Thursday, November 09, 2017 11:55 AM / BMI
BMI View: The victory of President Macky Sall's governing alliance in July's parliamentary election is a boon for the continuation of the president's reform policies, which will underpin strong economic growth over coming years. The result is also suggests that President Sall is highly likely to secure a second presidential term in 2019.
The convincing victory of President Macky Sall's Benno Bokk Yakaar (BBY) alliance in the July parliamentary election bodes well for the continuation of Sall's reform program, which he has been implementing since coming to power in 2012. The result also acts an endorsement of the president and points to a strong likelihood that he will win a second mandate in 2019.
The outcome of the election – a result in line with our expectations – reinforces our view that after Senegal will continue to be an economic outperformer in the years ahead. Indeed, we forecast average real GDP growth of 7.1% over the next three years, well above the regional average of 3.2%.
Reforms To Continue With Increased Parliamentary Share
The BBY increased its share of parliamentary seats from 119 to 125 at the July election and, with the party continuing to hold executive and legislative power, this bodes well for the continuation of Sall's reform agenda over the coming years. We believe that BBY's victory will lead to continued improvements in the country's business environment.
The key plank of the reform agenda
is the Plan Sénégal Émergent (PSE), which aims to cut red tape; foster good
governance and greater adherence to the rule of law; and improve human capital
and physical infrastructure. The effort, introduced in 2014, has seen the
country climb steadily in measures such as the World Bank's Ease Of Doing
Business index and underpins the country's high score in BMI's
Operational Risk Index score relative to SSA's other fast-growing economies.
We also believe that BBY's victory bodes well for further improvements in governance and accountability and will entrench Senegal's status as a beacon of stability in the region. Indeed Sall and his government have overseen a sharp reduction in corruption since coming to power, with the country steadily rising the ranks in successive editions of Transparency International's Corruptions Perception Index.
The country's score has risen from
29 in 2011 to 64 in the 2016 edition as the president has taken measures such
as requiring cabinet ministers, heads of parastatals and any government
official managing budgets of greater than XOF1.0bn (USDXXmn) to declare their
assets. President Sall and BBY also oversaw a change to the constitution that
shortens term limits (the winner of the 2019 presidential election will serve
for only five years instead of the current seven), which was widely viewed as
positive for governance.
Second Presidential Term For Sall Looks Likely
The BBY's victory in the election is a positive endorsement from the electorate not only of the party's performance but also of Sall himself, and we believe that it signals that the president is on course to win a second term in 2019. In the lead up to the vote, there were protests in the capital Dakar against the arrest of the city's mayor, Khalifa Sall (no relation to the president), on what his supporters claim were trumped up corruption charges.
Some had speculated that these
protests were a signal of growing frustration with the president and that his
party would be punished at the parliamentary elections. In any event, Khalifa
Sall's Manko Taxawu Sénégal coalition only managed to win seven seats, less
than half of the total available in Dakar, indicating that the protests were
not reflective of a broad loss of support for the president.
Khalifa Sall's arrest in March 2017, which came amid speculation that he was planning to vie for the presidency, followed the arrest of Karim Wade (son of former president Abdoulaye) after he was announced as his Parti Démocratique Sénégalais (PDS)'s presidential candidate.
The detention of the two men has
led critics to accuse Sall of using his anti-corruption drive as veil to
neutralize opponents. The parliamentary election results suggest that voters
either do not believe this or are not particularly concerned by it. As such,
for now, there is little sign that such accusations will harm President Sall's