VZCZCXRO8618
PP RUEHMA RUEHPA
DE RUEHDK #2473/01 2861238
ZNR UUUUU ZZH
P 131238Z OCT 06
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 6564
INFO RUEHZK/ECOWAS COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 03 DAKAR 002473 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/EPS - JANET POTASH, DRL/AE, G/TIP AND AF/W 
DEPT PLEASE PASS USTR FOR CONNIE HAMILTON 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PHUM AGOA SG
SUBJECT: AGOA ELIGIBILITY REVIEW - SENEGAL 
 
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 
system. 
 
 
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 
¶2007. 
-- 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 
state. 
-- 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 
Ministers. 
-- 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 
issues. 
 
¶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 
enterprise. 
-- 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 
 
DAKAR 00002473  003 OF 003 
 
 
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 
problematic. 
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 
unions. 
-- 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 
prostitution. 
 
¶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 
None. 
 
Jackson