In a report published on April 20, The African Private Equity and Venture Capital Association (AVCA) published a summary of the economic climate in Senegal. Focusing on private investments, the document describes the country's standpoint on the African map.
Named a gateway to West African markets, Senegal is home to numerous international banks and institutions serving the whole of Francophone West Africa. It partakes in initiatives such as AfCFTA - African Continental Free Trade Area, which aims to create a single market for goods, services, and movement of persons on the whole continent. The country is also a member of AGOA, a trade program meant to establish stronger commercial ties between the United States and sub-Saharan Africa. The Senegal officials also plan to create an Economic Partnership Agreement with the European Union.
Sustaining an average GDP growth rate of 6.5% between 2014 and 2019, Senegal quickly recovered from the pandemic, having a real GDP growth accelerated to 5.5% in 2022 according to the IMF. The index owes its increase, i.e., to capital deals done in the country.
source: AVCA
According to the report, Senegal has been experiencing a rapid increase in infrastructural investments for the last six years – 96% of total private deal value went into infrastructure. Ports, high-speed railways, and airports are just the tip of the iceberg (described in detail here). The country's rapid development of private investments results from numerous factors: well-balanced democracy, a strong military active when needed, and general peace so rare in the region.
It is not only a sheer number of investments that counts in this case - the other factors speak volumes about the country's situation. The AVCA report notes that, e.g., a quarter of all startups in Senegal were female-founded, and 20% of the deals reported in Senegal were in companies led by women.
2023 is forecasted to bring about an even higher GDP growth (9.2% according to Trading Economics), and the number of projects is ever-increasing. It seems that the investors are racing to seize the opportunity.
Comments