Senegal to reduce energy subsidies to below 1% of GDP by 2029

Senegal plans to reduce energy subsidies to less than 1% of GDP annually by 2029 to alleviate pressure on public finances. Prime Minister Ahmadou Al Aminou Lô announced the reform, noting that the current system is inequitable, with the wealthiest 20% of households receiving approximately 65% of the roughly CFA 800 billion ($1.4 billion) spent annually on fuel subsidies.

The government intends to implement a gradual and differentiated reduction of subsidies based on energy products. While support for butane gas used in homes will be maintained, electricity subsidies will shift toward a social tariff targeting low-consumption households and small businesses.

To mitigate the impact on the poor, social protection spending is projected to double to CFA 140 billion by 2027. The reform aims to redirect resources toward vulnerable populations, such as the National Family Security Grant, ensuring that those with greater consumption capacity pay the true price of energy.