HomeReportsBureau of Economic and Business Affairs2019 Investment Climate Statements...Senegal

# 					2019 Investment Climate Statements: Senegal			

 In this section										/

													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Senegal’s stable political environment, favorable geographic position, high growth rate, and generally open economy offer attractive opportunities for foreign investment. The Government of Senegal welcomes foreign investment and has prioritized efforts to improve the business climate, although significant challenges remain. Senegal’s macroeconomic environment is stable. The currency – the CFA franc used in eight West African countries – is pegged to the euro. Repatriation of capital and income is relatively straightforward. Investors cite cumbersome and unpredictable tax administration, bureaucratic hurdles, opaque public procurement, a weak and inefficient judicial system, inadequate access to financing, and a rigid labor market as obstacles. The government is working to address these problems and improve Senegal’s competitiveness.

Senegal is pursuing an ambitious development plan, the *Plan Senegal Emergent* (Emerging Senegal Plan, or “PSE”), to improve infrastructure, achieve economic reforms, and increase investment in strategic sectors. Under the PSE, the growth rate reached 7.2 percent in 2018 and exceeded 6 percent in each of the past four years. With good air transportation links, a newly opened international airport, and improving ground transportation, Senegal also aims to become a regional center for logistics, services, and industry. The government is developing port facilities, transportation infrastructure, the digital economy, and special economic zones (SEZ).

Senegal’s low ranking (141st out of 190 countries) in the 2019 World Bank’s *Doing Business* survey reflects the bureaucratic challenges foreign investors can face. Nevertheless, Senegal has made some improvements in its performance over the past several years and was cited as a top performer for improvements made in 2015 and 2016. The Government of Senegal continues to implement measures to reduce the cost of setting up a business.

While Senegal has a well-developed legal framework for protecting property rights, settlement of commercial disputes can be cumbersome and slow. The government has prioritized efforts to fight corruption, increase transparency, and improve governance. The government has launched a new Commercial Court which, when fully operationalized, will prioritize the resolution of business disputes. Senegal compares favorably with many African countries in corruption indicators, but companies report that problems with corruption and opacity persist. The United States and Senegal signed a Bilateral Investment Treaty (BIT) in 1983, which took effect in 1990.

France is historically Senegal’s largest source of foreign direct investment (FDI), but the government wants more diversity in its sources of investment. U.S. investment in Senegal has expanded since 2014, including investments in power generation, industry, and the offshore oil and gas sector. In addition to a developing petroleum industry, other sectors that have attracted substantial investment are agribusiness, mining, tourism, and fisheries. Other important investment partners include Mauritius, Indonesia, Morocco, China, Turkey, and the Gulf States.

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.

*Table 1: Key Metrics and Rankings*

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Toward Foreign Direct Investment**

The Government of Senegal welcomes foreign investment.  Foreign firms are generally able to invest in Senegal free from systematic discrimination in favor of local firms.  Nevertheless, some U.S. and other foreign firms have noted that, in practice, Senegal’s investment environment seems to favor incumbents and insiders – often other foreign firms – at the expense of new market entrants. Common complaints include excessive and inconsistently applied bureaucratic processes, nontransparent judicial processes, and an opaque decision-making process for public tenders and contracts.

Senegal’s Investment Promotion Agency (APIX), www.investinsenegal.com  , provides a range of administrative services to foreign investors. APIX is working to reduce the administrative burden of starting a business in Senegal, although red tape and slow processes continue to hamper investment.  APIX has launched a one-stop shop, the APIX Administrative Procedures Facilitation Center, with the goal of helping businesses perform all business registration procedures with government, local authorities and public institutions within two days. In practice, however, the World Bank Doing Business 2019 estimates that it takes six days to register a firm. In addition to other bureaucratic and documentary requirements, registering a business requires certification of certain documents by a public notary registered in Senegal. Senegalese law provides special preferences to facilitate investment and business operations by medium and small enterprises, including reduced interest rates for Senegalese-owned companies.

The government conducts ongoing dialogue with the private sector through the *Conseil Presidentiel de l’Investissement* (Presidential Council on Investment, or “CPI”). Among other activities, the CPI sponsors an annual forum at which investors comment on the government’s policies and actions. Another important venue for dialogue is the annual *Assises de l’Entreprises* sponsored by the *Conseil National du Patronat*, the national employers’ association. More information can be found atwww.cnp.sn.  Senegal does not have a business ombudsman or other official charged with coordinating complaints about the business climate. In practice, investors must often engage directly at the minister level to resolve business climate concerns.

**Limits on Foreign Control and Right to Private Ownership and Establishment**

There are no barriers to ownership of businesses by foreign investors in most sectors. There are some exceptions for strategic sectors such as water, electricity distribution, and port services where the government and state-owned companies maintain responsibility for most physical infrastructure but allow private companies to provide services. Senegal allows foreign investors equal access to ownership of property and does not impose any general limits on foreign control of investments.  Senegal’s Investment Code includes guarantees for equal treatment of foreign investors including the right to acquire and dispose of property.

