While there has been significant uncertainty surrounding the likelihood of further political unrest, the O&G sector has remained largely untouched and continuing to operate freely.
August 25, 2021
Africa - West
The fiscal regime that applies in Senegal to the upstream oil and gas industry consists of the Senegalese tax law, the Senegalese petroleum code and the amendments to the aforementioned by virtue of a relevant production sharing contract ("PSC") or contract of service concluded between the Senegalese Government and the contractor (hereafter, the holder).
Senegal’s stable political environment, favorable geographic position, strong and sustained growth, and generally open economy offer attractive opportunities for foreign investment. The Government of Senegal welcomes foreign investment and has prioritized efforts to improve the business climate, although significant challenges remain. Senegal’s macroeconomic environment is stable. The currency – the CFA franc used in eight West African countries – is pegged to the euro. Repatriation of capital and income is relatively straightforward, although the regional central bank has recently tightened restrictions on the use of “offshore accounts” in project finance transactions. Investors cite cumbersome and unpredictable tax administration, bureaucratic hurdles, opaque public procurement, a weak and inefficient judicial system, inadequate access to financing, and a rigid labour market as obstacles. High real estate and energy costs, as well as high factor costs driven by tariffs, undermine Senegal’s competitiveness. The government is working to address these barriers.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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