2013 Investment Climate Statement - Senegal

2013 Investment Climate Statement
Bureau of Economic and Business Affairs
February 2013

Senegal offers investors a stable political environment, democratic institutions, two day business registration, a relatively robust telecommunications infrastructure, an advantageous geographic location, a world class container port, non-stop flights to and from the United States (U.S.), a bilateral investment treaty with the U.S., a stable regional currency - the CFA franc (fixed to the Euro at CFA 655.957 to 1 Euro and guaranteed by the French Treasury), easy repatriation of capital and income, and abundant semi-skilled and unskilled work force. Despite these obvious strengths, overly rigid and demanding labor laws, high factor costs, an inefficient and inconsistent judiciary, and constraints in obtaining long-term credit from commercial banks have restrained private, foreign and domestic investment. Judicial, tax, customs, and regulatory decisions are frequently slow to be issued, influenced by political considerations, and lacking transparency.

The country's Investment Code offers incentives to companies willing to locate off the Cap Verde peninsula. Senegal accepts binding foreign arbitration of investment disputes. French companies are the largest foreign investors.

Openness to Foreign Investment

The Government of Senegal officially welcomes foreign investment, but potential investors, and indeed all businesses, face obstacles, including non-transparent regulation and high factor costs. There is no legal discrimination against businesses and business conducted or owned by foreign investors. There are no barriers in regard to 100 percent ownership of businesses by foreign investors in most sectors. However, in some key sectors such as telecommunications, water, mining, and security-related services, foreign investors may have majority control, but may not acquire 100 percent ownership.

Under the former Wade administration, Senegal pursued major investment deals with foreign partners, both private and government-controlled. Some projects were offered via public tender and some were negotiated privately. The Sall administration is trying to enforce procurement regulations and be seen to be transparent in entering into agreements. Foreign investors have secured contracts to exploit mineral resources, provide garbage services, and manage Dakar's maritime port. A law to enhance transparency in public procurement and public tenders entered into force in 2008 through a Public Procurement Regulatory body (ARMP). This body annually reviews government public procurement contracts and publishes reports on bad practices, procurement violations as well as highlighting best practices.

The Government does some screening of proposed investments, mostly to verify compatibility with the country's overall development goals. Foreign investors are encouraged to utilize the "one stop" service of Senegal's Investment Promotion Agency (APIX) for registration and obtaining APIX, Ministry of Economy and Finance, Senegalese Customs, and other approvals needed to secure a business license, which can now be completed in approximately eight days. Depending on the proposed business activity, other approvals from specific Ministries, such as Agriculture and Interior, can take additional time. There is no provision in Senegalese law permitting domestic businesses to adopt articles of incorporation or association that limit or control foreign investment. There is no pattern of discrimination against foreign firms making investments in Senegal.

Senegal's 2004 Investment Code remains the main body of law regulating foreign investments. The Code provides basic guarantees for the repatriation of profit and capital and equality of treatment. It also specifies tax and customs exemptions according to the size of the investment, classification of the investor (such as small or medium-sized enterprise versus a larger corporation), and location (investments outside of Dakar receive longer periods of exoneration from taxes). Following recommendations by major donors, Senegal established a Presidential Investors Council (PIC) designed to improve the business climate and reduce obstacles to domestic and foreign private investment. The PIC has had some success in lobbying for certain "pro-business" changes in Senegal's tax code, eliminating the equalization tax on the informal sector, and lowering the VAT on tourist industries from 18 percent to 10 percent. However, the new tax code increases the corporate tax rate from 25 percent 30 percent.

In the 2013 World Bank Doing Business Report, Senegal ranked 166 out of 183 countries. The ranking reflects the number of papers that need to be filed and the cost of filing rather than the time it takes to file. The report notes that several reforms were not implemented during the pre-election and election period. The report welcomes Senegal as an ''open country in Africa where good governance is a basic principle in the constitution.'' The report suggests that Senegal make improvements in land registration, in Small and Medium Enterprises (SME) financing, agro-industry financing, electricity connectivity, economic governance and improvement of the legal environment.

