RESTRICTED GENERAL AGREEMENT C/MS/41 4 January 1994 ON TARIFFS AND TRADE Limited Distribution
(94-0018) COUNCIL
TRADE POLICY REVIEW MECHANISM SENEGAL
Report by the Secretariat
In pursuance of the CONTRACTING PARTIES' Decision of 12 April 1989 concerning the Trade Policy Review Mechanism (BISD 36S/403), the Secretariat submits herewith its report on Senegal. The report is drawn up by the Secretariat on its own responsibility. It is based on the information available to the Secretariat and chat provided by Senegal. As required by the Decision, in preparing its report the Secretariat has sought clarification from Senegal on its trade policies and practices. Document C/RM/G/41 contains the report submitted by the Government of Senegal.
NOTE TO ALL DELEGATIONS Until further notice, this document is subject to a press embargo. SenegaI C/RM/S/41 ------.-PagePageiii..... iii
CONTENTS
Page SUMMARY OBSERVATIONS vii (1) Senegal in World Trade vii
(2) Institutional Framework viii
(3) Trade Policy Features and Trends ix
(i) Recent evolution ix (ii) Type and incidence of trade policy instruments ix (iii) Temporary measures xi (4) Trade Policies and Foreign Trading Partners xi
THE ECONOMIC ENVIRONMENT 1 (1) Major Features of the Senegalese Economy 2 (i) Agriculture 4 (ii) Fisheries 5 (iii) Mining and energy 5 (iv) Manufacturing 6 (v) Tourism 6 (2) Recent Economic Performance 7 (3) Trade Performance 10 (i) Commodity pattern of trade 13 (ii) Regional pattern of trade 15 (4) Outlook 16 C/RM/S/41 TradePolicy Review Mechanism
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Page II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 19 (1) General Framework 18 (2) Structure of Trade Policy Formulation 19 (i) Executive branches of the Government 19 (ii) Advisory bodies 20 (iii) Review bodies 20 (3) Trade Policy Objectives 21 (i) General trade policy objectives 21 (ii) Sectoral trade policy objectives 21 (iii) Objectives in the Uruguay Round 21 (4) Trade Laws and Regulations 22 (5) Trade Agreements and Arrangements 24 (i) Multilateral agreements 24 (ii) Regional agreements 24 (iii) Bilateral agreements 26 (iv) Other agreements or arrangements 26
XII. TRADE-RELATED ASPECTS OF EXCHANGE AND INVESTMENT POLICIES 27 (1) The Monetary and Exchange Framework 27 (2) Foreign Exchange Allocation 29 (3) Foreign Direct Investment and Trade 30 Senegal C/RM/S/41,
IV. TRADE POLICIES AND PRACTICES BY MEASURE 33 (1) Overview 33
(2) Measures Directly Affecting Imports 35
(i) Registration, documentation 35 (ii) Tariffs 36 (iii) Other levies and charges 41 (iv) Customs valuation 43 (v) Minimum import prices 43 (vi) Pre-shipment inspection 43 (vii) Rules of origin 44 (viii) Import prohibitions 44 (ix) Import licensing 45 (x) Import quotas 46 (xi) State-trading 47 (xii) Import cartels 48 (xiii) Countertrade 48 (xiv) Standards and other technical requirements 48 (xv) Government procurement 50 (xvi) Local content requirements 51 (xvii) Anti-dumping, countervailing duty and safeguard actions 51 (xviii) Measures implemented in exporting countries 51 (xix) Free-trade zones, export processing zones 51 (xx) Other measures 52
(3) Measures Directly Affecting Exports 52
(i) Registration, documentation 52 (ii) Export taxes, charges, levies 52 (iii) Minimum prices 52 (iv) Export prohibitions 53 (v) Export licensing 53 (vi) Export quotas 53 (vii) State trading 54 (viii) Export cartels 54 (ix) Voluntary restraints, surveillance and similar measures 54 (x) Export subsidies 54 (xi) Duty and tax concessions 55 (xii) Export finance 55 (xiii) Export insurance and guarantees 55 (xiv) Export promotion, marketing assistance 56 (xv)Free-trade zones, export-processing zones 5 C/RM/S/41 Trade Policy ReviewMechanism Page vi
Page (4) Measures Affecting Production and Trade 56 (i) Adjustment assistance 56 (ii) Assistance for research and development 57 (iii) Production subsidies, tax concessions 57 (iv) Pricing and marketing arrangemen 57 (v) State-owned enterprises 59 (vi) Regional assistance 59 (vii) Other measures 60
V. TRADE POLICIES AND PRACTICES BY SECTOR 61 (1) Introduction 61 (2) Agriculture, fisheries, forestry and related industries 61 (i) Crops 62 (ii) Livestock 66 (iii) Beverages 67 (iv) Fish, shellfish and products 67 (v) Forestry 69 (3) Industry 69 (i) Coal, petroleum and natural gas 70 (ii) Ores and metals 71 (iii) Precious stones and precious metals 71 (iv) Row hides and skins, leather and furskins, footwear and travel goods 71 (v) Textiles and clothing 71 (vi) Mineral products and fertilizers 72 (vii) Chemicals 73 (viii) Machinery and equipment 74 (ix) Transport equipment 74 (x) Other products 74
VI. TRADE DISPUTES AND CONSULTATIONS 75 (1) GATT Dispute-Settlement 75 (2) Other Disputes 75
REFERENCES 76
APPENDIX TABLES 79 Senegal C/RM/S/411 Page vii
