In January 1994 Senegal undertook a bold and ambitious economic reform program with the support of the international donor community. This reform began with a 50 percent devaluation of Senegal's currency, the CFA franc, which was linked at a fixed rate to the former French franc and now to the euro. Government price controls and subsidies have been steadily dismantled.
After seeing its economy retract by 2.1 percent in 1993, Senegal made an important turnaround, thanks to the reform program, with real growth in GDP averaging 5 percent annually during the years 1995–2001. Annual inflation was reduced to less than 1 percent, but rose again to an estimated 3.3 percent in 2001. Investment increased steadily from 13.8 percent of GDP in 1993 to 16.5 percent in 1997.
Thanks to this, Senegal's economy is starting to be one of the fastest growing in the world.
The main industries include food processing, mining, cement, artificial fertilizer, chemicals, textiles, refining imported petroleum, and tourism. Exports include fish, chemicals, cotton, fabrics, groundnuts, and calcium phosphate, and the principal foreign market is India at 26.7 percent of exports (as of 1998). Other foreign markets include the US, Italy, and the UK.
As a member of the West African Economic and Monetary Union (WAEMU), Senegal is working toward greater regional integration with a unified external tariff. Senegal is also a member of the Organization for the Harmonization of Business Law in Africa (OHADA).
Senegal realized full Internet connectivity in 1996, creating a mini-boom in information technology-based services. Private activity now accounts for 82 percent of GDP. On the negative side, Senegal faces deep-seated urban problems of chronic high unemployment, socioeconomic disparity, juvenile delinquency, and drug addiction.