Both foreign and domestic firms tend to cite the same problems in doing business in Senegal, inefficient regulation and bureaucracy, ineffective commercial courts, high factor costs, labor laws that makes it difficult to fire permanent employees for just cause, and occasional disputes over customs classifications, valuation, and taxation. President Macky Sall has committed to improving the business environment and boosting agricultural production. He has promised transparency and accountability in government, as well as independence for the judicial system. Partner that with the political stability of Senegal, the new tax code and you have a situation that is highly favorable for foreign investment.

Conversion and Transfer Policies

Commercial transfers are normally carried out rapidly and in full by local banking institutions. Companies find that the import and export of funds can be accomplished in a manner similar to commercial bank transactions. Originally the franc of the French Colonies of Africa (CFA), now more commonly known as the CFA franc of the African Financial Community is used by Senegal and seven other countries in the West African Economic Monetary Union, WAEMU (XOF) and seven countries in the Central African Monetary Union, CEMAC (XAF). Each monetary union has its own central bank. The CFA is pegged to the Euro at 1 Euro = 655.957 CFA. There are no restrictions on the transfer or repatriation of capital and income earned, or on investments financed, with convertible foreign currency. However, the Government does limit the amount of foreign exchange individuals may take outside Senegal on trips. Departing travelers may take a maximum of 6 million CFA in Euros or other foreign currency/travelers checks (approximately USD 13,000) upon presentation of a valid airline ticket. There is a small informal market for currency exchange in Senegal.

Remittances to Senegal from its citizens living overseas are routine and provide a significant source of income for many local Senegalese. In 2010, the estimated value of remittances, formal and informal, was estimated by Senegalese authorities at USD 1.2 billion or 8 percent of GDP.

Expropriation and Compensation

South African company Kumba International BV (KIO) has settled a dispute over the Faleme iron-ore deposit with Senegal. KIO initiated arbitration proceedings after the Senegalese government gave world number-one steelmaker ArcelorMittal permission to mine iron-ore deposits to which the company believed it held rights. KIO said that the parties had mutually settled through arbitration and that the terms of the settlement agreement would remain confidential.

Dispute Settlement

Senegal is a signatory to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. However, dispute actions are more likely to be taken through the International Center for the Settlement of Investment Disputes (Washington Convention), of which Senegal is a member.

In August 2012, Millicom and the government of Senegal settled their dispute bringing a four-year legal battle to an end. Senegal agreed to recognize the validity of Millicom’s existing mobile license as well as granting it rights to offer new services. In return, Millicom paid USD 103 million. The additional concessions awarded to Millicom include a 3G license, extension of its current license by 10 years to 2028, and the alignment of its license terms with those of other players in the market, which means it will be permitted to offer fixed-line, WiMax and cable TV services.

Foreign creditors receive equal treatment under Senegalese bankruptcy law in making claims against liquidated assets. Monetary judgments are normally in local currency. While Senegal has well-developed commercial and investment laws, and a legal framework for regulating business disputes, settlement of disputes within the existing framework is cumbersome and slow. Few judges or lawyers are conversant in commercial laws. Court cases are expensive and rarely resolved expeditiously. Decisions can be inconsistent, arbitrary, and non-transparent.

Foreign investors have found it difficult to fire employees for just cause or malfeasance. Foreign firms are often sued in the Senegalese courts by terminated employees who are frequently awarded damages and placement in their former positions. Although these decisions are sometimes overturned on appeal, the appeals process is costly and time consuming. Foreign firms in Senegal often cite burdensome labor law and arbitrary rulings by courts on labor cases as their number one frustration in doing business in Senegal.

Performance Requirements and Incentives

Senegal's Investment Code defines eligibility for investment incentives according to a firm's size and type of activity, the amount of the potential investment, and the location of the project. To qualify for significant investment incentives, firms must invest above CFA 100 million (approximately USD 200,000) or in activities that lead to an increase of 25 percent or more in productive capacity.

Investors may also deduct up to 40 percent of retained investment over five years. However, for companies engaged strictly in "trading activities," defined as "activities of resale in their existing state products bought from outside the enterprises," investment incentives might not be available.