SUMMARY OBSERVATIONS 1. Senegal's participation in the GATT traditional pegging ofSenegal's currency, the datesfrom 1947, as aFrench overseas territory. CFA franc, to the French franc has ruled out In 1958, it became an autonomous member of currency adjustments as a possible option to the French Community and gained full restore price competitiveness. independence in 1960. Three years later, Senegal was admitted as a GATT contracting 5. The primary objective of the New party, with rights and obligations applying Agricultural Policy has been to increase food retroactively from the date of independence. self-sufficiency. Deregulationandrestructuring of the marketing channels for major crops, in 2. Senegal's economicperformance since particular cotton, groundnuts and rice, were independence has been generallypoor, with real designed to increase the rôle ofprivate sector GDP trailingpopulation growth. Expansion in producers and distributors. The authorities have the second half of the 1970s, driven by aimed to reduce the share ofgroundnuts as the exceptionallyfavourable terms oftrade, could dominant cash crop relative to cotton, sugar, not be sustained. GDP per capita, estimated rice, fruits and vegetables. Though Senegal's at US$710 in 1990, has shown substantial trade dependence on the crop has declined fluctuationas itsmain determinant, agricultural markedly, groundnut production remains the production, is closely correlated with weather backbone of its rural economy, providing conditions. employmentfor up to 1 million people. 3. For more than a decade, government 6. Rapidpopulation growthputs the labour policies have been directed towards stabilizing market under considerablestrain. OfSenegal 's the economy, encouraging economic and labour force, estimated at around 3 million financial recovery and structural adjustment. people, no more than 200,000 people are The second half of the 1980s saw the formally employed. Underemployment in introduction of a New Agricultural Policy, a agriculture encourages migration towards the New Industrial .Policy andpublic sector reforms. major cities, compounding urban unemployment, These were complemented by investment in particular in the capital Dakar and incentives, initiatives to restructure the banking surrounding areas. Policy attention appears to sector, liberalization ofcommercial regulations, be shifting towards the large informalsector as including the lifting of price controls and a potential generator of economic expansion. attempts to streamline administrative requirements. (1) Senegal in World Trade 4. The New Industrial Policy sought to 7. With officially recorded imports worth inject dynamism in the manufacturing sector US$1.3 billion and exports of almost through rebalancing a highly distorted system US$900 million, Senegal accounted for of incentives. With a view to reducing and 0.03 per cent of world merchandise trade in harmonizing sectoral protection, Senegal's 1990. The ratio ofmerchandise trade to GDP import régime was substantially liberalized hasfluctuatedbetween 30and 35 per centsince between 1986 and 1988 through tariff 1980. reductions, removal ofprohibitions and licensing requirements, and increases in quota levels. 8. TheEuropean Communities is Senegal 's However, many enterprises remain vulnerable major tradingpartner, accountingforjust over to import competition, hampered by aging 50 per centoftotal imports and exports. Trade equipment, low capacity utilization and Iow links areparticularly close with France, mainly productivity, in particular of labour. The based on exports of traditional Senegalese C/RM/S/41 Trade Policy ReviewMechanism Page viii-i: products (fish, phosphates and groundnuts) in 15 per cent. Petroleum isprocessed in a large return for consumer and investment goods. refinery near Dakar; most of the output is Trade with Italy and Spain expanded currently consumed in the local market. significantly in the 1980s. 13. Senegal's bilateral trade agreements 9. Apart from rice imports from the with 50 countries provide mostly for m.f:n. United StatesandcertainAsian suppliers, some treatment, but duty-free access may be granted of which have in turn become important under the agreements withAlgeria, Morocco and customers phosphatesandmineralfertilizers, Tunisia. Senegal has not signed theAgreement Senegal records little importsfrom, and virtually on the Global System of Trade Preference no exports to, major regions such as the (GSTP) among developing countries, nor does Americas and non-EC Europe. it participate in any international commodity agreements. 10. Senegal 's trade with other countries in sub-Saharan Africa is mostly with members of (2) Institutional Framework theEconomic Community ofWestAfrican States (ECOWAS/in French: CEDEAO) and the West 14. The Constitution of the Republic of African Economic Community (WAEC/CEAO). Senegal was promulgated in March 1963. Imports comprise petroleum from Nigeria, Executivepower is vested in the President. He Gabon and Angola, and coffee, cocoa and designates the Prime Minister, who, in turn, manufactured goods from Côte d'Ivoire. The appoints the Council ofMinisters in consultation usual trade surplus with CEAO partners may with the President. Ministers are mostly have disappeared altogether recently as selectedfrom the main political party (le Parti petroleum trade with Mali has apparently socialiste sénégalais), but the current ceased. Government also comprises members of the opposition. Prime responsibilityfor tradepolicy 11. Senegal's export basket covers a matters rests with the Ministry of Trade and relatively narrow product range. Since the Crafts. Other Ministries with trade policy mid-1980s, export revenue ofthefisheries sector involvement include the Ministries