Business climate (political economy, macro - economic picture, ease of doing business, labour laws)

note based on open sources,
by Mr. Mohamed El Amin Kane, Marketing Assistant,
Embassy of India, Dakar,
3 May  2021

Table of Contents

Political and Macro-economic picture. 1

Market Overview.. 1

Investment Information. 1

Market Challenges. 2

Market Opportunities. 2

Market Entry Strategy. 2

Import Tariff Structure. 2

Non-Tariff Barriers. 3

Labour Environment 3

The Banking & Financial 4


Political and Macro-economic picture

Although West Africa in general is characterized by elevated political risks, Senegal remains on a trajectory towards greater political stability. It is one of few African countries to have never experienced a military coup. Public protests may occasionally occur resulting in isolated incidents of violence when unions, opposition parties, merchants, or students demand better salaries, working conditions or other benefits.

Macroeconomic performance was favorable prior to the COVID-19 pandemic. Annual growth over the past six (6) years (2014-2019) stood at 6%. However, given the covid-19 pandemic, growth rate stood at 1.9% in 2020 against a projected -0.7 percent. In 2021, growth is expected to rebound to 5.1% in 2021 and 6.0% in 2022 thanks to the performance of agriculture and the normalization of the transport sector. Investments in the gas field of Grand Tortue Ahmeyim and Sangomar will participate in the performance of the economy in 2021. Growth is projected to reach 6% in 2022.

The debt/GDP ratio reached 65.8% in 2020 and is expected to rise to 66.8% in 2021. In 2021, the budget deficit should remain high (-6.5%) while inflation should remain at 2% in 2021.

Market Overview

The Senegalese government welcomes foreign investment. In order to make Senegal as an investment destination and to decrease the red tape that accompanies the establishment of new enterprises, Government of Senegal created in 2000 the Agency for the promotion of investments and major works commonly known by its French acronym APIX with the mandate of finding ways to help the country address its infrastructure needs. APIX has reduced the average number of days it takes to start a business to six days. 

Investment Information

In order to enable companies to enjoy customs and tax incentives, Senegal has adopted two texts granting real advantages to companies which are eligible for the two following status:  Investment Code (CI) and Free Export Company (EFE). Some of the many benefits that businesses can enjoy under these statuses include exemption from customs duty, the suspension of VAT and tax on profits, reduction of corporate tax (15% instead of 30%), exemption from the duties and taxes levied on production equipment and raw materials, etc.

Summary of the investment code and free export company along with applied incentives are available on this link:

Market Challenges

Despite several reforms being undertaken by the authorities, business climate challenges remain.  A significant portion of Senegal’s economy is comprised of the informal sector. Legitimate companies bear a heavy tax burden. The Government has prepared a medium-term domestic revenue mobilization strategy which is being developed to bring the informal sector into the tax net, so that rates can eventually be lowered. The objective of this strategy is to increase the tax-to-GDP ratio to 20 percent by 2023.

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.

In its ambition to be among the top 50 countries by 2023, the country is working on an ambitious program aiming at reforming the business environment known as PREAC (Business Environment Reform and Competitiveness Program) so that more foreign direct investments (FDI) are attracted to Senegal.

Market Opportunities

Senegal offers trade and investment opportunities for Indian firms and an attractive location for Indian companies interested in this market. Dakar (capital of Senegal) can serve as the transport hub of the West Africa region with reasonably good Air and Road transport, telecommunication and IT networks.  There are direct air connections to USA, Europe, North Africa and Asia. Dakar can be seen as a gateway to the West African regional market thanks to its strategic location.

France is the leading investor in Senegal and its number one trading partner. Other important trading and investment partners include China, India, Morocco, and Turkey.

Top sectors with potential for Indian companies include the agriculture & agro-business, Rice, sea-food products & aquaculture, digital economy, health & pharmaceutical industry (manufacturing generics), tourism & culture, oil and gas sector; power generation systems and equipment; automobiles/trucks and automotive parts; construction equipment; medical equipment, software; farming equipment, irrigation systems, post-harvest handling systems, storage and silo facilities.