Eligible sectors for investment incentives include agriculture and agro-processing, fishing, animal-rearing and related industries, manufacturing, tourism, mineral exploration and mining, banking, and others. All qualifying investments benefit from the "Common Regime," which includes two years of exoneration from duties on imports of goods not produced locally for small and medium sized firms, and three years for all others. Also included is exoneration from direct and indirect taxes for the same period.

Exoneration from the Minimum Personal Income Tax and from the Business License Tax is granted to investors who use local resources for at least 65 percent of their total inputs within a fiscal year. Enterprises that locate in less industrialized areas of Senegal benefit from exemption of the lump-sum payroll tax of three percent, with the exoneration running from five to 12 years, depending on the location of the investment. The investment code provides for exemption from income tax, duties and other taxes, phased out progressively over the last three years of the exoneration period. Most incentives are automatically granted to investment projects meeting the above criteria. The new tax code was published December 31, 2012 (law # 2012-31 of December 2012 published in journal # 6706 of 31/12/2012).

An existing firm requesting an extension of such incentives must be at least 20 percent self-financed. Large firms -- those with at least 200 million CFA (400,000 USD) in equity capital -- are required to create at least 50 full-time positions for Senegalese nationals, to contribute the hard currency equivalent of at least 100 million CFA (200,000 USD), and keep regular accounts that conform to Senegalese (European accounting system) standards. In addition, firms must provide APIX with details on company products, production, employment and consumption of raw materials.

The Government does not, by statute, impose specific conditions or performance requirements on investment activities. However, the Government does negotiate with potential investors on a case-by-case basis.

Acquiring work permits for expatriate staff is typically straightforward. Citizens from WAEMU member countries are permitted to work freely in Senegal. In May of 2004, the Economic Community of West African States (ECOWAS) and WAEMU signed an agreement that, amongst other things, allows employment mobility between member countries.

Right To Private Ownership And Establishment

In addition to traditional guarantees offered to investors, e.g., free transfer of capital and income, and national treatment, private entities are permitted to establish and own businesses and to engage in most forms of remunerative activity. Foreign nationals are permitted to buy and hold land. Local majority ownership is not necessary. Land holdings for investors are frequently offered on the basis of long-term leases (i.e., 99 years). Several of the state-owned firms privatized in recent years were sold in part or in whole to foreign entities.

Protection of Property Rights

The Senegalese Civil Code, based on French law, enforces private property rights. The code provides for equality of treatment and non-discrimination against foreign-owned businesses. Property title and a land registration system exist in Senegal, but application is uneven outside of Senegal's urban areas. The Government streamlined procedures for registering property and reduce the associated costs in 2008 so that property can be duly registered within 18 days. Confirming ownership rights on real estate can be difficult, but once established, ownership is protected by law. Investors have also expressed concerns about the lack of investment-ready, developed business sites. The Government generally pays compensation when it takes private property through eminent domain actions. Senegal's housing finance market is underdeveloped and few long-term mortgage financing vehicles exist. There is no secondary market for mortgages or other bundled revenue streams. The judiciary is inconsistent when adjudicating property disputes.

Senegal is a member of the African Organization of Intellectual Property (OAPI), a grouping of 15 francophone African countries, which established a common system for obtaining and maintaining protection for patents, trademarks and industrial designs. Senegal has been a member of the World Intellectual Property Organization (WIPO) since its inception. Local statutes recognize reciprocal protection for authors or artists who are nationals of countries adhering to the 1991 Paris Convention on Intellectual Property Rights.

  • Patents: Patents are protected for 20 years. An annual charge is levied during this period. Trade secrets and computer chip design are respected.
  • Trademarks: Registered trademarks are protected for a period of 20 years. Trademarks may be renewed indefinitely by subsequent registrations.
  • Copyrights: Senegal is a signatory to the Bern Copyright Convention. The Senegalese Copyright Office, part of the Ministry of Culture, attempts to enforce copyright obligations. The bootlegging of music cassettes and CDs is common and of concern to the local music industry. The Copyright Office undertook actions in 2001, 2002, 2003 and 2006 to combat media piracy, including seizure of counterfeit cassettes and CD/DVDs and in 2008 established a special police unit to better enforce the country's anti-piracy and counterfeit laws.