The Government of Senegal does some screening of proposed investments, primarily to verify compatibility with the country’s overall development goals and compliance with environmental regulations. If the government is involved in project financing, the Ministry of Finance and Budget will also review financing arrangements to ensure compatibility with budget and debt policies. APIX can facilitate government review of investment proposals and the project approval process.

**Other Investment Policy Reviews**

On January 15, 2019, the Executive Board of the International Monetary Fund (IMF) completed the seventh review of Senegal’s economic performance under the program supported by a Policy Support Instrument (PSI) approved on June 24, 2015. For more information, see: https://www.imf.org/en/News/Articles/2019/01/18/pr1905-imf-exec-board-completes-7th-review-psi-senegal-concludes-2018-article-iv  .

**Business Facilitation**

The point of entry for business registration is the website of Senegal’s Investment Promotion Agency (APIX) at www.investinsenegal.com  . In 2018, the World Bank’s Doing Business Index ranked Senegal 64 out of 190 for “Starting a Business,” acknowledging significant improvement on this indicator over the past several years. APIX has launched a one-stop shop, the APIX Administrative Procedures Facilitation Center, with the goal of helping businesses perform all business registration procedures with government, local authorities and public institutions. The World Bank Doing Business 2019 estimates that it takes an average of six days to register a firm, with four separate administrative procedures, some of which require certification by a registered lawyer or notary.

Senegal’s Agency for the Development and Supervision of Small and Medium-sized Enterprises (ADEPME) has launched initiatives to support small and medium-sized enterprises (defined in Senegal as companies with fewer than 50 employees and annual revenues of less than 5 billion CFA (about USD 9 million)). These include tax incentives, grants for capacity building and for feasibility studies, and technical assistance to help firms operating in the informal sector formalize and register. ADEPME has also launched a program to certify the creditworthiness of SMEs, making them eligible for loans at preferential rates.

**Outward Investment**

The government neither promotes nor restricts outward investment.

							2. Bilateral Investment Agreements and Taxation Treaties					

According to the WTO (https://www.wto.org/english/tratop_e/tpr_e/s362-07_e.pdf ), Senegal has signed 28 bilateral investment treaties (BITs), of which 16 are currently in force. Senegal signed a BIT with the United States in December 6, 1983, which entered into force in October 25, 1990.  Other notable BIT partners include: Canada (2016); Kuwait (2009); Portugal (2011); Turkey (2012) Argentina (2010); France (2010); India (2009); Mauritius (2009) and Spain (2011). Senegal ratified the WTO Trade Facilitation Treaty in February 2017.

Senegal is a member of the Economic Community of West African States (ECOWAS), which seeks to create a regional free trade zone with approximately 300 million inhabitants. The ECOWAS Trade Liberalization System (ETLS), approved in 1979, has yet to be fully implemented, however. Senegal has adopted and implemented the ECOWAS Common External Tariff (CET) System and generally imposes tariffs in a transparent and rules-based way. In March 2018, Senegal signed the African Continental Free Trade Area agreement, a step toward a continent-wide liberalized market for goods and services.

Senegal does not have a bilateral taxation treaty with the United States.  Senegal has concluded agreements for the avoidance of double taxation with some 15 partners, including Belgium, Canada, Egypt, France, Kuwait, Lebanon, Malaysia, Mauritania, Mauritius, Morocco, Norway, Qatar, Chinese Taipei, Tunisia Malaysia, and Portugal.

Negotiations continue toward an Economic Partnership Agreement between the European Union and several West African countries, including Senegal.  More information may be found here: http://ec.europa.eu/trade/policy/countries-and-regions/negotiations-and-agreements/#_pending  

Some foreign firms, including U.S. companies, report concerns over Senegal’s system for assessing and collecting taxes from corporate entities. According to some reports, the processes used by tax authorities to calculate tax assessments are cumbersome, complex, and inconsistent, making necessary lengthy and uncertain negotiations over tax bills.  Some observers, including tax professionals, have reported that Senegalese tax authorities seem to target large, prominent companies for discriminatory taxation, ignoring smaller, unregistered firms that operate informally and pay little or no taxes. The government is implementing a program to incentivize small and medium-sized enterprises (SMEs) to formalize their operations, but progress has been slow. By some estimates, the informal sector represents up to 90 percent of the economic activity in the country.

Senegal has made no recent changes to its tax code, which can be accessed here: http://www.investinsenegal.com/IMG/pdf/cgi2013-2.pdf /  http://www.impotsetdomaines.gouv.sn/fr/documentation/code-general-des-impots-cgi  .

