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Guinea

Executive Summary

On September 5, 2021 Colonel Mamadi Doumbouya and Guinean military special forces seized power and detained former President Alpha Conde through a coup d’état.  COL Doumbouya declared himself Guinea’s head of state, dissolved the government and National Assembly and suspended the constitution.  Guinea is currently governed by the National Committee for Reunification and Development (CNRD), which is led by COL Doumbouya and comprised primarily of military officials.  On September 27, 2021 COL Doumbouya released the Transitional Charter which supersedes the constitution until a new Constitution is promulgated; Guinea’s penal and civil codes remains in force.  On October 1, 2021 the Supreme Court Justice installed COL Doumbouya as Head of State, Transition President, CNRD President, and Commander-in-Chief of Security Forces.  On January 22, 2022 the National Transition Council, the transition government’s legislative body, was installed but no timeline for future elections or return to civilian rule was provided as of April 2022.

Guinea enjoys sizeable endowments of natural resources, energy opportunities, and arable land.

These seeming advantages have not yet resulted in economic development, and may in fact hinder it, in an example of the famous “resource curse.”  Guinea’s economy has been based on extraction of primary resources, from at least the French colonial era and the slave trade before it.  This extractive paradigm and legacy of underdevelopment, combined with low levels of education, and longstanding patterns of nondemocratic governance dating back to the colonial era, limit the potential for broad-based economic growth based on value addition, innovation, and productive as opposed to extractive or rent-seeking investment.  At the same time, a sense of national identity and unity, and both formal and informal practices of solidarity that tend towards wealth redistribution may prove to be assets for the country’s development, if the government and the private sector can harness them productively.

The 2021 coup d’etat, persistent corruption, and fiscal mismanagement make the near-term economic prognosis for Guinea mixed.  In this context, Guinea has looked to foreign investment to bolster tax and export revenues and to support infrastructure projects and overall economic growth.  China, Guinea’s largest trading partner, dramatically increased its role in years leading up to the coup with a variety of infrastructure investments.  Investors should proceed with caution, understanding that the potential for profits comes with significant political risk.  Weak institutions mean that investors may secure lucrative concessions from the government in the short term, but these could be open to renegotiation or rescission in the long term.  Prior to the coup, former President Conde’s government implemented reforms to improve various aspects of the investment climate.  For example, the former government reduced property transfers fees from 2 to 1.2 percent of property value.  The time required to obtain a construction permit was reduced and import procedures were improved.  Since 2019, Guinea has implemented a permanent taxpayer identification number system that requires all payments to be made by “Real Time Gross System” (RTGS) immediate transfers.

Since the coup d’etat, the transition government has spoken extensively about fighting corruption and increasing transparency.  Transition President COL Doumbouya created the Court to Repress Economic and Financial Crimes (CRIEF) to handle cases involving embezzlement, corruption, and misuse of public funds over one billion GNF (approximately $110,000) in December 2021.  As of April 2022, the court has focused on collecting evidence for corruption cases against businesses tied to and officials that served in former President Conde’s government.

Endowed with abundant mineral resources, Guinea has the raw materials to be an economic leader in the extractives industry.  Guinea is home to a third of the world’s reserves of bauxite (aluminum ore), and bauxite accounts for over half of Guinea’s present exports.  Historically, most of the country’s bauxite was exported by Compagnie des Bauxites de Guinee (CBG) (Bauxite Company of Guinea) [a joint venture between the Government of Guinea, U.S.-based Alcoa, the Anglo-Australian firm Rio Tinto, and Dadco Investments of the Channel Islands], via a designated port in Kamsar.  While CBG still retains the largest reserves, the Societe Miniere de Boke (SMB) (Mineral Company of Boke), a Sino-Singaporean conglomerate, recently surpassed CBG as the largest single producer of bauxite.  New investment by SMB and CBG, in addition to new market entrants, are expected to significantly increase Guinea’s bauxite output over the next five to ten years.  Guinea also possesses over four billion tons of untapped high-grade iron ore, significant gold and diamond reserves, undetermined amounts of uranium, as well as prospective offshore oil reserves.  Artisanal and medium-sized industrial gold mining in the Siguiri region is a significant contributor to the Guinean economy, but some suspect much of the gold leaves the country clandestinely, without generating any government revenue.  In the long term, both former President Conde’s government and the transition government project that Guinea’s greatest potential economic driver will be the Simandou iron ore project, which is slated to be the largest greenfield project ever developed in Africa.  The transition government reached an ambitious agreement with Rio Tinto and the SMB-Winning Consortium (WCS) in March 2022 to develop the rail and port infrastructure to bring ore from Simandou to market by early 2025.  In 2017, the governments of Guinea and China signed a USD 20 billion framework agreement giving Guinea potentially USD 1 billion per year in infrastructure projects in exchange for increased access to mineral wealth.  In 2018, the Chinese Group TBEA invested USD 2.89 billion in the bauxite and alumina sector.  The project includes development of a bauxite mine, the construction of a port, railroad, and power plant to facilitate the supply chain.  The project is estimated to generate USD 406 million in annual revenue for Guinea.

The amended 2013 Mining Code stipulates that raw ore producers in Guinea begin processing raw ore into refined or processed products within a few years of development, depending on the terms of the individual investment and the mandate with the Ministry of Mines and Geology.  In April 2022, the transition government called upon bauxite concessionaires to solidify refining plans by May 2022.  U.S.-based companies are in varying stages of proposing LNG projects to furnish this upcoming tremendous energy need.  China is reportedly offering coal-based solutions to meet the potential demand.

