Senegal - Country Commercial Guide
Market Overview
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As a stable democracy with relatively advanced infrastructure and ambitious plans for expanding private investment, Senegal offers growing trade and investment opportunities for U.S. firms and an attractive location for companies looking to serve the West African regional market.  Since gaining independence from France in 1960, Senegal has developed strong democratic institutions, celebrating over 60 years of U.S.-Senegal diplomatic relations in 2021.    

Under its “Emerging Senegal Plan” (known by its French acronym PSE), the Government of Senegal (GOS) aims to boost sustained and inclusive growth through economic reforms and private sector driven investment projects.  With this private sector-based investment plan, Senegal hopes to structurally transform its economy, improve Senegal’s already strong macroeconomic performance, and achieve emerging market status by 2035.  Senegal has enjoyed one of the highest GDP growth rates in the 15-member Economic Community of West African States (ECOWAS) over the last five years, with sustained economic growth rates averaging 6.5 percent from 2014 through 2019.  With a severe COVID-19 downturn halting its run of strong growth, Senegal injected its economy with a $1.7 billion stimulus package focused on the health sector, vulnerable households, and the private sector.  As a result, the economy grew by 1.3 percent in 2020 thanks to the resilience of the agricultural sector.  In 2021, Senegal real GDP grew by 4.4 percent according to the World Bank officials. [1]  Major oil and gas projects — previously expected to add three to four percent GDP growth and create significant government revenue by 2022 were initially delayed due to COV-19 but are now back on track for first gas and oil in 2023.  The real GDP growth rate is projected over 5.5 percent from 2022. 

The IMF rates Senegal’s risk of debt distress as “moderate” because the country undertook new debt obligations to fuel development projects and stimulate the economy in the wake of COVID-19.  Senegal’s capital city Dakar is well positioned to expand its role as a regional business hub.  Dakar is growing as an aviation hub for passengers and cargo for West Africa, with bi-weekly direct eight-hour Delta Airlines flights to New York City, and connections with multiple locations in Africa, Europe, and the Middle East.  Air Senegal is the local flag carrier.  Air Senegal introduced bi-weekly flights to Washington DC (BWI) via New York (JFK) on September 2, 2021.  Senegal has a relatively advanced telecommunications infrastructure with approximately 17.5 million cell phone accounts and 338,000 landlines in a population of 17.2 million.  Mobile phone penetration defined as the ratio of SIM cards to the total population reached 114 percent in 2020, while individual internet use was 43 percent in 2020.The IMF reports that U.S. FDI stock in Senegal was approximately $114 million in 2019 (Table 1; up from $91 million in 2018).  Although France is historically Senegal’s largest source of FDI, China overtook France as Senegal’s largest bilateral trade partner in 2019.  Turkish economic influence is also rising, particularly in construction.  Other important investment partners include Morocco, Saudi Arabia, and other Gulf States, as well as the EU.  Sectors attracting substantial investment include petroleum and natural gas, agribusiness, mining, tourism, and fisheries. Investors can consult Senegal’s investment promotion agency (APIX) at www.investinsenegal.com for information on opportunities, incentives, and procedures for foreign investment, including a copy of Senegal’s investment code.

The Port of Dakar, responsible for 9 percent of Senegal’s international trade volume, is well served by major shipping lines.  It serves as a transshipment center for landlocked nations in West Africa, featuring deep draft of 11 meters and a wide access channel allowing round-the-clock access.  The GOS and various private sector partners are pursuing new state of-the-art port projects, including a new bulk and mineral port in Bargny and a new container terminal in Ndayane, both located south of Dakar.

Senegal’s major export industries include fish, gold, phosphates, horticulture products, cement, peanuts, and nut oil.  Prior to the COVID-19 slowdown, tourism was another important source of foreign exchange. The tourism sub-sector is showing recovery with an estimated growth rate of 3.2 percent in 2021, compared to a drastic contraction of the sector by 19.8 percent in 2020[2].  Senegal receives substantial remittances from nationals living abroad, representing 10.5 percent of GDP in 2020.  Despite the COVID-pandemic, workers’ remittances grew by 15 percent between 2020 and 2021. 

The point of entry for business registration is Senegal’s Investment Promotion Agency (APIX), https://investinsenegal.com/, which provides a range of services to foreign investors.  Since 2007, APIX has significantly reduced the average number of days it takes to start a business to six.  The government continues to expand its “single window” system, offering one-stop government services for businesses, opening new service centers in various locations, and projecting to have at least one service center in each of the country’s 45 regions by 2021.  Property owners can apply for construction permits online.  In 2019, the GOS made tax information and some payment options available online.  With the support of the UN Commission on Trade and Development (UNCTAD) and the government of Luxembourg, APIX recently launched an online portal, https://senegal.eregulations.org/ containing extensive information regarding regulations applicable to businesses and investments in Senegal.

Senegal is actively seeking to increase U.S. trade and investment.   While its commercial ties to France and its relatively small domestic market have previously limited U.S. commercial relationships, this is changing.  U.S. exports to Senegal increased by 5 percent from $281 million in 2020 to $382 million in 2021.  The bilateral goods trade was estimated at $530 million in 2021[3].   

A U.S.-Senegal Bilateral Investment Treaty (BIT) went into effect since 1990.  Senegal’s stock of Foreign Direct Investment (FDI) increased from $3.4 billion in 2015 to $6.4 billion in 2019 according to UNCTAD data.  U.S. investment in Senegal has expanded since 2014, including investments in power generation, renewable energy, industry, and offshore oil and gas.

The IMF reports that U.S. FDI stock in Senegal was approximately $114 million in 2019 (up from $91 million in 2018).  China overtook France as Senegal’s largest bilateral trade partner in 2019.  Turkish economic influence is also rising, particularly in construction.  Other important investment partners include Morocco, Saudi Arabia, and other Gulf States, as well as the EU. Sectors attracting substantial investment include petroleum and natural gas, agribusiness, mining, tourism, manufacturing, and fisheries.

The USG renewed Senegal’s privileges under the African Growth and Opportunity Act (AGOA), renewed for a 10-year period in 2016, which provides duty-free access for value-added goods to the U.S. market for most Sub-Saharan African countries, including Senegal.  Senegal is eligible for AGOA preferences.  Under AGOA exports increased gradually over the period 2011-2020. AGOA exports now represent 43 percent of total exports to the United States.   In 2021, Senegal’s AGOA exports represented more than half of total exports to the United States.  Mining-related products represented 65 percent of all Senegal’s exports under AGOA while cotton and textiles represented the remaining 35 percent in 2021.

Political & Economic Environment

Senegal has developed strong democratic institutions since gaining independence in 1960.  Free and fair elections in 2012 brought President Macky Sall to power and consolidated Senegal’s role as an example of democracy following the 12-year tenure of Abdoulaye Wade.  International observers assessed the February 2019 presidential election, in which President Sall easily won a second term, as free and fair, despite some isolated systemic issues and a few instances of campaign violence.  Results of the July 2022 legislative elections were split between the ruling and opposition parties and conducted under transparent and peaceful conditions, according to international observers.  Senegal will hold its next presidential elections in 2024.  For more information on Senegal’s political situation, please refer to the CIA factbook and to the following site https://theodora.com/wfbcurrent/senegal/index.htmland the U.S. Department of State Countries & Areas website.

State Department’s website for background on the country’s political environment.


[1]  

[2] Economic Situation and Financial Situation in 2021 and Outlook for 2022, Ministry of Economy, Planning and Cooperation.