							3. Legal Regime					

**Transparency of the Regulatory System**

Senegal has made some progress towards developing independent regulatory institutions, including regulators for the energy, telecommunications, and financial sectors. While Senegal lacks established procedures for a public comment process for proposed laws and regulations, the government frequently holds public hearings and workshops to discuss proposed initiatives. Proposed regulations are not always made available to the public in a timely way, however. Although Senegalese law requires proposed legislation to be published in advance in the government’s official gazette, the government does not consistently update the gazette’s website.

Authority to make rules and regulate rests with the relevant government ministry unless there is a separate regulatory authority for a particular industry. However, in some instances, a ministry or the president will exert authority over regulatory matters—e.g., determining electricity tariffs. Local government bodies do not have a decisive role in regulatory decisions.

In 1988, the government established the *Commission de Regulation du Secteur de l’Electricite* (CRSE) to regulate the electricity sector and set electricity tariffs. Although the CRSE is, by law, an independent agency, observers note that the government frequently exercises influence over its decisions. The government is preparing to expand the CRSE’s role to include regulation of hydrocarbon fuels. The CRSE holds public consultations every three years as part of its technical process for reviewing electricity tariffs. The *Autorite de Regulation des Telecommunications et des Postes* is responsible for licensing and regulation of telecommunications and postal services in Senegal. The regulator of financial institutions is the *Banque Centrale des Etats de l’Afrique de l’Ouest* (BCEAO), the regional central bank for the eight-member West African Economic and Monetary Union (WAEMU), based in Dakar.

Senegal is a member of the United Nations Conference on Trade and Development (UNCTAD)’s international network of transparent investment procedures. At https://senegal.eregulations.org/  there is detailed information on administrative procedures applicable to investment and income generating operations. This includes the number of steps required, name and contact details of the entities and persons in charge of procedures, required documents, and conditions, costs, processing time and legal bases for procedures. There is no legal requirement to conduct impact assessments of proposed regulations, and regulatory agencies rarely do so. There is no specialized government body tasked with reviewing and monitoring regulatory impacts.

Legal, regulatory and accounting systems closely follow French models, and West African Economic and Monetary Union (WAEMU) countries present their financial statements in accordance with the SYSCOA system, based on Generally Accepted Accounting Principles in France.

Senegal’s budget and information on debt obligations were widely and easily accessible to the public, including online. The budget was substantially complete and considered generally reliable.  Senegal’s supreme audit institution reviewed the government’s accounts, and has published its audit reports for Senegal’s budgets through 2016 online. The process for allocating licenses and contracts for natural resource extraction was outlined in law and appeared to be followed in practice. Basic information on natural resource extraction awards was publicly available, and the government participated actively in the Extractive Industries Transparency Initiative (EITI). Senegal is the first Francophone country in sub-Saharan Africa to submit to a fiscal transparency evaluation (FTE) by the IMF.  In its January 30, 2019 FTE, the IMF rated Senegal “average” overall for countries of similar income and institutional capacity. Senegal was rated “advanced” or “good” on fiscal forecasting, budgeting, and fiscal reporting. It was rated “basic” on monitoring risks triggered by subnational governments. Senegal’s fiscal transparency would be improved by the supreme audit authority making its reports on the budget available in a timely manner.

**International Regulatory Considerations**

As a member of the Economic Community of West African States (ECOWAS), Senegal adheres to regional requirements concerning the movement of people and goods. Similarly, financial and fiscal-policy directives of WAEMU are also enforced in Senegal, as are regulations issued by the BCEAO. Senegal is a member of the WTO and generally notifies draft regulations to the WTO Committee on Technical Barriers to Trade.  However, since 2005 Senegal has banned imports of uncooked poultry and poultry products from the world without notifying the WTO.

**Legal System and Judicial Independence**

While Senegal has well-developed commercial and investment laws and a legal framework for resolving business disputes and enforcing property rights, settlement of disputes is often cumbersome and slow. Senegal’s legal system is based on French traditions and practice. While Senegal’s legal system is one of the most effective in francophone Africa, it presents a challenging environment for resolution of commercial disputes. Court cases tend to proceed slowly, with ample opportunity for the parties involved to prolong the proceedings. Even when courts issue judgments, companies may encounter challenges in implementing court decisions and enforcing their contractual rights. Some foreign investors report experiencing discriminatory treatment by local courts. Investors may consider including provisions for binding arbitration in their contracts in order to avoid prolonged and unpredictable entanglements in Senegalese courts. To alleviate the growing backlog and delays in resolution of commercial disputes, the government of Senegal recently launched a Commercial Court as part of its investment climate reforms, although the court’s operations have yet to be fully implemented.

Senegal’s constitution provides that the judiciary is independent of the legislature and executive. In practice, however, the executive’s influence over the courts is occasionally evident though generally not overt. Executive interference in judicial matters is, however, rare in strictly commercial matters. While often cumbersome and time-consuming, judicial processes in Senegal are, as a rule, procedurally competent. Companies may seek judicial redress against regulatory decisions. Such cases are heard in administrative tribunals that specialize in adjudicating claims against the state.

