Senegal offers a stable political environment, relatively robust infrastructure, strong institutions and a favorable geographic position with growing opportunities for foreign investment. The Government of Senegal welcomes foreign investment and has prioritized efforts to improve its business climate. Senegal has maintained a stable macroeconomic environment, with its regional currency, the CFA franc, pegged to the Euro and easy repatriation of capital and income. Investors cite high factor costs, bureaucratic hurdles, limited access to financing and a rigid labor market as being among the obstacles to investment. The government is making efforts address some of these challenges, streamline bureaucratic procedures and improve Senegal’s competitiveness.
Senegal is pursuing an ambitious development plan, the “Plan Senegal Emergent” (Emerging Senegal Plan or "PSE"), which includes a series of economic reforms and increasing private investment in strategic sectors with the goal of increasing real GDP growth to an average of 7.1% from 2014 to 2018. The growth rate reached 6.5% in 2015, the highest in 12 years. The government is implementing reforms to the energy sector, higher education and the land tenure system, in order to improve Senegal’s attractiveness for foreign investment. Senegal also has ambitions to build on its position as a regional business hub with relatively good transportation links to become a regional center for logistics, services and industry. The Senegalese government is focusing on infrastructure projects to develop port facilities, transportation infrastructure and a Special Economic Zone. Senegal has joined the New Alliance for Food Security and committed to policy reforms to facilitate greater investment in agro-industry. As the government undertakes a range of investment-friendly reforms, capacity constraints and bureaucratic bottlenecks continue to impede the implementation of this agenda.
Senegal’s low ranking (153th out of 189 countries) in the 2016 World Bank Doing Business Report highlighted the bureaucratic challenges that foreign investors can face when pursuing projects in Senegal. After an even lower Doing Business ranking of 178 in 2014, Senegal was cited as a top performer in 2015 and 2016 for improving its business climate to raise its ranking. The Government of Senegal is continuing to implement a multi-year program to streamline procedures and reduce costs involved in setting up a business. The development of a Special Economic Zone is also intended to provide an easier environment for private investment.
While Senegal has a well-developed legal framework for protecting property rights, settlement of commercial disputes can be cumbersome and slow. The government of Senegal has prioritized efforts to fight corruption, increase transparency and improve governance. Senegal compares favorably with most African countries in corruption indicators, but companies report that some corruption may persist, particularly at lower levels. The U.S. and Senegal signed a Bilateral Investment Treaty in 1983 that includes provisions on non-discrimination, free transfer of funds, international legal standards for expropriation and the use of binding third-party arbitration for dispute resolution.
France is historically the largest source of foreign direct investment but the government of Senegal is keen to diversify its sources of investment. U.S. investment in Senegal has expanded since 2014 including several investments in power generation and participation of U.S. companies in offshore oil and gas exploration. Following the announcement of oil and gas discoveries in 2014-2015, energy sector investment is expected to expand during the next decade. Agriculture, agro-industry, mining, infrastructure, tourism and fisheries are among the other sectors that have attracted substantial investment.
Investors may consult the website of 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.