Index trend
Previous quarterly editions
Expropriation Risk: 52 52 44 43 ►Political Violence Risk:48 48 35 35 ►Terrorism Risk:33 33 33 33 ►Exchange Transfer and Trade Sanction Risk: 44 44 44 63 ▲Sovereign Default Risk:83 83 83 74 ▼
Overall Risk Temperature: 54 (Medium 2) TREND ▲
Special topic: Gray zone aggression
Degree to which the country relies on outbound gray zone action to achieve its strategic objectives1 = Not at all5 = Gray zone action is a core tactic
1
Impact of inbound gray zone attacks on the country1 = Negligible impact5 = Significant impact on economic growth and/or political stability
Senegal is neither a major target for, nor a perpetrator of, gray zone actions.
The Senegalese, like people in most countries in the region and beyond, are exposed to a variety of sources of disinformation, often over social media. Over the past decade, much of this has targeted Western countries, especially France. The impact of regional disinformation campaigns has often been exaggerated by regional governments, their Western allies and the Western press. While anger at France’s regional policies is widespread and politicians across the region have taken advantage of this — including the new Senegalese administration — foreign-inspired media campaigns are only a secondary driver.
However, social media and broader disinformation campaigns are likely to worsen in the coming months ahead of planned November legislative polls. President Bassirou Diomaye Faye in September dissolved Parliament and called for new elections, largely because he lacks a legislative majority in the National Assembly that he inherited from his predecessor. This has both blocked his promised reform efforts and contributed to heated political rhetoric.
To ensure a (likely) parliamentary majority, both Faye and Prime Minister Ousmane Sonko who heads his Patriots of Senegal (Pastef) party, as well as their supporters and legislative candidates, are likely to resort to the kind of populist rhetoric and messaging they used in the run-up to the March presidential election. Disinformation is likely from all parties in the upcoming campaign, although the role and influence of any foreign-inspired fake news or disinformation will likely be limited.
Ostensibly to counter media disinformation, the previous administration of former President Macky Sall (2012 – 2024) weaponized a 1977 law (Article 255 of the penal code) against “fake news,” with harsh anti-libel provisions to imprison opposition protesters and critical voices.
Faye’s administration, whose members suffered from considerable state repression under Sall, has also used this legislation against a handful of critical voices. Such use may increase ahead of the November polls, although arrests are unlikely to come close to the numbers arrested under Sall, at least in the coming months. Proposed judicial reforms aim to change the content of these laws to reflect international norms, but the new government may refrain from major changes if it feels such legislation serves its interests.
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The risk in this category is low to moderate. Despite the new administration's radical rhetoric, its economic program is overwhelmingly reformist rather than revolutionary, with an emphasis on reducing the debt, streamlining budget procedures and improving administrative efficiency. If promises to bolster judicial independence are implemented, expropriation risks may even decline.
However, the new administration may find itself partially a prisoner of its rhetoric, which heavily criticized Sall’s administration for signing murky contracts with foreign investors, especially in the oil and gas industry. Faye and Sonko during their campaign and following their election have promised to review existing contracts and potentially renegotiate them to secure fairer terms for Senegal.
They have already made early moves in this direction; Sonko in August announced the creation of a commission of experts to review Senegal’s oil and gas contracts, which will include legal, tax and energy specialists. No deadline has been set, nor have any more details been leaked, concerning the scale and scope of its operations. However, it is possible that during the upcoming legislative campaign the government escalates its rhetoric over unfair dealings and the need to assert Senegalese sovereignty over its resources.
Another related issue is that partly because of Senegal’s elevated debt-to-GDP level and lower-than-expected revenue collection, the government has made aggressive efforts to enforce tax laws and collect arrears from a variety of economic actors. Both Faye and Sonko built their careers in the tax administration, and this issue is important to them. This may extend to the oil and gas sector if government audits conclude they are not paying enough to the treasury.
Moreover, the government may have good legal grounds for demanding better fiscal terms from oil investors, in part due to the lack of transparency of earlier deals and credible allegations of corruption within former President Sall’s inner circle. This may encourage them to act.
Nonetheless, there will be limits to the new administration’s actions in the oil and gas sector. First, there are real constraints on reopening contracts, especially a joint liquefied natural gas project with neighboring Mauritania that would require the latter government’s consent for any renegotiation. For other contracts, such as the Sangomar deepwater oil field, new contract negotiations could prove costly, as they could delay production and potentially deter other investors.
