SENEGAL: An Introduction to General Business Law
The Situation in Senegal in 2024–25
The economic situation in 2024
The year 2025 marks the first year of implementation of the national development strategy in Senegal, the overall aim of which is to promote endogenous and sustainable development driven by empowered, viable and competitive territories and laying the foundations for sovereignty. It is also the first year of full and effective oil and gas production.
The international economic situation in 2023 was marked by continuing geopolitical tensions, in particular the Russian-Ukrainian crisis and conflicts in the Middle East as well as deteriorating security conditions in the sub-region.
Domestic economic activity was also impacted by pre-election social tensions, prompting the authorities to adopt restrictive measures, notably in telecommunications activities, which led to a slowdown in services (financial services, tourism, etc).
However, economic activity benefitted from a good agricultural campaign in 2023–24, as well as from the effects of various measures to support the national economy, in particular the inflow of significant finance through migrant remittances and foreign direct investment.
Economic activity increased in 2023 in Senegal thanks to the good performance of the primary and secondary sectors, which recorded growth rates that increased despite a deceleration in services. The year 2024 was marked by the effective start-up of oil production in June 2024, bringing Senegal into the club of hydrocarbon-producing countries.
However, economic activity was sluggish in 2024, reflecting the uncertainties arising from the political situation that prevailed in the first quarter in connection with the postponement of the presidential election. The economic momentum should accelerate because of the effective start-up of oil production, which will likely have a significant impact on growth despite uncertainties at the start of the year.
Financial and insurance services should remain robust despite the continued tightening of financing conditions for economies both nationally and internationally. Moreover, with the gradual return of the state to the domestic financial market, good prospects are expected for the banking market. As a result, this sub-sector is expected to grow. This trend is in line with the trend towards lending, which was up at the end of September 2024 compared with the same period in 2023.
The tertiary sector will continue to experience the slowdown that has been underway since 2022, mainly in transport, accommodation and food services, information and communication, and financial and insurance services.
Commercial activities are expected to increase in 2025. This situation should be seen in the context of the slowdown in domestic demand, which has led to an expected fall in the volume of imports of goods and services.
Mining and extracting activities will show a strong increase compared with the previous year, mainly due to oil and gas production. Mining and quarrying, on the other hand –excluding oil and gas – is likely to decline, mainly as a result of lower gold production.
Refining activity, for its part, is likely to see a decline after a strong recovery in 2023. In the first nine months of 2024, oil refining activity declined due to fewer imports of crude oil, mainly as a result of higher oil prices.
In the construction sub-sector, activity is set to slow as a result of the stoppage of several public works projects in the second quarter of the year. Over the first nine months of 2024, local cement sales did not consolidate, leading to a downward revision of growth in the sector in contrast to the increase seen a year earlier.
Construction materials manufacturing is also expected to grow in 2025. Total cement production and exports have risen. The improvement in the international raw materials situation has had a positive impact on the supply of basic products, in particular clinker and coal, which are intermediate products used in the cement manufacturing process in some of Senegal’s cement plants.
Information and communication services are expected to grow slowly in 2025. This slowdown will likely be linked, among other things, to “other information and communication services”, in particular television, which is in active competition with new online sources of information. Nevertheless, the sub-sector continues to benefit from the strong performance of mobile telephony and the internet. In addition, greater use of the internet through the strengthening of national 4G fibre optics coverage should further boost activity in the telecommunications sub-sector.
Economic outlook for 2025
In 2025, full-year oil and gas production will boost the economy.
In the primary sector, activity is expected to increase in 2025, supported by all sub-sectors. The primary sector, which accounts for more than 17% of GDP, is expected to contribute 0.9 percentage points to growth in 2025. The start of the period under review should see the consolidation of the gains made in the agricultural sector and the establishment of the first milestones, notably communal agricultural co-operatives aimed at achieving food self-sufficiency and strengthening the bargaining power of members in terms of the acquisition of inputs, financing and the marketing of products. This co-operative policy will be supplemented in the medium term by land reform, the operationalisation of agropoles and support programmes to ensure food security.
Livestock farming, for its part, should consolidate its momentum. Economic growth in this sub-sector is forecast for this year. It will also benefit from the communal agricultural co-operatives that are also active in the livestock sector. Economic activity in the fishing industry is expected to benefit primarily from efforts to preserve and restore marine biodiversity, including habitats. It would also benefit from initiatives to develop aquaculture and add value to fish production.
