Senegal’s economy saw a remarkable 8.9% growth in Q3 due to oil exports, with an 11.5% annual increase. Gas exports from BP’s project are anticipated to further enhance growth, although rates may stabilize post-2025. The government plans to address a significant budget deficit through expenditure cuts and improved tax collection, while new oil production from the Sangomar project contributes to economic momentum.
Senegal’s economy experienced significant growth in the third quarter, achieving a record expansion largely due to its commencement of oil exports. The National Agency of Statistics and Demography reported an 8.9% increase in GDP from the previous quarter and an impressive 11.5% year-over-year growth. The International Monetary Fund forecasts a further 9.3% growth for the upcoming year as Senegal also begins gas exports from BP’s Greater Tortue Ahmeyim project, expected to launch early next year.
According to Cheikh Niane, Secretary-General of the Ministry of Energy, Petroleum, and Mines, the gas production from the GTA project will be a catalyst for sustained economic growth into 2025. However, Mark Bohlund from REDD Intelligence cautions that growth rates may stabilize at lower levels thereafter. This expansion presents a vital opportunity for Senegal to address its public finance issues amid an anticipated budget shortfall exceeding 11% of GDP this year.
On the financial market front, Senegal’s dollar bonds showed little movement, with 2033 maturing notes increasing by 0.2 cents to 80.12 cents on the dollar. Additionally, securities due in 2031 rose similarly to reach 89.8 cents. Prime Minister Ousmane Sonko outlined a plan aiming to reduce the budget deficit to 3% of GDP by the year 2027, through government spending cuts and improved tax collection.
The Sangomar project, developed by Woodside Energy Group Ltd., marked its inaugural oil production in June 2023, adding to Senegal’s emerging status as an oil and gas producer. This production is set to enhance the country’s economic landscape significantly going forward.
Senegal’s record economic growth is primarily driven by new oil exports, with projections for even greater expansion as gas exports begin. The government aims to rectify budget deficits through fiscal reforms while leveraging newfound energy resources to ensure long-term sustainability. Continued investment in the energy sector will be crucial for maintaining growth and improving public finances.
Original Source: www.energyconnects.com
