Senegal Makes Strides in Transparency Across the Value Chain

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With the first production expected to flow from Senegal’s newly discovered oil and gas fields by 2022, together with the country’s ambitious gas-to-power masterplan, Senegal is on its way to becoming a regional energy hub.

The country has put together an oil and gas master plan in order to meet the Extractive Industries Transparency Initiative (EITI) guidelines – with transparency in the sector a key component of its energy blueprint.

When Senegal joined the EITI in 2013, the country’s economy was reliant on mining-related activities with extractive revenues counting for less than two percent of government revenues. Nevertheless, Senegal holds a leading position in phosphate extraction and exports, as well as income from other sectors.

Since the Grand Tortue Ahmeyim (GTA) gas field discovery in 2014 and subsequent finds; the hydrocarbon sector is about to become a key component of Senegal’s economy. As a soon-to-be oil and gas producer, the country plans to generate $1.04 billion of annual revenue from two offshore fields – GTA and SNE.

In 2012, President Macky Sall’s government voted for a public finance transparency law. That same year, the National Office Against Fraud and Corruption was created with important investigative and judicial powers.

Joining EITI in 2013 was the country’s first step in an all-encompassing plan to reduce corruption, promote transparency and ensure that the benefits of mining and exploration would return to Senegalese citizens.

In 2014, Senegal’s civil society came together and created the Citizen Network for Budgetary Transparency which brings together several professional associations. The organization aims to increase civil participation in key decision-making processes, such as budget planning by providing access to information and finance law analysis and strengthening capacity to intervene during budget-related debates.

In March 2016, the Constitution was amended through a referendum to introduce new ownerships rights. Senegalese citizens became sole owners of the country’s natural resources and entitled to transparent management of those resources.

Senegal is the first country in sub-Saharan Africa with a francophone approach to public financial management to volunteer for a fiscal transparency evaluation. This evaluation applies the standards and practices established in the IMF’s Fiscal Transparency Code (the Code), adopted in 2014. The Code is built around three pillars including fiscal reporting, fiscal forecasting and budgeting; and fiscal risk analysis and management.

In May 2018, Senegal became the first country in Africa to reach the ‘satisfactory progress’ standard set by the EITI board. It is also the fourth country globally to reach such a milestone. The international EITI board welcomed Senegal’s strategy in using EITI tools to push government reforms and encourage a strong public debate around key topics.

Fredrik Reinfeldt, the former Chair of EITI, said in a statement last year: “The progress achieved by Senegal is impressive. I congratulate the government and all stakeholders and encourage them to make Senegal a pioneer in systematic and regular disclosure of data about the extractives sector. Strengthening government systems and accountability mechanisms, and managing expectations will be key as the country joins the club of oil and gas producers in the coming years.”

In January 2019, Senegal adopted a new petroleum Bill, replacing the previous 1998 code. The new code implements a number of components aiming to increase attractiveness while providing social benefits to its people. Article 55 of the new code states that: “With the accession of Senegal to the EITI and new constitutional provisions on the transparent management of oil exploitation, holders of hydrocarbon mining titles must participate in reporting mechanisms regarding the payments they make to the State, including on social achievements.”

Since his election in 2012, H.E President Macky Sall has vowed to push transparency – especially in extractive industries – as a key pillar of Senegal’s Emerging Senegal Plan. During the opening of an EITI conference on ownership rights in Dakar, President Macky Sall stated: “The extraction and management of natural resources must be transparent and profitable in the long-term. Such transparency provides the tools to fight tax evasion, illegal financial transactions, money-laundering and improve the business climate. I would like to urge African EITI members to take practical steps to ensure full disclosure from operators in the extractive industries.”

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