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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Devaluation of the CFA Franc in Senegal: The Reaction of Small Businesses
Authors:Creevey, Lucy E.ISNI
Vengroff, Richard
Gaye, Ibrahima
Periodical:Journal of Modern African Studies
Geographic term:Senegal
informal sector
small enterprises
Development and Technology
Economics and Trade
External link:https://www.jstor.org/stable/161827
Abstract:This study explores the immediate and longer-term impacts of the devaluation of the CFA franc on 12 January 1994 as perceived by those small and medium-scale entrepreneurs in Senegal who straddle the line between the formal and informal sectors. The latter is one area of the Senegalese economy which has been enjoying growth, and in which some 60 percent of the population was said to be engaged in 1989. The study sampled reactions of entrepreneurs immediately following devaluation (January 1994), three months later (March 1994), and one year later (January 1995). The same issues seem to pose major problems for small-scale entrepreneurs in all samples: the prices of food and inputs for their businesses, the cost of transport and electricity, and the volume of sales on the local market. The research findings are not entirely consistent with either the IMF version of the effect of devaluation or the drastic counterinterpretation suggested by some detractors. Instead they indicate that in the informal sector devaluation in the short term has been experienced as primarily, but moderately, negative by making small businesses more difficult, limiting expansion, and clouding future prospects. Ref.