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Morocco

Executive Summary

At the confluence of Europe, Sub-Saharan Africa, and the Middle East, Morocco seeks to transform itself into a regional business hub by leveraging its geographically strategic location, political stability, and world-class infrastructure to expand as a regional manufacturing and export base for international companies. Morocco actively encourages and facilitates foreign investment, particularly in export sectors like manufacturing, through positive macro-economic policies, trade liberalization, investment incentives, and structural reforms. The Government of Morocco implements strategies aimed at boosting employment, attracting foreign investment, and raising performance and output in key revenue-earning sectors, with an emphasis placed on value-added industries such as renewables, automotive, aerospace, textile, pharmaceuticals, outsourcing, and agro-food. Most of the government’s strategies are laid out in the New Development Model released in April of 2021. As part of the Government’s development plan, Morocco continues to make major investments in renewable energy, is on track to meet its stated goal of 64 percent total installed capacity by 2030, and announced an even more ambitious goal of 80 percent by 2050.

According to the United Nations Conference on Trade and Development’s (UNCTAD)  World Investment Report 2021  , Morocco attracted the ninth-most foreign direct investment (FDI) in Africa in 2020. Peaking in 2018 when Morocco attracted $3.6 billion in FDI, inbound FDI dropped by 55 percent to $1.7 billion in 2019 and remained largely unchanged at $1.7 billion in 2020. UAE, France, and Spain hold a majority of FDI stocks. Manufacturing attracted the highest share of FDI stocks, followed by real estate, trade, tourism, and transportation. Morocco continues to orient itself as the “gateway to Africa,” and expanded on this role with its return to the African Union in January 2017 and the launch of the African Continental Free Trade Area (CFTA) which entered into force in 2021. In June 2019, Morocco opened an extension of the Tangier-Med commercial shipping port, making it the largest in Africa and the Mediterranean; the government is developing a third phase for the port which will increase capacity to five million twenty-foot equivalent units (TEUs). Tangier is connected to Morocco’s political capital in Rabat and commercial hub in Casablanca by Africa’s first high-speed train service. But weak intellectual property rights protections, inefficient government bureaucracy, corruption, inadequate money laundering safeguards and the slow pace of regulatory reform remain challenges. In 2021, Morocco was placed on the Financial Action Task Force’s (FATF) “grey list” of countries subjected to increased monitoring due to deficiencies int the fight against money laundering and terrorist financing.

Morocco has ratified 72 investment treaties for the promotion and protection of investments and 62 economic agreements, including with the United States and most EU nations, that aim to eliminate the double taxation of income or gains. Morocco is the only country on the African continent with a Free Trade Agreement (FTA) with the United States, eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods. The Government of Morocco plans to phase out tariffs for some products through 2030. The FTA supports Morocco’s goals to develop as a regional financial and trade hub, providing opportunities for the localization of services and the finishing and re-export of goods to markets in Africa, Europe, and the Middle East. Since the U.S.-Morocco FTA came into effect bilateral trade in goods has grown nearly five-fold. The U.S. and Moroccan governments work closely to increase trade and investment through high-level consultations, bilateral dialogue, and other forums to inform U.S. businesses of investment opportunities and strengthen business-to-business ties.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perception Index 2021 87 of 180 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2021 77 of 132 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2020 $457 https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2020 $3,020 https://data.worldbank.org/indicator/NY.GNP.PCAP.CD

 

1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

8. Responsible Business Conduct

Responsible business conduct (RBC) has gained strength in the broader business community in tandem with Morocco’s economic expansion and stability. The Moroccan government does not have any regulations requiring companies to practice RBC nor does it give any preference to such companies. However, companies generally inform Moroccan authorities of their planned RBC involvement. Morocco joined the UN Global Compact network in 2006 and in 2022 counts 24 private company as signatories, including the Confederation General des Entreprises du Maroc (CGEM), Morocco’s largest private sector lobbying group that represents more than 90,000 private companies. The Compact provides support to companies that affirm their commitment to social responsibility. While there is no legislation mandating specific levels of RBC, foreign firms and some local enterprises follow generally accepted principles, such as the OECD RBC guidelines for multinational companies. NGOs and Morocco’s active civil society are also taking an increasingly active role in monitoring corporations’ RBC performance. In 2017 a non-governmental National Observatory for RBC (ORSEM) was created with the objective of promoting responsible business practices, and in 2021, in collaboration with AtlantaSanad Assurance, a Moroccan insurance company, published its first corporate social responsibility guide. Morocco does not currently participate in the Extractive Industries Transparency Initiative (EITI) or the Voluntary Principles on Security and Human Rights, though it has held some consultations aimed at eventually joining EITI. No domestic transparency measures exist that require disclosure of payments made to governments. There have not been any cases of high-profile instances of private sector impact on human rights in the recent past. Morocco is not a signatory of the Montreux Document on Private Military and Security Companies, and Post is unaware of any private military companies operating in the country.