Guinea’s abundant rainfall and natural geography bode well for hydroelectric and renewable energy production. The largest energy sector investment in Guinea is the 450MW Souapiti dam project (valued at USD 2.1 billion), begun in late 2015 with Chinese investment, which likewise completed the 240MW Kaleta Dam (valued at USD 526 million) in May 2015.  Kaleta more than doubled Guinea’s electricity supply, and for the first-time furnished Conakry with more reliable, albeit seasonal, electricity (May-November). Souapiti began producing electricity in 2021. A third hydroelectric dam on the same river, dubbed Amaria, began construction in January 2019 and is expected to be operational in 2024. The Chinese mining firm TBEA is providing financing for the Amaria power plant (300 MW, USD 1.2 billion investment).  If corresponding distribution infrastructure is built, and pricing enables it, these projects could make Guinea an energy exporter in West Africa. In addition, U.S.-based Endeavor began operating Project Te in November 2020, a 50MW thermal plant on the outskirts of the capital.  Former President Conde’s government also signed an emergency agreement in December 2019 to buy power from the 105 MW Turkish Karpowership barge anchored off Conakry’s coast.  Former President Conde’s government emphasized investment in solar and other energy sources to compensate for hydroelectric deficits during Guinea’s dry season.  Toward that end, former President Conde’s government entered into several Memoranda of Understanding with the private sector to develop solar projects.

Agriculture and fisheries hold other areas of opportunity and growth in Guinea.  Already an exporter of fruits, vegetables, and palm oil to its immediate neighbors, Guinea is climatically well suited for large-scale agricultural production and export.  However, the sector has suffered from decades of neglect and mismanagement, lack of transportation infrastructure, and lack of electricity and a reliable cold chain.  Guinea is an importer of rice, its primary staple crop.

Guinea’s macroeconomic and financial situation is weak.  The aftermath of the 2014-2016 Ebola crisis left former President Conde’s government with few financial resources to invest in social services and infrastructure.  Lower natural resource revenues stemming from a drop in world commodities prices and ill-advised government loans strained an already tight budget.  In 2018 the government borrowed excessively from the Central Bank (BCRG), which threatened the first review of Guinea’s current International Monetary Fund (IMF) program.  Lower than forecast natural resource revenues in 2019 due to heavy rains and political violence threatened the fourth review, which Guinea passed in April 2020.  In December 2020, the Executive Board of the IMF completed its fifth and sixth reviews of Guinea’s economic performance. The completion of these reviews enabled the immediate disbursement of USD 49.47 million – bringing total disbursements under Guinea’s third extended credit facility to USD 66.60 million before the program’s end.

A shortage of credit persists, particularly for small- and medium-sized enterprises, and the government is increasingly looking to international investment to increase growth, provide jobs, and kick-start the economy. On March 13, 2020, Guinea confirmed its first Covid-19 case. The pandemic negatively impacted the well-being of households, particularly those working in the informal sector, who have limited access to savings and financial services.  Guinea experienced an Ebola epidemic from February to June 2021.  Despite its able handling of the epidemic, which kept deaths to a minimum, cross-border trade with Liberia, Ivory Coast, and Sierra Leone was reduced temporarily during the outbreak.  Violence surrounding the March 2020 legislative election and constitutional referendum, as well as the October 2020 presidential election, all negatively impacted Guinea’s growth prospects.  The transition government has worked to maintain economic stability since the 2021 coup d’etat, though without a timeline for elections, the uncertain political situation further limits potential growth.

Prior to the coup, Guinea passed and implemented an anti-corruption law, updated its Investment Code, and renewed efforts to attract international investors, including a new investment promotion website put in place in 2016 by Guinea’s investment promotion agency to increase transparency and streamline processes for new investors.  However, Guinea’s capacity to enforce its more investor-friendly laws is compromised by a weak and unreliable legal system.  Then President Conde inaugurated the first Trade Court of Guinea on March 20, 2018.  Transition President COL Doumbouya created the Court to Repress Economic and Financial Crimes (CRIEF) to handle cases involving embezzlement, corruption, and misuse of public funds over one billion GNF (approximately $110,000) in December 2021.  As of April 2022, the court has focused on collecting evidence for corruption cases against businesses tied to and officials that served in former President Conde’s government.

To attract foreign investment, the Private Investment Promotion Agency (APIP) and the Ministry of Commerce, Industry, and Small and Medium Enterprises hosted the second annual Guinea Investment Forum (GUIF) in Dubai in February 2022, following the inaugural event in Guinea in February 2021.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 150 of 175 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2021 130 of 132 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2020 $278 million https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2020 $1,020 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

7. State-Owned Enterprises

While all Guinea’s public utilities (water and electricity) are state-owned enterprises (SOEs), the former Conde administration proposed permitting private enterprises to operate in this sphere.  In 2015, the French firm Veolia was contracted to manage the state-owned electric utility Electricité de Guinée (EDG) – a contract which ended in October 2019.  Several private projects aimed at harnessing Guinea’s solar energy potential and gas-powered thermal plants are being implemented with the goal of producing and selling energy throughout Guinea and possibly to neighboring countries.  Other SOEs are found in the telecommunications, road construction, lottery, and transportation sectors.  There are several other mixed companies where the state owns a significant or majority share, that are typically related to the extractives industry.

The hydroelectricity sector could support Guinea’s modernization, and possibly even supply regional markets.  Guinea’s hydropower potential is estimated at over 6,000MW, making it a potential exporter of power to neighboring countries.  The largest energy sector investment in Guinea is the 450MW Souapiti dam project (valued at USD 2.1 billion), begun in late 2015 with Chinese investment.  A Chinese firm likewise completed the 240MW Kaleta Dam (valued at USD 526 million) in May 2015. Kaleta more than doubled Guinea’s electricity supply, and for the first-time furnished Conakry with more reliable, albeit seasonal, electricity (May-November). Souapiti began producing electricity in 2021.  A third hydroelectric dam on the same river, dubbed Amaria, began construction in January 2019 and is expected to be operational in 2024. The Chinese mining firm TBEA is providing financing for the Amaria power plant (300 MW, USD 1.2 billion investment).  If corresponding distribution infrastructure is built, and pricing enables it, these projects could make Guinea an energy exporter in West Africa.

