Once a magnet for foreign direct investment (FDI), attracting an average of three billion dollars annually over the past four years, Senegal saw a dramatic drop to just 37 million dollars in 2025, according to the United Nations Conference on Trade and Development (UNCTAD). This sharp decline raises critical questions: Is this the end of a golden investment cycle, or are investors hesitating due to concerns about the government’s financial policies and broader economic outlook?
Understanding the sudden downturn
The collapse in FDI is largely cyclical. Major oil and gas ventures like Sangomar and Grand Tortue have driven investment inflows in recent years, but most of these projects are now complete. The focus has shifted to production, which requires far less capital injection.
However, Senegal could have attracted far more than the 37 million dollars recorded in 2025, insists Moubarak Lo, former economic advisor to the Prime Minister and now an independent consultant. “Structurally, Senegal has the capacity to sustain between three and five billion dollars in annual investments,” he explains. “But this demands aggressive economic promotion. The country lacks a robust international investment promotion network, unlike many of its peers. While roadshows are conducted, they fall short of what’s needed. Passive waiting isn’t enough; proactive outreach is essential. Senegal excels at attracting portfolio investments like government securities or treasury bonds but falters when it comes to direct investments—a shortcoming that must be addressed.”
Investors grapple with uncertainty
Senegal’s staggering debt—officially 132% of GDP at the end of 2024, per IMF estimates—might seem like a deterrent on paper. Yet experts argue that private investors aren’t necessarily deterred by public debt alone. Justin Maria, Director of Access Bank in France, points to the France as an example, where private investors continue to flock despite a public debt exceeding 3.5 trillion euros.
For Maria, the real concern lies in lack of visibility. “Senegal is perceived as a risky destination—not because of long-term fundamentals, which remain sound, but due to short-term uncertainty. Investors lack clarity on public finances and liquidity conditions, and that’s what’s holding them back.”
A path to recovery
Moubarak Lo rejects the “high-risk” label, insisting Senegal has the tools to restore its appeal swiftly. Though the IMF suspended its program with Dakar in late 2024, ongoing negotiations may soon pave the way for renewed support. “Senegal currently has around twenty to thirty major projects in the pipeline. The solution is clear: identify key global players for each project and personally engage them to invest. The country can turn the tide this year or, more realistically, by 2027,” he asserts.
While Senegal struggles, other nations in the region have thrived. The Guinea topped the charts in 2025, raking in over 7.7 billion dollars in FDI, as reported by UNCTAD.