Department of State

Department of the Treasury

Department of Labor

9. Corruption

In February 2021, Morocco was placed on the Financial Action Task Force’s (FATF’s) “grey list” of countries of concern regarding money laundering and terrorist financing. Following the grey list designation, Morocco made a high-level commitment to work with the FATF and Middle East and North Africa FATF to strengthen the effectiveness of its Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) regime. Morocco has taken steps towards improving its AML/CFT regime, including passing new AML legislation, but significant challenges remain.

In Transparency International’s 2021 Corruption Perceptions Index  , Morocco’s score dropped by one point causing its ranking to fall one additional position to 87th out of 180 countries. According to the State Department’s 2020 Country Report on Human Rights Practices, Moroccan law provides criminal penalties for corruption by officials, but the government generally did not implement the law effectively. Officials sometimes engaged in corrupt practices with impunity. There were reports of government corruption in the executive, judicial, and legislative branches during the year.

According to the Global Corruption Barometer Africa 2019 report published in July 2019, 53 percent of Moroccans surveyed think corruption increased in the previous 12 months, 31 percent of public services users paid a bribe in the previous 12 months, and 74 percent believe the government is doing a bad job in tackling corruption.

The 2011 constitution mandated the creation of a national anti-corruption entity. Morocco formally established the National Authority for Probity, Prevention, and Fighting Corruption (INPLCC) but it did not become operational until 2018 when its board was appointed by the king. The INPLCC is tasked with initiating, coordinating, and overseeing the implementation of policies for the prevention and fight against corruption, as well as gathering and disseminating information on the issue. In 2021 parliment passed Law No 19-46 to strengthen INPPLC’s effectiveness in its fight against corruption, creating an integrated framework aimed at improving cooperation and coordination, criminalizing corruption, and improving prevention efforts. Additionally, Morocco’s anti-corruption efforts include enhancing the transparency of public tenders and implementation of a requirement that senior government officials submit financial disclosure statements at the start and end of their government service, although their family members are not required to make such disclosures. Few public officials submitted such disclosures, and there are no effective penalties for failing to comply. Morocco does not have conflict of interest legislation. In 2018, thanks to the passage of an Access to Information (AI) law, Morocco joined the Open Government Partnership, a multilateral effort to make governments more transparent. As part of its 2021-2023 Open Government National Action Plan, Morocco launched a national portal for open government , to share its various commitments and allow its citizens to monitor progress and submit their suggestions and concerns. Although the Moroccan government does not require that private companies establish internal codes of conduct, the Moroccan Institute of Directors (IMA) was established in June 2009 with the goal of bringing together individuals, companies, and institutions willing to promote corporate governance and conduct. IMA published the four Moroccan Codes of Good Corporate Governance Practices. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials. Morocco signed the UN Convention against Corruption in 2007 and hosted the States Parties to the Convention’s Fourth Session in 2011. However, Morocco does not provide any formal protections to NGOs involved in investigating corruption. For more information on corruption issues, please view the Human Rights Report. Although the U.S. Mission is not aware of cases involving corruption regarding customs or taxation issues, American businesses report encountering unexpected delays and requests for documentation that is not required under the FTA or standardized shipping norms.

Resources to Report Corruption

National Authority for Probity, Prevention, and Fighting Corruption (INPPLC)

Avenue Annakhil, Immeuble High Tech, Hall B, 3eme etage, Hay Ryad-Rabat
+212-5 37 57 86 60
Contact@inpplc.ma

Transparency International National Chapter 
24 Boulevard de Khouribga, Casablanca 20250
Telephone number: +212-22-542 699
Contact@transparencymaroc.ma

10. Political and Security Environment

Morocco enjoys political stability. There has not been any recent damage to commercial facilities and/or installations with a continued impact on the investment environment. Demonstrations occur in Morocco and usually center on economic, social, or labor issues. Demonstrations can attract hundreds to thousands of people in major city centers. Participants are typically, but not always, non-violent and the demonstrations are peaceful and orderly.

