Senegal’s economic growth surged to 8.9% in Q3, driven by oil exports, with a 9.3% growth projected for next year by the IMF. The country is set to begin gas exports from BP’s project, increasing growth potential. The government plans to reduce its budget deficit significantly by 2027, addressing public financial challenges amid strong growth.
Senegal has achieved unprecedented economic growth, recording an 8.9% increase in gross domestic product (GDP) in the third quarter due to the commencement of oil exports. The International Monetary Fund has projected a growth rate of 9.3% for the upcoming year. The National Agency of Statistics and Demography indicated the economy expanded by 11.5% compared to the same period last year, signaling a strong upward trajectory in economic performance.
With the anticipated export of gas from BP Plc’s Greater Tortue Ahmeyim liquefied natural gas project set to begin next year, further acceleration in economic growth is expected. Cheikh Niane, Secretary-General of the Ministry of Energy, Petroleum, and Mines, highlighted that the first gas output from this project is likely to contribute to additional growth in the first quarter of 2025, although a decline in growth rates is expected afterward.
This rapid economic expansion presents a unique opportunity for Senegal to address its public finances amid predictions of a budget deficit exceeding 11% of GDP for this fiscal year. Prime Minister Ousmane Sonko has stated that the government is committed to reducing the deficit to 3% of GDP by 2027 through strategic reductions in government expenditure and enhancements in tax collection.
In June, Woodside Energy Group Ltd., Australia’s largest oil and gas producer, initiated its first oil production at the Sangomar project located offshore Senegal. Investors have shown cautious optimism, as evidenced by the continuing stability of Senegal’s dollar bonds, which saw slight gains on Monday.
Senegal is experiencing significant economic growth, driven primarily by the introduction of oil exports, with a projected rise of 9.3% forecasted for next year. The government aims to rectify public finance issues, targeting a deficit reduction to 3% of GDP by 2027. Upcoming gas exports are expected to further boost the economy, despite anticipated fluctuations in growth rates beyond 2025.
Original Source: www.energyconnects.com
