Doing Business:
Senegal slashes days required to start a business from 58 to 2

Senegal has reduced the number of days to start a business from 58 to two, potentially catapulting it from slot 150 to a tie for first place in the world on this World Bank Doing Business indicator. This drastic leap was made possible in part by coordinated efforts between USAID and the World Bank, strong presidential interest, and targeted technical assistance by USAID/Senegal’s Economic Growth Program to key Senegalese institutions to prepare a road map on how to simplify the registration process.

Every year since 2003, Doing Business has ranked and published statistics that show the ease of conducting business in 178 countries. The 2008 report, which was released Oct. 19 and measured data through June 1, 2007, ranked Senegal at 159th under the “Starting a Business” indicator because 58 days were required to register a business. Australia was at the top of the list, requiring just two days to start a business, while Guinea-Bissau came in last, requiring 233 days. Senegal is now conceivably the top performer in Africa on this indicator. 

Following recommendations from a USAID-funded consultant working closely with the government, other notable improvements have been made. The number of procedures to start a business has been reduced from 10 to seven, while overall costs have been cut by 20%.

“USAID is proud to have been part of the process. It marks a great step forward in making Senegal more competitive,” says Peter Trenchard, Director of USAID/Senegal’s Economic Growth Office. “This clearly shows that political will and follow-up action can bring about important reform at minimal cost.”

Under this new system, 437 companies have been registered since June 2007 by the national agency for investment promotion (APIX). Of this number, 126 companies represent foreign investment. 

Streamlining the process to start a business, APIX created a New Enterprise Support Office that houses representatives of four agencies responsible for specific administrative procedures. Each representative has approval authority and all approvals are obtained in one day. Another time-saving change was to allow new businesses to post announcements of their registration on a Ministry of Economy and Finance website instead of advertising in the local press. According to Rita Dacosta Fall at APIX, an average of five to 10 new businesses register each day, and sometimes the lines reach into the garden.

“We are ambitious. We want to surpass what other countries have done to promote business to gain a competitive edge,” Fall says, adding:  “Investment must become everyone’s business, from the taxi driver to the president.”

One new business is A.S.R. Mulitmetals Senegal, a $37 million scrap metal recycling venture that will soon employ 150 people about 25 miles from Dakar. Its general manager, Vijay Anand of India, says the Support Office at APIX has been extremely helpful in assisting him with his administrative paperwork.

Momentous as this change has been, many other reforms are required for Senegal to position itself as a country with competitive international business standards.  These reforms include improvements to labor and judicial policies as well as implementation of the new procurement code.   Fallou Dieye of APIX sees reduction of business start-up costs as the next priority in creating a “world class investment climate” in Senegal.

“We hope that success on this initial indicator will encourage the government to bring about greater reform that will make it easier and more attractive to do business in Senegal,” says Trenchard. 

USAID/Senegal, as part of the African Growth and Competitiveness Initiative (AGCI), plans to support Senegal in implementing its Accelerated Growth Strategy over the next three years to improve the business environment and increase the West African country’s competitiveness.