Local political observers are skeptical that Faye will make serious moves in this direction. However, an effort may be made to obtain better terms from ongoing discussions with potential investors in the Yakaar-Teranga bloc, from which oil major BP has withdrawn.
Nonetheless, future investors may face more forthright demands for revenue-sharing and greater pressure to ensure higher levels of local employment and clearer benefits to host communities. The new administration may also seek more from existing international agreements, such as Senegal’s current fishing accords with the European Union, which have negatively affected fishing stocks and local employment.
Despite an upcoming election, political violence risks appear minimal in the coming months. Faye and Sonko’s government is benefiting from an extended honeymoon period and significant popular legitimacy.
Major protests last year and earlier this year, and their violent repression, were the fruit of a three-year-long political crisis between the Sall’s administration and the former opposition, whose most prominent figure is the current prime minister. With Sall out of the picture and most of the 1,000 opposition activists, including Faye and Sonko, now released from prison, the main drivers of tension have abated.
However, the new administration faces many obstacles to implementing its reform program, including powerful vested interests, institutional hurdles and structural imbalances in Senegal’s economy. There are few easy policy solutions to these problems, meaning that many in Faye’s enthusiastic voter base could grow disillusioned with the lack of progress in the coming years. This could provide the seedbed for future unrest and popular mobilization.
The terrorism risk is low to moderate as regional jihadist insurgencies approach the Senegalese border. Credible reports suggest that Mali-based jihadists have at times entered Senegal’s southeastern Kedougou Region for refuge and resupply. Artisanal mining communities in the region are potential vectors for jihadist infiltration and expansion.
The government has been aware of the threat for some time and has significantly increased its security presence in the region and public investment to address the economic causes of insurgency. The new administration has also instituted a ban on artisanal mining along the Falémé River along the Malian border in Kedougou, officially for environmental reasons due to spillover of toxic chemicals into the local river and water supply. However, the move also likely aims to reassert state control over a sector that could provide potential funding for jihadists.
Overall, the Senegalese state is significantly better-resourced and capable than its Malian neighbor. This will play in its favor against jihadist ambitions. However, it may not prevent an insurgency from developing in the Kedougou or Tambacounda regions in the coming years.
Meanwhile, the terrorism risk in urban areas, especially Dakar, is currently limited. Regional jihadists have not employed urban terrorism for years, although this is always subject to change.
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The risk in the coming months is limited and nearly nonexistent as long as Senegal remains within the CFA monetary zone, a currency pegged to the euro whose exchange rate is guaranteed by the French Treasury.
Furthermore, the new administration is unlikely to move aggressively on its official ambitions to withdraw from the CFA. The government has already walked back campaign declarations, now suggesting that any move away from the CFA would only occur in consultation with other CFA-zone member states. Faye's official program is also clear on both a multiyear timeline and its ultimate realization being contingent on fulfilling key macroeconomic criteria.
If this were done outside of a negotiated and well-telegraphed process, the short-term costs could be significant, and the new currency would likely suffer major depreciation in its early days. One potential warning sign of an abrupt departure from the currency would be a dramatic degradation of relations with Paris.
The likelihood of Senegal leaving the CFA zone will nevertheless increase over time. While this will increase uncertainty over monetary policy and capital flows, any such departure if well managed could benefit the Senegalese economy. So far, official statements suggest that the new administration will approach the question pragmatically.
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The default risk in the coming months is very low, despite somewhat worrying debt levels. A core element of the new administration’s economic plan is to reduce the debt load. This is significant, at 72% of GDP, with debt service costing 47% of domestic revenue.
Their main strategies for doing so include raising revenues by expanding the local tax base and boosting export revenues. These strategies may prove difficult to accomplish, at least in the short term. However, budgetary austerity would clash with the administration’s goals to address cost-of-living concerns and boost growth and thus is not likely.
This means that politics may interfere to some extent with debt reduction. At the same time, expected new revenues from oil and gas fields may give the administration some fiscal space unavailable to other governments in a similar situation in the coming years. In the short term, though, slower-than-expected growth — projected by the International Monetary Fund (IMF) at 6% this year — may further weigh on Senegal’s debt position.
Moreover, the government in early June raised a $750 million, seven-year Eurobond at a nominal rate of 7.75%, partly on the back of market expectations regarding Senegal’s oil production. While this reflects market confidence in the country’s longer-term debt sustainability, it does add to Senegal’s overall debt burden.
Nevertheless, IMF officials are reportedly favorably impressed with Senegalese authorities and their commitment to reform. There is also no indication in the short or medium term that Senegal would be in a position where it would need to default on its debt obligations.