**Laws and Regulations on Foreign Direct Investment**

Senegal’s 2004 Investment Code provides basic guarantees for equal treatment of foreign investors and repatriation of profit and capital. It also specifies tax and customs exemptions according to the investment volume, company size and location, with investments outside of Dakar eligible for longer tax exemptions. A law to enhance transparency in public procurement and public tenders entered into force in 2008, establishing a public procurement regulatory body, the*Autorité de Régulation des Marchés Publics* (ARMP), which publishes annual reviews of public procurement. Procedures for challenging tender awards are available. The government enacted a law on public-private partnerships in 2014 to facilitate expedited approval of projects that include a minimum share of domestic investment.

More information on Senegal’s legal and regulatory environment, including texts of the Investment Code, the Mining Code, a new Petroleum Code finalized in February 2019, can be found at the following:

- Investment Code:  http://investinsenegal.com/IMG/pdf/resume_ci_et_dispositifs_incitatifs_du_cgi-3.pdf 
- Mining Code:  http://itie.sn/reglementation/  
- Petroleum Code:  http://www.droit-afrique.com/uploads/Senegal-Code-2019-petrolier.pdf 

**Competition and Anti-Trust Laws**

Senegal’s national competition commission, the *Commission Nationale de la Concurrence*, is responsible for reviewing transactions for competition-related concerns.

**Expropriation and Compensation**

Senegal’s Investment Code includes protection against expropriation or nationalization of private property with exceptions for “reasons of public utility” that would involve “just compensation” in advance. In general, Senegal has no history of expropriation or creeping expropriation against private companies.  The government may sometimes use eminent domain justifications to procure land for public infrastructure projects with compensation provided to land owners. Senegal’s Bilateral Investment Treaty with the U.S. also specifies that international legal standards are applicable to any cases of expropriation of investment and the payment of compensation.

**Dispute Settlement**

*ICSID Convention and New York Convention*

Senegal is a member of the International Convention 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). Senegalese law recognizes the *Cour d’Appel*(Appeals Court)as the competent authority for the recognition and enforcement of awards rendered pursuant to ICSID.  Senegal is also a signatory to the Organization for the Harmonization of Corporate Law in Africa Treaty (OHADA). This agreement supports enforcement of awards under the New York Convention. The*Autorité de Régulation des Marchés Publics* (ARMP) manages a dispute resolution mechanism for public tenders.

*Investor-State Dispute Settlement*

Senegal has growing experience in using international arbitration for resolution of investment disputes with foreign companies, including some cases involving tax disputes with U.S. firms. The government has also prevailed in some arbitration cases, including a 2013 arbitration decision in a high-profile case with a multinational company over an integrated mining/railway/port project, fostering greater confidence within the government to the arbitration process. Senegal’s Bilateral Investment Treaty with the United States includes provisions to facilitate the referral of investment disputes to binding arbitration.

International firms have pursued a variety of investment disputes during the last decade, including at least two U.S. firms involved in tax and customs disputes. One U.S. energy firm was involved in a tax dispute and ultimately prevailed in arbitration. Another company has an ongoing case over whether imported industrial inputs would be subject to customs duties. Other foreign companies in the mining and telecommunications sectors have pursued commercial disputes over licensing. These disputes have often been resolved through arbitration or an amicable settlement.

Senegal has no history of extrajudicial action against foreign investors.

*International Commercial Arbitration and Foreign Courts*

The government has initiated several programs to establish commercial courts and use alternative dispute resolution mechanisms to reduce the time required for resolving business disputes. Under the OHADA treaty, Senegal recognizes the corporate law and arbitration procedures common to the 16 member states in western and central Africa. Senegalese courts routinely recognize arbitration clauses in contracts and agreements. It is not unusual for courts to rule against state-owned enterprises in disputes involving private enterprises.

**Bankruptcy Regulations**

Senegal has commercial and bankruptcy laws that address liquidation of business liabilities. Foreign creditors receive equal treatment under Senegalese bankruptcy law in making claims against liquidated assets.  Monetary judgments are normally in local currency. As a member of OHADA, Senegal permits three different types of bankruptcy liquidation through a negotiated settlement, company restructuring, or complete liquidation of assets.  Senegal ranked 94th out of 190 countries on the “Resolving Insolvency” indicator in the 2019 World Bank Doing Business Index. According to the index, it takes an average of 36 months to complete liquidation proceedings in Senegal.  Secured creditors recover an average of 30.1 cents per every dollar owed in such proceedings, compared to an average of 20.3 for sub-Saharan Africa and 70.5 for OECD high income countries.