Morocco has historically experienced terrorist attacks. Travelers should generally exercise increased caution due to terrorism as terrorist groups continue plotting possible attacks in Morocco. Terrorists may attack with little or no warning, targeting tourist locations, transportation hubs, markets/shopping malls, and local government facilities. Visitors are encouraged to consult the Department of State’s Morocco Travel Advisory for the most current information.

11. Labor Policies and Practices

In the Moroccan labor market, many Moroccan university graduates cannot find jobs commensurate with their education and training, and employers report insufficient skilled candidates. The educational system does not prioritize STEM literacy and industrial skills and many graduates are unprepared to meet contemporary job market demands. In 2011, the Moroccan government restructured its employment promotion agency, the National Agency for Promotion of Employment and Skills (ANAPEC), to assist new university graduates prepare for and find work in the private sector that requires specialized skills. The government also is pursuing a strategy to increase the number of students in vocational and professional training programs. The Bureau of Professional Training and Job Promotion (OFPPT), Morocco’s main public provider for professional training, has made several large-scale investments to address the country’s skills gap, counting more than 390 training centers with a capacity to attend 500,000 individuals annually. According to official government figures, unemployment stood at slightly above pre-pandemic levels at 11.8 percent in early 2022, with youth (ages 15-24) unemployment spiking at over 26 percent in 2020. The female labor participation rate remains extremely low at 21.6 percent, ranking 180 out of 189 countries surveyed in a 2018 World Bank survey. Of the female population in the work force, unemployment remains higher than average at 13.2 percent. The World Bank and other international institutions estimate that actual unemployment – and underemployment – rates may be higher. According to a study by Morocco’s central bank, Morocco made considerable progress incorporating its informal economy, which now hovers slightly below 30 percent of GDP. In 2021 newly elected Head of Government Aziz Akhannouch announced an aggressive plan to create 1 million jobs in the private and public sector over his government’s five-year mandate, which in part will be accomplished by increasing government positions, encouraging growth and hiring in the private sector, and further legitimizing Morocco’s informal sector.

Pursuing a forward-leaning migration policy, the Moroccan government has regularized the status of over 50,000 sub-Saharans migrants since 2014. Regularization provides these migrants with legal access to employment, employment services, and education and vocation training. The majority of sub-Saharan migrants who benefitted from the regularization program work in call centers and education institutes, if they have strong French or English skills, or domestic work and construction.

Under Moroccan Labor Code, Law Number 65-99, there are two types of employment contracts: fixed-term and permanent. Under a fixed-term labor contract, the duration of employment ends on a defined date and early termination initiated by the employer will result in damages equivalent to the amount of corresponding wages for the remainder of the contract. A permanent employment contract can be terminated at any time through the implementation of a well-defined dismissal procedure. The law prohibits the dismissal of an employee without a valid reason and failure to follow these very strict procedure would likely result in the Labor Court ruling the dismissal to be unfair and result in damages being awarded to the dismissed employee. In the case of economic or structural layoffs, the employer must notify the employee’s union presentative and seek permission from the provincial governor prior to conducting any layoffs. In the case of dismissal for misconduct, the bar of proving gross misconduct is typically high and it is common for labor courts to rule in the favor of the dismissed employee – even those who commit a blatant act of gross misconduct – if the employer does not follow the dismissal procedure properly.

Dismissals deemed as unfair carry heavy financial penalties to employers. In the case of a dismissal determined to be unfair of an employee who has worked six months or more in the same company, the Labor Code dictates the employer must compensate the dismissed employee including pay-in-lieu of notice, indemnity, damages, and other miscellaneous costs. These costs balloon as the seniority and base salary of the dismissed employee increases. Cases where employers and employees go to court are rare, as both sides typically opt for an amicable resolution settled out of court which allows employers to negotiate reduced compensation payments and quicker payouts to the employee. Businesses have the added incentive to settle outside of court since Labor Courts have a reputation of siding with the employee on wrongful dismissal lawsuits. Labor law is applicable in all sectors of employment; there are no specific labor laws to foreign trade zones or other sectors. More information is available from the Moroccan Ministry of Foreign Affairs Economic Diplomacy unit.

