In Brief
Senegal is the presource curse in real time. Between 2014 and 2024 — the decade spanning discovery and first production — the country accumulated an extra $7 billion in debt that its previous government systematically concealed from the IMF, its parliament, and its citizens. Public debt rose from around 45% of GDP to over 100%. When production finally began in June 2024, Senegal entered the revenue phase carrying the full weight of its presource borrowing.
Growth Outcome vs. Counterfactual
The chart below shows actual GDP per capita against three counterfactual benchmarks: pre-discovery growth trend, IMF WEO vintage forecasts, and a synthetic control estimate. All series indexed to pre-discovery year = 100. Placeholder data — final estimates from Stata pipeline pending.
Anatomy of a Lost Decade
GDP per capita trajectories for resource-discovering countries — actual outcomes vs. what could have been. Index: pre-discovery year = 100.
Note: Placeholder estimates only. Final figure will use Penn World Table 10.x data, IMF WEO vintage forecasts, and Stata-estimated synthetic controls. The amber shaded region indicates the estimated growth cost between actual and counterfactual paths.
Lessons and Policy Implications
The presource curse can coexist with reasonable headline growth
Senegal's GDP growth averaged 5–6% during the presource decade. This was enough to mask the underlying fiscal deterioration. Countries and their international partners should look beyond headline growth to debt trajectories and fiscal transparency.
Election cycles and resource expectations are a toxic combination
Anticipated hydrocarbon revenues provided political licence for spending that was not yet fiscally grounded. The pattern — discovery → elevated expectations → election-cycle spending → debt accumulation — is the Ghana story with a ten-year fuse.
Off-balance-sheet liabilities are the new presource risk
Senegal's hidden debt came from state-owned enterprise liabilities, arrears, and PPP commitments excluded from official reporting. As governments navigate IMF debt limits, the risk migrates off-balance-sheet. Transparency frameworks must catch up.
Democratic institutions can correct — but not prevent — the presource curse
Senegal voted out the government responsible, ordered an audit, and exposed the hidden debt. But democratic correction after the fact does not undo debt accumulated before the election. Prevention remains the only effective remedy.
Entering the revenue phase with excessive debt eliminates the resource dividend
The cruelest outcome: oil revenues arrive to service debt taken on in anticipation of those same revenues. Senegal's Sangomar production exceeded targets in 2024 — but with debt above 120% of GDP, fiscal space to deploy those revenues is severely constrained.
References
- Cust, J. and Mihalyi, D. (2017). 'The Presource Curse'. Finance & Development, 54(4). IMF.
- IMF (2024). 'IMF Statement on Senegal'. Press release, October 2024.
- Senegal Court of Auditors (2025). Rapport sur l'Exécution des Lois de Finances 2019–2023.
- Woodside Energy (2024). Sangomar Phase 1 Operations Update.
James Cust · Development Economics · World Bank / University of Oxford · jamescust.com