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Senegal: Horizon Scanning 2022

Africa Connected: Issue 7

By Mouhamed Kebe

What is the single biggest legislative change on the horizon in the next 18 months?

Senegal’s parliament passed a new Public Private Partnership (PPP) Act on 22 February 2021. The law and its implementing decree are intended to modernise the country’s PPP regime to strengthen the interests of state and local actors, paving the way for an overhaul of the laws governing PPPs.

What impact, in terms of foreign investment (or doing business), will this legislative change have?

The PPP Act will apply to a wide range of contract types including partnership contracts with public payment and contracts with payment by users. The PPP Act expands the list of sectors that are eligible to use PPPs and, in so doing, increases the number of investors that may be attracted to this contract mechanism.

In addition to expanding the scope of PPPs, the PPP Act also overhauls the existing institutional framework pertaining to public-private agreements. First, the law extends the competence of Senegal’s existing Procurement Bureau, allowing it to oversee the use of PPP contracts. This body will be responsible for providing advisory opinions as to whether PPP contracts should be executed. The law also establishes an inter-ministerial council that will serve as the regulatory and governing body of the entire Senegalese PPP regime. The Act also modernises the dispute settlement regime pertaining to PPPs, requiring any dispute arising with respect to such agreements to be referred to the dispute settlement body of the Procurement Bureau before it can be brought to courts or arbitration.

By establishing a more structured and purposeful system, Senegal hopes to demonstrate to foreign and local investors that it is ready to expand its public partnerships with private entities. The PPP Act, along with the implementing decree, will have an important impact in terms of foreign investment and doing business in the country.

In which sectors do you expect to see increased investment and / or financial movement in the next 18 months?

The oil and gas and infrastructure sectors (particularly roads, railways and ports) are attracting the most investment and will continue to do so in the next 18 months. The government’s “Emerging Plan,” which presents its priorities for developing the country, places infrastructure at the forefront. This includes plans to develop energy infrastructure. The projects envisioned in the Emerging Plan are now being implemented and will require substantial investment to be successfully concluded.

What is the most relevant regional or pan-African economic trend you expect to see in the next 18 months?

Developments with the African Continental Free Trade Area (AfCFTA) agreement will most certainly be the most important to watch in the upcoming 18 months. This agreement has the potential to have a monumental impact across the continent. However, the next 18 months will be of utmost importance to see how the agreement comes to fruition and how receptive African nations and foreign investors are to it.

In terms of the legal services market, what growth are you seeing on the horizon in the next 18 months?

We expect Senegal to have steady growth for the next 18 months. Several projects that were put on standby because of the pandemic are now resuming. These projects and the complexities involved with restarting economic activity will require legal support. The legal services market is already responding to this reality, with local firms making a concerted effort to develop their capacity to respond to the needs of international clients. At the same time, international law firms are establishing themselves on the continent, either through alliances with local firms or with their own subsidiaries.

In terms of legal services, in what areas are your clients requesting more assistance in?

Our clients are requesting assistance in energy and natural resources, labour, corporate, tax, as well as infrastructure and projects.