Morocco has roughly 20 collective bargaining agreements in the following sectors: Telecommunications, automotive industry, refining industry, road transport, fish canning industry, aircraft cable factories, collection of domestic waste, ceramics, naval construction and repair, paper industry, communication and information technology, land transport, and banks. The sectoral agreements that exist to date are in the banking, energy, printing, chemicals, ports, and agricultural sectors.

According to the State Department’s Country Report on Human Rights Practices, the Moroccan constitution grants workers the right to form and join unions, strike, and bargain collectively, with some restrictions (S 396-429 Labor Code Act 1999, 65-99). The law prohibits certain categories of government employees, including members of the armed forces, police, and some members of the judiciary, from forming or joining unions and from conducting strikes. The law allows several independent unions to exist but requires 35 percent of the total employee base to be associated with a union for the union to be representative and engage in collective bargaining. The government generally respected freedom of association and the right to collective bargaining. Employers limited the scope of collective bargaining, frequently setting wages unilaterally for the majority of unionized and nonunionized workers. Domestic NGOs reported that employers often used temporary contracts to discourage employees from affiliating with or organizing unions. Legally, unions can negotiate with the government on national-level labor issues.

Labor disputes (S 549-581 Labor Code Act 1999, 65-99) are common, and in some cases result in employers failing to implement collective bargaining agreements and withholding wages. Trade unions complain that the government sometimes uses Article 288 of the penal code to prosecute workers for striking and to suppress strikes. Labor inspectors are tasked with mediation of labor disputes. In general, strikes occur in heavily unionized sectors such as education and government services, and such strikes can lead to disruptions in government services but usually remain peaceful.

In response to the widespread difficulties caused by the COVID-19 pandemic, Morocco’s Special Commission for the Development Model presented King Mohammed VI the New Development Model in May 2021. This model will serve as a roadmap for Moroccan development with a special focus on decreasing poverty, improving social services and expanding social security protections.

Chapter 16 of the U.S.-Morocco Free Trade Agreement (FTA) addresses labor issues and commits both parties to respecting international labor standards.

14. Contact for More Information

Foreign Commercial Service
U.S. Consulate General Casablanca, Morocco
+212522642082
FCSCasaSpecialist@trade.gov  

Senegal

Executive Summary

Senegal’s stable democracy, relatively strong economic growth, and open economy offer attractive opportunities for foreign investment. Senegal’s macroeconomic environment remains generally stable, although aggressive measures to counter the economic impact of COVID-19 and rising commodity costs are pushing public debt to nearly 70 percent of GDP, the internal debt distress threshold of the Economic Community of West African States (ECOWAS). The currency – the CFA franc used in eight West African countries – is pegged to the Euro and remains stable.

The Government of Senegal (GOS) welcomes foreign investment and has prioritized efforts to improve the business climate, and many companies choose Senegal as a base for operations in Francophone Africa. Since 2012, Senegal has pursued an ambitious development program, the Plan Senegal Emergent (Emerging Senegal Plan, or “PSE”), to improve infrastructure, achieve economic reforms, increase investment in strategic sectors, and strengthen private sector competitiveness. The GOS expanded the “single window” system to provide services to companies, opening new service centers across the country, harmonizing more than 60 GOS websites, and digitizing dozens of government services and payment mechanisms. The national digital agency, ADIE, plans to lay 4,500 kilometers of additional fiberoptic cable to increase internet access. Senegal has plans to transition power plants from fuel oil to domestic natural gas starting in 2023, when two recently discovered oil and gas fields come online. A new Public-Private Partnership (PPP) law entered into force in November 2021, modernizing and clarifying PPP procedures and encouraging local content.

With good air transportation links, a modern airport, expanding seaports, availability of mobile money and other financial technologies, and improving ground transportation, Senegal aims to become a regional commercial and services hub. Three Special Economic Zones offer investors tax exemptions and other benefits. Repatriation of capital and income is generally straightforward, although the regional central bank sometimes limits the number of “offshore accounts” for companies registered in Senegal and engaged in project finance. Although some companies report problems, Senegal scores favorably on corruption indicators compared to other countries in the region.

