Attracting investment, a key component of economic diplomacy, is an active policy of the Senegalese Government, outlined in the Emerging Senegal Plan and designed to play a pivotal role in the structural transformation of our economy.
Given the significant contribution of the diaspora to the country’s economic and social development, the State of Senegal has established a number of mechanisms to not only promote but also support investment by Senegalese citizens living abroad.
Indeed, Senegalese emigration is a major source of financial and material flows into Senegal. The share of remittances from Senegalese citizens abroad in the GDP increased from 6% in 2001 to 13% in 2017 (ANSD, 2018).
Although primarily intended for household consumption, these remittances indicate, through their growth rate, a high investment potential available within the Diaspora. It is on the strength of this observation that government initiatives have been taken to redirect remittances towards productive economic investment.
In this regard, Senegalese Embassies and Consulates abroad serve as “entry points” for Senegalese citizens abroad wishing to invest in their country of origin.
Diplomatic and consular missions are able to inform project promoters about the support initiatives and mechanisms available to them in Senegal, as well as the relevant national bodies to contact for an investment project.
Given the multiplicity of existing initiatives in Senegal, contacting Embassies and Consulates provides investors with greater clarity, in addition to giving them the opportunity to submit, through diplomatic and consular services, requests for audiences with the relevant authorities, in the case of projects of a certain scale.
The objective of this contribution is to provide a brief overview of the main structures with the general or specific aim of supporting investment by Senegalese citizens abroad, focusing on investment facilitation (APIX) and financing.
Investment Facilitation: The Diaspora One-Stop Shop (APIX)
Created within the Senegalese Agency for Investment Promotion and Major Works (APIX S.A.), the Diaspora One-Stop Shop aims to facilitate investment by Senegalese citizens abroad by being at their disposal for all matters relating to business creation (advice and assistance), the investment code, access to finance and land. A sign of the modernisation of the Senegalese Administration, the Diaspora One-Stop Shop has both a physical presence (at the APIX headquarters) and a virtual one (“Diaspora Space” on the Agency’s website: https://investinsenegal.com/). With the Diaspora One-Stop Shop, users can access “sector fact sheets” of promising sectors or statistical documents useful for making investment decisions. To benefit from the services of the Diaspora One-Stop Shop, interested parties must provide proof of their expatriate status (consular card, residence permit, etc.) or, if they have returned to Senegal, prove that their installation is no more than one year old (by presenting, for example, the removal certificate provided by an Embassy or Consulate).
It is worth noting that making contact with the Diaspora One-Stop Shop is an important step. It allows you to learn, for example in terms of business creation, the respective advantages of the different statuses of your future company (SA, SARL, GIE or sole proprietorship). Investors can also have fruitful discussions about the location of their project in the different regions of Senegal. While several parameters are to be taken into account in this perspective (access to resources, transport, production costs, etc.), investment incentives such as tax, customs and social benefits granted under the Investment Code are an important factor to be included in the investment decision-making phase.
For this, it is important to contact the Diaspora One-Stop Shop and explore the specific benefits provided for in Articles 18 and 19 of the said Code, in particular the customs benefits (exemption from import duties and suspension of VAT payable on entry) for materials and equipment that are neither produced nor manufactured in Senegal and that are specifically intended for production or operation under the approved programme. The Code also provides for tax benefits such as exemption from the Employer Contribution (CFCE) for five years. Similarly, with regard to corporation tax, newly approved companies are authorised to deduct part of their investments from the amount of taxable profit.
Eligibility for all these specific benefits depends on the sector of activity (agriculture; manufacturing activities; extraction or processing of mineral substances; tourism; health; education, etc.), the amount of investment (10 million minimum), the location of the project, etc. This is why it is important for Senegalese citizens abroad to discuss with the One-Stop Shop to ensure that the activities planned in Senegal are not excluded from the scope of the Investment Code or simply fall under other specific Codes. In the latter scenario, it is always advisable to check the benefits that can or cannot be combined. In addition to these support policies initiated by the Senegalese State to promote diaspora investment, there is the financing component.
Additional business support initiatives
Although generally limited to Senegalese citizens living in certain countries, co-investment initiatives such as:
Support Programme for Solidarity Initiatives for Development (PAISD, co-financed by the Senegalese State, the European Union and the French Development Agency
Diafrikinvest funded by the EU, have a proven positive track record in supporting diaspora members wishing to contribute to Senegal’s economic and social development.
Similarly, return aid projects (with investment support) are sometimes funded by host countries in direct partnership with firms in Senegal able to ensure their monitoring and evaluation, or through the International Organisation for Migration.
Senegalese diplomatic missions
Hence the crucial interest, for any Senegalese citizen abroad wishing to invest or return to the country, to approach diplomatic or consular services, in order to obtain more information on the support options (facilitation and financing) available for the various investment projects or solidarity contributions to the improvement of Senegal’s socio-economic situation.
In the future, the establishment of Support Offices for Senegalese Citizens Abroad (BASE) in host countries should have as a major impact the optimisation of investment support mechanisms for diaspora members.
Through its proximity, the BASE, whose pilot phase of implementation took place in Italy, will have as its mission, among other things, to provide information on investment opportunities in Senegal and to facilitate administrative procedures for business creation.