of has exceeded groundnuts and groundnut Agriculture; FisheriesandMaritime Transport; products. Fish exports have, however, stagnated ForeignAffairs; AfricanEconomiclntegration; recently, reflecting resource bottlenecks and Energy, Mining and Industry; Public Health; closures of processing plants. The share of and the Ministry ofthe Economy, Finance and phosphates, currently around 10 per cent of Planning, which includes the customs export value, has halved since the mid-1970s administration. as a result of lower prices and environmental concerns in traditional markets. Phosphate is 15. Legislative power is vested in the alsoprocessed into chemicals andsubsequently unicameral National Assembly, whose exported, in line with government policies to 120 members are elected by popular vote for encourage manufacturing based on domestic five-year terms. Legislation passed by the natural resources. NationalAssembly is submitted to the President of the Republicfor promulgation. 12. About halfofthe import value is made up ofmanufactures. Food deliveries, accounting 16. Some ofSenegal's major trade-related for an additional 20 and 30per cent, are mainly regulations have been introduced by law, such destinedfor the urban population; the diet in as the Customs Law, the Investment Law and rural area is dominated by locally grownfood the Law establishing the Dakar Free Zone. An crops such as millet and sorghum. The share enabling law, adopted in 1989, authorized the offuels, in particular crude oil, hovers around President to modify border taxes during aperiod Senegal C/RM/S/41. 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of two years, and current tax rates have have induced frequent changes in fiscal accordingly been established by (Presidential) measures, thus reducing the stability of the Ordinance. Other instruments, particularly with import régime. Significant tax increases and respect to licensing ofimportsandexports, have the introduction of new taxes since 1989 have generally been introduced by specific not only reversed the earlier decline in the level Presidential Decrees. Regulations are at times ofeffectiveprotection, but widened its dispersion supplemented by orders of the Minister among industries. responsible for the policy in question or explanatory letters/circulars by the (ii) Type and incidence of trade policy administration. instruments 17. Senegal has no independent statutory 21. Senegal 's importsfrom GATTmembers body to review or advise the Government on aresubject to a uniform 15 per centad valorem trade or industrial policies. tariff, unless regional or bilateral trade agreements prescribe more favourable (3) Trade Policy Features and Trends conditions. Imports from non-m.f.n. sources attract three times the normal m.fn. rate. Tariff (i) Recent evolution protection is complementedby various taxesand charges at varying and often considerably higher 18. Senegal's trade régime has undergone rates. numerous changes since the mid-1980s. Rationalization ofindustryprotection has been 22. Senegal is currently renegotiating its an important element. With the removal of GATT schedule of tariff bindings, originally many non-tariffmeasures on imports, between established before independence. Senegal's 1986 and 1988, protection has since relied suspended schedule covers approximately mainly on price-based instruments. However, one-quarter of all tarifflines, with bound rates import licences are still requiredfor a variety rangingfromfree to 25 per centfor all items, of mainly agricultural products. except cigarettes (75 per cent). The suspension of the relevant GATTprovisions, first granted 19. Deregulationinagriculture,privatization in 1990, has been extended by successive of State ownership in major enterprises and decisions until 31 December 1993. Increased dismantling of certain trade privileges have bindings have been offered by Senegal in the enlarged the scope for the private sector to Uruguay Round. engage in international trade. For example, the Caisse depéréquation et de stabilisation des prix 23. In addition to the single-rate tariff there (CPSP) has ceased to regulate consumer and are two major import taxes, a fiscal duty and producerprices ofimportant commodities (flour, a stamp duty. Fiscal duty is levied atfour rates tomatoes, cotton, sugar and groundnuts). up to 50 per cent, but one-quarter oftariffitems However, while reforms have resulted in some are exempt. Though the "normal' rate is curbs on administrative red tape, the overall 20per cent, product reclassifications have regulatoryframework remains complicated. It increased six-fold the number of items subject is generally recognized, including by government to a rate of30 per cent. The stamp duty, levied officials, that muchfurther work is required to at 3 per cent with no exemptions, was streamline the trade régime, and improve its introduced in 1990 to raise additional revenue. transparency and predictability for economic The cumulated simple average of ail three operators. import taxes is 35. 7per cent. 20. Import taxesprovide a substantial share 24. Further charges are levied on all ofgovernment revenue. Pressures on the budget seaborne trade, which is subject to a C/RM/S/41 Trade Policy Review Mechanism Page X.