Plans for improving the distribution network to enable electricity export are in process with the development of the Gambia River Basin Development (OMVG) (Organization pour la Mise en Oeuvre de Fleuve Gambie, in French) transmission project connecting Guinea, Senegal, Guinea Bissau, and The Gambia.  The OMVG project involves the construction of 1,677 kilometers of 225-volt transmission network capable of handling 800MW to provide electricity for over two million people.  At the same time, Guinea is moving forward with the Côte d’Ivoire, Liberia, and Sierra Leone, (CLSG) transmission interconnector project, which will integrate Guinea into the West African Power Pool (WAPP) and allow for energy import-export across the region.  While neither former President Conde’s administration nor the transition government have published significant information concerning the financial stability of SOEs, EDG’s balance sheet is understood to be in the red. The IMF reported that as recently as 2017, up to 28 percent of Guinea’s budget went towards subsidizing electricity, and the IMF urged that EDG improve tariff collection since large numbers of its users do not pay. Former Prime Minister Ibrahima Kassory Fofana announced in March 2021 that EDG subsidies cost Guinea’s government USD 350 million annually.

The amount of research and development (R&D) expenditures is not known, but it would be highly unlikely that any of Guinea’s SOEs would devote significant funding to R&D.  Guinean SOEs are entitled to subsidized fuel, which EDG uses to run thermal generator stations in Conakry.  Guinea is not party to the Government Procurement Agreement.

Corporate governance of SOEs is determined by the government. Guinean SOEs do not adhere to the OECD guidelines.  SOEs are supposed to report to the Office of the President, however, typically they report to a ministry.  Seats on the board of governance for SOEs are usually allocated by presidential decree.

8. Responsible Business Conduct

The 2013 Mining Code includes Guinea’s first legal framework outlining corporate social responsibility.  Under the provisions of the code, mining companies must submit social and environmental impact plans for approval before operations can begin and sign a code of good conduct, agreeing to refrain from corrupt activities and to follow the precepts of the Extractive Industry Transparency Initiative (EITI).  However, lack of capacity in the various ministries involved makes government monitoring and enforcement of corporate social responsibility requirements difficult, a gap that some non-governmental organizations (NGOs) are filling.  In February 2019, Guinea was found to have achieved meaningful progress in implementing EITI standards.  The EITI Board outlined eight corrective actions, including disclosing more information on infrastructure agreements, direct subnational payments, and quasi-fiscal expenditures.  The Board noted that the EITI should play a role in overseeing the new Local Economic Development Fund (FODEL).  Mining companies continue to note a lack of transparency in the expenditure of revenues by the National Agency for Mining Infrastructure (ANAIM).

The 2019 Environmental Code also has specific provisions regarding environmental and social due diligence on any development projects.  The Code requires each development project to conduct an environmental impact study which includes a list of mitigation measures for any negative impact.

Guinea has laws that protect the population from adverse business impacts however, these laws are not effectively enforced.  In the last few years, there were several cases of private enterprise having an adverse impact on human rights, especially in the mining and energy sectors.  The government is often reluctant to fully enforce legislation regarding responsible conduct and the mitigation of these impacts.  There are several local and international organizations that are promoting and monitoring the implementation of RBCs.  Guinea is not signatory of the Montreux document on Private Military and Security Companies.

9. Corruption

According to Transparency International’s 2021 Corruption Perception Index, Guinea lost 13 points and was ranked 150 out of 180 countries listed.

Guinea passed an Anti-Corruption Law in 2017, and in April 2019, a former director of the Guinean Office of Advertising was sentenced to five years in prison for embezzling GNF 39 billion (approximately USD four million), though in June 2019, he was acquitted by the Appeals Court and was elected a member of the National Assembly in March 2020.  It is not clear whether the Anti-Corruption Law was used to prosecute the case.  According to a 2019 Afrobarometer survey, at least 40 percent of Guineans reported having given a government official a bribe, while a 2016 World Bank Enterprise Survey reported that of 150 firms surveyed, 48.7 percent reported that they were expected to give “gifts” to public officials to get things done, but only 7.9 percent reported having paid a bribe.

The business and political culture, coupled with low salaries, have historically combined to promote and encourage corruption.  Requests for bribes are a common occurrence.  Though it is illegal to pay bribes in Guinea, there is little enforcement of these laws.  In practice, it is difficult and time-consuming to conduct business without giving “gifts” in Guinea, leaving U.S. companies, who must comply with the Foreign Corrupt Practices Act, at a disadvantage.

Although the law provides criminal penalties for corruption, the law does not extend to family members of government officials. It does include provisions for political parties.  According to the World Bank’s 2018 Worldwide Governance Indicators, corruption continues to remain a severe problem, and Guinea is in the 13th percentile, down from being in the 15th percentile in 2012.  Public funds have been diverted for private use or for illegitimate public uses, such as buying vehicles for government workers.  Land sales and business contracts generally lack transparency.

Guinea’s Anti-Corruption Agency (ANLC) is an autonomous agency established by presidential decree in 2004.  The ANLC reports directly to the President and is currently the only state agency focused solely on fighting corruption, though it has been largely ineffective in its role with no successful convictions.  The ANLC’s Bureau of Complaint Reception fields anonymous tips forwarded to the ANLC. Investigations and cases must then be prosecuted through criminal courts.  According to the ANLC, during the past year there were no prosecutions as a result of tips.  The agency is underfunded, understaffed, and lacks computers and vehicles.  The ANLC is comprised of 52 employees in seven field offices, with a budget of USD 1.1 million in 2018.

Former President Conde’s administration named corruption in both the governmental and commercial spheres as one of its top agenda items.  In November 2019, Ibrahim Magu, the acting Chairman of the Economic and Financial Crimes Commission of Nigeria, and President Alpha Conde reached an agreement through which the Commission will assist Guinea to establish an anti-corruption agency; however, it is not clear if that meant reforming the existing anti-corruption agency or establishing a new anti-corruption agency.

