Senegal’s struggle to attract foreign investment despite strong economic potential
After four consecutive years of robust performance averaging three billion dollars annually, foreign direct investments (FDI) in Senegal plummeted to just 37 million dollars in 2025, according to the United Nations Conference on Trade and Development. Is this the conclusion of a massive investment cycle, or a growing wariness toward the government’s financial policies?
While the sharp decline in foreign investments is largely cyclical—with major oil and gas projects like Sangomar and Grand Tortue driving significant financial inflows in recent years—the bulk of these investments has now transitioned into production phases.
Moubarak Lo, former economic advisor to the Prime Minister and now an independent consultant, believes Senegal could have attracted far more than the 37 million dollars recorded in 2025. He states: «Structurally, Senegal has the capacity to sustain three to five billion dollars in annual investments. However, this requires proactive economic promotion. The country lacks a dedicated international investment promotion network, unlike many of its peers. While roadshows are conducted, they are insufficient. A passive approach will not suffice; Senegal must adopt a proactive stance. We excel in attracting portfolio investments in government securities or bonds, but the same effort is not applied to direct investments—this shift in strategy is urgently needed.»
Lack of clarity fuels investor uncertainty
Despite Senegal’s staggering debt—estimated at 132% of GDP by the end of 2024 according to the IMF—this figure does not inherently deter private investors, the expert argues. Justin Maria, Director of Access Bank in France, concurs, pointing to France as an example, where private investors continue to flock despite a public debt exceeding 3.5 trillion euros.
Maria emphasizes that what truly unsettles investors is the absence of clear visibility: «Senegal has become a high-risk country—not necessarily in terms of long-term fundamentals, as no one possesses a crystal ball, but in the short term. There is no transparency regarding public finances or liquidity, and this opacity is what stifles investor confidence.»
«We can turn the tide by next year»
Moubarak Lo dismisses the notion of Senegal being a high-risk destination and insists the country possesses the tools to quickly restore its appeal. He acknowledges that while the IMF suspended its program at the end of 2024, ongoing discussions with Dakar continue.
«Right now, Senegal has around thirty major projects on the table. The strategy? Identify the five or six key global companies for each project and persuade one of them to invest in the country. We can reverse this trend as early as this year, or more confidently by 2027,» he asserts.
In contrast to Senegal’s challenges, other nations saw a rise in direct investments last year. Guinea, for instance, topped the list with over 7.7 billion dollars in inflows in 2025, as reported by the UNCTAD.
