VZCZCXRO2531
PP RUEHPA
DE RUEHDK #0604/01 0671844
ZNR UUUUU ZZH
P 081844Z MAR 06
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 4513
INFO RUEHRC/USDA FAS WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 03 DAKAR 000604 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/EPS, EB/TPP/BTA, DRL/PHD, INR/AA AND AF/W 
STATE PLS PASS USTR 
AID/W FOR AFR/WA 
TREASURY FOR SONIA RENANDO 
USDOC FOR 4510/OA/PMICHELINI, AROBINSON-MORGAN/KBOYD 
USDOC FOR 3131/CS/ANESA/OIO/BORR/GLITMAN/MSTAUNTON 
ACCRA FOR USAID/WARP 
PARIS FOR POL - D'ELIA 
PARIS OPLS PASS USOECD 
 
E.O. 12958: N/A 
TAGS: ETRD EAGR ECON PHUM SG
SUBJECT: SENEGAL: INPUT FOR 2006 PRESIDENT'S REPORT ON 
AGOA 
 
REF: STATE 026707 
 
¶1.  Embassy Dakar's submission for the 2006 President's 
Report on the African Growth and Opportunity Act (AGOA) 
for Senegal follows. 
 
MARKET ECONOMY /ECONOMIC REFORM/TRADE LIBERALIZATION 
--------------------------------------------- ------- 
¶2.  Senegal's market-based economy is heavily dependent on 
agriculture, with over 60 percent of the population 
depending on it.  Principal foreign earnings derive from 
remittances, fish, phosphates, tourism, peanuts and 
services.  The economy grew by 5.1 percent in 2005. 
During the year, Senegal finalized the privatization of 
SONACOS, the national peanut-processing parastatal. 
Privatization of the electricity parastatal, Senelec, 
remains halted pending improvements to its balance sheet. 
The GOS is in negotiations with an Indian syndicate and 
with Chinese investors on divesting the government's 
majority interest in Industries Chimiques du Senegal 
(ICS), a phosphate processor and the country's largest 
industrial concern. 
 
¶3.  Senegal developed an Accelerated Growth (AG) Strategy 
aimed at achieving at least a 7.5 percent growth rate for 
2006-2015.  Coordinated by Senegal's Investment Promotion 
Agency (APIX), the AG strategy encourages public-private 
partnerships in the agro-industry, fishery, tourism, 
textile and information technology sectors.  In 2005, the 
GOS also established Senegal's Agency for Export Promotion 
ASEPEX); however, as of March 2006, it is not yet fully 
operational.  Foreign investors still face an unstable 
regulatory environment and weak commercial law enforcement 
due to a lack of resources and specialized judicial 
expertise. 
 
¶4.  In July 2005, Dakar hosted the Fourth AGOA Forum to 
promote diversified and expanded trade between Africa and 
the U.S.  Public and private sector representatives of the 
37 AGOA eligible countries attended the three-day Forum. 
Discussion topics included U.S. market access for high- 
value specialty products, energy development and oil 
exploration in Sub-Saharan Africa and AGOA customs 
requirements. 
 
¶5.  The Animal, Plant and Health Inspection Service 
(APHIS) continued to assist West Africa's agriculturalists 
to address Sanitary and Phyto-Sanitary (SPS) issues and to 
organize regional harmonization of SPS measures.  At the 
regional level, Senegal participated in the submission of 
two Pest Risk Assessments (PRAs) for papayas and mangos to 
APHIS in Accra.  At the national level, three PRAs for 
cherry tomatoes, asparagus and melons were submitted to 
APHIS in Dakar and are still waiting approval.  The 
waiting time for approval is estimated to be from 18 
months up to five years.  In order to decrease the 
approval waiting time, APHIS will send an expert from 
Senegal's DPV (Plant Health Service) to APHIS' Center for 
Plant Health Science and Technology (CPHST) in Raleigh, 
North Carolina in 2006 as a Cochran Fellow. 
 
¶6.  In November 2005, USAID launched the West African 
Trade Hub (WATH) - Dakar: a resource center that provides 
assistance to West African businesses, government, and 
regional organizations to improve trade systems, boost 
exports and manage 15 regionally embedded AGOA resource 
centers.  In February 2006, WATH organized a 
business/HACCP training session for regional seafood 
exporters from The Gambia, Senegal, Cape Verde, and 
Mauritania; organized a private showing in Boston, New 
York, and Miami of fish and seafood produced by seven 
different West African companies; managed a booth 
presentation at the International Boston Seafood show in 
March; and is facilitating negotiations between a 
Senegalese tuna processing company and a potential 
American distributor. 
 