Despite Senegal’s many advantages, significant challenges remain. Investors at times cite burdensome and unpredictable tax administration, complex customs procedures, bureaucratic hurdles, opaque public procurement practices, an inefficient judicial system, inadequate access to financing, and a rigid labor market as obstacles. High real estate and energy costs, as well as high costs of inputs for manufacturing, also constrain Senegal’s competitiveness. High levels of unemployment and underemployment, especially among the country’s large youth population, represent a long-term macroeconomic challenge.

A U.S.-Senegal Bilateral Investment Treaty went into effect since 1990. Senegal’s stock of foreign direct investment (FDI) increased from $3.4 billion in 2015 to $6.4 billion in 2019, according to UNCTAD data. U.S. investment in Senegal has expanded since 2014, including investments in power generation, renewable energy, industry, and offshore oil and gas. The IMF reports that U.S. FDI stock in Senegal was approximately $114 million in 2019 (Table 1; up from $91 million in 2018). Although France is historically Senegal’s largest source of FDI, China overtook France as Senegal’s largest bilateral trade partner in 2019. Turkish economic influence is also rising, particularly in construction. Other important investment partners include Morocco, Saudi Arabia, and other Gulf States, as well as the EU. Sectors attracting substantial investment include petroleum and natural gas, agribusiness, mining, tourism, manufacturing, and fisheries.

Investors can consult Senegal’s investment promotion agency (APIX) at www.investinsenegal.com  for information on opportunities, incentives, and procedures for foreign investment, including a copy of Senegal’s investment code.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 73 of 180 Transparency International  
Global Innovation Index 2021 105 of 131 Global Innovation Index 
U.S. FDI in partner country ($M USD, stock positions) 2019 $114.0 million U.S. Foreign Direct Investment 
World Bank GNI per capita 2020 $1,430 World Bank Gross National Income 

1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

7. State-Owned Enterprises

Senegal has generally reduced government involvement in SOEs during the last three decades. However, the GOS still owns full or majority interests in 24 SOEs, including the national electricity company (Senelec), Dakar’s public bus service, the Port of Dakar, National Post, the national rail company, and the national water utility. Senelec retains control over power transmission and distribution, but it relies increasingly on independent producers to generate power. The GOS has also retained control of the national oil company, PETROSEN, which is involved in hydrocarbon exploration in partnership with foreign oil companies and operates a small refinery dependent on government subsidies. The GOS has modest and declining ownership of agricultural enterprises, including one involved in rice production. In 2018, the government revived the state-owned airline, Air Senegal. The GOS also owns a minority share in Sonatel-Orange Senegal, the country’s largest internet and mobile communications provider.

The Direction du Secteur Parapublic, an agency within the Ministry of Finance, manages the government’s ownership rights in SOEs. The GOS’s budget includes financial allocations to these enterprises, including subsidies to Senelec. SOE revenues are not projected in budget documents, but actual revenues are included in quarterly reports published by the Ministry of Finance. Senegal’s supreme audit institution (the Cour des Comptes) conducts audits of the public sector and SOEs.

8. Responsible Business Conduct

Following the lead of foreign companies, some Senegalese firms have begun adopting corporate social responsibility programs and responsible business conduct standards. However, this movement is not yet widespread.

Senegal’s 2016 Mining Code specifies the criteria and procedures by which the government awards natural resource extraction contracts or licenses. The code requires mining companies to participate in transparency reporting following the guidelines of the Extractive Industries Transparency Initiative (EITI). The GOS appears to follow the Mining Code and its implementing regulations in practice, although unregulated artisanal mining is common in some areas. Basic information on awards was publicly available online through the government’s official journal, and included details regarding geographic areas, resources under development, companies involved, and the duration of contracts. In January 2019, the government adopted a new Petroleum Code, which clarifies mechanisms for reserving revenues from oil and gas projects to the government. Senegal has been an active member of the EITI since 2013. In May 2018, the EITI Board declared Senegal the first country in Africa to have made “satisfactory progress” in implementing EITI standards. In October 2019, Senegal hosted the 41st quarterly meeting of the EITI Board, along with a conference on EITI implementation in Africa. The government’s EITI committee reports directly to the President.

