“Francophone Africa is increasingly being viewed as a dynamic and exciting region to do business in… Despite diversity, these countries have all experienced significant levels of growth over the past decade,” said professional services firm Ernst & Young in a recent brief.
French-speaking Africa is an informal grouping of countries based on common language and colonial heritage. One of the countries in this region that investors could consider is Senegal, located in West Africa with a population of about 13 million.
According to Abdoulaye Thiam, manager of DHL Express in Senegal, the country’s mining industry is currently the fastest growing sector. Senegal has rich gold, iron and uranium deposits. In the coming years, Senegal will also be in a position to produce more than 7% of the world’s zircon output.
Thiam is, however, excited by the potential of agriculture in the country. “If you told me you have five million euros to invest, I would say ‘come let’s go to the north of the country and put it in agriculture’.”
Attracting foreign investment
France has traditionally been a major player in Francophone African markets. Thiam says that French companies are, however, mostly active in industries where France itself is strong. Outside these sectors there are companies from across the world. For instance, in the mining sector there is strong participation from South Africa and Australia.
According to Thiam, Senegal is also seeing interest from Middle Eastern companies that are investing in infrastructure.
Nigerian billionaire Aliko Dangote recently invested in a cement plant in Senegal. According to the company, Senegal has a high demand for cement in order to meet housing needs. “The country has all the raw materials to produce enough cement and export to other continents.”
Although French is the official language in Senegal, Thiam says that English-speaking business people shouldn’t be too concerned about getting lost in translation. He explains that most Senegalese people attended basic English classes in school. Many business leaders and government officials are proficient in English, and those that aren’t will have a close associate that is.
Thiam says that companies also need to look beyond Dakar, Senegal’s capital and commercial hub. “Dakar is a nice place to stay, but you also need to go inland and see what’s happening,” he said.
Dealing with the challenges
Doing business in Senegal is, however, not without its challenges. Thiam says that one of the hurdles companies can expect is finding good human resources. Many highly-educated Senegalese studied abroad, with only a small percentage returning to the country. He is, nevertheless, optimistic that better graduates are currently being produced by newly established high schools and universities.
He explains that the cost of providing accommodation for expat workers in Dakar is likely to be steep. In last year’s Mercer’s Cost of Living survey, Dakar was ranked as the 50th most expensive place for expatriates to live in the world. The survey compares the cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
According to Thiam, business in Senegal slowed down in 2012 due to political turmoil. “Senegal went through a tough year in 2012. It was the year of the elections and there were a lot of protests. Business was very slow. A new president has been elected. This year has been off to a better start and the Ministry of Finance is announcing that the national debt is now completely paid, which is good news for business.”
Despite these challenges, Thiam believes that Francophone West Africa, and Senegal specifically, is making steady progress. “Francophone Africa is moving, although not all countries are growing at the same speed because of political issues. I’m really confident on the future of Senegal. People are more educated now, and they have better skills. People are now more focused on development in this part of the world.”
Of all the things that Senegal has got going for it, Thiam says the best thing about the country is the hospitality of the people. Senegal has recently been ranked as the sixth friendliest country in the world, behind Austria (fifth) and ahead of Portugal (seventh).
“If you arrive in Senegal, you will be welcomed by the policemen, by the taxi drivers, by the people on the road, at the hotel. You will see that there is something different here in this country – which we call teranga (meaning ‘hospitality’ in the local Wolof language). This is really in the DNA of the Senegalese people.”