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Country Commercial Guides for FY 2000: Senegal Report prepared by U.S. Embassy Dakar, released July 1999    Note*

I. EXECUTIVE SUMMARY

This Country Commercial Guide (CCG) presents a comprehensive look at Senegal's commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. Embassies through the combined efforts of several U.S. Government Agencies.

With its capital city of Dakar located on the westernmost point of Africa, Senegal is a gateway to the continent. It has some of the best commercial facilities in West Africa, with good international and domestic transportation links. Although its industrial base is smaller than that of rival Cote d'Ivoire, many companies use Senegal as a regional center for West African operations. Senegal is also known as one of Africa's most politically stable countries - a functioning multi-party democracy has evolved since independence from France in 1960.

The domestic economy in this small semi-arid country remains heavily dependent on agriculture, and thus the amount of rainfall, which may vary considerably from year to year. Phosphates, fish, and peanuts are the major exports. Tourism and services are also important foreign exchange earners.

Senegal's comprehensive economic reform programs, supported by the IMF, the World Bank, and other donors including France, Japan, and the United States, have produced positive macroeconomic indicators since the January 1994 CFA franc devaluation. Annual GDP growth was 5% in 1999 versus 5.7% in 1998. The inflation rate in 1999 was 1.2%.

Senegal has phased out most quantitative restrictions on imports, reduced tariffs, dismantled monopolies, liberalized the labor market, and is privatizing state-owned industries to re-establish the conditions for sustained growth and increased private investment and competitiveness.

Commercial Environment

The Senegalese are generally well disposed toward Americans, and are actively seeking U.S. trade and investment. In the past, the country's historic ties to France and its relatively small domestic market have limited U.S. business relationships here. In addition, U.S. businesses should be aware that domestic credit in Senegal is extremely tight and indigenous Senegalese firms are typically small and under-financed.

France remains Senegal's largest trading partner, although its share of trade has been declining since the CFA devaluation. In 1999, total Senegalese imports were estimated to be USD 1.41 billion. The United States is the fifth-largest supplier to Senegal (four percent) after France, which provided 30 percent of all imports, Nigeria (seven percent), Italy, Thailand and Germany. U.S. exports to Senegal continued a slight upward trend, reaching USD 63 million in 1999 versus USD 59.2 million in 1998. The United States runs a significant surplus in bilateral trade. Major U.S. exports include tallow, tobacco products, cosmetics and refurbished equipment. A significant percentage of U.S. exports to Senegal is part of the active "suitcase trade" market that is not measured by U.S. Government figures. For example, Senegalese Customs measured U.S. exports to Senegal at USD 84.9 million for 1998.

Major Business Opportunities

Although Senegal offers a relatively limited internal market for U.S. business, new emphasis on the use of market forces to regulate the economy, the liberalization of imports, and privatizations in key sectors such as power generation and telecommunications could spell increased opportunities for sales of U.S. products in Senegal. Other best prospects for U.S. business in Senegal include agricultural commodities, mining, tourism, information technology, used clothing, and cosmetics.

Embassy Assistance

Embassy Dakar is dedicated to offering assistance and counsel to American business persons wishing to explore Senegal's stable and increasingly favorable environment for trade and investment. Embassy Dakar also has a "partner post" relationship with the overseas staffs of the Departments of Commerce and Agriculture in Abidjan.

Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM or via the Internet. Please contact STAT-USA at 1-800-STAT-USA for more information. Country Commercial Guides can be accessed via the World Wide Web at http://www.stat-usa.gov; http://1997-2001.state.gov/; and http://www.mac.doc.gov/. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information should contact the U.S. Department of Commerce, Trade Information Center by telephone at 1-800-USA-TRADE. Embassy Dakar's commercial information web page is located at http://www.dakarcom.com. Its e-mail address is dakarcom@telecomplus.sn. The CCG for Senegal is available from that site as a downloadable file.

The Government of the United States acknowledges the contribution that outward foreign direct investment makes to the U.S. economy. U.S. foreign direct investment is increasingly viewed as a complement or even a necessary component of trade, for example, roughly 60 % of U.S. exports are sold by American firms that have operations abroad. Recognizing the benefits that U.S. outward investment brings to the U.S. economy, the Government of the United States undertakes initiatives, such as Overseas Private Investment Corporation (OPIC) programs, investment treaty negotiations and business facilitation programs, that support U.S. investors.