SENEGAL: An Introduction

Legal or Market Changes Affecting Technology Companies in Senegal

Within the past decade, the economic, social and legal landscape of Senegal has undergone developments at various levels. Indeed, Senegal is increasingly becoming a country favourable to investment on a regional and international scale.

In recent years, companies in the new technologies and digital sectors have decided to set up in Senegal. As a result, the government has had to upgrade the legal framework for this and related sectors. Since then, Senegal has set about building a world-class infrastructure to attract international and regional companies in the information and communications technology (ICT), research and innovation sectors by:

- setting up an attractive framework for investors (regulatory and tax framework);

- creating a platform for innovative e-government solutions in development sectors such as health, education and agriculture; and

- improving R&D and entrepreneurship in the ICT field.

The State has therefore implemented a policy of growth and modernisation of its administration based on ICT, and has made major investments to modernise telecommunications infrastructures. This modernisation of the digital economy has led to the emergence and implementation of mobile money, entrepreneurship, and contact centres (telemarketing, hotlines, remote technical support, etc).

The following is a non-exhaustive list of changes made by the State to strengthen co-operation with foreign investors.

Senegal as the new regional digital hub 

With the major involvement of the State, Senegal can now be considered as a country that is part of the digital economy. In this new era of globalisation, access to a digitised telecommunications network is essential. Therefore, public authorities have set up a company called Sénégal Numérique SA (SENUM SA). This is a national company whose creation was authorised by Law 2021-39 of 13 December 2021, replacing the former Agence de l'Informatique de l'Etat (ADIE). Its remit is to implement the State's computerisation policy and to manage the State’s digital infrastructure.

SENUM SA is responsible for carrying out and promoting – in co-ordination with the various departments of the administration, other bodies and local authorities – all types of actions enabling the administration to equip itself with a coherent system for processing and disseminating information. With this in mind, it is developing a range of products and services to contribute to good governance by promoting effective and efficient digital government at the service of citizens.

SENUM SA supports the transformation of the public sector, offering its expertise to transform its business and remain competitive in the digital age. It administers and maintains the State's systems infrastructure, IT networks and telecommunications.

Senegal has also invested in a Digital Technology Park (Parc des Technologies Numériques du Sénégal, or PTN). Developed́ on a closed 25-hectare site located in the Diamniadio Urban Pole, PTN is the first and very large regional platform for the promotion of innovation and the development of digital services, creating jobs and enabling the improvement of service provision in several sectors (agriculture, health, education, finance, employment, governance and transport).

ICT: updating digital regulations 

The first measure taken by the Senegalese government in the digital field was to update the code of digital transactions. The legislator had to regulate digital consumption and the development of e-commerce. The first step was the adoption of Law 2008-08 of 25 January 2008 on electronic transactions and Decree 2008-718 of 30 June 2008 on e-commerce. It adopts a technology-neutral approach, supporting electronic transactions, and specifying requirements for proof and signature. 

In order to eliminate legal constraints blocking the use of electronic transactions, the bill enshrines the equivalence between electronic files and paper documents. With the dual aim of efficiency and security, electronic writing has been recognised as equivalent to paper at several levels.

The bill also provides for:

 - a clear definition of the notion of electronic communication;

 - a clear definition of the notion of electronic commerce, as well as the liability of electronic merchants, a framework for commercial solicitations by prohibiting unsolicited advertising by electronic message, without having obtained the prior consent of the recipients;

 - minimum monitoring obligations and, consequently, rules governing the liability of technical service providers; and 

 - the participation of hosting and access providers in the fight against the acceptance, processing and distribution of illicit content.

This law, which deals in substance with consumer protection, has been reinforced by the adoption of the Prices and Consumer Protection Act 2021.

The second stage is community-based, with provisions relating to digital transformation already in place – notably, with the Commercial Companies Uniform Act. Article 454-1 paragraph 1 enshrines the use of videoconferencing in the AGMs of commercial companies; Article 82 of the Uniform Act on General Commercial Law enshrines the equivalent of the electronic signature. There is also a plan to draft a Uniform Act on electronic transactions, which should cover publication, electronic canvassing, protection of consent, contracts, electronic signatures and electronic evidence.

Foreign direct investment and the revision of the Investment Code

To facilitate the foreign direct investment (FDI), the legislation does not require review or approval by national authorities except for the certain sectors listed below. However, a declaration for statistical purposes to the Directorate of Money and Credit (Ministry of Finance) is required for all FDI.

The Public Procurement Code and the Public-Private Partnership Law guarantee the free participation of foreign investors in international tenders, in accordance with the principle of equal treatment and non-discrimination.

In addition to this general framework, Senegal has signed a number of bilateral agreements on investment promotion and protection. These offer broader benefits than the Investment Code to investors who are nationals of states that are party to the agreements.

Please note that investors – regardless of their nationality – enjoy the same treatment as Senegalese natural or legal persons and have the same duties and obligations under the laws of Senegal, subject to reciprocity and without prejudice to measures that may concern all foreign nationals or result from the provisions of treaties or agreements to which the Republic of Senegal is a party.

With this in mind, a new Investment Code has been adopted in which the government has provided specific incentives to stimulate investment in key sectors, such as agriculture and agribusiness, fishing, livestock and related industries, manufacturing, tourism, mining and hydrocarbons, among others. Investment incentives include, but are not limited to:

 - customs duty exemptions;

 - VAT suspension;

 - tax credits for qualifying investments that are deductible over time;

 - greater investment protection; and

 - free export company status for agricultural, industrial and telecommunications companies deriving at least 8% of their turnover from exports.

In other words, investment is supported by an attractive incentive policy based on legal, fiscal and customs measures that are regularly updated. Tax relief measures, guarantees and advantages are granted to investors through the new Investment Code, the free export enterprise regime and the public–private alliance law. A modern one-stop shop centralises, facilitates and accelerates administrative formalities.

The need for a framework to protect personal data 

Senegal has a law on the protection of personal data (Law No 2008-12 of 25 January 2008), which institutes the creation of the Senegalese Personal Data Protection Commission to ensure compliance with the 2008 law on the protection of personal data. This authority oversees the legality of all collection, transmission, processing, storage and use of personal data.

Depending on the type of processing envisaged, information and authorisation are required. In this respect, the legislator has provided for a number of regimes:

 - an exemption system;

 - a declaration system; 

 - a system of authorisation covering, in particular, the interconnection of files – ie, the transmission of data collected in Senegal to other countries.

As regards the transfer of data to a third country, which is often the case for digital companies, articles 49 et seq of the 2008 law stipulate that the data controller may only transfer personal data to a third country if that country ensures a sufficient level of protection of the privacy, freedoms and fundamental rights of individuals when it comes to the processing of which such data is or may be the subject.

The adequacy of the level of protection provided by a data controller is assessed on the basis of the security measures applied in accordance with this law, as well as the specific characteristics of the processing (such as its purposes, its duration and the nature, origin and destination of the data processed). The law makes no specific provision for storage except to guarantee its security.