Cablegate: Agoa Eligibility Review - Senegal

Published: Fri 13 Oct 2006 12:38 PM
DE RUEHDK #2473/01 2861238
P 131238Z OCT 06
E.O. 12958: N/A
REF: STATE 163056
Embassy Dakar is pleased to provide information for Senegal's AGOA
eligibility review. The following information is based on the
template provided and has also been provided via e-mail to AF/EPS.
Country: SENEGAL
Current AGOA Status: Eligible
Country Background Summary: Senegal has an estimated population of
11.7 million. 2005 GNI was $8.2 billion; GNI per capita was
$710.0. Senegal had GDP growth of 6.2 percent in 2005 following a
similar rate in 2004. Projections for 2006 indicate significantly
lower growth, due in part to high global fuel prices, local energy
distribution problems, an underperforming fisheries sector, and
major congestion in Dakar. During 2005, annual inflation was 2.5
percent, and government debt manageable. Senegal reached its
Heavily Indebted Poor Countries (HIPC) Completion Point in April
2004, triggering debt rescheduling by most bilateral and
multilateral donors, with a potential for a total of $488 million
(net present value) in debt stock reduction. HIPC criteria for
Senegal include enhanced governmental spending on primary education,
improved health care and sounder governmental finances. Senegal
enjoys the benefits of long-term democratic stability, including a
free press and active opposition. President Abdoulaye Wade won the
presidency in free and peaceful elections in 2000. Senegal has been
a vocal supporter of U.S. anti-terrorist actions, and does not
engage in activities that undermine U.S. national security or
foreign policy interests. Senegal does not engage in gross
violations of internationally recognized human rights. Senegal
faces severe challenges in providing adequate education and social
services for its growing population.
Comments on Eligibility Requirements
I. Market-based Economy
A. Major Strengths Identified
-- Since 1994, the Government has implemented a series of economic
policy reforms to enhance competitiveness by dismantling monopolies,
liberalizing markets and privatizing state-owned industries.
-- Senegal's investment code provides for equitable treatment of
foreign and local firms. Free transfer of capital and profits is
guaranteed. The Government is pursuing additional reforms to ensure
transparency and a level playing field in procurements and
infrastructure projects under competitive bidding procedures.
-- Foreign private entities are permitted to establish and own
businesses and to engage in most forms of remunerative activity.
There is no restriction on 100 percent ownership of businesses by
foreign investors in most sectors. Senegal has attempted to attract
foreign investment with a liberal investment code.
-- The Investment Promotion Agency (APIX) works to improve service
to investors, including offering a single window (or one-stop shop)
for government services. This agency is becoming more effective
over time. APIX has completed an action plan for simplifying
administrative procedures for private investment, based on World
Bank recommendations. APIX administers a Presidential Committee on
Private Investment, which identifies problem areas and suggests
regulatory fixes.
-- Senegal is a member of WIPO and of the Bern Copyright Convention,
and is working to update its IPR code. The Government is
cooperating with Microsoft on a software legitimization campaign.
In 2006, the USG sponsored a regional workshop in Dakar to highlight
the growing problem of counterfeit pharmaceuticals.
-- The Government lowered the corporate tax rate to 25 percent
effective January 2006.
B. Major Issues/Problems Identified
-- In 2006, Senegal's energy delivery system was severely disrupted,
with routine, short-lived power interruptions throughout the county.
The promised privatization of Senelec, the electricity parastatal,
is not on track, and the firm had difficulty remaining current on
payments to power generation companies. The county's sole refinery
ceased operations, pending its re-nationalization and the
formulation of a new operational plan.
-- Additional judicial reforms are essential for Senegal to increase
private investment.
The number of days it takes to start a business in Senegal increased
in 2006 from 57 to 58.
In 2005, the Government sold the national peanut-processing
parastatal to a consortium of private investors, but the groundnut
sector remains stagnant.
-- Senegal's fishing agreement with the European Union ended in
April 2006 and a renegotiated agreement has not yet been signed.
The local fisheries sector is seriously depressed.
-- The Government does not plan to institute a direct pass-through
of the total rise in fuel input cost to consumers.
-- Senegal needs to address serious shortcomings in its pension
DAKAR 00002473 002 OF 003
II. Political Reforms/Rule of Law/Anti-Corruption
A. Major Strengths Identified
-- Senegal has a pluralistic democratic political system.
Opposition political parties operate freely. Freedom of expression
is protected.
-- Senegal has a diverse and lively press, although it practices
self-censorship on some sensitive political and security issues.
-- The legislative elections of April 2001 were free and fair, and
resulted in the first parliamentary majority for the Senegalese
opposition; legislative and local elections held since October 2001
were widely regarded as free and fair.
-- Presidential and legislative elections are scheduled for February
-- The armed forces are generally professional and disciplined.
They traditionally remain aloof from politics and are firmly under
civilian control.
