The most radical reforms proposed by Faye are unlikely to be implemented in 2024
All multinationals are advised to closely monitor any upcoming speeches by the president-elect and his economic team to assess the extent to which government policies will shift from the previous administration. Multinationals exposed to the public sector are recommended to establish relationships with the new decision makers to evaluate which policy areas will be most impacted by a change in the presidency and the new role of the state in the economy. They will also need to position their offerings as aligning with the government’s new growth and development goals. Consumer-facing firms should gauge the impact of the election results on consumer confidence levels and capitalize on any change in consumption patterns that may emerge.
Overview
- Bassirou Diomaye Faye, the opposition candidate backed by Ousmane Sonko, was declared the winner of the presidential election on March 26, 2024. Provisional results revealed that Faye gathered 53.7% of the votes, whereas the ruling party’s candidate, Amadou Ba, gathered 36.2% of the votes.
- Faye and Sonko were released from prison 10 days prior to the election date, after President Macky Sall introduced an amnesty bill that pardoned prisoners who were detained based on politically motivated infractions between February 2021 and February 2024. This followed an attempt by Sall to postpone the election date by 10 months, but failed after the constitutional court ordered that the election take place before April 2, 2024.
- Faye and Sonko are both affiliated with a left-wing Pan-Africanism ideology that has influenced Faye’s electoral program. The “Diomaye President Coalition” program has promised strengthening the role of the state in the economy by suggesting reform to the monetary system, renegotiating the terms of oil and gas agreements with international oil companies, and introducing a single public investment bank of Senegal.
Our View
A peaceful transition of power between current President Sall and President-elect Faye will take place on April 3, 2024, diminishing the prospects of any protests that may elevate the risk of operational disruptions in Senegal. Once in power, expectations surrounding Faye’s presidency will be elevated given the radical promises of change made during the course of campaigning. However, FrontierView believes that Faye will not deliver on his most radical promises, namely dropping the use of the CFA franc (instead opting for the more workable option of reforming the monetary union) and renegotiating the contract terms with oil and gas companies (because most oil wells will imminently begin production). Faye’s lack of a parliamentary majority—for the time being—will also hinder passing such reforms. Nevertheless, preference will be given to national companies in any newly announced projects, but more specifically in projects that tap into Senegal’s national resources. Moreover, the state’s role in the economy will be strengthened under Faye, which will make it more difficult for non-African or non-Senegalese companies to sell to the public sector. Consumer-facing firms are unlikely to be as affected by economic policies under Faye, but nationalist sentiment may drive consumers away from foreign goods and toward locally produced goods. Despite the prospect of policy change under Faye, FrontierView retains its GDP growth forecast of 7% YOY in 2024, driven by the initiation of oil and gas production.
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