In January 2021, Beny Steinmetz, an Israeli businessman and billionaire was sentenced to five years in jail in Geneva for bribing the wife of Guinea’s late President Lansana Conté to gain the rights to one of the world’s richest iron-ore deposits.  He was also ordered to pay a 50 million Swiss franc (USD 56 million) fine.  Steinmetz has long claimed to be a victim of a vast international conspiracy to deprive him of the rights to the Simandou project.  He plans to appeal his case.

Transition President COL Doumbouya created the Court to Repress Economic and Financial Crimes (CRIEF) to handle cases involving embezzlement, corruption, and misuse of public funds over one billion GNF (approximately $110,000) in December 2021.  As of April 2022, the court has focused on collecting evidence for corruption cases against businesses tied to and officials that served in former President Conde’s government.

 

A 2016 survey by the ANLC, the Open Society Initiative-West Africa (OSIWA), and Transparency International found that among private households, 61 percent of the respondents stated they were asked to pay a bribe for national services and 24 percent for local services.  Furthermore, 24 percent claimed to have paid traffic-related bribes to police, 24 percent for better medical treatment, 19 percent for better water or electricity services, and 8 percent for better judicial treatment.

Guinea is a party to the UN Anticorruption Convention.  http://www.unodc.org/unodc/en/treaties/CAC/signatories.html

Guinea is not a party to the OECD Convention on Combatting Bribery.  http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm

Since 2012, Guinea has had a Code for Public Procurement (Code de Marches Publics et Delegations de Service Public) that provides regulations for countering conflicts of interest in awarding contracts or in government procurements.  In 2016, the government issued a Transparency and Ethics charter for public procurement that provides the main do’s and don’ts in public procurement, highlighting avoidance of conflict of interest as a priority.  The charter also includes a template letter that companies must sign when bidding for public contracts stating that they will comply with local legislation and public procurement provisions, including practices to prevent corruption.

Since April 2020, Government of Guinea officials and family must complete the asset declaration form which is available on the Court of Audit website.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

National Agency to Fight Corruption (ANLC)
Cite des Nations, Villa 20, Conakry, Guinea
Korak Bailo Sow, Permanent Secretary
+224 622 411 796
ddiallo556@gmail.com
+224 620 647 878
cc@anlcgn.org

Contact at a “watchdog” organization:

Transparency International
Dakar, Senegal
+221-33-842-40-44
forumcivil@orange.sn  

Guinea Association for Transparency
Oumar Kanah Diallo, President
+224 622 404 142
okandiallo77@gmail.com
agtguinee224@gmail.com 

10. Political and Security Environment

Guinea has had a long history of political repression, with more recent episodes of politically-motivated violence around elections.  The country suffered under authoritarian rule from independence in 1958 until its first democratic presidential election in 2010.  It has seen continued political violence associated with national and local elections since 2010, culminating in the most recent September 2021 coup d’etat.

On September 5, 2021 Colonel Mamadi Doumbouya and Guinean military special forces seized power and detained former President Alpha Conde through a coup d’état.  COL Doumbouya declared himself Guinea’s head of state, dissolved the government and National Assembly and suspended the constitution.  Guinea is currently governed by the National Committee for Reunification and Development (CNRD), which is led by COL Doumbouya and comprised primarily of military officials.  On September 27, 2021 COL Doumbouya released the Transitional Charter which supersedes the constitution until a new Constitution is promulgated; Guinea’s penal and civil codes remains in force.  On October 1, 2021 the Supreme Court Justice installed COL Doumbouya as Head of State, Transition President, CNRD President, and Commander-in-Chief of Security Forces.  On January 22, 2022 the National Transition Council, the transition government’s legislative body, was installed but no timeline for future elections or return to civilian rule was provided as of April 2022.

In March 2020, the former Conde administration amended the constitution through a referendum that allowed former President Conde to seek a third term in office.  Observers noted the process was not transparent, inclusive, or consultative.  Major opposition parties boycotted the referendum and accompanying legislative elections.  This resulted in resetting presidential term limits and the ruling party, the Rally for the Guinean People, gaining a super majority in the National Assembly.  Domestic and international observers raised concerns regarding widespread violence and voting irregularities in the legislative elections, including closed and ransacked polling stations.

In October 2020 President Alpha Conde ran for reelection for a third term under the new constitution.  International and domestic observers raised concerns about widespread electoral violence, restrictions on freedom of assembly, the lack of transparency in vote tabulation, and inconsistencies between the announced results and tally sheet results from polling stations.  Violent protests during both elections closed businesses in major population centers, resulted in about 150 deaths, and the arbitrary detention of hundreds of people including several prominent opposition figures.  Political intimidation and arbitrary detention of opposition members continued for several months after the election.

The local populace in Boke, Bel-Air, and Sangaredi disrupted road and/or railroad traffic on at least three occasions in 2017 and at least twice in 2018, in response to grievances over employment, lack of services, and other issues.  Although none of these events targeted American or foreign investors, they were disruptive to business in general and eroded confidence in the security situation under which investors must operate in Guinea.  Street violence is difficult to predict or avoid, but generally does not target westerners.

Presidential elections in 2015 sparked violent protests in Conakry, but clashes between police and demonstrators were largely contained.  In addition to political violence, sporadic and generally peaceful protests over fuel prices, lack of electricity, labor disputes, and other issues have occurred in the capital and sometimes beyond since 2013.  In February 2017, seven civilians died in confrontations with security services during large protests against education reforms.  After two days of violent protests in March 2018, teachers’ unions and the government agreed to a raise of 40 percent.  These protests over teacher union pay became intermingled with political protests over voting irregularities in the February 4 local elections.  The political opposition claims the government is responsible for the deaths of over 90 people during political protests over the past eight years.