							4. Industrial Policies					

**Investment Incentives**

Senegal’s Investment Code provides for investment incentives, including temporary exemption from customs duties and income taxes, for investment projects.  Eligibility for investment incentives depends upon a firm’s size and the type of activity, amount of the potential investment, and location of the project. To qualify for significant investment incentives, firms must invest above CFA 100 million (approximately USD 165,000) 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. For companies engaged strictly in “trading activities,” however, investment incentives may not be available.

Eligible sectors for investment incentives include agriculture and agro-processing, fishing, livestock 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 can be 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 may 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 (USD 330,000) 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 (USD 165,000 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.

**Foreign Trade Zones/Free Ports/Trade Facilitation**

In 2017, Senegal passed legislation to create special economic zones (SEZ) regime. Enterprises approved under the SEZ regime may be granted tax and customs concessions for up to 25 years.  Benefits may include: exemptions from duties and taxes on imports of goods, raw materials and equipment (except for community levies); application of a reduced 15 percent corporate tax rate; and exemption from certain taxes and charges such as the business tax and property taxes. To qualify for these benefits, companies must represent a minimum investment of CFA 100 million (USD 165,000), create at least 150 direct jobs during their first year of operation, and generate at least 60 percent of their revenue from exports.  In November 2018, President Sall inaugurated the country’s first SEZ, the Integrated Industrial Platform of Diamniadio, a suburb of Dakar; it is expected to create approximately 20,000 jobs by 2023. The government plans to launch two additional SEZs – the Sandiara Industrial Area (in Mbour) the Special Economic Zone of Ndiass. With a growing interest in economic zones, there is a need for more clarity and coherence in the incentives offered by the government.

**Performance and Data Localization Requirements**

Except in the petroleum sector (discussed below), the government does not currently impose, by statute, specific requirements for including local content, input or employment in investment activities.  The government has announced, however, that it favors local content, and the current administration is pursing legislation that would require some level of local content in new investment projects. The government also negotiates with potential investors on a case-by-case basis to support local employment or ensure incentives for investors to meet their contractual commitments.  The U.S. Bilateral Investment Treaty with Senegal includes provisions for companies to engage freely professional, technical, and managerial assistance necessary for planning and operation of investments. Nevertheless, foreign firms often find that voluntarily including local content in their projects makes their proposals more competitive.

Senegal approved a new Petroleum Code in February 2019.  The new law updated Senegal’s oil and gas legal framework, which was initially adopted two decades ago when the country sought to attract initial investments for largely untested resources.  Senegal’s recent string of major offshore petroleum discoveries, however, has attracted major international players and led the government to adjust the legislation to preserve a greater share of the profits for Senegal.  The gist of the law reflects the spirit of the new constitution, which stipulates that the country’s natural resources belong to its people. As a result, the law guarantees more favorable terms to the national oil company Petrosen, including a minimum of 10 percent interest in projects in the exploration phase and up to 30 percent interest when projects reach the development and exploitation stages.  Although oil and gas blocks will still be awarded through open international tenders, the new law will require foreign oil companies to source a portion of labor and materials locally and contribute to a training fund for local workers.

Acquiring work permits for expatriate staff is typically straightforward.  Citizens from WAEMU member countries may work freely in Senegal.

							5. Protection of Property Rights					

**Real Property**

The Senegalese Civil Code provides a framework, based on French law, for enforcing private property rights.  The code provides for equality of treatment and non-discrimination against foreign-owned businesses. Senegal maintains a property title and a land registration system, but application is uneven outside of urban areas.  Establishing ownership rights to real estate can be difficult.  Once established, however, ownership is protected by law.

The government has undertaken several reforms to make it easier for investors to acquire and register property.  It has streamlined procedures and reduced associated costs for property registration. The government has developed new land tenure models intended to facilitate land acquisition by resolving conflicts between traditional and government land ownership.  If the new models are widely adopted, the government and donors expect they will facilitate land acquisition and investment in the agricultural sector while providing benefits to traditional landowners in local communities.

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 ranked 118 out of 190 countries in the 2019 Doing Business Index for Registering Property. According to the World Bank methodology, it requires an average of 41 days to register property (a slight improvement from 2018) against an average of 53.9 days in sub-Saharan Africa and 20.1 days in Organisation for Economic Co-operation and Development (OECD) high-income countries.  Five separate procedures are required for property registration.

**Intellectual Property Rights**

Senegal maintains an adequate legal framework for the protection of intellectual property rights (IPR), but it has limited institutional capacity to implement this framework and enforce IPR 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.  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 are registered with the *Agence sénégalaise pour la Propriété industrielle et l’Innovation technologique*(ASPIT) and are protected for 20 years.  An annual charge is levied during this period.  Registered trademarks are protected for a period of 20 years.  Trademarks may be renewed indefinitely by subsequent registrations.

Senegal is a signatory to the Bern Copyright Convention.  The Senegalese Copyright Office, part of the Ministry of Culture, protects copyrights.  Bootlegging of music CDs is common and of concern to the local music industry. The Copyright Office has taken actions to combat media piracy, including seizure of counterfeit cassettes and CD/DVDs.  In 2008, the government established a special police unit to better enforce the country’s anti-piracy and counterfeit laws.