However, despite an adequate legal and regulatory framework, enforcement of intellectual property rights is weak. In general, the Government has not committed the resources to combat IPR violations or to seize counterfeit goods. Customs screening for counterfeit goods coming from China, Nigeria, Dubai and other centers of illegal production is weak and confiscated goods occasionally re-appear in the market. Nonetheless, there has been a recent effort by Customs to understand the impact of counterfeit products on the Senegalese marketplace, and officers have participated in trainings offered by manufacturers to identify counterfeit products.

Transparency of the Regulatory System

The new government of Macky Sall has made good governance and transparency in the management of public affairs a priority. The World Bank has congratulated Senegal "for positive indicators of good governance." The 2012 Ibrahim Index of Good Governance put Senegal in 16th place in Africa and 5th out of 16 countries in West Africa. Senegal recorded its lowest score (53rd) in the category “sustainable economic development.” President Macky Sall has created a new Ministry of Good Governance “in order to strengthen the mechanisms of regulation and the control of virtuous governance according to its Minister Abdoul Latif Coulibaly.”

There is no requirement for a public comment process for proposed laws and regulations; however, the Government frequently holds public hearings and workshops to discuss proposed initiatives and programs.

Efficient Capital Markets and Portfolio Investment

In general, domestic investment is hampered by an under-developed financial sector. Nineteen commercial banks from France, Nigeria, Morocco and Togo with conservative lending guidelines and high interest rates and collateral requirements dominate bank lending. Few firms are eligible for long-term loans, and small and medium sized enterprises have little access to credit. Citibank (United States) operates in Senegal as an investment bank. U.S. firms also have access to the U.S. Overseas Private Investment Corporation (OPIC) and Export-Import Bank (EXIMBANK) facilities.

In 2011, Senegal issued a 500 million USD bench mark bond in the foreign bond market. This has put Senegal in a higher league than it has typically played in and has therefore attracted greater scrutiny from international investors. In general, the infrastructure for expanding business lending, credit risk analysis, skilled commercial law specialists, and auditors, etc. does not exist. The West African Regional Stock Exchange (BRVM), headquartered in Abidjan, Cote d’Ivoire with local offices in each of the WAEMU member countries offers additional opportunities to attract increased foreign capital and to give private investors access to more diversified sources of financing. However, to date only one Senegalese company, Sonatel, is traded on the BRVM. There is no system to encourage and facilitate portfolio investment.

Legal, regulatory and accounting systems closely follow French models and WAEMU countries present their financial statements in accordance with the SYSCOA system, which is based on Generally Accepted Accounting Principles in France.

Political Violence

There have been incidents of sporadic civil disturbances over the past few years, but they have generally taken place as unions, opposition parties, merchants or students demand better salaries, living or working conditions. The violence on June 23, 2011 over constitutional changes was a shock to the Senegalese people and did not last beyond a day. Sporadic incidences of violence as result of petty banditry continue in the Casamance region, which has suffered from a two-decade-old conflict ignited by a local rebel movement seeking independence for the region.


The 2012 Corruption Perception Index (CPI) administered by Transparency International Senegal ranks Senegal 94th out of 176 countries. In 2011, Senegal was in the 99th place. This ranking is still below average: 15th in Africa and 7th in West Africa behind Cape Verde, Burkina Faso and Benin.

Since his inauguration President Macky Sall has been seen to be fighting corruption and promoting good governance. He has reactivated the Court of Repossession of Illegally Acquired Assets, reactivated judicial cases from 2008, and created new structures such as the National Anti-Corruption (OFNAC) and the Commission of restitution and recovery of illegally acquired assets. The mission of OFNAC is to fight corruption, embezzlement of public funds and fraud. OFNAC has the power of self-referral (own initiative investigation). OFNAC is composed of twelve members appointed by decree.

It is important for U.S. companies, irrespective of their size, to assess the business climate in the relevant market in which they will be operating or investing, and to have an effective compliance program or measures to prevent and detect corruption, including foreign bribery. U.S. individuals and firms operating or investing in foreign markets should take the time to become familiar with the relevant anticorruption laws of both the foreign country and the United States in order to properly comply with them, and where appropriate, they should seek the advice of legal counsel.

