1

2

Executive Summary This market study, the first study ever conducted by the Mauritius Freeport Authority (MFA) in

Western Africa, provides a broad overview of the trade potentials that exist in Senegal. Geographically

better located than other West African countries and at the crossroads of the main maritime trade

routes between USA, Europe and the south-west African continent, Senegal is rapidly asserting itself

as a main transit point for goods destined for the south-west region. With its capital city of Dakar

located on the westernmost point of Africa, Senegal is a gateway to the continent. The economy has an

important consumer base of roughly 11 million inhabitants and a market potential in excess of 60

million inhabitants due to its membership to the West African Economic and Monetary Union

(UEMOA).

With relatively good infrastructural facilities in terms of port, airport, railway link, and

telecommunication system combined with a strong services sector including a dynamic banking

system and an effective regulatory and legal framework, Senegal has a major comparative advantage

compared to other countries in the West African sub region for investment. Although Senegals

domestic market is relatively small, its increasing openness to foreign trade and market forces means

that opportunities for Freeport companies are increasing. Sectors offering potential for Freeport

operators and business operators are in information technology, packaged foods, textile goods &

accessories, used clothing, electrical and electronic goods and cosmetics. It is recognised that the

Senegalese business operators are very aggressive traders and very business-oriented. Cross-border

trade is largely dominated by exports of intermediary products to Mali.

The main findings of this market study on Senegal are as follows:

Senegalese traders are very business-oriented and very aggressive on the international front

sourcing their goods from major hub centres such as Dubai and Hong Kong,

Risk assessment of the country reveals that Senegal has a good legal and banking system to

safeguard interests of business operators,

Despite a high domestic unemployment rate averaging 45% and an overall dependence on

France for trade, Senegal remains by far the ideal country for market penetration to the West

African and Sub West African countries.

Main sourcing for intermediary goods include Europe with growing imports from the Far East

(Hong Kong, Thailand) and in the Middle East(Dubai),

Senegalese business operators are very keen to conduct business with Mauritian traders with

co-sharing of marketing costs,

3

Excellent business opportunities and prospects for Freeport operators exist in the Textile, Used

Garments and Pharmaceutical markets,

An important informal market exists in Senegal and a trading association -UNACOIS

regrouping the main informal market players assist these traders to structure their operations.

Major opportunities for trade with Freeport traders exist in this informal sector,

Direct flight connection through Johannesburg by South African Airways will be available as

from beginning of November 2002 with two direct flights between Johannesburg and Dakar

weekly,

Senegal has daily sailings to Europe, weekly sailings to the USA and hub ports in Italy, Spain

and France are used for goods destined from and to the Middle East, Asia and the Far East,

Maritime freight costs are more expensive by an average 8-15% for goods destined to Senegal

via Mauritius compared to direct shipment from the principal sourcing Markets in Asia

China, Singapore. However, additional shipping connections through MSC and Maersk lines

serving Dakar from Cape Town will see a reduction in freight costs.

Opportunities exist for our Freeport operators to enter into alliances and joint ventures with

business operators in Senegal to tap into the vast West African market. Senegalese business

operators interviewed are keen to enter into such agreements and to explore new sources of

supply for their products.

Trade opportunities though direct shipment to Dakar from sourcing countries present the most

cost effective option.

All rights reserved. No part of this report may be reproduced in any forms or by any means without written consent from the Mauritius Freeport

Authority.

Mauritius Freeport Authority October 2002.

4

CHAPTER 1

GENERAL OVERVIEW AND INTRODUCTION

1 GENERAL BACKGROUND

To take advantage of trade opportunities in the region, MFA has organized a number of market surveys

in the past in Eastern and Southern Africa, namely in Kenya, Tanzania, Malawi, Zambia, Zimbabwe

and Uganda. Market studies and surveys are essential tools that enable the Authority to gauge the trade

potentials that exist in regional and international markets by providing key business information to our

operators. The market surveys have, in the past, aimed at providing specific market and trade-related

information to Freeport licensees and identifying key trade areas, products and business segments

where trade potentials exist. The regional market, however, poses a number of limitations and

constraints. The recent events in Madagascar, which affected Freeport export turnover by more than

60% during the months of February to May 2002, show the fragility and volatility of our traditional

export market base.

Conscious of the limitations and constraints in the region, MFA has set a key objective in its Strategic

Plan 2002-2005 of identifying new business opportunities for the Freeport. A market study in West

African countries forms part of our overall long term strategy of exploring and developing new

markets and fits within the mandate of diversifying our business and target market portfolio. In West

Africa, Senegal is recognised as the most politically and economically stable country. Its emergence as

a natural gateway and hub for all of the sub-West African region justifies the need for our Freeport

operators, in the first instance, to explore business opportunities with trade partners in this country,

and secondly to tap into the vast West African market base. The private sector is already capitalizing

on the growing opportunities that exist in this part of the world, especially with the advent of AGOA I

and AGOA II. Compagnie Mauricienne de Textile (CMT) is already investing in Senegal with

growing interest shown by other private operators such as Rogers, Ajanta Pharma and a number of

active Freeport licensees. Trade flows with Senegal by Mauritian operators is still insignificant but

there is a strong willingness for business operators to tap into the vast West African market.

1.1 Scope

This market study goes beyond the scope of a study for the Freeport sector as no study has been carried

out so far for the business community in Mauritius in this part of the region. It aims at providing wide

encompassing trade and business related information to the potential investor by identifying key

investment and trade opportunities in this part of the region.

5

It also aims at studying and analyzing the total logistics and associated costs involved in the shipment

of goods from different regions to West Africa as well as the best trade route that can be used to enable

Mauritian products to be exported competitively from Mauritius to West Africa. The study initially

targeted two countries, namely Senegal and Ivory Coast. However, following the military coup attempt

in Ivory Coast on the 19th September 2002, the study focuses only on the trade potential in Senegal and

it explores the possibility for Senegal to become the natural gateway of our business operators for

export of goods to other West African countries, namely Mali, Guinea Bissau, Mauritania, Ivory

Coast. It may also become a spring board for exports destined for USA in the context of the

opportunities under the AGOA.

1.2 Structure of report

The market study is split in two parts. The first section provides general information comprising the

country profile, economic, political, investment and trade climate. Basic information on the Senegalese

economy is given in chapter one. Macroeconomic analysis of the main economic sectors of the

Senegalese economy is given in chapter two with main economic indicators, investment incentives,

imports, exports and trade flows.

The second section provides essential trade and business information on key business sectors where

opportunities for trading by Freeport licensees exist, namely in the textile, pharmaceutical, chemical,

fish, building materials, plastics, computers, electrical and general goods sectors of activity. An

overview of trade sector, key business players and contact details, sources of imports, business

opportunities for each of the above sectors are presented in tabular form. Chapter five considers the

main import regulations, tariffs and duties imposed with a comparative analysis of freight costs for

direct shipment to Senegal and transhipment via Mauritius. The infrastructural facilities and the

telecommunications network are also covered in this chapter.

1.3 Objectives

The main objectives of the study are set out