Other instances of violence occurred in 2014 and 2015 during the Ebola epidemic when local citizens attacked the vehicles and facilities of aid workers.  The Red Cross, MSF (Doctors Without Borders) and the World Health Organization (WHO) also reported cases of property damage (destroyed vehicles, ransacked warehouses, etc.).  On September 16, 2014, in the Forest Region village of Womei, eight people were killed by a mob when they visited the village as part of an Ebola education campaign. The casualties included radio journalists, local officials, and Guinean health care workers.

The small mining town of Zogota, located in Guinea’s Forest Region, saw the deaths of five villagers, including the village chief, during August 2012 clashes with security forces over claims that the Brazilian iron-mining company Vale was not hiring enough local employees and was instead bringing workers from other regions of Guinea.  The ensuing instability led to Vale evacuating all expatriate personnel from the town.

Following the death of President Lansana Conte on December 22, 2008, a military junta calling themselves the National Council for Democracy and Development (CNDD) took power in a bloodless coup.  Immediately following the coup, the U.S. government suspended all but humanitarian and election assistance to Guinea.  The African Union (AU) and ECOWAS suspended Guinea’s membership pending democratic elections and a relinquishment of power by the military junta.  In September 2009, junta security forces attacked a political rally in a stadium in Conakry, killing 150 people, and raping over a hundred women.

The state had persecuted political dissidents and opposition parties for decades.  The Sekou Toure regime (1958-1984) and the Lansana Conte regime (1984-2008) were marked by political violence and human rights abuses.

11. Labor Policies and Practices

Guinea has a young population and a high unemployment rate.  Potential employees often lack specialized skills.  The country has a poor educational system and lacks professionals in all sectors of the economy. Guinea has deficits in specialized skills needed for large-scale projects of any kind.

According to a 2019 World Bank report on “Employment, productivity and inclusion of youth”, in 2017 Guinea’s economy was based on services (49 percent of GDP), mining and industry (37 percent) and agriculture (10 percent).  The tendencies show that employment in Guinea is like other countries in the region, with a high level of employment in the informal sector.  According to the 2018 World Bank Development Indicators, approximately 65 percent of Guineans above 15 years old, (56 percent males and 44 percent females) were employed in the formal or informal sectors.  Of those employed, 52 percent were working in agricultural sector, 34 percent in commerce, and 14 percent in industry and manufacturing.

In March 2020, the National Assembly revised the Children’s Code to increase protections and rights afforded to minors.  The new code provides increased penalties for offenses that expose children to violence, sexuality, the display or dissemination of obscene images, and messages not intended for children.  The new code also increases penalties relating to child labor, sexual abuse, sexual exploitation of children and the fight against child pornography.  Under the new code children between the ages of 12 and 14 can perform light work, which does not meet international standards, as it applies to children under age 13.  In addition, the new code does not prescribe the number of hours per week permitted for light work, nor does it specify the conditions under which light work may be done. Moreover, these laws only apply to workers with written employment contracts, leaving self-employed children and children working outside of formal employment relationships vulnerable to exploitation.

Guinea’s National Assembly adopted a new labor code in February 2014 which protects the rights of employees and is enforced by the Ministry of Technical Education, Vocational Training, Employment and Labor.  The Labor Code sets forth guidelines in various sectors, the most stringent being the mining sector.  Guidelines cover wages, holidays, work schedules, overtime pay, vacation, and sick leave.  The Labor Code also outlaws all discrimination in hiring, including on the basis of sex, disability, and ethnicity.  It also prohibits all forms of workplace harassment, including sexual harassment.  However, the law does not provide antidiscrimination protections for persons based on sexual orientation and/or gender identity.

Although the law provides for the rights of workers to organize and join independent unions, engage in strikes, and bargain collectively, the law also places restrictions on the free exercise of these rights.  The Labor Code requires unions to obtain the support of 20 percent of the workers in a company, region, or trade that the union claims to represent.  The code mandates that unions provide ten days’ notice to the labor ministry before striking, but the code does allow work slowdowns. Strikes are only permitted for professional claims.  The Labor Code does not apply to government workers or members of the armed forces.  While the Labor Code protects union officials from anti-union discrimination, it does not extend that same protection to other workers.

The law prohibits child labor in the formal sector and sets forth penalties of three to ten years imprisonment and confiscation of resulting profits.  The law does not protect children in the informal sector.  The minimum age for employment is 16.  Exceptions allow children to work at age twelve as apprentices for light work in such sectors as domestic service and agriculture, and at 14 for other work.  A new child code was adopted at the National Assembly in December 2019, though it was never enacted by former President Conde.  The new child code provides more severe sentences for violations related to child labor.

The Labor Code allows the government to set a minimum monthly wage through the Consultative Commission for Labor and Social Laws.  The minimum wage for all sectors was established in 2013 at 440,000 GNF (approximately USD 50).  There is no known official poverty income level established by the government.

The law mandates that regular work should not exceed ten-hour days or 48-hour weeks, and it mandates a period of at least 24 consecutive hours of rest each week, usually on Sunday.  Every salaried worker has the legal right to an annual paid vacation, accumulated at the rate of at least two workdays per month of work.  There also are provisions in the law for overtime and night wages, which are a fixed percentage of the regular wage.  The law stipulates a maximum of 100 hours of compulsory overtime a year.

The law contains general provisions regarding occupational safety and health, but neither former President Conde’s government nor the transition government have established a set of practical workplace health and safety standards.  Moreover, no orders have been issued laying out the specific safety requirements for certain occupations or for certain methods of work called for in the Labor Code.  All workers, foreign and migrant included, have the right to refuse to work in unsafe conditions without penalty.

Authorities rarely monitor work practices or enforced the workweek standards and the overtime rules.  Teachers’ wages are low, and teachers sometimes have gone for months without pay.  When salary arrears are not paid, some teachers live in abject poverty.  From 2016-2018, teachers conducted regular strikes and as a result and were promised a 40 percent increase in pay.  Initially they received only ten percent, but in March 2018, the government began to pay the remaining 30 percent.  In February 2019, the teacher’s union accepted the government proposal at the time and returned to work.  In January 2020, the teachers started an indefinite strike demanding higher wages and the re-running of a census of currently employed teachers.  As of end of March 2020, the teachers’ strike was put on hold due to the COVID-19 pandemic.

