by This article was written by Kennedy Ochieng
Located in the Western Part of Africa, Senegal borders the North Atlantic Ocean between Guinea-Bissau and Mauritania. It has a total area of 196,722 sq km of with water covering 4,192 sq km. It has tropical climate, dominated by hot, dry, harmattan wind between December to April and rainy season between May and November. With these we can discuss the business environment of Senegal based on the following factors; Political, Economical, demographic, environmental and other factors.
Politically, Senegal being a multiparty state remains one of the most stable democracies in Africa and has a long history of participating in international peacekeeping and regional mediation. The incumbent president Macky Sall has ensured that the opposition also has a voice unlike president Wade therefore changes in bills and laws regarding the business must undergo through intensive scrutiny before implementation. This means that investors stand to enjoy smooth operations without uncertainty of the future. Tax laws are also imposed on the businesses after careful consideration of the benefits and the vices.
Over the last decade, Senegal has suffered from unreliable power supply which has led to public protests and high unemployment and has prompted migrants to flee Senegal for better jobs in Europe. This was also necessitated by the fact that Senegal relies heavily on donor assistance and foreign direct investment. The country can however specialize in phosphate mining, fertilizer production and fishing while also hire professional experts to continue their oil and iron ore exploration projects. If this is actually discovered there will be tremendous growth in the economy and other support industries as transport, communication and banking facilities will increase. The main industries include food processing, mining, cement, artificial fertilizer, chemicals, textiles, refining imported petroleum and tourism. It is a member of OHAD {Organization for the Harmonization of Business Law in Africa} and WAEMU {West African Economic and Monetary Union}. Information Technology investors can take advantage of the development in ICT in Senegal to do business as there is increased growth in internet users {1.818 million in 2009}.
Senegal has a population of over 12.5 million about 42 percent of whom live in rural areas. Density in these areas varies from about 77 inhabitants per square kilometer (200 /sq mi) in the west-central region to 2 per square kilometer (5.2 /sq mi) in the arid eastern section. This means that most businesses are located in the urban centers. Potential investors should however invest in rural areas as they will evade increased competition which leads to low returns in the long-run.
Senegal as a country, though located in the arid areas of Africa can be a good place for doing Agriculture. By entrepreneurs practicing irrigation, they can grow drought resistant crops and sell these both locally and internationally. The stable government should also come up with the policy of reducing export duties on Agricultural products and also provide raw materials for local farmers.
Recently the president of the United States of America, Barrack Obama visited the country and provided insight to entrepreneurs. This will to a great extent motivate the organizations to invest hugely in the country therefore the business environment is expected to boom in the coming two years and lift Senegal economically. It is therefore advisable to start establishing permanent structures as early as this year since there will be high demand for the same in the future.
To conclude, investors wishing to invest in Senegal must first consider the pros and cons provided in this article before they commit their resources. This is because there are risks involved and also benefits depending on the foundation one lays. Wise decisions means prosperity and similarly wrong choices may lead to economic meltdown.
