72755 v1 World Trade Indicators 2009/10 Senegal Trade Brief Trade Policy External Environment Senegal’s trade regime has become more open since Senegal’s exports do not have very favorable access to the introduction of the Common External Tariff international markets as reflected in the country’s (CET) of the West African Economic and Monetary Market Access TTRI2 (including preferences) of 4.2 Union (WAEMU) in 1999. Based on its latest MFN percent, compared to the SSA average of 3.9 percent Tariff Trade Restrictiveness Index (TTRI)1 of 10.2 and the low-income average of 5.6 percent. The percent, Senegal’s economy is more open to trade than weighted average rest of the world tariff faced by that of its Sub-Saharan Africa (SSA) (11.3 percent) and Senegalese exports is 4.6 percent, with a rate of 2.8 low-income comparators (11.6 percent). Based on the percent for agricultural goods and 5.1 percent for non- TTRI, it ranks 95th out of 125 countries (where 1st is agricultural goods. The country’s currency, the CFA least restrictive). The agricultural sector is given higher franc, which is pegged to the euro, appreciated by 7 tariff protection (13.1 percent) compared to the non- percent against the U.S. dollar in 2008, making the agricultural sector (9.2 percent). Senegal’s average country’s exports more expensive in foreign currency MFN applied tariff has been relatively constant since terms. 2001 and is now 11.9 percent. In line with the WAEMU’s policy, the maximum MFN applied tariff As negotiations between ECOWASand the EU (excluding alcohol and tobacco) is 20 percent. As a towards a comprehensive Economic Partnership member of Economic Community of West African Agreement (EPA) stalled prior to the December 2007 States (ECOWAS), the four-band CET was revised in deadline, the preferences under the Cotonou June 2009 to include a fifth band of 35 percent, Agreement elapsed. Senegal, however, maintains a primarily at the behest of Nigeria. The country’s trade similar level of preferences to the EU market under policy space, as measured by the wedge between the ―Everything But Arms‖ (EBA) initiative for least bound and applied tariffs (the overhang), is 18 developed countries. The country continues to percent. Regarding its commitment to liberalizing negotiate a comprehensive EPA with the EU as part services trade, Senegal ranks 67th (out of 148) on the of the ECOWAS. Access to the Chinese market has GATS Commitments Index. also improved for Senegalese products as the two governments signed a deal in October 2008, which In response to the high food and fuel prices during increased the number of categories of goods exported 2006–08, the Senegalese government introduced to China with a zero-tariff treatment from 190 to more several untargeted subsidies and waived import tariffs than 600. on wheat and rice. However, most of these subsidies and tax suspensions were lifted later in 2008. Behind the Border Constraints Senegal remained in the bottom 20 percent of international business environments in 2009, being ranked 157th out of 183 countries, in the Ease of Doing Business index. The Logistics Performance Unless otherwise indicated, all data are as of August 2009 Index (LPI), a measure of the extent of trade and are drawn from the World Trade Indicators 2009/10 facilitation, rates Senegal at 2.37, on a scale of 1 to 5, Database. The database, Country Trade Briefs and compared with 2.35 for the SSA region and 2.29 for Trade-at-a-Glance Tables, are available at countries in the low-income group. It ranks 101st (out http://www.worldbank.org/wti. of 150) in the world and 16th (out of 39) in the SSA region (with South Africa leading the regional group). If using information from this brief, please provide the Among the LPI subcategories, its strongest following source citation: World Bank. 2010. ―Senegal performance is in lowering domestic logistics costs, Trade Brief.‖ World Trade Indicators 2009/10: Country Trade while its weakest performance is in the quality of Briefs. Washington, DC: World Bank. Available at transport and IT infrastructure for logistics and the http://www.worldbank.org/wti. World Trade Indicators 2009/10 Senegal Trade Brief ease and affordability of arranging international Notes shipments. 1. TTRI calculates the equivalent uniform tariff that would keep domestic welfare constant. It is weighted by Trade Outcomes import shares and import demand elasticity. 2. MA-TTRI calculates the equivalent uniform tariff of Real trade growth decelerated from 15.6 to 6.6 percent trading partners that would keep their level of imports in 2008, and is expected to fall further to 3.1 percent constant. It is weighted by import values and import in 2009. This lackluster performance was driven by a demand elasticities of trading partners. steep decline in import growth from 20.4 percent in 3. Agence Nationale de la Statistique et de la 2007 to 6.9 percent in 2008 and a less drastic fall in Démographie 2009, p. 3. export growth from 8.1 percent in 2007 to 6.2 percent in 2008. This weak growth is expected to continue through 2009, during which imports are projected to References grow by only 3.8 percent and exports by only 2 percent. Agence Nationale de la Statistique et de la Démographie. 2009. Reperes Statistiques du Premier Trimestre 2009. In nominal terms, trade growth increased slightly from . 2008, pushed up by acceleration in export growth CUTS Centre for International Trade, Economics and from 19.8 percent in 2007 to an estimated 30.1 percent Environment (CUTS CITEE). 2008. Dossier on in 2008. Import growth, on the other hand, declined Preferential Trade Agreements. CUTS CITEE. October from 33.9 percent in 2007 to an estimated 29.6 percent 2008. . in 2008, increasing by 33.8 percent compared to 5 Europa. 2009. ―EU and West Africa Move Forward on percent the previous year. Services exports also Regional Economic Partnership Agreement.‖ performed well increasing by an estimated 21.9 Europa. June 17, 2009. . growth rate of 48.9 percent in 2007. The solid Food and Agriculture Organization of the United performance of services exports may however not be Nations (FAO). 2008. ―Policy Measures Taken by maintained in 2009 as tourism receipts are expected to Governments to Reduce the Impact of Soaring be hurt by lower demand in international markets, Prices—Africa—Senegal.‖ FAO. December 15, 2008. leading to a projected growth rate of only 2.5 percent. With falling export prices, goods exports will fare no . better in 2009, with an expected decline of 15.6 International Monetary Fund (IMF). 2009. IMF Country percent. For instance, the average price of phosphoric Report No. 09/5. IMF. January 2009. acid, one of the country’s main exports, is expected to . quarter of 2009, exports had already fallen by 22 The Economist Intelligence Unit (EIU). 2009. Country percent in nominal U.S. dollar terms compared to the Report—Senegal. EIU. August 2009. . share of GDP was 2.63 percent in 2008. An important USDA Foreign Agricultural Service. April 16, 2009. source of foreign exchange for the country, Senegal: Trade Report—Quarterly Imports. Global remittances were 9.8 percent of the GDP in 2008, Agricultural Information Network. .