The Government of Senegal continues to improve Senegal’s investment climate. Since 2007, Senegal has dramatically reduced the average number of days it takes to start a business. The Government of Senegal continues to expand its “single window” system offering one-stop government services for businesses, opening new service centers in various locations and projecting at least one service center in each of the country’s 45 regional departments by 2023. Property owners can apply for construction permits online. In 2019, the Government of Senegal made tax information and some payment options available online.
Senegal’s state information agency SENUM has an ambitious plan to increase access to Wi-Fi and digitize more government services onto a national hub[1]. The Government of Senegal made progress in operationalizing the new Commercial Court, prioritizing the resolution of business disputes. Although companies continue to report problems with corruption and opacity, Senegal compares favorably with many countries in the region in corruption indicators.
High energy costs also serve as a challenge to the growth of industry. The Millennium Challenge Corporation (MCC) compact, signed in December 2018 aims to decrease energy costs by modernizing the power sector, increasing access to electricity in rural Senegal, strengthening the electrical transmission network in Dakar, and improving governance of the power sector. The Compact entered into force on September 5, 2021, for a five-year period and procurement bidding is open on the Millennium Challenge Account Senegal website, although most project components have been already procured[2].
Despite these improvements, business climate challenges remain. Because the informal sector dominates Senegal’s economy, legitimate companies bear a heavy tax burden, although Senegal is making progress in broadening the tax base. Some U.S. companies complain about delays and uncertainty in the project development process. High costs for real estate and energy undermine Senegal’s competitiveness. Senegal’s bureaucracy remains slow and difficult to navigate for projects requiring government approval. A slow legal system and challenges in resolving commercial disputes are impediments to investment despite the recent creation of a commercial court and may serve as an obstacle for foreign small and medium-sized businesses. Senegal has a procurement regulatory agency (ARMP) and standardized procurement practices. However, application of these rules has been inconsistent.
According to the World Bank, per capita GDP 2022 is $1,598.07, and $4,209 when adjusted by purchasing power parity (PPP). As a result, U.S. companies interested in this market may want to consider a regional strategy using Dakar as a hub for West Africa. Moreover, firms seeking to provide goods and services to the Government of Senegal should bear in mind that prevailing fiscal pressures and a narrow revenue base mean the Government of Senegal is price-sensitive in its decision to procure goods and services.