Despite legal protection against working in unsafe conditions, many workers feared retaliation and did not exercise their right to refuse to work under unsafe conditions.  Accidents in unsafe working conditions remain common.  The government banned artisanal mining during the rainy season to prevent deaths from mudslides, but the practice continues.

Pursuant to the Labor Code, any person is considered a worker, regardless of gender or nationality, who is engaged in any occupational activity in return for remuneration, under the direction and authority of another individual or entity, whether public or private, secular, or religious.  In accordance with this code, forced or compulsory labor means any work or services extracted from an individual under threat of a penalty and for which the individual concerned has not offered himself willingly.

A contract of employment is a contract under which a person agrees to be at the disposal and under the direction of another person in return for remuneration.  The contract may be agreed upon for an indefinite or a fixed term and may only be agreed upon by individuals of at least 16 years of age, although minors under the age of 16 may be contracted only with the authorization of the minor’s parent or guardian.  An unjustified dismissal provides the employee the right to receive compensation from the employer in an amount equal to at least six months’ salary with the last gross wage paid to the employee being used as the basis for calculating the compensation due.

The Investment Code obliges new companies to prioritize hiring local employees and provide capacity training and promotion opportunities for Guineans, a sentiment echoed by public remarks from Transition President COL Doumbouya and other members of the transition government.

14. Contact for More Information

Caroline Corcoran
Economic and Commercial Officer
U.S. Embassy Conakry
+224 655 104 428
corcorance@state.gov

Liberia

Executive Summary

Liberia offers opportunities for investment, especially in natural resources such as mining, agriculture, fishing, and forestry, but also in more specialized sectors such as energy, telecommunications, tourism, and financial services. The economy, which was severely damaged by more than a decade of civil wars that ended in 2003, has been slowly recovering, but Liberia has yet to attain pre-war levels of development. Liberia’s largely commodities-based economy relies heavily on imports even for most basic needs like fuel, clothing, and rice – Liberia’s most important staple food. The COVID-19 pandemic disrupted many sectors of the economy, which contracted in 2019 and 2020. However, the World Bank and IMF expect per capita GDP to return to pre-COVID-19 levels by 2023. Growth will be driven mainly by the mining sector, although structural reforms are also expected to increase activity in agriculture and construction.

Low human development indicators, expensive and unreliable electricity, poor roads, a lack of reliable internet access (especially outside urban areas), and pervasive government corruption constrain investment and development. Most of Liberia lacks reliable power, although efforts to expand access to the electricity grid are ongoing through an extension from the Mount Coffee Hydropower Plant, connection to the West Africa Power Pool, and other internationally supported energy projects. Public perception of corruption in the public sector is high, as indicated by Liberia’s poor showing in Transparency International’s 2021 Corruption Perceptions Index, where Liberia ranked 136 out of 180 countries. Low public trust in the banking sector and seasonal currency shortages result in most cash being held outside of banks. To remedy this, the Central Bank of Liberia (CBL) in 2021 initiated a plan to print and circulate additional currency. The new printing and minting will provide 48 billion Liberian dollars through 2024. The CBL and commercial banks have also successfully pushed the adoption of mobile money, which Liberians access through their mobile phones to make everyday purchases and pay bills. However, the government has yet to activate the “national switch,” meaning banking instruments like ATMs and mobile money accounts remain unintegrated and are not interoperable.

The government-backed Business Climate Working Group (BCWG) works with public and private sector stakeholders to explore how to create a friendlier business environment.  International donors also work with the government to improve the investment climate, which ranks toward the global bottom by most global measures. Despite these numerous challenges, Liberia is rich in natural resources. It has large expanses of potentially productive agricultural land and abundant rainfall to sustain agribusinesses. Its rich mineral resources offer significant potential to investors in extractive industries. Several large international concessionaires have invested successfully in agriculture and mining, though negotiating these agreements with the government often proves to be a lengthy and byzantine struggle. The fishing industry, long dormant compared to pre-war levels, is making improvements that should make it more attractive for investment.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 136 of 180 http://www.transparency.org/research/cpi/overview 
Global Innovation Index 2020 N/A https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in Liberia ($M USD, historical stock positions) 2019 -$94 million https://apps.bea.gov/international/factsheet/ 
World Bank GNI per capita 2020 $570 http://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

7. State-Owned Enterprises

Liberia has approximately 20 state-owned enterprises (SOEs), which are governed by boards of directors and management teams overseen by government ministries. All are wholly government-owned and semi-autonomous. The president of Liberia appoints board members and directors or managers to govern and run SOEs. The Public Financial Management (PFM) Act defines the requirements for SOEs.

SOEs employ more than 10,000 people in sea and airport services, electricity supply, oil and gas, water and sewage, agriculture, forestry, maritime, petroleum importation and storage, and information and communication technology services. Not all SOEs are profitable, and some citizens and advocacy groups have called for SOEs to be dissolved or privatized. Liberia does not have a clearly defined corporate code for SOEs. Reportedly, high-level officials, including some who sit on SOE boards, influence government-owned enterprises to conduct business in ways not consistent with standard corporate governance. Not all SOEs pay taxes, or do so transparently, and SOE revenue is not always transparently reported or adequately reflected in national budgets.

8. Responsible Business Conduct

Liberian authorities have not clearly defined responsible business conduct (RBC). The Liberian Environmental Protection Agency (EPA), however, includes RBC requirements in policies such as the National Disaster Risk Reduction and Resilience Strategy (2020-2030), the National Climate Change Response Strategy (2018), and the National Adaptation Plan (2020-2030).   Foreign companies are encouraged, but not required, to publicly disclose their policies, procedures, and practices to highlight their RBC practices.

