Investment climate of Senegal

Economy

Growth of gross domestic product (GDP) in Senegal in 2015 is estimated to have been 5.1% in 2015 and is predicted to reach 6.6% in 2016 and 6.5% in 2017. The economy is therefore projected to grow by around 5 percent over the period 2017-2019. Senegal’s economy is among the fastest growing economies in Sub-Saharan Africa. The fisheries and agriculture sector led growth in 2016 by 10% compared to 18% in 2015 and industry was second at 6.8% in 2016. Senegal’s current account deficit fell from 7.0% of GDP in 2015 to 6.5% in 2016, as exports increased faster than imports. The fiscal position improved as the fiscal deficit fell from 4.8% of GDP in 2015 to 4.2% in 2016. The fiscal deficit is expected to fall below 4% of GDP in 2017 despite stronger public investment.  Public debt increased to 60% of GDP in 2016 from 56.7% in 2015, but the risk of debt distress remains low.

Why invest in Senegal?

  • Stable and open economy
  • Modern infrastructure
  • Educated human resources
  • Privileged access to regional market
  • Investor friendly environment
  • Strategic location from Europe and USA

Political

Senegal is one of the most stable countries in Africa, with three peaceful political transitions and four presidents since its independence from France in 1960. On 20 March 2016, Senegal held a referendum to vote on measures to strengthen its political system. The next presidential election is due in 2019, while legislative elections are planned for 2017.

Population

World Population Review estimates the population of Senegal at 16 million in 2017 with growth rate of 2.89%. The population of Senegal was 9.9 million in the 2013 population census.  About 56% of the population live in rural areas.

Urbanisation

About 44% of total population was estimated in 2015 to live in urban areas with an estimated annual average rate of change rate of urbanization of 3.59% for the period from 2010 to 2015.

Doing business in Senegal

The highlights of World Bank score of doing business in Senegal are summarised as follows;

Topics World Bank  2017 Rank World Bank 2016 Rank Change in Rank
Overall 147 146  

-1

Starting a Business 90 82  

-8

Dealing with Construction Permits 139 136  

-3

Getting Electricity 162 160 -2
Registering Property 142 152 10
Getting Credit 139 134  

-5

Protecting Minority Investors 137 136 -1
Paying Taxes 174 180 6
Trading across Borders 130 125 -5
Enforcing Contracts 144 144  

Resolving Insolvency 101 86 15

The government is the in process of creating conducive environment for doing business.

Credit Rating

According to Moody the country was rated       Ba3 with stable outlook in April 3017.

Remittances

There are no restrictions on the transfer or repatriation of capital and income earned, or on investments financed with convertible foreign currency.

Arbitration and commercial disputes

Senegal has legal framework that can resolve business disputes and enforce property rights although the process is cumbersome and slow. The government of Senegal has taken positive steps to establish commercial courts to speed up the process of resolving commercial disputes. Senegal is a signatory to the Organization for the Harmonization of Corporate Law in Africa Treaty (OHADA) that provides for common corporate law and arbitration procedures in the 16 member states in western and central Africa. Senegal is a member of the International Center for the Settlement of Investment Disputes (ICSID) and a signatory of the Convention on the Recognition and Enforcement of Arbitral Awards (the New York Convention).

Key development challenges

  • The implementation of the Plan Senegal Emergent (PSE) on reform and public investment remains a challenge.
  • Agriculture volatility as a result if being dependent on climate.
  • Global oil and food prices could recover more rapidly creating more pressure on reserves.

Corruption index

Senegal scored 45 points out of 100 on the 2016 Corruption Perceptions Index and ranked number 64 out of 176 countries   as per Transparency International.

Security

The country is safe for travellers except Casamance region of south-western Senegal (between the southern border of Gambia and the northern border of Guinea-Bissau) remains affected by a small number of armed separatist groups and banditry.

Unemployment and skilled labour

The country does not have adequate supply of skilled human resources. The current unemployment figures are not readily available.

Attitude to Foreign Direct Investment

France is historically the largest source of foreign direct investment but the government of Senegal is keen to diversify its sources of investment. Senegal’s 2004 Investment Code provides basic guarantees for equal treatment of foreign investors and repatriation of profit and capital. Investors are welcome to all sectors of the economy with some exceptions for water, electricity distribution, and port services sectors where the government and state-owned companies maintain responsibility for most physical infrastructure but allow private companies to provide the basic infrastructure services. The government has privatized companies involved in the airline, water, finance, real estate and telecommunications sectors with no restriction on the participation of foreign investors. The Senegal investment promotion agency (APIX) is responsible for attracting investors through its one-stop shop. The investors can perform all business registration procedures with government, local authorities and public institutions within less than two days.

Restrictions on Foreign investment

The country allows foreign investors equal access to ownership of property and does not impose any general limits on foreign control of investments. There is no provision in Senegalese law permitting domestic businesses to adopt articles of incorporation or association that limit or control foreign investment.

Intellectual  Property (IP) Rights.

Senegal maintains a legal framework for protection of intellectual property (IP), but has limited institutional capacity to implement this framework and enforce IP protections. Senegal has been a member of the World Intellectual Property Organization (WIPO) since its inception. Senegal is also a member of the African Organization of Intellectual Property (OAPI), a grouping of 15 francophone African countries with a common system for obtaining and maintaining protection for patents, trademarks and industrial designs.  Senegal is a signatory to the Bern Copyright Convention. The Senegalese Copyright Office, part of the Ministry of Culture, attempts to enforce copyright obligations. Enforcement of IPR is weak because the government has limited capacity to combat IPR violations or to seize counterfeit goods.

Natural Resources

The natural resources include phosphate, iron ore, gold and titanium

Information about Investment climate of Senegal has been summarized to include the following;

 

Sources of information

www.worldbank.org

www.state.gov

www.afdb.org/

www.investinsenegal.com

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