June 12, 2021

Senegal lagging behind

While it is still presented as the least developed continent in the world, Africa has still not succeeded in initiating a transformation of its economy from a predominance of primary to secondary education. Senegal has also fallen into this trap.

While it was the most industrialized French-speaking African country in the first years of independence, the Teranga country failed to develop manufactures capable of absorbing unemployment and ending the trade balance deficit. . it continues to live on transfers from Senegalese residing abroad, which amount to some US $ 2.2 billion, according to the latest statistics available.

Senegal’s Chemical Industry

Thus, in Senegal, the tertiary sector already represents 59% of the GDP, even though it contributes very little to solving unemployment. Indeed, agriculture which represents only 17% of the GDP, occupies two-thirds (2/3) of the population.

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At the secondary level, alongside the phosphate industry with the Chemical Industries of Senegal, a few large agro-food processing units and in construction materials represent the bulk of the sector. Senegal is very proud of the share of industry in its GDP, since it represents 23.50% of the GDP, or double the average for the continent. But, by pushing the analysis, it does not take long to realize the country’s weaknesses in this area. Indeed, industry employs only 18% of the working population. It is therefore not in a position to contribute to inclusive growth. Especially since the capital is almost entirely held by foreign investors. Most Senegalese who can access modern sources of finance prefer to invest in trade.

Thus, the production of fertilizers and phosphoric acid is in the hands of the Indorama company of businessman Sri Prakash Lohia. Currently, Indorama owns 78% of the capital of ICS (Chemical Industries of Senegal), against only 15% for the State. In the building materials sector, in addition to the Nigerian group DangoteCement which has the third cement plant installed in the country. While Sococim Industries is also 100% owned by the Vicat group through several of its subsidiaries. There remains Ciments du Sahel, the only company in the sector whose majority shareholder is a Senegalese of Lebanese origin and native of Rufisque, in this case LatfallahLayousse. The same can be said of the Senegalese Sugar Company (CSS) which belongs to the Frenchman Claude Mimran.

Certainly, currently Senegalese industrialists are trying to take the lead. This is notably the case with BabacarNgom, the majority shareholder of SEDIMA, which has established itself in the flour mill, the production of animal and poultry feed and the poultry industry. SerigneMboup of the CCBM Group by joining forces with the Korean Samsung has set up an assembly unit for household appliances of this brand.

It must be said that Senegalese public industries tend to change hands to be bought by foreign capital, this is because they are confronted with problems of governance, union movements, but also political influences. And such situations do not necessarily get better when companies are taken over, which means that we are witnessing a veritable waltz of shareholders, as is the case with Sonacas, which has changed hands several times, or even ICS that went from the state to Indian investors, before the Indonesians came to the rescue.

For example, concerning Sonacos, which became Suneor after its takeover by the Advens group in 2005, it experienced financial difficulties which led it to be bought by the State to save an entire sector with considerable political weight. Indeed, this cruet has always been essential because hundreds of thousands of farmers sell it their harvest of peanuts. The State will pass the hot potato on to Ibrahim BiboBourgi who will soon hand over the company to the State two years later.

This year, we have heard several times the Senegalese authorities complain of not finding outlets for groundnut production, which has reached record levels. This was the case, during the visit of Turkish President Erdogan, as well as a delegation of Chinese businessman that President MackySall himself was forced to beg to buy the seeds.

Nonetheless, the energy sub-sector which has long been the traditional Achilles heel of the Senegalese economy is poised to resolve its difficulties. Indeed, Senegal has been faced with both high energy prices, particularly electricity and recurring cuts. As a result, economic activity is often affected by energy-related issues, although there is a marked improvement. Indeed, Sénélec, which has a monopoly on electricity distribution, seems to have left the red zone. Last year she was even a beneficiary. And in terms of investment, it has made giant strides, in particular with the upgrading of old power plants and the commissioning of others such as the TaibaNdiaye plant (87 MW) and the extension of the Cap des Biches plant. (50 MW). The rehabilitation of SENELEC’s production capacities must continue through the commissioning of the Sendou 1 coal-fired power station not far from Dakar and AfricaEnergy in Mboro, 120 km from the capital, with respective capacities of 125 MW and 270 MW.

Given the delays taken, the catching-up effort resulting from this growth may however be insufficient to be able to further stimulate the development of other industrial sectors. The energy constraint weighs heavily on growth, even today.

It must be said that the policies pursued by successive governments do not exploit the full potential of the country. Today, for example, with a minimum wage of 52,500 CFA francs and 62% of “15-60 year olds” not working, Senegal could be one of the most competitive countries in all industries with high labor potential. ‘artwork. However, to date, no effort has been made to develop the clothing industry, the automotive subcontracting industry, electronics or even IT offshoring in order to create value. Currently, other countries are on the way to take up the challenge, such as Ethiopia, Kenya, Rwanda and even Côte d’Ivoire and Ghana.