The U.S. Government seeks to level the global playing field for U.S. businesses by encouraging other countries to take steps to criminalize their own companies ‘acts of corruption, including bribery of foreign public officials, by requiring them to uphold their obligations under relevant international conventions. A U.S. firm that believes a competitor is seeking to use bribery of a foreign public official to secure a contract should bring this to the attention of appropriate U.S. agencies, as noted below.

  • U.S. Foreign Corrupt Practices Act: In 1977, the United States promulgated the Foreign Corrupt Practices Act (FCPA), which makes it unlawful for a U.S. citizen, and certain foreign issuers of securities, to make a corrupt payment to foreign public officials for the purpose of obtaining or retaining business for or with, or directing business to, any person. The FCPA also applies to foreign firms and persons who take any act in furtherance of such a corrupt payment while in the United States. For more detailed information on the FCPA, see the FCPA Lay-Person’s Guide at: http://www.justice.gov/criminal/fraud/docs/dojdocb.html.
  • Other Instruments: It is U.S. Government policy to promote good governance, including host country implementation and enforcement of anti-corruption laws and policies pursuant to their obligations under international agreements. Since enactment of the FCPA, the United States has been instrumental in the expansion of the international framework to fight corruption. Several significant components of this framework are the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-bribery Convention), the United Nations Convention against Corruption (UN Convention), the Inter-American Convention against Corruption (OAS Convention), the Council of Europe Criminal and Civil Law Conventions, and a growing list of U.S. free trade agreements.
  • OECD Anti-bribery Convention: The OECD Anti-bribery Convention entered into force in February 1999. As of December 2009, there were 38 countries party to the Convention including the United States (see http://www.oecd.org/dataoecd/59/13/40272933.pdf). Major exporters China, India, and Russia are not parties, although the U.S. Government strongly endorses their eventual accession to the Convention. The Convention obligates the Parties to criminalize bribery of foreign public officials in the conduct of international business. The United States meets its international obligations under the OECD Anti-bribery Convention through the U.S. FCPA. Senegal is not a party to the OECD convention.
  • UN Anticorruption Convention: The UN Anticorruption Convention entered into force on December 14, 2005; there are 143 countries party to it as of December 2009 (see http://www.unodc.org/unodc/en/treaties/CAC/signatories.html). The UN Convention is the first global comprehensive international anticorruption agreement. The UN Convention requires countries to establish criminal and other offences to cover a wide range of acts of corruption. The UN Convention goes beyond previous anticorruption instruments, covering a broad range of issues ranging from basic forms of corruption such as bribery and solicitation, embezzlement, trading in influence to the concealment and laundering of the proceeds of corruption. The Convention contains transnational business bribery provisions that are functionally similar to those in the OECD Anti-bribery Convention and contains provisions on private sector auditing and books and records requirements. Other provisions address matters such as prevention, international cooperation, and asset recovery. Senegal is a party to the UN Convention.
  • OAS Convention: In 1996, the Member States of the Organization of American States (OAS) adopted the first international anticorruption legal instrument, the Inter-American Convention against Corruption (OAS Convention), which entered into force in March 1997. The OAS Convention, among other things, establishes a set of preventive measures against corruption provides for the criminalization of certain acts of corruption, including transnational bribery and illicit enrichment, and contains a series of provisions to strengthen the cooperation between its States Parties in areas such as mutual legal assistance and technical cooperation. As of December 2009, the OAS Convention has 33 countries party (see http://www.oas.org/juridico/english/Sigs/b-58.html) Senegal is not a party to the OAS Convention.
