Hydrocarbon production will have a "positive impact" on Senegalese growth in 2023, according to the BCEAO

The expected start of Senegal's hydrocarbon production this year will have a "positive impact" on the country's economic growth rate by the end of 2023, says the national management of the BCEAO, confirming forecasts already made by local authorities.

In a press release, the BCEAO, the Central Bank of West African States, added that it had noted that this hydrocarbon production could also have a positive impact on Senegal's external current account.

The BCEAO's national directorate for Senegal gave this information following its first quarterly meeting, for the year 2023, with the Professional Association of Banks and Financial Institutions of Senegal (APBEFS) and the general managers of these same structures.

‘’Le cadrage macroéconomique 2023-2024 du Sénégal et de l’Union’’, l’union monétaire des huit pays membres de ladite banque centrale, ‘’a été présenté aux dirigeants des établissements de crédit’’, lors de cette rencontre, affirme le communiqué.         

This framework highlights the positive impact of the start of hydrocarbon production on economic growth and the current account with the outside world'', says the management of the Senegalese branch of the BCEAO. 

This outlook confirms the expectations of the Senegalese authorities, according to which the country's growth rate, from 4.8% in 2022, should reach 10% in 2023, thanks to the first oil and gas revenues expected this year.

The central bank's forecasts also highlight "the expected fiscal consolidation efforts to bring the budget deficit to the 3% target set by the EU convergence pact by 2024".

According to the same source, the situation of the Senegalese banking system at the end of December 2022 was judged "globally satisfactory". 

It explains that credits increased by 19.8%, year-on-year, to reach 6,808.5 billion CFA francs at the end of December 2022.

This development was mainly driven by a 32.2% increase in short-term loans, an 11.2% increase in medium-term loans and an 18.6% increase in long-term loans. 

In Senegal, portfolio activities on public securities in particular also increased significantly by 31.5% at the end of 2022.

The securities portfolio of Senegalese banks stood at CFAF 3,115 billion at the end of December 2022, compared with CFAF 2,369 billion a year earlier.

The quality of the portfolio has improved'', notes the BCEAO's national management for Senegal. 

It adds that ''the managers of credit institutions have welcomed the initiatives taken by the Commercial Court of Dakar on the development of a modus operandi for the settlement of bank litigation cases''. 

This measure should make it possible to reduce the costs and processing times of these cases before the commercial court,'' according to the national management of the BCEAO's Senegalese branch.

The leaders of credit institutions in Senegal ''reiterated their wish that old cases pending before the courts of first instance could be transferred to the commercial court''.

APS