In general, however, the government has limited capacity to combat IPR violations or to seize counterfeit goods.  Customs screening for counterfeit goods production is weak and confiscated goods occasionally re-appear in the market.  Nevertheless, the government has made efforts to raise awareness of the impact of counterfeit products on the Senegalese marketplace, and officers have participated in trainings offered by manufacturers to identify counterfeit products.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

							6. Financial Sector					

**Capital Markets and Portfolio Investment**

Senegalese authorities take a generally positive view of portfolio investment.  Assisted by the debt management office of the Central Bank of West African States (BCEAO) and thanks to a well-functioning regional debt market, Senegal has historically issued regular debt instruments in local currency to manage its finances.  Beginning in 2011, the government began accessing international debt markets, issuing U.S. dollar-denominated eurobonds in 2011, 2014, 2017, and 2018. Some observers, including the IMF, have expressed mild concern over the recent rise in Senegal’s external debt, which reached 52 percent of GDP in 2018.

A handful of Senegalese companies are listed on the West African Regional Stock Exchange (BRVM), headquartered in Abidjan, Cote d’Ivoire.  The BVRM also has local offices in each of the WAEMU member countries, offering additional opportunities to attract foreign capital and access diversified sources of financing.

In 2018, the BCEAO launched the region’s first certification program for dealers in securities and other financial instruments.  Modeled on accreditation programs offered by the Chartered Institute for Securities and Investment (CISI), the new program was supported by the U.S. Treasury’s Office of Technical Assistance.

The government does not restrict payments for current international transactions.

**Money and Banking System**

While Senegal’s banking system is generally sound, the financial sector is under-developed. Senegal’s approximately twenty commercial banks, primarily based in France, Nigeria, Morocco, and Togo, follow generally conservative lending guidelines, with collateral requirements that most potential borrowers cannot meet.  Few firms are eligible for long-term loans, and small- and medium-sized enterprises have little access to credit. According to a 2014 government survey, less than 5 percent of enterprises receive financing from commercial banks. Senegal’s banking sector is regulated by the BCEAO, the regional central bank, and the WAEMU regional banking commission.  Increasingly available mobile money services offer Senegalese consumers alternatives to traditional banking and credit services.

**Foreign Exchange and Remittances**

*Foreign Exchange*

As one of the eight WAEMU countries, Senegal uses the CFA franc – issued by the BCEAO – as its currency.  The CFA franc is pegged to the euro. Senegal’s Investment Code includes guarantees of access to foreign exchange and repatriation of capital and earnings, although repatriation transactions are subject to procedural requirements of financial regulators, including limitations imposed by the BCEAO on the use of offshore accounts.  Local financial institutions routinely carry out commercial transfers in a timely fashion. The government limits the amount of foreign exchange that individual travelers may take outside Senegal. Departing travelers may take a maximum of 6 million CFA francs (approximately USD 10,000) in foreign currency and travelers checks upon presentation of a valid airline ticket.  Senegal’s Bilateral Investment Treaty with the United States includes commitments to ensuring free transfer of funds associated with investments.

*Remittance Policies*

Remittances from Senegal’s large diaspora represent around 9 percent of GDP and are one of the main resources for the country.  According to the last IMF review of Senegal’s economy, remittances remains a significant component of the current account but are expected to decline as a percent of GDP over the medium term.

**Sovereign Wealth Funds**

In 2012, Senegal established a sovereign wealth fund (*Fonds Souverain d’Investissements Strategiques,* or FONSIS) with a mandate to leverage public assets to support equity investments in commercial projects supporting economic development objectives, FONSIS invests primarily in strategic sectors defined in the Plan Senegal Emergent (PSE), including agriculture, fishing, infrastructure, energy, mining, tourism, and services.

Senegal maintains several taxes and funds allocated for specific purposes such as expanding access to transportation, energy, and telecommunications, including the autonomous road maintenance fund and the energy support fund.  For these funds, some information is included in budget annexes; these funds are subject to the same auditing and oversight mechanisms as ordinary budgetary spending. FONSIS reports that it abides by the Santiago Principles for sovereign wealth funds.

							7. State-Owned Enterprises					

Senegal has generally reduced government involvement in state-owned enterprises (SOEs) during the last three decades.  However, the government still owns full or majority interests in approximately 20 such companies, including the national electricity company (Senelec), Dakar’s public bus service, the Port of Dakar, the national postal company (National Post), the national rail company, and the national water utility.  The state-owned electricity company, Senelec, retains control over power transmission and distribution, but it relies increasingly on independent power producers to generate power. The government has also retained control of the national oil company, Petrosen, which is involved in hydrocarbon exploration in partnership with foreign oil companies and operates a small refinery dependent on government subsidies.  The government has modest and declining ownership of agricultural enterprises, including a state-owned company involved in rice production.