The fishing sub-sector would also benefit from the implementation of the strategic plan for inland fishing and the installation of fish feed production units to boost the development of aquaculture. In addition, the improved governance of the sector that has been initiated with the publication of the list of fishing vessels present in Senegalese waters should make it possible to reduce illegal or undeclared fishing. Finally, the non-renewal of fisheries agreements with the European Union will certainly encourage the reproduction of resources and benefit small-scale fishing.
The secondary sector will continue the momentum that began in 2024, driven by oil and gas production. Overall, growth is expected in the secondary sector. This dynamism will be largely underpinned by extractive activities in the wake of oil and gas production, which is expected to increase. Growth in the non-hydrocarbon secondary sector is expected to be underpinned by renewed activity in the agrifood, refining, construction materials and public works sectors. Non-hydrocarbon growth is therefore forecast for 2025.
In addition to hydrocarbons, gold mining will be boosted by the Massawa gold project, the heavy minerals project, the titanium and rutile production project, the Faleme iron ore project (Miferso), which is currently being relaunched, the Boya project in Diamba , and the Boto gold project, which is currently under development.
The manufacture of agrifood products will be on the rise in 2025, marking a revival in activity after a difficult recent period. This dynamism will be underpinned by the strength of the edible fats business, which should grow because of the measures taken by the authorities to improve the supervision of groundnut seed collection and the continued recovery of SONACOS SA. In the same vein, activities related to the processing of husked rice and flour will also progress, benefitting from the good trend in rice production.
The oil refining business should remain dynamic, taking advantage of the opportunity to source some of its crude oil from Sangomar. At the same time, this sub-sector will also benefit from the efforts made as part of SAR's restructuring process. Activity is expected to increase by 2025. The manufacture of basic chemicals is expected to recover, putting the sector on a growth path in 2025 compared with the decline in 2024.
In addition, the implementation of structuring projects to achieve food self-sufficiency should stimulate fertiliser production against a backdrop of increased agricultural production, as well as expanding global demand for chemical products and fertilisers.
In the electricity sub-sector, the rehabilitation of Senelec’s production capacity will continue, as will the expansion of national electricity coverage – particularly in rural areas – thanks to the implementation of the second phase of Le Millennium Challenge Account Sénégal Compact. The sub-sector will also benefit from progress in the field of renewable energies, as well as improved quality of service through increased production capacity.
As a result, the electricity and gas sub-sector should continue to perform well and make progress. In the construction sector, activity is expected to be marked by a timid recovery in public investment works and an improvement in household confidence following the pacification of the political arena. However, the sector is likely to continue to suffer from the setback of the suspension of building permits.
The building materials sub-sector is also expected to remain buoyant, in line with developments in the construction and public works sector, in order to meet domestic and external demand, particularly from other neighbouring countries, with the expected installation of a fourth cement plant. Overall, the building materials sector is expected to grow in 2025.
The tertiary sector should be on a comfortable growth trajectory; it should benefit from the renewed dynamism of all sub-sectors, as well as from a much more favourable international environment.
The transport sub-sector should benefit from the good performance of other economic activities and the gradual development of the national rail network. At the same time, the strengthening of Air Senegal’s services and the rehabilitation and upgrading of regional airports should further consolidate activity in this sub-sector.
Accommodation and catering services should pick up pace after a sharp slowdown in 2024 due to the uncertainties arising from the postponement of the presidential election. This sub-sector will also benefit from the support of the state, which will continue its efforts to make local tourism more attractive and to prepare for the Youth Olympic Games scheduled for 2026.
Activity in the tertiary sector is also set to benefit from the good performance of information and communication services, driven by mobile phones and broadband internet (4G and 5G), which should see demand fuelled by both demographic growth and the gradual digitisation of the economy.
Senegal's political situation in 2024
Senegal experienced a political crisis between 2021 and 2024. During this period, Senegal experienced unprecedented political tension. This crisis caused significant loss of human life and economic assets associated with the effects of COVID-19. However, presidential and legislative elections were not followed by a post-election crisis, and political stability was once again restored. Since independence, Senegal has always held regular, multiparty elections. In addition, Senegal has historically been a source of regional stability because of the peace that generally reigns, and it is considered a flourishing democracy where elections are generally held on the due date.
In this new era, the climate of insecurity and uncertainty between 2021 and 2024 is a thing of the past, and the current political stability is conducive to investment. The Senegal Vision 2050 programme is a structured response to a number of challenges characterised by a concise, rigorous and bold vision. With the strengthening of its security system to prevent and deal with traditional and emerging threats, both internal and external, Senegal remains a country of peace. The policy of good governance advocated by the new authorities is an incentive for investment in Senegal.