Some non-governmental organizations (NGOs), civil society organizations (CSOs), and workers organizations/unions promote or monitor foreign company RBC policies and practices. However, NGOs and CSOs monitoring or advocating for RBC do not conduct their activities in a structured and coordinated manner, nor do they tend to monitor locally owned companies.

Most Liberians are generally unaware of RBC standards.  Generally, the government expects foreign investors to offer social services to local communities and contribute to a government-controlled social development fund for the area in which the enterprise conducts its business. Some communities complain that these contributions to social development funds do not reach them.  The government frequently includes clauses in concession agreements that oblige investors to provide social services such as educational facilities, health care, and other services which other governments typically provide. Foreign investors have reported that some local communities expect benefits in addition to those outlined in formal concession agreements.

Liberia is a member of the Extractive Industries Transparency Initiative (EITI). The National Bureau of Concessions monitors and evaluates concession company compliance with concession agreements, but it does not design policies to promote and encourage RBC. Some NGOs report that several concessions have violated human or labor rights, including child labor and environmental pollution. Liberia has several private security companies, but the country is not a signatory to the Montreux Document on Private and Security Companies. Private security companies are regulated by the Ministry of Justice, and they perform a range of tasks such as providing security or surveillance to large businesses, international organizations, diplomatic missions, and some private homes.

9. Corruption

Liberia has laws against economic sabotage, mismanagement of funds, bribery, and other corruption-related acts, including conflicts of interest. However, Liberia suffers from corruption in both the public and private sectors. The government does not implement its laws effectively and consistently, and there have been numerous reports of corruption by public officials, including some in positions of responsibility for fighting corrupt practices. On December 9, 2021, the United States Treasury Department sanctioned Nimba County Senator Prince Yormie Johnson under the Global Magnitsky Act for personally enriching himself through pay-for-play funding schemes with government ministries and organizations. In 2021, Liberia ranked 136 out of 180 countries on Transparency International’s Corruption Perception Index . See http://www.transparency.org/research/cpi/overview .

The  Liberia Anti-Corruption Commission     (LACC) currently cannot directly prosecute corruption cases without first referring cases to the  Ministry of Justice     (MOJ) for prosecution. If the MOJ does not prosecute within 90 days, the LACC may then take those cases to court, although it has not exercised this right to date. The LACC continues to seek public support for the establishment of a specialized court to exclusively try corruption cases.

In October 2021 the Liberia Anti-Corruption Commission (LACC), with the Swedish International Development Cooperation Agency (SIDA) and the United Nations Development Program (UNDP), launched “The Anti-Corruption Innovation Initiative Project.” LACC will hire at least 15 officers around the country who will report on corruption to the LACC. LACC is also developing a national digital platform for the public to report corruption.

Foreign investors generally report that corruption is most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems.  Multinational firms often report paying fees not stipulated in investment agreements. Private companies do not have generally agreed and structured internal controls, ethics, or compliance programs to detect and prevent bribery of public officials. No laws explicitly protect NGOs that investigate corruption.

Liberia is signatory to the Economic Community of West African States (ECOWAS) Protocol on the Fight against Corruption, the African Union Convention on Preventing and Combating Corruption (AUCPCC), and the UN Convention against Corruption (UNCAC), but Liberia’s association with these conventions has done little to reduce rampant government corruption.

10. Political and Security Environment

President Weah’s inauguration in January 2018 marked the first peaceful transfer of power in Liberia from one democratically elected president to another since 1944. International and domestic observers have said midterm senatorial and special elections since then have been largely peaceful, although there were reported instances of vote tempering, election violence, intimidation, and harassment of female candidates. Liberia’s relatively free media landscape has led to vigorous pursuit of civil liberties, resulting in active, often acrimonious political debates, and organized, non-violent demonstrations. Liberia adopted a press freedom law in 2019, but there have been reports and instances of violence and harassment against the media and journalists. Numerous radio stations and newspapers distribute news throughout the country. The government has identified land disputes and high rates of youth and urban unemployment as potential threats to security, peace, and political stability.

The United Nations Mission in Liberia (UNMIL), a peacekeeping force, withdrew from Liberia in March 2018 and turned over responsibility for security to the government. Protests and demonstrations may occur with little warning. The Armed Forces of Liberia and law enforcement agencies, including the Liberia National Police (LNP) , Liberia Immigration Service (LIS) , and Liberia Drug Enforcement Agency (LDEA) , maintain security in the country. There are also many private security firms. Most security personnel are in the capital city Monrovia and other urban areas. The effectiveness of soldiers and police is limited by lack of money and poor infrastructure.

11. Labor Policies and Practices

With a literacy rate of just under 50 percent, much of the Liberian labor force is unskilled.  Most Liberians, particularly those in rural areas, lack basic vocational or computer skills.  Liberia has no reliable data on labor force statistics, such as unemployment rates.  Government workers comprise the majority of formally employed Liberians.

An estimated four out of five Liberian workers engage in “vulnerable” or “informal” employment. Many work in difficult and dangerous conditions that undermine their basic rights.  The Ministry of Labor (MOL) largely attributes high levels of vulnerable and informal employment to the private sector’s inability to create employment.  There is an acute shortage of specialized labor skills, particularly in medicine, information and communication technology, and science, technology, engineering, and mathematics (STEM). Migrant workers are employed throughout the country, particularly in service industries, artisanal diamond and gold mining, timber, and fisheries.

The predominantly female workers who sell in markets and on the streets face significant challenges, including a lack of access to credit and banking services, limited financial literacy and business training, few social protections or childcare options, harassment from citizens and local authorities, and poor sanitation within marketplaces. Through the Bureau of Small Business Administration (SBA) at the Ministry of Commerce and Industry, businesses owned by female informal workers are being formalized using a “one-stop shop” registration mechanism. Development partners are also designing programs aimed at empowering women businesses and entrepreneurs.

