- Senegal’s trade deficit shrank by 52% year-on-year by July 2025
- Surge in gold exports and falling hydrocarbon costs drove the improvement
DAKAR, SENEGAL – Senegal has slashed its trade deficit by more than half, fuelled by a surge in gold exports and a decline in hydrocarbon import costs.
At the end of July 2025, the deficit stood at -932.2 billion CFA francs ($1.5 billion), compared to -1,934.7 billion CFA francs a year earlier, according to the latest data. Exports jumped 60% to 3,272.1 billion CFA francs, while imports rose modestly by 5.6% to 4,204.4 billion CFA francs.
It comes at a time economists caution the gains remain highly vulnerable to swings in global commodity prices.
Independent economist Mor Ndiaye told Allen Dreyfus the narrowing deficit was “mainly due to the decline in the hydrocarbon import bill (linked to world prices) and the strong performance of gold exports, a traditional product.”
He stressed that Senegal’s much-anticipated GTA gas project “has not yet contributed measurably to this improvement. Its impact on the trade balance will be a medium-term phenomenon.”
Fragile gains amid global volatility
Ndiaye warned the improvement could easily unravel if global conditions turn unfavourable.
“The evolution of commodity prices is the main external risk for Senegal’s trade balance,” he said. “The current positive trend is very fragile and remains dependent on a volatile global context.”
He explained that strong global demand or geopolitical tensions could boost gold, oil and phosphate prices, lifting Senegal’s export revenues even without a rise in volumes. Conversely, a global recession or falling demand could drive down prices and wipe out recent gains.
“For example, if global price dynamics are unfavourable, the progress made could be reversed,” Ndiaye said. “The price of gold would fall if markets are calm, the price of oil would fall with overproduction or declining demand, and fertiliser prices would collapse. As an impact, Senegal’s export revenues would fall in value, which would widen the trade deficit.”
The economist also downplayed claims of diversification. “There is no sign yet of a massive diversification of exports,” he said. “The export economy still relies on a small number of primary products.
However, mining products such as zircon and titanium contribute to a slight diversification. The structure of the economy remains poorly diversified and dependent on a few key sectors.”
Regional impact
While the immediate benefits for Senegal’s economy are clear, the broader effect on the CFA franc and the West African Economic and Monetary Union (WAEMU) is more nuanced.
“A direct impact, for example, Senegal is a significant economy, but one of eight WAEMU countries,” Ndiaye said. “The effect of an isolated improvement in its trade balance, although positive, is diluted across the entire zone. As for the real and positive indirect impact, this improvement contributes to an overall positive trend for the zone, which indirectly strengthens the external position of the CFA franc.”
Ndiaye said the improvement complements gains made by other WAEMU economies such as Côte d’Ivoire, collectively reinforcing the bloc’s macroeconomic stability. “This news is excellent for Senegal and is part of a positive dynamic for the entire Union,” he added.
Senegal’s government is likely to tout the narrowing trade gap as a sign of economic resilience, but with global commodity markets in flux, the sustainability of this progress remains uncertain.
