Benefits and challenges for Senegal

Benefits and challenges for Senegal
Benefits and challenges for Senegal

Senegal is going through a period marked by high inflation in the prices of basic foodstuffs, threatening the purchasing power of households. In this context, President Bassirou Diomaye Faye and his Prime Minister Ousmane Sonko took a bold initiative to lighten the burden on the Senegalese: a reduction in the prices of sugar, rice, oil and bread.

Announced on June 13, 2024, this measure raises both hopes and prospective challenges: Beyond the direct economic impact on Senegalese families, this initiative opens a crucial debate on the food, monetary, industrial and commercial sovereignty of the country.

Savings Canceled for Senegalese Households

The price reductions announced are substantial: 50 CFA francs for sugar, 40 CFA francs for broken rice, 100 CFA francs for refined oil and 15 CFA francs for baguette. To measure the concrete impact of these reductions on households, we simulated the annual savings for households of 10, 20 and 30 members.
1. Household of 10 members:
• Sugar :
o Average consumption of 14 kg per week.
o Annual savings = 14 kg * 50 FCFA * 52 weeks = 36,400 FCFA.
• Rice :
o Average consumption of 21 kg per week.
o Annual savings = 21 kg * 40 FCFA * 52 weeks = 43,680 FCFA.
• Oil :
o Average consumption of 20 liters per week.
o Annual savings = 20 liters * 100 FCFA * 52 weeks = 104,000 FCFA.
• Bread: Average consumption of 8 baguettes per day. Annual savings = 10 baguettes * 15 FCFA * 365 days = 43,800 FCFA.
Total annual savings for a household of 10 members: 227,880 FCFA.
2. Household of 20 members:
• Sugar :
o Average consumption of 28 kg per week.
o Annual savings = 28 kg * 50 FCFA * 52 weeks = 72,800 FCFA.
• Rice :
o Average consumption of 42 kg per week.
o Annual savings = 42 kg * 40 FCFA * 52 weeks = 87,360 FCFA.
• Oil :
o Average consumption of 40 liters per week.
o Annual savings = 40 liters * 100 FCFA * 52 weeks = 208,000 FCFA.
• Bread :
o Average consumption of 16 baguettes per day.
o Annual savings = 16 baguettes * 15 FCFA * 365 days = 87,600 FCFA.
Total annual savings for a household of 20 members: 455,760 FCFA.
3. Household of 30 members:
• Sugar :
o Average consumption of 42 kg per week.
o Annual savings = 42 kg * 50 FCFA * 52 weeks = 109,200 FCFA.
• Rice :
• Average consumption of 63 kg per week.
• Annual savings = 63 kg * 40 FCFA * 52 weeks = 131,040 FCFA.
• Oil :
• Average consumption of 60 liters per week.
• Annual savings = 60 liters * 100 FCFA * 52 weeks = 312,000 FCFA.
• Bread: Average consumption of 30 baguettes per day. Annual savings = 30 baguettes * 15 FCFA * 365 days = 164,250 FCFA.
Total annual savings for a household of 30 members: 683,640 FCFA.

The Challenge of Passing on Price Drops

Although the announced price reductions are well received, their effective implementation remains a major challenge. Importers have agreed to reduce their margins, but these reductions must be passed down the distribution chain to neighborhood grocers. This dynamic requires the patriotic cooperation of all economic actors, which is entirely possible. The government has set up a national consumer committee to support, monitor and guarantee the application of these measures. However, the success of this initiative will largely depend on the goodwill of professionals and the capacity of the State to enforce the new pricing.

The Question of Food and Monetary Sovereignty
This reduction in food prices raises a broader and crucial question: that of national sovereignty. Senegal, like many developing countries, relies heavily on imports for its basic food products. This dependence exposes the country to fluctuations in international markets, particularly those of rice, wheat, sugar and oil, largely influenced by the economic dynamics of producing countries.

1. Food Sovereignty:
The government’s announcement of a 22% drop in seed prices last May aims to stimulate local production. This initiative is essential to reduce dependence on imports and improve food security. Strengthening local production would not only stabilize prices but also create jobs and boost the rural economy.

2. Monetary Sovereignty:
Controlling inflation and price stability also requires an effective monetary policy. Senegal uses the CFA franc, a currency linked to the euro, which limits the country’s monetary flexibility. Discussions on the creation of a West African currency could offer new perspectives for better control of local economic policies.

3. Industrial and Commercial Sovereignty:
Industrial development is crucial to diversifying the Senegalese economy and reducing its dependence on imports. The recent announcement of the start of oil production on the Sangomar field is an opportunity to strengthen the national economy. In order for this wealth to truly benefit the population, President Bassirou Diomaye Faye and his Prime Minister Mr. Ousmane Sonko advocate transparent and equitable management of oil revenues and a renegotiation of contracts for a win-win partnership.

The initiative to reduce food prices by the new Senegalese government is an important step to relieve households and stimulate the economy. The potential savings for households are significant, especially for large families. However, this measure will only be able to produce its effects if it is correctly implemented and if it is accompanied by a broader strategy to strengthen food, monetary, industrial and commercial sovereignty.

President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko find themselves at a decisive crossroads. They are transforming this crisis into an opportunity to redefine the foundations of the Senegalese economy and strengthen our sovereignty. The key to success lies in the implementation of sustainable, inclusive and transparent policies that allow every Senegalese to benefit from the country’s wealth. The challenges are numerous, but with their strong political will and the mobilization of all stakeholders, Senegal can hope for a more prosperous and autonomous future.
(By Biram Khoudia Lo)

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