-- Audits of state-owned companies and agencies, begun in 2000 after
President Wade's election, have resulted in judicial proceedings
against government officials. The President raised the judges'
salaries after the latter protested in 2002 and 2005 over poor pay
and working conditions.
-- Freedom of religion is guaranteed in Senegal, which is a secular
-- The Government supports an alternative business dispute
resolution center.
-- The Government has enacted legal reforms to provide greater
protection for women and children.
B. Major Issues/Problems Identified
-- The judiciary is subject to executive influence and pressure.
Lengthy pre-trial detention is a problem. The Government of Senegal
has considered reviving criminal charges against former Prime
Minister Idrissa Seck, provisionally released earlier in the year
after being charged with corruption-related crimes.
-- Credible allegations of corruption have been made concerning
government procurement, dispute settlement, regulatory and
enforcement agencies. President Wade has himself admitted to
possible public corruption within his government, including
allegations against the former Prime Minister and former and serving
-- Corruption can range from large-scale customs fraud, including
false invoice declarations, to bribe taking by inspectors and public
safety officials. Corruption in the judiciary is also a problem.
III. Poverty Reduction
A. Major Strengths Identified
-- The Government continues to allocate national budgetary outlays
according to its former Poverty Reduction Strategy Paper (PRSP). It
is developing a new Strategy for Accelerated Economic Growth,
calling for export-driven growth and additional emphasis on
expanding agricultural output.
-- A World Bank program provides capacity-building and training for
Senegal's judiciary. The U.S. Department of the Treasury also
provided training in anti-money laundering and terrorism finance
B. Major Issues/Problems Identified
-- Senegal's proposed "Return to Agriculture Program" to discourage
illegal migration and increase rural incomes remains ineffective,
and agricultural productivity continues to fall, relative to other
African countries.
IV. Workers' Rights/Child Labor/Human Rights
A. Major Strengths Identified
-- The Government generally respects the rights of its citizens.
The Government rejected calls from some intellectuals to introduce
Shari'a and reaffirmed the separation of state and religion.
-- The Government has enacted laws increasing the legal protection
of women and children, and ratified ILO Convention 182 on the worst
forms of child labor in 2000.
-- The labor code recognizes the right of workers to form and join
trade unions, and any group of workers in a similar trade or the
same profession may create a union. Similarly the right to strike
is recognized but restricted. The new Constitution, adopted in
2001, undermines the right to strike by stipulating that a strike
must not infringe upon the freedom to work or jeopardize the
-- Senegal has recently passed laws to protect children from
pedophilia, pornography, prostitution and trafficking. The Minister
of Women and Family was recognized in 2005 as a "Trafficking Hero"
for her dedication to fighting trafficking in children and the
leader of a Senegalese NGO was a Trafficking Hero in 2006. In
October 2006, President Wade and the World Bank organized a
Presidential Council on street children.
-- The Government has taken significant steps to curtail human
rights abuses by the military and gendarmerie.
Most private and public sector workers in the formal economy are
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organized and bargain collectively.
-- Senegal has remained a stable democracy since its independence.
Good governance and respect for human rights are policy priorities.
B. Major Issues/Problems Identified
-- Prison conditions and lengthy pre-trial detention continue to be
The Government has taken major steps to eliminate human rights
abuses by the military in Casamance counter-insurgency operations.
The conflict today includes petty banditry.
-- The Government must approve the existence of a trade union. The
Government has the authority to dissolve and disband trade unions by
administrative authority, and broad powers to requisition workers
from private enterprises and public services. The ILO has raised
questions regarding Senegal's full adherence to worker rights,
particularly with regards to the right of association.
-- While there are legal regulations concerning workplace safety,
government officials often do not enforce them. The ILO has been
critical of the process by which the Government registers trade
-- Police at times tortured and beat suspects during questioning and
arbitrarily arrested and detained persons, including one report of
torture in 2006. This is not a government policy but an act of
individual police officers acting on their own.
-- Anti-union sentiment within government is strong.
-- Many children live on the streets and work as beggars, vendors,
or prostitutes, some under force or duress. Girls as young as eight
work up to 12 hours per day, seven days per week as domestics.
-- The law prohibits the sale of persons, abduction, and hostage
taking; there are reports of women and girls trafficked for work or
V. International Terrorism/U.S. National Security
A. Major Strengths Identified
-- Senegal participates in UN peacekeeping operations in the
Democratic Republic of the Congo, Cote d'Ivoire, Liberia and Sudan.
Senegal also has civilian police and gendarmes in Bosnia-Herzegovina
and Haiti.
-- Senegal has been a leading African supporter for the U.S.-led
global coalition against terrorism. President Wade proposed an
African pact against terrorism and, as the leader of a country that
is 95 percent Muslim, has taken a strong pro-U.S./anti-terrorist
position. Senegalese Islam is generally moderate.
B. Major Issues/Problems Identified
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