Market Entry Strategy

Once the decision to invest or to open a business in Senegal is made, the Indian company or investor is strongly advised to get in touch with a legal counsel and a notary for all the legal formalities associated with the incorporation of a company. A list of lawyers, notaries and chartered accountants is available on these websites:

Senegalese Bar Association:

Chamber of Notaries:

Import Tariff Structure

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. Senegal has adopted and implemented the ECOWAS Common External Tariff (CET) System.

The ECOWAS Common External Tariff (CET) is largely based on the WAEMU CET, which was set up in 2000. However, while the WAEMU CET contains four tariff bands, the ECOWAS CET includes five, adding one more higher band to the original design. The tariff bands are set at 0%, 5%, 10%, 20% and 35%. The fifth tariff band is meant to protect sensitive industries. Given below is the table import tariff structure of ECOWAS CET which entered into force on January 1st, 2015.


Type of Goods

Duty Rate


Basic social goods



Basic goods, raw goods, capital goods



Inputs and semi-finished goods



Finished goods



Specific goods for economic development



In addition to the customs duties shown in the table above, other local taxes and levies applicable to imported goods into Senegal may include the followings:

·       Statistical Charge (RS in French): 1%

·       Community Solidarity Tax (PCS in French): 1%

·       The ECOWAS collection (PCC, in French): 0.5%

·       Senegalese Council of Shippers (COSEC, in French): 0,2% when goods are shipped by sea

·       Value Added Tax (VAT): 18%

For any further details, please visit Senegal’s customs office:

Non-Tariff Barriers

When some products such as onions or potatoes are abundantly available in the local market, a ban is imposed on the importation of the said products.

Language remains the major non-tariff-barrier as most of documents are in French (tenders, bids, incorporation documents and so on). Even advertisements and business cards need to be in French advisable).

An official approval known by its French acronym A.M.M. (Autorisation de Mise sur le Marché) is required to import a pharmaceutical product into Senegal.

An approval called DIPA (Import Declaration of Food Products) is required before any food product is imported into Senegal

Labour Environment

Senegal’s labour environment is governed by several regulations including the Act 97-17 of 1 December 1997, which constitutes the Labour Code for instance. Some key principles to bear in mind are that all contracts of employment must be in writing and in French. There are two types of employment contracts in force in Senegal: the fixed-term contract (commounly known as CDD, French acronym) and the indefinite employment contract (commounly known as CDI, French acronym). A contract is for a fixed term when the term is specified in advance, by the will of the parties. It cannot be concluded for a duration greater than two years and can be renewed only once (exceptionally the duration can be greater than two years for specific contracts). The contract of indefinite duration has no term or the duration is not specified.

Recruitment of Senegalese workers is free but must be declared to the Labour Ministry. In the case of expatriate workers, their recruitment is subject to prior authorization and the employment contract must be submitted to the Ministry of Labour for approval.

Employees must be registered with the various social bodies, namely: Senegalese Pensions Scheme (IPRES), Social Security Fund (CSS) and Health Contingency Fund (PMI).

The Banking & Financial

Senegal’s financial system is supervised by the Central Bank of West African States (BCEAO), which is responsible for monetary policy and stability of the financial system in WAEMU (West African Economic and Monetary Union) area: These countries share common a common currency, the West African CFA Franc (XOF) issued by the BCEAO and pegged to the euro (1 Euro equals to FCFA 655.957). Parity and fixed convertibility are guaranteed by the French Treasury.

 Senegal’s banking system consists of a set of banks and other financial institutions interacting with the Central Bank of West African States (BCEAO) which is the banking authority. Senegal’s banking sector has expanded over the last few years, with 26 banks in operation as on December 2020. A Regional Stock Exchange (BRVM) exists in the WAEMU Region, with headquarters in Abidjan, Côte d’Ivoire. Sen

Insurance companies are regulated by the Conférence Interafricaine des Marchés d’Assurances (CIMA).

In the field of taxation, it may be pointed out that a new Tax Code came into force in Senegal on 1 January 2013 following the adoption of Law No.2012-31 of 31 December 2012, published in the Law Gazette on 31 December 2012. One of the most significant changes introduced by the new code is a higher corporation tax rate, which increased from 25% to 30% of taxable profit.

For further details, Indian entrepreneurs & investors are advised to seek advice from the National Association of Accountants and Chartered Accountants of Senegal (ONECCA) – Website: