Business
Doing Business in Africa: A profile of Senegal
Finally, in terms of closing or liquidating a business, Senegal ranks 79th out of 183 countries. On average, it takes three years to fully close a business at a cost of seven percent of the value of the estate with a recovery rate of 32 cents on the dollar.
Table 1 presents a summary of these rankings as well as Senegal’s overall ease-of-doing business rating. Senegal is not an easy place to do business as it ranks near the bottom in most of the categories the World Bank measures. It does best in the area of cross-border trade.
Table 1:
World Bank Ease of Doing Business
Assessment and Rankings: Senegal
Prospects
Despite having some of the elements of instability that perennially threaten African growth and prosperity elsewhere on the continent, Senegal’s ability to avoid the worst in terms of armed conflict and civil unrest has been a valuable component of the country’s success.
This is in no small part due to the country’s now strong tradition of democratic politics, which has served as a mechanism to divert what might have otherwise become a zero-sum gain over resources into a mutually beneficial, win-win system of accommodation, negotiation, and compromise. As a consequence, like elsewhere in Africa that has adopted and maintained strong democratic norms – such as in Botswana – corruption is much less a problem in Senegal than elsewhere in Africa.
That being said, Senegal is still a relatively poor country dominated by its agricultural sector – which is highly vulnerable to fluctuations in weather. In an effort to diversify the economy away from agricultural production Senegal has developed a valuable phosphate mining sector, a lucrative source of hard-currency earnings, as well as a commercial fishing sector that has so far struggled to compete effectively against wealthier, more efficient Asian competitors.
Other parts of the Senegalese economy are also beginning to develop. Tourism, for instance, has become a new leading sector and the government has made a great effort to promote Gorée Island, which in 1978 was designated a UNESCO World Heritage site. Since then, 200,000 people visit the island annually, providing a major source of income for the people of nearby Dakar – Senegal’s capital.
Figure 3:
Senegal Economic Growth,
Percent Increase, 2003 – 2013
Looking ahead, Senegal has several obstacles to overcome. First, while its annual gross domestic product growth is now averaging just over 4 percent a year, this number still lags behind Africa’s more dynamic economies. This means that when it comes to attracting investor dollars Senegal is likely to fall behind countries like Kenya, Ethiopia, or even other West African states.