In 2018, the government relaunched a wholly state-owned airline, Air Senegal. The government owns a minority share in Sonatel-Orange Senegal, the country’s largest internet and mobile communications provider.

The *Direction du Secteur Parapublic,* an agency within the Ministry of Finance, manages the government’s ownership rights in enterprises.  The government’s budget includes financial allocations to these enterprises, including subsidies to Senelec.  SOE revenues are not projected in budget documents, but actual revenues are included in quarterly reports published by the Ministry of Finance.  Senegal’s supreme audit institution (the *Cour des Comptes*) conducts audits of the public sector and SOEs.  Its reports are made publicly available atwww.coursdescomptes.snandwww.ige.sn, but not always in a timely fashion.

In 2018, the IMF, pursuant to an ongoing Policy Support Instrument, recommended that the government reduce its subsidies to the National Post to reduce public sector borrowing requirements.

**Privatization Program**

The government has no program for privatizing the remaining SOEs.

							8. Responsible Business Conduct					

Following the lead of foreign companies, some Senegalese firms have begun adopting corporate social responsibility programs and responsible business conduct standards. This movement, however, is not yet widespread.

The criteria and procedures by which the government awards natural resource extraction contracts or licenses are specified in Senegal’s 2016 Mining Code.  The new code requires mining companies to participate in transparency reporting, following the guidelines of the Extractive Industries Transparency Initiative (EITI).  The government appeared to follow the Mining Code and its implementing regulations in practice, although unregulated artisanal mining is common in some areas. Basic information on awards was publicly available online through the government’s official journal, and included details regarding geographic areas, resources under development, companies involved, and the duration of contracts.  In January 2019, the government adopted a new Petroleum Code, in response to major offshore hydrocarbon discoveries since 2014. The new code clarifies mechanisms for reserving revenues from oil and gas projects to the government. Senegal has been an active member of the EITI since 2013. In May 2018, the EITI Board declared Senegal the first country in Africa to have made “satisfactory progress” in implementing EITI standards.  In October, Senegal hosted the 41st quarterly meeting of the EITI Board, along with a conference on EITI implementation in Africa. The government’s EITI committee reports directly to the president.

							9. Corruption					

Senegalese law provides criminal penalties for corruption, but the government often did not enforce the law effectively.  Officials frequently engaged in corrupt practices with impunity.

A 2014 law requires the president, cabinet ministers, speaker and chief financial officer of the National Assembly, and managers of public funds in excess of one billion CFA francs (approximately USD 1.8 million) to disclose their assets to OFNAC.  Failure to comply may result in a penalty amounting to one-quarter of an individual’s monthly salary until forms are filed. The president may dismiss appointees who do not comply. With the exception of disclosures made by the president, disclosures made under the law are confidential and unauthorized release of asset disclosures is a criminal offense.

The government has made some limited progress in improving its anti-corruption efforts, but corruption remains a problem.  The current administration mounted corruption investigations against several public officials (primarily the president’s political rivals) and has secured several convictions.  The government reactivated the Court of Repossession of Illegally Acquired Assets to investigate corruption by former government officials. President Sall also created new institutions such as the National Anti-Corruption Commission (OFNAC) and procedures to require asset declarations from public officials.  OFNAC is composed of twelve members appointed by decree with a mission to fight corruption, embezzlement of public funds and fraud. The government of Senegal has also taken steps to increase budget transparency in line with regional standards. Senegal ranked 67 out of 180 countries, in Transparency International’s 2018 Corruption Perception Index (CPI), representing a substantial increase over Senegal’s ranking of 99 in 2011.

Notwithstanding Senegal’s positive reputation for corruption relative to regional peers, investors continue to report corruption as an issue at lower levels of the bureaucracy where officials with modest salaries may demand “tips” for advancing permits and other official paperwork.  Some high level officials in Sall’s administration are rumored to be involved in corrupt dealings. It is important for U.S. companies to assess corruption risks and develop an effective compliance program or measures to prevent and detect corruption, including foreign bribery. U.S. firms operating in Senegal can underscore to interlocutors in Senegal that they are subject to the Foreign Corrupt Practices Act (FCPA) in the United States and may consider seeking legal counsel to ensure compliance with anti-corruption laws in the United States and Senegal.

OFNAC did not publish an annual report during the year.  OFNAC’s first annual report in 2016 concluded that bribery, misappropriation, abuse of authority, and fraud remained widespread within government institutions, particularly in the health and education ministries, the postal services, and the Transport Administration.  The OFNAC president was dismissed two months later, and the organization has not published any reports since.

Senegal’s financial intelligence unit, *Cellule Nationale de Traitement des Informations Financières* (CENTIF) is responsible for investigating money laundering and terrorist financing. CENTIF has broad authority to investigate suspicious financial transactions, including those of government officials.