9. Corruption

Senegalese law provides criminal penalties for corruption. The National Anti-Corruption Commission (OFNAC) has a mandate to enforce anti-corruption laws. In January 2020, OFNAC released overdue reports on its activities for 2017 and 2018 and swore in six new executive-level officials, bringing its managing board to a full complement for the first time in several years. A 2014 law requires the President, cabinet ministers, speaker and chief financial officer of the National Assembly, and managers of public funds more than one billion CFA francs (approximately $1.8 million) to disclose their assets to OFNAC. In 2020, all but one of these government officials complied with these disclosure requirements.

The GOS has made limited progress in improving its anti-corruption efforts. The current administration has mounted corruption investigations against several public officials (primarily the President’s political rivals) and has secured several convictions. In July 2020, President Sall launched an initiative to enforce a requirement that cabinet members and other high-level officials disclose their assets and issued a report disclosing his own personal assets.

The GOS has also taken steps to increase budget transparency in line with regional standards. Senegal ranked 73 out of 180 countries in Transparency International’s 2021 Corruption Perception Index. Notwithstanding Senegal’s positive reputation for corruption relative to regional peers, the government often did not enforce the law effectively, and some officials continued to engage in corrupt practices with impunity. Reports of corruption ranged from rent-seeking by bureaucrats involved in public approvals to opaque public procurement to corruption in the police and judiciary. Allegations of corruption against President Sall and his brother related to the development of oil and gas emerged in the press in 2019. While a subsequent investigation did not uncover wrong-doing, suspicions of high-level government corruption remain among many in civil society and the political opposition.

Senegal’s financial intelligence unit, Cellule Nationale de Traitement des Informations Financières (National Financial Information Processing Unit, CENTIF), is responsible for investigating money laundering and terrorist financing. CENTIF has broad authority to investigate suspicious financial transactions, including those of government officials. In February 2019, the regional FATF body – the Inter-Governmental Action Group against Money Laundering (GIABA) – issued a Mutual Evaluation Report of Senegal’s anti-money laundering and countering terrorist financing (AML/CTF) performance, measured by FATF standards. Although GIABA found the GOS’s understanding of AML/CTF standards and risks adequate, it gave Senegal non-compliant or partially compliant ratings on 26 of FATF’s 40 AML/CTF legal standards. Senegal also received ten low ratings and one moderate rating on the FATF’s 11 indicators measuring efforts to combat money laundering, terrorist financing, and weapons of mass destruction proliferation financing. Key weaknesses included: lack of domestic legislation implementing BCEAO AML/CTF directives; inadequate monitoring of nonprofits and non-financial professions, such as lawyers and accountants, who engage in financial transactions; inadequate inspections and sanctions of financial institutions; weak interagency cooperation; and poor AML/CTF capacity among police, judiciary, and customs. As a result, and in the absence of improvements, in February 2021, FATF added Senegal to its “gray list.” The GOS has committed to an action plan to address its deficiencies.

It is important for U.S. companies to assess corruption risks and develop an effective compliance program to prevent corruption, including bribery. U.S. firms operating in Senegal can underscore to partners that they are subject to the Foreign Corrupt Practices Act and may seek legal counsel to ensure full compliance with anti-corruption laws. The U.S. Government seeks to level the global playing field for U.S. businesses by encouraging other countries to take steps to criminalize all corruption, including bribery of officials, and requiring governments to uphold their obligations under relevant international conventions. A U.S. firm that believes a competitor is using bribery to secure a contract may convey this to U.S. officials.

Senegal is a signatory of the United Nations Convention Against Corruption but is not a signatory of the OECD Convention on Combatting Bribery.

10. Political and Security Environment

Senegal has long been regarded as an anchor of stability in politically unstable West Africa. It is the only regional country that has never had a coup d’état. International observers assessed the February 2019 presidential election, in which President Sall won a second term, as free and fair, despite a few instances of campaign violence. Public protests occasionally spawn isolated incidents of violence when unions, opposition parties, merchants, or students demand better salaries, working conditions, or other benefits.

