Senegal’s rapid economic growth has been underpinned by strong public investment in its infrastructure but the country is looking to the nascent oil and gas industry as the main driver of its growth post-coronavirus.

The francophone west African country – with an estimated gross domestic product (GDP) of $23.9bn last year and a population of 17.2m people – witnessed average economic growth of 6.38% between 2014 and 2019, according to the IMF. It is forecasting the economy will expand by 2.99% in 2020 – down from its earlier forecast of 6.75% before the Covid-19 crisis hit – and by 5.48% next year. Income per head was $1427 in 2019.  


The country, which is perceived as one of Africa’s most stable nations, with three major peaceful political transitions since independence in 1960, received $629m in FDI in 2018, up from $587m in 2017, according to the UN Conference on Trade and Development. The total stock of FDI reached $5.3bn in 2018. Net FDI inflows increased to 2.6% per cent of GDP in 2018 from 1.3% in 2016, according to the IMF. 

Infrastructure investment

Senegal is bordered by Guinea-Bissau, Mali and Mauritania and surrounds its smaller anglophone neighbour the Gambia. The capital city, Dakar, has a population of 2.45 million in its metropolitan area. 

The nation’s strong economic performance since 2013 has been credited to the government’s ambitious national development plan, known as plan for an emerging Senegal (PES), which aims to turn it into an emerging country by 2035. It has three pillars: structural transformation of the economic framework; promotion of human capital; and good governance and rule of law.

“Senegal’s strong economic performance during the past few years has been driven by public investment in new infrastructure, including new airports and new motorways, under the government’s PES,” says Victoria Billing, the UK ambassador to Senegal. "A major overhaul of the country’s infrastructure has happened, which has certainly made it more attractive to foreign investors. The government’s finances will be stretched in the wake of the Covid-19 crisis and I believe one of its absolute priorities will be to improve the enabling environment for the private sector," she adds.

“The oil and gas sector should play an increasingly significant role in the country’s economy in the future, especially when a number of projects are expected to come on stream from 2022. British investors have been very interested in the industry and the supply chains around it,” says Ms Billing.

Between 2014 and 2017, oil and gas reserves worth more than 1bn barrels of oil and 40,000bn cubic feet of gas were found in Senegal (most of it is shared with Mauritania), according to the IMF.

Oil and gas projects

Two big oil and gas projects in Senegal are currently under development. The Sangomar oil and gas field is being developed by a joint venture made up of Woodside Energy, an Australian exploration company; Capricorn Senegal, a subsidiary of Cairn Energy, the British company; FAR, an Australian exploration company; and Societé des Petroles du Sénégal (Petrosen), the state-owned oil company. Work on the field started in early 2020 and the first oil production is targeted for 2023. Covid-19 is not expected to delay this project. 

Meanwhile, US oil company Kosmos Energy and BP are jointly developing a liquefied natural gas (LNG) initiative, called Greater Tortue Ahmeyim. It is the deepest offshore project in Africa and expected to produce up to 10m metric tonnes of LNG a year. Commercial production is scheduled for 2022 but could be delayed by the Covid-19 crisis, as the country’s lockdown has made it difficult for equipment to be moved around.

The government eased its Covid-19-related lockdown at the start of May. The authorities never imposed a total lockdown but the borders were closed and travel between the main cities was banned. 

Planned reforms

“FDI into Senegal has remained at modest levels in recent years,” says Cemile Sancak, IMF resident representative in Senegal. “The development of the hydrocarbon sector presents an opportunity for FDI. The industry's share in the country's total GDP is expected to reach around 5% when full production begins. 

“The authorities’ development plan aims to steer the development strategy from public sector-led growth to a model centred on private sector as the engine of growth. An ambitious reform agenda encompasses the justice system, the labour market, land reform, public-private partnerships, the investment code, and digitalisation of the tax system. Improving access to credit and creating a transparent, rules-based tax system would also boost private investment and help unlock Senegal’s export potential.”

Other flagship projects under PES include the $1.14bn Dakar Regional Express Train, a 55km railway line with 14 stations currently under construction, which connects Dakar city centre with Blaise Diagne International Airport. APIX, the country’s investment promotion agency, awarded the project’s construction contracts to ENGIE, a French electric utility company, and Thales, the French electrical systems maker. Construction began in December 2016 and is scheduled for completion in 2020, though it could now be delayed until 2021 because of the Covid-19 crisis.

Another major project is a logistics and industrial park at Diamniadio, a city located within a special economic zone, 30km from Dakar and close to the new airport. The Senegalese government, led by president Macky Sall since 2012, has ploughed $44m into the project and private sector companies have invested a similar sum. 

The government also wants to construct a modern 1500km railway line between Dakar and Bamako, the capital city of landlocked neighbour Mali, and to revamp the Port of Dakar with a new terminal that can handle ships of 35,000 deadweight tonnage.

In 2012, Senegal became the first country in west Africa to adopt a law on public-private partnerships. It means the government has a structured institutional framework and well-defined procedures when it engages with technical partners and private investors. Senegal was ranked 123 among 190 economies in the World Bank’s Ease of Doing Business annual ratings 2020, an improvement of 18 places on 2019 rankings, while Transparency International ranked the country joint 66th out of 180 countries in its Corruption Perceptions Index 2019.