Senegal’s economy is one of the fastest-growing in Africa, with a growth rate of above 6% from 2014 to 2018. The country is home to 15.4 million people and is one of the most stable countries in the region. This growth was heavily burgeoned by the service industry, which made up about 60% of the country’s total GDP. The shock caused by the COVID-19 pandemic has caused a severe slowdown in growth, falling to an estimated 1.3% in 2020. Although the country has instituted a comprehensive stimulus plan, Senegal’s economy is still facing a slow and painful recovery, which could be disastrous for the country’s long-term future. International aid to Senegal is vital for the country’s recovery.
Incoming Aid to Senegal
In a press release on November 11, Germany and the EU announced the approval of relief funding for Senegal — 112 million in EU funding and 100 million in funding from Germany itself. The EU has a broader history of aid to Senegal, with more than a billion euros of aid sent from 2014 to 2020. Germany also has a history of friendship with Senegal, as the two entered into a reform partnership in 2019. The amount of aid rendered illustrates the strong commitment of both the EU and Germany to Senegal’s economy. The money will go toward Senegal’s COVID-19 stimulus program and will enable the government to continue relief efforts for its population.
The Benefits of Aid to Senegal
German development minister, Gerd Müller, was strongly in favor of aid to Senegal and described many problems currently ailing Senegal’s economy. Nearly half of the country is unemployed and the shrinking economy will especially impact small and medium businesses, which make up 90% of all Senegalese jobs. Müller said, “We must not forget that the consequences of COVID-19 are far more dramatic in developing countries.”
Müller is optimistic that the aid will enable the protection of jobs and the production of medical equipment necessary to fight COVID-19. Senegal’s stimulus plan involves a trillion francs (roughly 1.8 billion USD) aimed at strengthening healthcare. The government also opened a program for businesses to receive cash loans for support.
Although Senegal’s economy is robust, it is still dependent on foreign aid to finance these measures. Aside from the aid coming from the EU and Germany, the World Bank approved $100 million in aid back in June 2020, demonstrating a need for further funding to prevent larger setbacks in Senegal’s economy.
The Importance of International Aid During COVID-19
Senegal’s handling of the pandemic itself has been praised throughout the world. It ranks second to New Zealand on Foreign Policy’s Global COVID-19 Response Index, measuring the response of national leaders to the pandemic. The country took broad health safety measures at the beginning of the crisis, which hurt Senegal’s economy but protected the lives of Senegalese people. The large role that international aid plays in enabling Senegal and other countries around the world to successfully fight the COVID-19 pandemic must be duly noted.
– Bradley Cisternino