  • Council Of Europe Criminal Law And Civil Law Conventions: Many European countries are parties to either the Council of Europe (CoE) Criminal Law Convention on Corruption, the Civil Law Convention, or both. The Criminal Law Convention requires criminalization of a wide range of national and transnational conduct, including bribery, money-laundering, and account offenses. It also incorporates provisions on liability of legal persons and witness protection. The Civil Law Convention includes provisions on compensation for damage relating to corrupt acts, whistleblower protection, and validity of contracts, inter alia. The Group of States against Corruption (GRECO) was established in 1999 by the CoE to monitor compliance with these and related anti-corruption standards. Currently, GRECO comprises 46 member States (45 European countries and the United States). As of December 2009, the Criminal Law Convention has 42 countries party to it and the Civil Law Convention has 34 (see www.coe.int/greco.) Senegal is not a party to the Council of Europe Conventions.]
  • Free Trade Agreements: While it is U.S. Government policy to include anticorruption provisions in free trade agreements (FTAs) that it negotiates with its trading partners, the anticorruption provisions have evolved over time. The most recent FTAs negotiated now require trading partners to criminalize “active bribery” of public officials (offering bribes to any public official must be made a criminal offense, both domestically and trans-nationally) as well as domestic “passive bribery” (solicitation of a bribe by a domestic official). All U.S. FTAs may be found at the U.S. Trade Representative Website: http://www.ustr.gov/trade-agreements/free-trade-agreements. Senegal does not have a free trade agreement (FTA) in place with the United States. Consult USTR Website for date: http://www.ustr.gov/trade-agreements/free-trade-agreements.
  • Local Laws: U.S. firms should familiarize themselves with local anticorruption laws, and, where appropriate, seek legal counsel. While the U.S. Department of Commerce and U.S Department of State cannot provide legal advice on local laws, the Department’s U.S. and Foreign Commercial Service in addition to the Economic/Commercial office in the U.S. Embassy in Dakar, Senegal can provide assistance with navigating the host country’s legal system and obtaining a list of local legal counsel.
  • Assistance For U.S. Businesses: The U.S. Department of Commerce offers several services to aid U.S. businesses seeking to address business-related corruption issues. For example, the U.S. and Foreign Commercial Service can provide services that may assist U.S. companies in conducting their due diligence as part of the company’s overarching compliance program when choosing business partners or agents overseas. The U.S. Foreign and Commercial Service can be reached directly through its offices in every major U.S. and foreign city, or through its Website at www.trade.gov/cs.
  • The Department of Commerce and Department of State provide worldwide support for qualified U.S. companies bidding on foreign government contracts through the Commerce Department’s Advocacy Center and Department of State’s Office of Commercial and Business Affairs. Problems, including alleged corruption by foreign governments or competitors, encountered by U.S. companies in seeking such foreign business opportunities can be brought to the attention of appropriate U.S. government officials, including local embassy personnel and through the Department of Commerce Trade Compliance Center “Report A Trade Barrier” Website at tcc.export.gov/ReportaBarrier/index.asp.
  • Guidance on The U.S. FCPA: The Department of Justice’s (DOJ) FCPA Opinion Procedure enables U.S. firms and individuals to request a statement of the Justice Department’s present enforcement intentions under the anti-bribery provisions of the FCPA regarding any proposed business conduct. The details of the opinion procedure are available on DOJ’s Fraud Section Website at www.justice.gov/criminal/fraud/fcpa. Although the Department of Commerce has no enforcement role with respect to the FCPA, it supplies general guidance to U.S. exporters who have questions about the FCPA and about international developments concerning the FCPA. For further information, see the Office of the Chief Counsel for International Counsel, U.S. Department of Commerce, Website, at http://www.ogc.doc.gov/trans_anti_bribery.html. More general information on the FCPA is available at the Websites listed below.
  • Exporters and investors should be aware that generally all countries prohibit the bribery of their public officials, and prohibit their officials from soliciting bribes under domestic laws. Most countries are required to criminalize such bribery and other acts of corruption by virtue of being parties to various international conventions discussed above.
  • The potential for corruption is a significant obstacle for economic development and competitiveness in Senegal, in spite of the country's anti-corruption laws, regulations, penalties, and agencies. Credible allegations of corruption have been made concerning government procurement, dispute settlement, and decisions by the judiciary and regulatory and enforcement agencies. Transparency International, in its 2011 Perceptions of Corruption Index, ranked Senegal 112 out of 182 countries.