The March 2021 arrest of opposition figure Ousmane Sonko on alleged rape charges led to several days of intense protests that spiraled into widespread riots and looting. The unrest, Senegal’s worst in decades, was fueled by pandemic-related hardship, particularly among the youth. According to press reports, 14 people died, hundreds were injured, and private businesses across the country were damaged. While a few local businesses were damaged, firms associated with France – historically targeted by some groups as relics of the colonial past — bore the brunt of the looting and property damage. Despite this bout of unrest, foreign investors largely remained confident in Senegal’s stability and economic rebound. Most observers agreed that strong private sector investment, facilitated by improvements to the business climate and better mobilization of capital, is needed to address youth employment.

Years of declining violence in the Casamance region, home of a four-decade-old separatist conflict, ignited into a full military conflict between Senegal’s army and elements of the Movement of Democratic Forces in Casamance (MFDC) in March 2022. The Senegalese government indicated that the military operation would continue until MFDC resistance is eradicated, putting an end to the armed separatist movement.

Security is a top priority for the government, which increased its defense and security budget by 92 percent between 2012 and 2017. The Armed Forces Ministry noted a 32 percent budget increase for the fiscal year 2021.

11. Labor Policies and Practices

Senegal’s Labor Code, based on the French system, was last updated in 1997. The code retains a rigid approach that, according to some observers, favors social over economic goals. Rules relating to employment contracts, layoffs, and redundancy protections are some of the most stringent in the world, imposing high costs on businesses. However, labor law is not well-enforced, especially in the dominant informal sector.

Acquiring work permits for expatriate staff is typically straightforward. Citizens from WAEMU member countries may work freely in Senegal.

Senegal has an abundant supply of unskilled and semi-skilled labor, with a more limited supply of skilled workers in engineering and technical fields. While Senegal has one of the best higher educational systems in West Africa and produces a substantial pool of educated workers, limited job opportunities in Senegal lead many to emigrate.

Relations between employees and employers are governed by the Labor Code, industry-wide collective bargaining agreements, company regulations, and individual employment contracts. The Code provides legal protection for women and children and prohibits forced or compulsory labor. It also establishes minimum standards for working age, working hours, and working conditions, and bars children from performing many dangerous jobs. Senegal ratified International Labor Organization Convention 182 on the worst forms of child labor in 2000. The Code recognizes the right of workers to form and join trade unions. Any group of workers in a similar trade or profession may create a union, although formal approval by the Ministry of the Interior is required. The right to strike is recognized but sometimes restricted. The GOS has the authority to dissolve trade unions and requisition workers from private enterprises.

Two powerful industry associations represent management’s interests: the National Council of Employers and the National Employers’ Association. The principal labor unions are the National Confederation of Senegalese Workers and the National Association of Senegalese Union Workers, a federation of independent labor unions. Collective bargaining agreements cover an estimated 44 percent of formal sector workers. Most workers, however, work in the informal sector, where labor rules are not enforced.

Child labor remains a problem, particularly in the informal sector, mining, construction, transportation, domestic work, agriculture, and fishing, where labor regulations are rarely enforced. Despite some progress, Senegal still struggles with forced child begging. Tens of thousands of religious students (talibés) are enrolled in Koranic schools (daaras) where some are forced to beg to enrich teachers, a corruption of the intended lesson in humility. The GOS has made some progress in combatting these practices, but more progress is needed.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source USG or international statistical source USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) N/A N/A 2020 $25,051 Senegal GDP 
U.S. FDI in partner country ($M USD, stock positions) N/A N/A 2019 $114 U.S. FDI in Senegal 
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2019 $0 Senegal FDI in United States 
Total inbound stock of FDI as % host GDP N/A N/A 2020 34.6% Total FDI in Senegal 

“0” reflects amounts rounded to +/- USD 500,000.

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy
From Top Five Sources/To Top Five Destinations (US Dollars, Millions) in 2019
Inward Direct Investment Outward Direct Investment
Total Inward $4,688 100% Total Outward $949 100%
France #1 $2,333 50% France #1 $409 43%
Mauritius #2 $636 14% Mali #2 $129 14%
Canada #3 $626 14% Cote d’Ivoire #3 $127 13%
Nigeria #4 $200 4% India #4 $93 10%
China #5 $180 4% Mauritius #5 $69 7%

Data 

14. Contact for More Information

Aichatou Fall
Economic Specialist
U.S. Embassy, Route des Almadies, B.P. 49, Dakar, Senegal
+221 33 879 4000
FallAX@state.gov 

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