Page last updated at 00:01 GMT, Tuesday, 10 March 2009

Senegal's lifeblood drains away

By Julian Bedford
BBC World Service, Rufisque, Senegal

Construction site
Remittances from abroad have helped fund a construction boom in Dakar

The monies sent back by those working overseas to their families in Senegal have been the lifeblood of the economy for the past 20 years.

As much as $2bn is sent back from France, Italy, the US and other developed countries by the estimated 15% of the population who now live and work abroad.

Exact estimates are difficult, but Mansour Tall of the UN's Habitat programme reckons that those remittances amount to twice the official figure of $1bn.

But whatever the exact amount, it is becoming clear that these remittances are among the victims of the international financial crisis.

Mr Tall has conducted regular field research into the flow of remittances, and he says that what he has been discovering in his most recent trips is alarming.

Flows drying up

"Migrants are sending less money, or they are sending it less often - once every three months instead of once a month."

If this continues there will be lots of unhappiness. It's affecting every day life

The consequences of the squeeze are being felt by El Hadji Amadou Gueye, whose sister works in Italy.

The money she has been sending back has allowed Amadou to build first a house, then convert the garage into a hairdressing salon from where his wife, Faramata Wade, runs the business that brings in a valuable second income.

"The money doesn't just allow us to build houses," he says outside the simple concrete structure in Rufisque, 30km outside the capital Dakar.

"It meets all sort of everyday expenses."

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World leaders will meet next month in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.
Only one African country will be represented at summit.
This week BBC World News and World Service Radio will be examining how Africa is coping with the crisis, with our blog and reports from the continent

His sister cannot afford to send as much because she is having to deal with the falling incomes and job losses that are now a feature of the Italian economy.

And Amadou knows he is one of the lucky ones. He has his house.

Others who are still building theirs, or who have yet to lay their hands on the boon of cash transfers from abroad, are suffering more.

"If this continues, there will be lots, lots of unhappiness. It's definitely affecting every day life," he says.

The situation is much worse in central Senegal where there are entire villages which survive solely on the money their relatives earn in Europe and the United States.

If they lose that support, then the exodus of the inhabitants first to the cities, then possibly on to the developed world in search of a livelihood, will accelerate.

Housing boom

And the spin-off consequences are also severe.

Much of the growth in the Senegalese economy in recent years has been thanks to a housing boom.

Western Union sign
15% of the population lives and works overseas
Over 70% of Senegalese living overseas send money home
Up to 70% of the budget of their families comes from remittances
Remittances make up more than 7.6% of GDP
World Bank estimates global remittances may total as much as $95 billion annually

Look around Dakar and all you can see are construction sites as the city expands to cope with its ever-growing population.

Around 30% of the money sustaining that boom is remittance money.

If that tap is turned off, then the boom will become a bust.

No wonder Amadou and many like him are concerned.

Mansour Tall is also very worried about the effect on poverty.

"The effect is very dramatic because the fall in remittances has arrived at the same time as last year's sharp rise in prices," he says.

"And that's the reason why many households we had classified as in the middle income bracket are now slipping into poverty."

Senegal has a greater reliance on remittances than most of its neighbours, and the hardship is more acute here than in other countries such as Mali.

But the transfer of money back home is the key to many African economies, and its sharp decline is bound to have serious implications for the continent.

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Country profile: Senegal
25 Jun 08 |  Country profiles

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