Anti-Corruption Resources

Some useful resources for individuals and companies regarding combating corruption in global markets include the following:

  • Information about the U.S. Foreign Corrupt Practices Act (FCPA), including a “Lay-Person’s Guide to the FCPA” is available at the U.S. Department of Justice’s Website at: http://www.justice.gov/criminal/fraud/fcpa.
  • Information about the OECD Anti-bribery Convention including links to national implementing legislation and country monitoring reports is available at: http://www.oecd.org/department/0,3355,en_2649_34859_1_1_1_1_1,00.html. See also new Anti-bribery Recommendation and Good Practice Guidance Annex for companies: http://www.oecd.org/dataoecd/11/40/44176910.pdf
  • General information about anticorruption initiatives, such as the OECD Convention and the FCPA, including translations of the statute into several languages, is available at the Department of Commerce Office of the Chief Counsel for International Commerce Website: http://www.ogc.doc.gov/trans_anti_bribery.html.
  • Transparency International (TI) publishes an annual Corruption Perceptions Index (CPI). The CPI measures the perceived level of public-sector corruption in 182 countries and territories around the world. The CPI is available at: http://www.transparency.org/policy_research/surveys_indices/cpi/2009.
  • TI also publishes an annual Global Corruption Report which provides a systematic evaluation of the state of corruption around the world. It includes an in-depth analysis of a focal theme, a series of country reports that document major corruption related events and developments from all continents and an overview of the latest research findings on anti-corruption diagnostics and tools. See http://www.transparency.org/publications/gcr.
  • The World Bank Institute publishes Worldwide Governance Indicators (WGI). These indicators assess six dimensions of governance in 212 countries, including Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption. See http://info.worldbank.org/governance/wgi/sc_country.asp. The World Bank Business Environment and Enterprise Performance Surveys may also be of interest and are available at: http://go.worldbank.org/RQQXYJ6210.
  • The World Economic Forum publishes the Global Enabling Trade Report, which presents the rankings of the Enabling Trade Index, and includes an assessment of the transparency of border administration (focused on bribe payments and corruption) and a separate segment on corruption and the regulatory environment. See http://www.weforum.org/en/initiatives/gcp/GlobalEnablingTradeReport/index.htm.
  • Additional country information related to corruption can be found in the U.S. Department of State’s annual Human Rights Report available at //2009-2017.state.gov/g/drl/rls/hrrpt/.
  • Global Integrity, a nonprofit organization, publishes its annual Global Integrity Report, which provides indicators for 92 countries with respect to governance and anti-corruption. The report highlights the strengths and weaknesses of national level anti-corruption systems. The report is available at: http://report.globalintegrity.org/.

Bilateral Investment Agreement

Senegal and the U.S. have a Bilateral Investment Treaty, which allows for international arbitration. (U.S. companies entering the Senegalese market should ensure that their contracts with third parties make a provision for binding international arbitration in case of a dispute.) The treaty also provides for Most Favored Nation treatment for investors, internationally recognized standards of compensation in the event of expropriation, free transfer of capital and profits, and procedures for dispute settlement, including international arbitration. Senegal has signed similar agreements for protection of investment with France, Switzerland, Denmark, Finland, Spain, Italy, the Netherlands, South Korea, Romania, Japan, Australia, China, Iran, Morocco, and Sudan. Senegal has concluded tax treaties with France, Mali, and West African Economic and Monetary Union (WAEMU) member states. There is currently no tax treaty and no imminent prospect of one between the United States and Senegal.

Overseas Private Investment Corporation (OPIC) and Other Investment Insurance Programs

OPIC has been examining possible investments in Senegal but has no current projects. Senegal is a member of the Multilateral Investment Guarantee Agency (MIGA), an arm of the World Bank.


Unskilled and semi-skilled labor is abundant in Senegal, but there are relatively few highly-trained workers in the fields of engineering, information systems, and management. In-country opportunities for these workers are limited, and as a result many trained in these fields look outside Senegal for employment.

Relations between employees and employers are governed by the labor code, industry wide collective bargaining agreements, company regulations and individual employment contracts. There are two powerful industry associations that represent management's interests: the National Council of Employers (CNP) and the National Employers' Association (CNES). The principal labor unions are the National Confederation of Senegalese Workers (CNTS), and the National Association of Senegalese Union Workers (UNSAS), a federation of independent labor unions. The inflexibility of the Labor Code and the complexity of labor issues are often high on the list of complaints by investors and foreign companies.