0.3 per cent maritime tax and on most imported agricultural products are established by a textile fabrics, which attract a special tax of consultative committee which includes 1 per cent. Value-added tax and excise taxes representatives of producers, main importers and are collected by customs at the time of related ministries. Quota allocations are importation. With wholesale and retail trade communicated directly to the importers inprinciple subject to VAT, a supplementary tax concerned. Seasonal restrictions are applied (taxe d'égalisation) is applied on imports to onfarmproducts such as bananas, onions and approximate the VAT applicable on the potatoes. Second-hand clothing is subject to a importer's profit margin. prescribed annual import quota, but licences may be suspended before the ceiling is reached 25. The combination of significant border ifthe local clothing market appears saturated. and internal levies results in taxation levels of over 90 per cent for many consumer and "Iuxury items. Tax evasion through smuggling 28. State trading activities are confined to and, possibly, underinvoicing is widespread. some foodstuff categories and other basic Estimates of illicit trade range up to supplies. Importation ofbroken rice is reserved CFAF 209 billion annually (two-fifths of current for the Caisse depéréquation et de stabilisation imports), although suchfigures are disputed by des prix (CPSP) or any other public entity government officials. The authorities have designated by the State. Profits on imported responded with import tax reductions on inputs rice are used to pay premium prices for local for competing domestic products, specific ricepurchasedfrom rural development agencies. labelling requirements and increased border SONA COS (Société nationale de surveillance. Since mid-1992, preshipment commercialisation des oléagineux du Sénégal), inspection is mandatory for all consignments establishedin 1975, is entrusted with groundnut worth CFAF 1.5 million (f.o.b.) and more, marketing and milling, domestic sales and barring some product-specific exceptions. exports. The Société africaine de raffinage (SAR), the only petroleum refinery in Senegal, 26. Minimum rates offiscal duty (minima has the sole right to import crude oil. de perception) were introduced on cigarettes, lighters and matches in 1989. They have 29. The public sector in Senegalpurchases subsequently been extended to some 300 items goods and services worth around to counter underinvoicing. In addition, the CFAF 50 billion annually. Procurement is authorities have broadened the use ofreference generally subject to competitive tendering or prices (valeurs mercuriales) for customs "adjudication" procedures, but selective or valuation. The relevant list covered 24 six-digit single tendering may apply in specific cases. tariff line items in 1993, but a more extensive Procurement regulations are currently being set of referenceprices is applied topreferential harmonized with World Bank guidelines. imports from other CEAO members. Both the Senegalese suppliers ofgoods and services have minimum fiscal duties and the referenceprices been allowed a preferential margin of up to have the potential of providing significant 10 per cent since 1982. No particular protection to local industries. preferences apply to ECOWAS or CEAO suppliers. 27. Precise information on the existence of import quotas is missing, but their range 30. Financial constraints appear to have appears limited to fewer products than those discouraged the introduction of tax-funded subject to import licensing (sorghum, millet, support schemes. However, energy costs are broken rice, maize meal, wheat andflour, seed reduced to "internationally competitive" levels potatoes, onions, bananas, sugar and, from for certain purposes, notably phosphate 1992, vegetable oils). Quota levels for production which qualifiesfor reimbursements Senegal C/RM/S/41 Page xi
through an Energy Fund, and commercial (4) Trade Policies and Foreign trading fishing. Export subsidies for manufactures, Partners introduced in the early 1980s, have been suspended since1990 and an export finance 35. Senegal has sought to use the Uruguay scheme is not currently operational. Round to achieve better access to major developed markets without compromising its 31. Most exports have been liberalized since preferential position in the EC, its dominant 1983. Prior authorization continues, however, trading partner, under the Lomé Convention. to be required for exports of cereals, sugar, Senegal is among the 69 developer country peanut and tomato products, precious metals, signatories to the Convention, under which the andjewellery; andphosphates andphosphate- European Communities accords preferential basedfertilizers are subject to an export duty benefits. Senegalese exports, however, do not (droitfiscal). The duty on groundnutproducts qualify for additional preferences extended by is temporarily suspended, but reference prices the EC in the Loméframework, e.g. under the apply. Sugar and Banana Protocols. 