Official Resources

• The Senegalese media publishes regular COVID-19 updates in collaboration with Senegalese health authorities. Monitor the official Senegalese Ministry of Health website and World Health Organization site for updates.

COVID-19 Restrictions

Movement Restrictions

• Is a curfew in place? No
• Are there restrictions on intercity or interstate travel? No
• Land borders with The Gambia are open for routine travel, but all others remain open only for commercial transport. Individuals must present a negative COVID-19 test to cross at all land borders.

Transportation Options

• Are commercial flights operating? Yes
• Is public transportation operating? Yes
  • Use of facial covering is required on public transportation, including taxis.  
• Violators of Senegal’s COVID-19 restrictions may incur fines or be detained by law enforcement officials. 

Economic Measures

Key Policy Responses as of June 3, 2021

FISCAL

• In 2020 the government implemented and economic and resilience package of up to 7 percent of GDP anchored in a revised budget. It consists of four main pillars: (i) improving the health system, (ii) strengthening social protection, (iii) stabilizing the economy and the financial system to support the private sector and employment, and (iv) securing supplies and distribution for key foodstuffs, medicine and energy products. A precise assessment of the implementation of these measures will take place over the next few weeks.

  Health system: The government has allocated FCFA 97 billion (0.7 percent of GDP) to improve testing, treatment, and prevention.

  Social protection: One million households received food aid (FCFA 64 billion) and utility payments (for water and electricity) for poorer customers were suspended for a 2-month period (FCFA 15,9 billion).

   

  Stabilizing the economy: Hard-hit sectors such as tourism and transport received direct support of about FCFA 100 billion. The government has also set up a partial credit guarantee scheme for companies affected by the COVID-19 crisis for a total amount of CFAF 200 billion (CFAF 100 billion for credit to large companies with a 20 percent state guarantee and CFAF 100 billion for small enterprises with a state guarantee of 50 percent). However, the uptake has been low and the government has revised the design of this mechanism to make it more attractive in the context of the 2021-21 recovery plan. An expedited payment of unmet obligations aimed at strengthening firms balance sheets (FCFA 200 billion instead of the FCFA 121 billion foreseen in the initial budget). On the tax side, the deadline for paying suspended tax obligations was extended from 12 to 24 months to improve the liquidity of firms.

  The policy focus is shifting to supporting the nascent recovery and the government has revised its flagship national development strategy “Plan Senegal Emergent” to reflect lessons from the pandemic. This has resulted in a new action plan (PAP2A) with a renewed emphasis on reaching self-sufficiency and reduce the reliance on imports for food (notably rice), pharmaceutical products, and health services; the plan also aims to support a return to strong and inclusive private sector-led growth, by accelerating structural transformation.

  The government has finalized a revised 2021 budget which incorporates (i) COVID-19 vaccine spending, (ii) additional measures for youth and women employment, (iii) a weaker economic outlook given the prolonged impact of the pandemic and (iv) higher energy subsidies. Preliminary estimates suggest that the fiscal costs for the vaccination effort in 2021-2022 will be about 0.5 percent of GDP. The government plans to vaccinate 20 percent of the population by end-2021 and at least 60 percent by the end of the first quarter of 2022.

MONETARY AND MACRO-FINANCIAL

• The regional central bank (BCEAO) for the West-African Economic and Monetary Union (WAEMU) has taken steps to better satisfy banks demand for liquidity and mitigate the negative impact of the pandemic on economic activity. In April 2020, the BCEAO adopted a full allotment strategy at a fixed rate of 2.5 percent (the minimum monetary policy rate) thereby allowing banks to satisfy their liquidity needs fully at a rate about 25 basis points lower than before the crisis. In June 2020, the Monetary Policy Committee cut by 50 basis points the ceiling and the floor of the monetary policy corridor, to 4 and 2 percent respectively. The BCEAO also: (i) extended the collateral framework to access central bank refinancing to include bank loans to prequalified 1,700 private companies; (ii) set-up a framework inviting banks and microfinance institutions to accommodate demands from solvent customers with Covid19-related repayment difficulties to postpone for a 3 month renewable period debt service falling due, without the need to classify such postponed claims as non-performing; and (iii) introduced measures to promote the use of electronic payments. In addition, the BCEAO launched a special 3-month refinancing window at a fixed rate of 2.5 percent for limited amounts of 3-month "Covid-19 T-Bills" to be issued by each WAEMU sovereign to help meet immediate funding needs related to the current pandemic. The amount outstanding of such special T-Bills initially issued by Senegal was equivalent to 1.4 percent of GDP, with some rollover possibility through such special T-Bills benefitting from a refinancing rate equivalent to the prevailing monetary policy rate but to be all paid back by end-2020. The BCEAO has launched in February 2021 a special 6-month refinancing window at the floor of the interest rate corridor to help WAEMU governments meet Covid recovery funding needs. Through this special window banks shall be able to refinance all bonds with maturity of 3 years or more governments currently plan to issue on the regional financial market in 2021. The amount of bonds eligible to the new refinancing window for Senegal is equivalent to 4 percent of projected 2021 GDP. The new refinancing window is expected to remain in place for the term of the eligible bonds issued in 2021. Finally, WAEMU authorities have extended by one year the five-year period initiated in 2018 for the transition to Basel II/III bank prudential requirements. In particular, the regulatory capital adequacy ratio will remain unchanged at end-2020 from its 2019 level of 9.5 percent, before gradually increasing to 11.5 percent by 2023 instead of 2022 as initially planned. In addition, in June 2020 the West African Development Bank (BOAD) created a CFAF 100 billion window to extend 5 to 7 year refinancing of banks’ credit to SMEs in the 8 WAEMU member countries. In December 2020, the BCEAO instructed WAEMU banks to refrain from distributing dividends with a view to strengthening their capital buffers in anticipation of the impact of the COVID-19 crisis on asset quality.

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