Forced or Compulsory Labor

The labor law prohibits all forms of forced or compulsory labor, including that by children; however, the Talibe (children in Islamic schools forced to beg on the streets as part of their education) are often written about as an example of forced child labor. The latest government survey by the national statistical agency (ANDS) is from 2005. The number of employed children aged 5 to 14 was estimated at over 450,000 corresponding to more than 15% of this age group. Senegal has a national program of child protection and national legislation to eradicate the worst forms of child labor; however, funding priorities for this area of the economy are very low. A National Framework for the Struggle Against the Worst Forms of Child Labor has recently been initiated by the Ministry of Labor with International Labor Organization (ILO) Assistance.

Foreign Trade Zones/Free Ports

The Dakar Free Industrial Zone (ZFID) is largely inactive and stopped issuing new licenses in 1999. Firms already located there may continue receiving benefits until 2016. In 2007 the Government of Senegal signed an agreement with Jafza International of Dubai to establish a "special economic zone" outside of Dakar. The project remains in the development phase and the zone's incentives portfolio is not yet known.

Major Foreign Investors

Senegal today trades more with emerging markets than with developed ones; most of the foreign direct investment the country has received recently has come from emerging nations (China, Brazil, India and the Middle East). Foreign Direct Investment (FDI) increased to around an average of 186 million Euros between 2006 and 2010 (or 2.1% of GDP, up from 0.8% of GDP 2000-2005). Most new FDI is linked to the modernization of Senegal or recapitalization to improve the financial situation in key sectors. Europe remains the largest trading partner, but its share has declined to 38% of total trade from 48% in 2006. Asia represents 19% of total trade compared with 15% in 2006.

Approximately 235 subsidiaries of French groups are present in Senegal, accounting for 25 percent of all formal enterprises. French investors are present in the major multinational import-export firms, shipping companies, banking, food production, mechanical engineering, agribusiness, petroleum distribution, industrial equipment, vehicles, chemicals and pharmaceuticals, tourism and insurance industries. Privatizations in telecommunications and public utilities have increased the presence of French business in Senegal.

Investments by Senegalese citizens of Lebanese origin are significant in light import-substituting industries such as food products, textiles, chemicals, plastics and rubber. Matelec SAL, a division of the Doumet group from Lebanon has also invested in power generation in Senegal. Swiss investment includes the multinational Nestle and a waste management company. Germany, Japan, and South Korea have moderate investments in Senegal. Taiwan was active in Senegal's fish and canning industry. Indian interests have historically been a major investor in Senegal's phosphates industry and purchase nearly all phosphate output. Moroccan investment has increased since ATTI purchased the majority of shares of Banque Senegalo-Tunisienne (BST), Credit du Senegal, and Compagnie Bancaire de l'Afrique de L'Ouest (CBAO) to become one of the largest commercial banks of Senegal. Sudan's telecommunications company Sudatel won an international tender for a new license to provide fixed and mobile telephone and internet services. Iran Khodro Auto Company opened an assembly plant for Samand sedans near Senegal's second largest city, Thies. In recent years, China has increased its commercial presence in Senegal and its EXIM Bank has invested in a number of new building projects. Turkey is also increasing its influence in Senegal with numerous trade missions and a direct flight to Istanbul with Turkish Airlines.

Significant U.S. investors include General Electric, Fortesa International, Phillip-Morris, Pfizer, Citibank, Caterpillar, Cummins, APR Energy, IBM, Google and Hewlett Packard. .. Delta Airlines flies twice a week to Dakar from New York’s JFK airport, United Airlines and USAir have code share agreement with South African Airlines out of Dulles International Airport in Virginia to Dakar and then on to Johannesburg, South Africa.

Foreign Direct Investment Statistics

The United Nations Conference on Trade and Development report (CNCUCED) entitled ‘World Investment Report 2012’ indicates that in 2011, Senegal benefited from USD 286 million in Foreign Direct Investment (FDI). Senegal’s FDI comes from 25 different countries. Europe is the leader ahead of Asia and emerging countries such as China, India and Singapore. FDI recipient sectors include: ICT services, financial services, mining, agriculture, education, tourism and health.