DAKAR - Senegal’s new president Bassirou Diomaye Faye is taking over an economy that is growing at a much slower pace than in previous years, with high inflation and an absence of jobs pushing young people to seek livelihoods elsewhere, often by undertaking fatal journeys to Europe by boat.

A key part of his reform agenda will revolve around following through on his vow to renegotiate contracts for the exploration of offshore oil and gas. In his first major policy announcement, delivered in a television speech yesterday, Faye said Senegal will conduct an audit of its oil, gas, and mining sectors. “Investor rights will always be protected, as well as the interests of the state and the people,” he said.

Senegal’s economy is estimated to have grown by 4.1% last year, continuing a downward trend since 2021 when the country posted 6.5% growth. It grew at an average of 6.5% a year in the five years up to 2018.

Recent growth struggles have been attributed to shocks caused by COVID-19, the Russia-Ukraine crisis, and delays in commissioning proposed multi billion dollar oil and gas projects. But investor interest and private consumption in Senegal were also depressed by social unrest in the months preceding Faye’s election.

Businesses often had to close their premises during protests last year triggered by the former government’s imprisonment of Ousmane Sonko, whose popularity was key to Faye’s victory.

Faye’s broad plan is to trigger “systemic change” in Senegal, ostensibly signaling a departure from former President Macky Sall. The now ex-president achieved high growth years through the “Plan for an Emerging Senegal,” a 2014 strategy paper for development through 2035.

Faye’s inclination to build on or abandon the plan will become clearer in the coming weeks. But an assumption behind the World Bank’s projection of 8.8% growth this year and 9.3% in 2025 is the beginning of hydrocarbon production, a key pillar of the Emerging Senegal agenda.

And at a time when two-thirds of Africa’s low income countries are at high risk of sovereign defaults with $650 billion in external debt, Faye will be expected to keep a close eye on Senegal’s expanding debt stock. The country is at moderate risk of distress but public debt is estimated at over 76% of GDP.