¶7.  In early 2006, USAID launched the Support for 
Accelerated Growth and Increased Competitiveness (SAGIC) 
 
DAKAR 00000604  002 OF 003 
 
 
program to increase trade with North America under AGOA, 
Europe and Africa.  SAGIC will increase exports in 
priority sectors, develop public-private partnerships 
(PPPs,) and support policy reforms to improve the business 
environment. 
 
¶8.  Senegal continues to work within the West Afriacn 
Economic and Monetary Union (WAEMU or UEMOA), upholding 
the Common External Tariff (CET) for regional trade of 
goods and services. 
 
OPENNESS TO FOREIGN INVESTMENT/COMMERCIAL DISPUTES 
--------------------------------------------- ----- 
¶9.  Senegal's investment code provides basic guarantees 
for the repatriation of profit and capital and equality of 
treatment.  It also specifies tax and customs exemptions 
according to the size of the investment, classification of 
the investor, and location.  In recent history, there have 
been no major expropriations.  Senegal is a member of the 
International Center for the Settlement of Investment 
Disputes under the Washington Convention.  The GOS accepts 
binding foreign arbitration of investment disputes and 
foreign creditors receive equal treatment under Senegalese 
bankruptcy law in making claims against liquidated assets. 
The Senegalese Civil Code provides national treatment and 
non-discrimination against foreign-owned business' 
property rights. 
 
¶10.  The U.S. Chief of Mission, with strong support from 
USAID/Senegal, chairs the Private Sector Working Group, 
which worked intensively this year to strengthen the 
business enabling environment in Senegal.  This group 
elaborated a set of common policy messages that donors are 
communicating in their dialogue with the GOS.  USAID also 
carried out important preliminary work to assess the 
business environment by conducting a survey of the 
American business community and an analysis of economic 
growth stakeholders. 
 
¶11.  The Millennium Challenge Corporation (MCC) is 
reviewing Senegal's USD 1.2 billion proposal to build an 
industrial platform 25 miles east of Dakar to promote 
economic growth and alleviate congestion in the capital, 
where 80 percent of Senegal's industry is based. 
 
RULE OF LAW/POLITICAL PLURALISM/ANTI-CORRUPTION 
--------------------------------------------- -- 
¶12.  Senegalese authorities have initiated reforms to 
strengthen rule-of-law, transparency, and anti-corruption 
programs.  With Support form the U.S. Department of 
Homeland Security, Senegalese Customs has initiated an 
action plan to combat fraud.  Senegal is also taking steps 
to improve the legal and judicial environment, including 
enhanced training for magistrates and commercial law 
practitioners, establishment of an arbitration court, and 
new recovery and enforcement procedures consistent with 
OHADA.  Senegal is a signatory to the UN Anti-Corruption 
Convention. 
 
POVERTY REDUCTION 
----------------- 
¶13.  Having received debt forgiveness status in 2004 for 
completing the Heavily Indebted Poor Countries (HIPC) 
program and debt-forgiveness from the international 
financial institutions in 2005, Senegal has developed a 
post-HIPC plan to generate poverty reduction priorities 
over the next five years.  Of the CFA 43.1 billion (USD 
78.4 million) collected from HIPC savings, the GOS 
allocated CFA 4.1 billion (USD 7.5 million) and CFA 4.4 
billion (USD 8 million) to improve operating expenditures 
for education and health, respectively.  The remaining CFA 
34.5 billion (USD 62.7 million) will be invested in the 
construction of schools and health centers, infrastructure 
and agriculture projects, and credit programs targeting 
women in rural areas. 
 
HUMAN RIGHTS/LABOR/CHILD LABOR 
------------------------------ 
¶14.  Senegal is a vibrant democracy with no history of 
 
DAKAR 00000604  003 OF 003 
 
 
coup d'etats or military government.  Separatist activity 
in the southern Casamance region has declined, with the 
signing of a truce on December 30, 2004.  Human rights 
organizations expressed concern about the July 2005 arrest 
of former Prime Minister Idrissa Seck arrest on state 
security and embezzlement charges.  Seck released in 
February 2006 but may yet face illegal enrichment charges. 
 
JACKSON