Senegal faces challenges in attracting foreign investment despite economic promise

After four consecutive years of robust growth, with foreign direct investments (FDI) averaging $3 billion annually, Senegal saw a dramatic decline to just $37 million in 2025, according to the United Nations Conference on Trade and Development (UNCTAD). The sharp downturn raises questions: Is this a natural end to a cycle of massive investments, or a reflection of investor caution toward the government’s financial policies?

The collapse in investment is primarily cyclical: major oil and gas projects like Sangomar and Grand Tortue have driven significant inflows in recent years, but most of those investments have now concluded. The focus has now shifted to production.

Senegal could have attracted far more than the $37 million recorded in 2025, argues Moubarak Lo, former economic advisor to the Prime Minister and now a consultant. He emphasizes the need for a more proactive approach: “Senegal has the potential to consistently attract between three and five billion dollars annually in foreign investment, but this requires an active promotion strategy. Unfortunately, the country lacks a dedicated network for promoting investments abroad, unlike its peers. While roadshows are conducted, they are insufficient. Waiting passively is not enough—proactivity is essential. The country excels at attracting portfolio investments in government securities and Treasury bonds, but falls short in direct investments. A fundamental shift in strategy is needed.”

Lack of clarity dampens investor confidence

Senegal’s staggering debt, which reached 132% of GDP by the end of 2024 according to the IMF, might seem like a deterrent on paper. However, experts argue that it does not necessarily discourage private investors. Justin Maria, Director of Access Bank in France, points out that high public debt has not deterred investors in countries like France, which boasts debt exceeding €3.5 trillion.

For Maria, the real concern lies in uncertainty: “Senegal has become a high-risk country—not necessarily in terms of long-term fundamentals, as no one has a crystal ball—but in the short term, investors lack clarity on the state of public finances and liquidity. This is what is holding them back.”

“A turnaround is possible next year”

Moubarak Lo rejects the notion that Senegal is a high-risk destination and believes the country can quickly regain its appeal. Even though the IMF suspended its program with Dakar at the end of 2024, ongoing discussions continue.

“Today, Senegal has around 20 to 30 major projects in the pipeline. Each project must be presented to the five or six key global companies capable of investing, and efforts must be made to convince at least one of them to commit. A turnaround is possible as early as this year, or more certainly by 2027,” he asserts.

While Senegal struggles, other countries saw their FDI inflows rise last year. Guinea led the way, attracting over $7.7 billion in 2025, according to UNCTAD’s report.