to Senegal's landlocked neighbors, who could profit from
exporting through Dakar's international port. Roads are
overly congested in major urban areas as well as poorly
maintained almost everywhere in the country. Electricity
supplies are unreliable, very expensive and far from
universally available. The Port of Dakar, the closest
African port to the U.S. and Western Europe, is in great
need of modernization to meet the potential demand of the
sub-region alone. The country has done little to take
advantage of potential trade preferences under the
African Growth and Opportunity Act (AGOA),although new,
direct trade links to the U.S. should help augment
Senegalese exports to the U.S.
8. (SBU) Senegal has traditionally been a French and
Lebanese expatriate business preserve. In recent years,
China, India, Morocco, and Iran have become significant
economic players in Senegal. Some high-profile U.S.
companies operate in Senegal, including Citibank, General
Electric, Pfizer, Colgate-Palmolive, Microsoft, Ernst and
Young, Suffolk University, UPS, and Phillip Morris.
While the Government rhetoric speaks favorably of the
benefits of the private sector, in practice the
Government involves itself in many major transactions and
potential investments that undermine the principles of
free, open and transparent competition.
9. (SBU) For 2007, the Government of Senegal will have
to deal with a significant budget deficit, while at the
same time continuing to finance significant public
investments in roads and a new international airport.
Since 2004, Senegal has been eligible as a potential
Millennium Challenge Account (MCA) partner and is
continuing to do the required feasibility studies for a
proposed MCA Compact to build a major new industrial
SIPDIS
SIPDIS
SENSITIVE
TATE FOR AF/W, AF/RSA AND INR/AA
ABIDJAN, ABUJA AD LONDON ALSO FOR USDAO
PARIS FOR POL ? D?ELIA AD USDAO
E.O. 12958: N/A
TAGS: OVIP PGOV ECO PHUM EAID MASS PREL SG
SUBJECT: SENEGAL: SENESETTER FOR GENERAL WARD
6. (SBU) There is general economic stability, and GDP
growth had averaged five percent annually for the last
ten years, but is estimated to have fallen to three
percent in 2006. More than half the population lives in
poverty; one-third to one-half have no reliable
employment; the agricultural sector, which employs 60
percent of the population, is weak and unreliable; and
most youth see emigration as a panacea, as shown by the
recent flight of thousands of Senegalese to the Canary
Islands. On a more positive note, Senegal graduated from
the Highly Indebted Poor Countries program. In 2005 and
2006, the IMF and the World Bank forgave over USD 1
billion in multilateral debt, potentially freeing up over
USD 80 million per year for poverty reduction. Despite
these successes, the business environment remains
difficult. Corruption is an issue, and while Wade has
said the right things about combating it, members of his
own inner circle are often rumored to demand bribes and
percentages of investments.
7. (SBU) Senegal's manufacturing and services sectors
are hampered by major infrastructure weaknesses that
prevent Senegal from taking advantage of its favorable
geographic location. Senegal's underdeveloped road and
dilapidated railway systems do not provide adequate links
to Senegal's landlocked neighbors, who could profit from
exporting through Dakar's international port. Roads are
overly congested in major urban areas as well as poorly
maintained almost everywhere in the country. Electricity
supplies are unreliable, very expensive and far from
universally available. The Port of Dakar, the closest
African port to the U.S. and Western Europe, is in great
need of modernization to meet the potential demand of the
sub-region alone. The country has done little to take
advantage of potential trade preferences under the
African Growth and Opportunity Act (AGOA),although new,
direct trade links to the U.S. should help augment
Senegalese exports to the U.S.
8. (SBU) Senegal has traditionally been a French and
Lebanese expatriate business preserve. In recent years,
China, India, Morocco, and Iran have become significant
economic players in Senegal. Some high-profile U.S.
companies operate in Senegal, including Citibank, General
Electric, Pfizer, Colgate-Palmolive, Microsoft, Ernst and
Young, Suffolk University, UPS, and Phillip Morris.
While the Government rhetoric speaks favorably of the
benefits of the private sector, in practice the
Government involves itself in many major transactions and
potential investments that undermine the principles of
free, open and transparent competition.
9. (SBU) For 2007, the Government of Senegal will have
to deal with a significant budget deficit, while at the
same time continuing to finance significant public
investments in roads and a new international airport.
Since 2004, Senegal has been eligible as a potential
Millennium Challenge Account (MCA) partner and is
continuing to do the required feasibility studies for a
proposed MCA Compact to build a major new industrial