Senegal vs. Mauritania

Senegal's economy is driven by mining, construction, tourism, fisheries and agriculture, which are the primary sources of employment in rural areas. The country's key export industries include phosphate mining, fertilizer production, agricultural products and commercial fishing and Senegal is also working on oil exploration projects. It relies heavily on donor assistance, remittances and foreign direct investment. Senegal reached a growth rate of 7% in 2017, due in part to strong performance in agriculture despite erratic rainfall.

President Macky SALL, who was elected in March 2012 under a reformist policy agenda, inherited an economy with high energy costs, a challenging business environment, and a culture of overspending. President SALL unveiled an ambitious economic plan, the Emerging Senegal Plan (ESP), which aims to implement priority economic reforms and investment projects to increase economic growth while preserving macroeconomic stability and debt sustainability. Bureaucratic bottlenecks and a challenging business climate are among the perennial challenges that may slow the implementation of this plan.

Senegal receives technical support from the IMF under a Policy Support Instrument (PSI) to assist with implementation of the ESP. The PSI implementation continues to be satisfactory as concluded by the IMF's fifth review in December 2017. Financial markets have signaled confidence in Senegal through successful Eurobond issuances in 2014, 2017, and 2018.

The government is focusing on 19 projects under the ESP to continue The government's goal under the ESP is structural transformation of the economy. Key projects include the Thiès-Touba Highway, the new international airport opened in December 2017, and upgrades to energy infrastructure. The cost of electricity is a chief constraint for Senegal's development. Electricity prices in Senegal are among the highest in the world. Power Africa, a US presidential initiative led by USAID, supports Senegal's plans to improve reliability and increase generating capacity.

Mauritania's economy is dominated by extractive industries (oil and mines), fisheries, livestock, agriculture, and services. Half the population still depends on farming and raising livestock, even though many nomads and subsistence farmers were forced into the cities by recurrent droughts in the 1970s, 1980s, 2000s, and 2017. Recently, GDP growth has been driven largely by foreign investment in the mining and oil sectors.

Mauritania's extensive mineral resources include iron ore, gold, copper, gypsum, and phosphate rock, and exploration is ongoing for tantalum, uranium, crude oil, and natural gas. Extractive commodities make up about three-quarters of Mauritania's total exports, subjecting the economy to price swings in world commodity markets. Mining is also a growing source of government revenue, rising from 13% to 30% of total revenue from 2006 to 2014. The nation's coastal waters are among the richest fishing areas in the world, and fishing accounts for about 15% of budget revenues, 45% of foreign currency earnings. Mauritania processes a total of 1,800,000 tons of fish per year, but overexploitation by foreign and national fleets threaten the sustainability of this key source of revenue.

The economy is highly sensitive to international food and extractive commodity prices. Other risks to Mauritania's economy include its recurring droughts, dependence on foreign aid and investment, and insecurity in neighboring Mali, as well as significant shortages of infrastructure, institutional capacity, and human capital. In December 2017, Mauritania and the IMF agreed to a three year agreement under the Extended Credit Facility to foster economic growth, maintain macroeconomic stability, and reduce poverty. Investment in agriculture and infrastructure are the largest components of the country's public expenditures.