Economywide Impacts of Expansion of Maritime Infrastructure in Senegal

Senegal’s port enjoys its strategical location to form Trans-Saharan trade rout boasting as one of the best infrastructure in the region. Country’s trade industry largely depends on its port. Over 70% of country’s mineral and forest production are exported, while around 15% of its agricultural products enters the export market. About 50% of the Senegal’s demand for agricultural products, including rice, come from the imports. Petroleum products and petrochemicals dominate the country’s import industry. However, the port capacity is increasingly facing pressures due to its infrastructural constraints, which could create iceberg types of trade costs, and also adversely affect the efficiencies of exports and imports. The infrastructural investment can potentially raise the port capacity and hence will increase the efficiencies of trade transactions, and will raise the preference for traded goods. A recursive dynamic computable general equilibrium model is used to evaluate potential outcome of increased preferences and efficiencies of exports and imports on the economic performances and wellbeing of the country. The model imitates the structure of the Senegal economy in the year 2017 and projected the business usual baseline to 2022. The simulated scenarios are contrasted against the baseline. It is expected that increase in trade, in general, would support increased food security and growth of the economy. However, the impacts of increase in efficiencies and preferences of exports and imports would bring a change in the structure of the domestic activities differently.