Senegal’s long-term political stability, combined with the government’s strong commitment in recent years towards sustainably raising the nation’s growth potential, positions it as an attractive market for private equity investment on the continent.
Since the inauguration of the Plan for an Emerging Senegal (PES) championed by President Macky Sall in 2014, Senegal has experienced real GDP growth averaging over 6% annually between 2014 and 2019, and its economy is expected to rebound to 5.1% by the close of 2021 and reach 6% in 2022.
In December 2019, Senegal became the second African country to pass a Startup Act, further illustrating the government’s commitment to stimulating private investment in the country. The Act, which is part of the “Digital Senegal 2025” strategy, aims to create a better environment for innovation and entrepreneurship by providing tax breaks and reducing the legal complexities of business regulation for startups and small businesses.
This stride towards digitisation also aims to create 35,000 direct jobs by 2025 and raise the contribution of digital technologies to the GDP by 10%. These regulatory developments have driven Senegal’s steady rise on the World Bank’s Doing Business Index, rising from 153 in 2016 to its current rank of 123 in 2020.
As one of Africa’s fastest-growing economies, Senegal is an attractive market for private equity and venture capital investment in Francophone West Africa. The formation of a state-backed PE fund valued at over US$100 million in 2019 - the first of its size and kind on the continent - recognises Senegal’s potential as an investment market.