Investment Rating - The report does not explicitly provide an investment rating for the social protection financing industry in Senegal Core Insights - Social protection is a central pillar of Senegal's development strategy, with the Vision Senegal 2050 placing it at the heart of the new development model [28] - Despite recent developments, the Senegalese social protection system remains insufficient to meet the population's needs, with less than one in four Senegalese benefiting from a social protection program [29] - The expansion of the fiscal space, particularly through increased tax revenues, is a prerequisite for enhanced financing of social assistance [31] Summary by Sections 1. Estimating Financing Needs for Social Protection - The current level of social protection spending in Senegal is low, amounting to 387 billion FCFA, or 2.4% of GDP in 2022, which is below many comparable developing countries [40] - The composition of social protection expenditures is diverse, with a significant portion allocated to non-contributory and contributory programs related to old age, health, poverty, and national solidarity [45] 2. Mobilizing More Tax Revenues for Social Protection Financing - The tax pressure rate in Senegal was 19.8% of GDP in 2022, with potential additional tax revenues estimated at around 3% of GDP through tax reform [31] - The report emphasizes the need for a tax reform that focuses on broadening the tax base rather than increasing rates, which are already high [32] 3. Prioritizing Budgetary Commitment for Social Protection - A cautious approach to earmarking revenues is recommended, as prioritizing budgetary commitments is preferable to rigid earmarking mechanisms that create budgetary inflexibilities [31] 4. Developing Contributory Schemes - The low level of social contributions is attributed to a narrow tax base and relatively low ceilings, with significant financial viability challenges within the health branch of contributory schemes [94][101] 5. Strengthening the Formal Economy and Engaging Self-Employed Workers - The extent of informal work hampers social protection financing, necessitating differentiated formalization strategies based on the profiles of informal workers [107][110] 6. Enhancing Social Compliance - Social evasion poses a major challenge for financing contributory schemes, requiring measures to strengthen compliance and improve the collection of social contributions [134][135] 7. Towards a Gradual Financing Strategy for Social Protection - Achieving universal social protection requires both the extension of social assistance and contributory schemes, with options and costs for gradual expansion discussed [140][141]