The U.S. Government seeks to level the global playing field for U.S. businesses by encouraging other countries to take steps to criminalize all acts of corruption, including bribery of foreign public officials, and 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 may bring this to the attention of appropriate U.S. agencies.

Senegal is a signatory of the United Nations Convention against Corruption but it is not a signatory of the OECD Convention on Combatting Bribery.

*Resources to Report Corruption*

Mrs. Seynabou Ndiaye DiakhatéPresidenteOffice National de Lutte Contre La Fraude et la Corruption (OFNAC)Lot 72-73, Cité Keur Gorgui à Mermoz-PyrotechnieTelephone: 800 000 900 / +221 33 889 98 38www.ofnac.sn

Birahim SeckPresidentForum Civil40 Avenue Malick Sy (1er étage) – B.P. 28 554 – DakarTelephone: +221 33 842 40 44forumcivil@orange.sn / http://www.forumcivil.sn/  

							10. Political and Security Environment					

Senegal has long been regarded as an anchor of stability in the West Africa region that is vulnerable to political unrest.  It is the only mainland West African country that has never had a coup d’état since gaining independence in 1960. Senegal experienced sporadic incidents of political violence during the lead up to national elections in March 2012 due to strong opposition to former President Wade’s decision to seek re-election for a third term. The 2012 presidential election, however, reinforced Senegal’s reputation as the strongest democracy in West Africa. 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.  Public protests occasionally spawn isolated incidents of violence when unions, opposition parties, merchants, or students demand better salaries, working conditions or other benefits. Sporadic incidents of violence as result of petty banditry continue in the Casamance region, which has suffered from a three-decade-old conflict ignited by a local rebel movement seeking independence for the region, but the level of violence has declined in recent years as the government and rebel groups have engaged in negotiations to resolve the conflict.

Security is a top priority for the government, which has increased its defense and security budget by 92 percent between 2012 and 2017.

							11. Labor Policies and Practices					

Senegal has an abundant supply of unskilled and semi-skilled labor, with a more limited supply of skilled workers in engineering and technical fields.  While Senegal has one of the best higher educational systems in West Africa and produces a substantial pool of educated workers, limited job opportunities in Senegal lead many to look outside of the country 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.  Senegalese law permits all workers to form unions with limited exceptions for security force members, including police and gendarmes, customs officers, and judges. The labor code requires prior authorization from the Ministry of Interior by giving the ministry discretionary power to issue a document recognizing a trade union before it can exist legally. The law allows unions to conduct their activities without interference and provides for the right to bargain collectively.  Collective bargaining agreements, however, apply only to an estimated 44 percent of union workers. Trade unions organize on an industry-wide basis, very similar to the French system of union organization, though most workers are involved in informal sector occupations where they are often self-employed and not subject to the labor code.

Although Senegal has institutions and policies in place to combat the worst forms of child labor, most of its efforts are directed towards the overall labor market.  The recently adopted draft legislation on article L145 of the labor code relative to the minimum age for admission to employment is a good start. The law is yet to be applied, however.  In some cases, religious and political considerations keep the government from taking strong action to protect children, who are subject to exploitation in areas such as forced begging, artisanal mining, agriculture, and sex work.  Moreover, child labor done in the home, on the family farm, or in a family informal business is as socially acceptable and not targeted by the government. Outside of the artisanal gold sector and forced child begging, the government does not consider child labor to be a problem warranting spending limited national resources.  A way forward could be to leverage other sectors that impact children, such as education and health, and use their resources and programs in such a way as to have an impact on child labor.

							12. OPIC and Other Investment Insurance Programs					

The Overseas Private Investment Corporation (OPIC) offers financing and investment insurance to support U.S. investment projects in Senegal and is actively seeking to strengthen its portfolio in the country.  OPIC is currently supporting several investment projects in Senegal including two energy projects, one microfinance project and an agribusiness project. Additional projects in the energy and tourism sectors are under consideration.  Senegal is a member of the Multilateral Investment Guarantee Agency (MIGA), an arm of the World Bank

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

*Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy*

*Table 3: Sources and Destination of FDI*

							14. Contact for More Information					

Cheikh Oumar DiaEconomic SpecialistU.S. Embassy, Route des Almadies, B.P. 49, Dakar, Senegal+221 33 879 4867diaco@state.gov

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### On This Page

                    -  Executive Summary 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment   
                    -  2. Bilateral Investment Agreements and Taxation Treaties   
                    -  3. Legal Regime   
                    -  4. Industrial Policies   
                    -  5. Protection of Property Rights   
                    -  6. Financial Sector   
                    -  7. State-Owned Enterprises   
                    -  8. Responsible Business Conduct   
                    -  9. Corruption   
                    -  10. Political and Security Environment   
                    -  11. Labor Policies and Practices   
                    -  12. OPIC and Other Investment Insurance Programs   
                    -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                    -  14. Contact for More Information   

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