Doing Business in Africa: A profile of Senegal

When this metric is applied to Senegal, the bank finds that Senegal ranks as 101^st out of 183 in ease of starting a business, making Senegal a relatively difficult country to start a legal commercial enterprise. To start a business in Senegal, one has to complete four bureaucratic procedures that take a total of eight days and cost almost $667. Additionally, Senegal requires startups to have $2,132 in operating capital before they can commence operations.

Figure 1:

How the World Bank Measures Ease of Starting a Business

Using similar metrics for other aspects of business operations, the bank ranked Senegal in a number of other areas. For ease of obtaining a construction permit, Senegal ranks 117^th out of 183. It takes the completion of 16 procedures and an average of 210 days at a cost of $4,784, — about four-and-a-half times Senegal’s per capita income. Clearly, obtaining construction permits is a significant problem and a major obstacle to business creation and expansion in this country.

Continuing in its assessment, the World Bank has determined that in order to obtain and register property, Senegal does even worse, ranking 167^th out of 183 countries. To register property in Senegal requires completion of six bureaucratic procedures that take, on average, 122 days and cost 20.6 percent of the property’s financial value in fees and other costs.

Senegal also does poorly when it comes to obtaining credit. It ranks 152^nd out of 183, making the country one of the more difficult places in the world to obtain credit. Here, as depicted in Figure 2, the bank examines the legal rights of creditors and borrowers in secured transactions and bankruptcy law as well as the strength of credit information bureaus and exchanges. If lenders have both strong legal rights and easy access to a wide variety of information about the client’s creditworthiness, reasons the bank, credit should be more readily available.

When information on borrowers is significantly lacking – as is the case in most of Africa – legal protections for creditors must in turn be very strong. In Senegal, creditors have weak legal rights and there is very little credit information available on the general population.

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