Liberia’s labor law, the 2015 Decent Work Act, gives preference to employing Liberian citizens, and most investment contracts require companies to employ a defined percentage of Liberians, including in top management positions. In 2021, the Ministry of Labor issued an order that restricts certain employment opportunities in commercial business establishments with branches in Monrovia and other parts of the country to Liberians. The order was the result of a memorandum of understanding between the Ministry of Labor and the Liberia Chamber of Commerce  calling for the creation of five hundred jobs for new college and university graduates.

Foreign companies often report difficulty finding local skilled labor. Child labor is a problem, particularly in extractive industries. The Decent Work Act guarantees freedom of association and gives employees the right to establish labor unions. Employees can become members of organizations of their own choosing without prior authorization. Workers, except for civil servants and employees of state-owned enterprises, are covered by the Act.  The Act allows workers’ unions to conduct activities without interference by employers. It also prohibits employers from discriminating against employees because of membership in or affiliation with a labor organization. Unions are independent from the government and political parties.  Employees, through their associations or unions, often demand and sometimes strike for better compensation. When company ownership changes, workers sometimes seek payment of obligations owed by previous owners or employers.

The Decent Work Act provides that labor organizations, including trade or employees’ associations, have the right to draw up constitutions and rules regarding electing representatives, organizing activities, and formulating programs.

There were no major labor union-related negotiations affecting workers or the labor market during 2021.

While the law prohibits anti-union discrimination and provides for the reinstatement of workers dismissed because of union activities, it allows for dismissal without cause provided the company pays statutory severance packages. The Decent Work Act sets out fundamental rights of workers and contains provisions on employment and termination of employment, minimum conditions of work, occupational safety and health, workers’ compensation, industrial relations, and employment agencies.  It also provides for periodic reviews of the labor market as well as adjustments in wages as the labor conditions dictate. The government does not waive labor laws to attract or retain investment, but the National Investment Commissions (NIC) provides investment incentives based on economic sectors and geographic areas (see Investment Incentives in section 4 above).

The MOL does not have an adequate or effective inspection system to identify and remedy labor violations and hold violators accountable. It lacks the capacity to effectively investigate and prosecute unfair labor practices, such as harassment or dismissal of union members or instances of forced labor, child labor, and human trafficking.

14. Contact for More Information

U.S. Commercial Service Contact Information
Email:  Monrovia-Commerce@state.gov 
Phone: (+231) 77-677-7000

Mauritania

Executive Summary

The deterioration of the global economy that resulted from the COVID-19 pandemic had a severe impact on the Mauritanian economy and reversed the previously bright economic outlook that led to the reduction of the country’s poverty rate from 10.9 percent in 2008 to 6.0 percent in 2014. The Mauritanian government response has been swift in mitigating the impact of the pandemic with the support from international partners by way of assistance funds and debt service suspensions. As a response to the pandemic’s economic impact, President Ghazouani launched the Economic Recovery Plan (ProPEP) in September 2020. ProPEP aims to boost the economy and improve the living conditions of vulnerable populations by reducing extreme poverty, expanding basic socio-economic infrastructures, organizing the information sector, and adopting a regulatory framework conducive to private sector development. As part of his annual speech to the parliament on January 29, Prime Minister Bilal presented a brighter picture of Mauritania’s economic outlook highlighting the government’s push to attract more investors. His presentation highlighted Mauritania’s natural resources which consist of deposits of copper, gypsum, uranium, and hydrocarbons including one of Africa’s largest offshores discoveries, the Greater Tortue Ahmeyim (GTA) natural gas field.

The 2022 budget reflects the Mauritanian government’s priorities as it attempts to revitalize the national economy and alleviate poverty, especially in the informal sector which was particularly impacted by COVID-19 and comprises 70 to 75 percent of the total economy. With its considerable natural resources, Mauritania places great importance on foreign direct investment (FDI). The continued global demand for iron-ore boded well for Mauritania throughout the pandemic as iron ore production is a main contributor to the country’s GDP. Real GDP is expected to grow from 2.8 percent in 2021 to 4.2 percent in 2022.

Mauritania has substantial renewable energy potential, particularly when it comes to solar, wind, and hydro power resources. The natural gas reserves at GTA are expected to enter production in 2023. The energy sector (hydrocarbons and renewable energy) offers opportunities for increased U.S. direct investment in Mauritania. On February 28, Kosmos Energy announced that it will increase investments in Mauritania and Senegal in 2022 by USD 300 million to accelerate development of the GTA gas field. According to Power Africa, the Government of Mauritania is working to expand its electricity supply and encourage investment in the renewable energy sector to stimulate the economy with the aim of reaching universal access by 2030. To do this, the GIRM will:

  • Increase new production capacity from local resources, mainly natural gas;
  • Increase the share of renewable energies in its total energy production, targeting 60 % by 2030;
  • Further develop the transmission network and interconnections with neighboring countries; and
  • Implement decentralized solutions in isolated areas.

Traditionally, U.S. investment in Mauritania has been primarily in the hydrocarbons and mining sectors. However, the Mauritanian government’s efforts to meet the challenges of food self-sufficiency provide an opportunity for U.S. agro-businesses to engage with Mauritania through supplies and equipment sales, as well as technical training. In 2019, Mauritania ranked as the United States’ 157th largest goods export market amounting to USD 91 million. Mauritania’s top export categories were machinery (USD 24 million), meat poultry (USD 15 million), vehicles (used and new) (USD 9 million), minerals fuels (USD 9 million).

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 140 of 180 http://www.transparency.org/research/cpi/overview 
Global Innovation Index 2021 N/A https://www.globalinnovationindex.org/analysis-indicator 
U.S.  FDI in partner country ($M USD, historical stock positions) 2019 USD 96 https://apps.bea.gov/international/factsheet/  
World Bank GNI per capita 2020 USD 1,670 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

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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