REUTERS SUMMIT-Senegalese president says Africa a 'land of opportunity' for investors

by Reuters
Monday, 7 April 2014 14:38 GMT

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* Senegal says 7 pct growth target within reach

* May borrow $500-$800 mln a year for infrastructure

* Seeks partner for Senegal Airlines

* Plans road, rail projects, doubling power capacity

By Daniel Flynn and Diadie Ba

DAKAR, April 7 (Reuters) - Fast-growing African economies represent a "land of opportunity" for investors and those deterred by short-term turbulence in emerging markets will be the losers in the long run, Senegal's president said on Monday.

President Macky Sall said his West African country was on track to nearly double its annual economic growth to 7 percent by 2017 thanks to a $21 billion programme of investment that aims to turn Senegal into a regional hub for transport, logistics and tourism.

Elected in 2012, Sall has won praise from investors and multilateral agencies for his anti-corruption measures and economic reforms but is under pressure to create more jobs and diversify the economy from fishing and agriculture.

He said his government would look to borrow between $500 million and $800 million a year to fund large-scale rail, energy and road projects under the plan, dubbed Emergent Senegal.

With many African countries hungry for infrastructure investment, Sall said foreign investors should not be concerned by fears of capital flight as the U.S. Federal Reserve winds down its monetary stimulus programme this year.

"Africa is a land of opportunity," Sall told the Reuters Africa Summit. "If people withdraw their credit, others will replace them because business opportunities are there, growth is there and the population is there."

"If someone does not see this opportunity, and turn their back on Africa - well, it won't be Africa that loses."

Regarded as a bastion of political stability in a region notorious for coups and civil wars, Senegal's nearly $15 billion economy has nonetheless underperformed some others in the region in recent years, partly due to poor harvests.

It grew around 4 percent in 2013, according to the IMF, below the average in sub-Saharan Africa of around 5 percent.


Central to its plans to make Senegal a logistics hub, Sall's government aims to open a new international airport being built 30 kilometres (20 miles) outside the capital Dakar next year. It is also looking to attract private sector capital for national carrier Senegal Airlines, relaunched in 2011 under the previous administration.

"We are looking for a strategic partner who could take a stake in the capital, whether it is South African Airways , Air France or Ethiopian," he said. "So far, we have not decided who will be our partner, but that should come very soon."

To address a long-standing electricity deficit, Sall plans to more than double Senegal's generation capacity to some 1,000 megawatts by the end of his mandate in 2017. The government also plans to refurbish a defunct rail line to the Malian capital Bamako, linking Senegal to the interior of the continent.

To help fund this, Senegal won commitments for $7.8 billion in financing from donors at a conference in Paris in February.

Sall has received praise from multilateral institutions for paring back the budget deficit to around 5.4 percent of GDP last year, and aims to cut it below 5 percent this year. His government has shut or merged dozens of state agencies and cracked down on public sector graft, obliging senior state officials to declare their assets for the first time.

As a result, Senegal's 2011 Eurobond has been amongst the best performers in Africa. The government said last year it could issue a new $500 million Eurobond in the first half of 2014.

"We have the choice of doing a new Eurobond or using other borrowing mechanisms but it's clear that we are going to borrow to finance these infrastructure activities," he said. "It could be $500 million a year, or $800 million a year - it depends on how we manage our Treasury."

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