32. A Free Zone in Dakar, established in 36. Within West Africa, Senegal is among 1974, was intended to attract export-oriented, theprime initiators andparticipants in regional labour-intensive manufacturing enterprises by cooperation efforts. It is one ofthe 16 members offering duty and tax concessions. The original of the Economic Community of West African expectations have, however, not materialized; States (ECOWAS), which aims to establish a the 12 existing enterprises make no more than customs union andfree movement ofindustrial a marginal contribution to the Senegalese and agricultural goods, services, labour and economy. An increasing share of their output capital amongparticipants. Trade liberalization is soldin Senegal, subject to the normal internal has, however, met numerous setbacks; thus, taxes and import duties on importedcomponents. tariff cuts on selected industrial products, intendedtobe introducedfrom 1January 1990, 33. Senegal has not acceded to any of the have apparently not yet become operational. Tokyo Round Agreements, but has observer status in the MTN Agreements on 37. Tradeliberalization appears tobemore import Licensing, Anti-dumping and advanced among the seven ECOWAS members Countervailing Measures, Subsidies and forming the WestAftican Economic Community Technical Barriers to Trade. it is not a (WAEC/CAAO). Participants are committed to signatory to the Multi-Fibre Agreement (MFA). removing non-tariffbarriers among each others, If ratified by Senegal, the Uruguay Round will extending duty-free treatment on raw materials bring Senegal into the full range of trade and preferential tariff treatment on specified agreements on goods and services included in manufactured products, and gradually the Single Undertaking. introducing a common external tariff. More than 400 manufactured products have been (iii) Temporary measures approved for CEAO preferences and may be traded subject to a regional cooperation tax 34. Senegal has no specific safeguard (TCR); Senegal applies this tax at rates varying provisions or anti-dumping or countervailing between zero and over 40 per cent. Tariff duty legislation. However, the application of exemptions apply on various raw materials and reference import prices (valeurs mercuriales) crafts in ECOWAS and CEAO trade. may serve similar purposes. 38. Reflecting historical ties, strong economic links persist with France, inparticular throughfinancial and monetary arrangements C/RM/S/41 Trade Policy Review Mechanism Page xii
among France andits overseas departments and 40. However, the competitiveness of territories, Monaco and 14 developing countries. trcditional Senegalese exports has been eroded The CFA franc, the currency used by Senegal as several rival suppliers have devalued their and the six other members of the West African currencies, and high costs have hampered Monetary Union, has been pegged to the development ofnew activities, such as tourism. French franc at a fixed parity for several Import pressure, fuelled by the strength of the decades. Analysts andfinancial institutions have CFA franc, has proven difficult to control even increasingly questioned whether the advantages through very high taxation. The black markets of the current arrangement, for example in non-convertible currencies of neighbouring reductions in transfer costs, continue to Mauritania and the Gambia have also outweigh the economic costs associated with the encouraged considerable commodity arbitrage mobility to change parities tofacilitate structural and smuggling in returnfor, until recently, the adjustments in a depressed economy. fully convertible CFA franc. Achieving increased output of traded goods must be a 39. The maintenance of a fixed parity crucial element of Senegal's national appears to be an important political symbol. development strategy and it is difficult to see Doubts also linger whether devaluation could many alternatives to lay the ground for trigger rapid real expansion, rather than merely sustainable economic expansion. igniting inflation and social unrest, as few, if any, industries seem ready for take-off. Moreover, failure to agree among participating States on the appropriate devaluation rate could jeopardize monetary union. eBegd C/RM/S/41 Page...... 1..
1. THE ECONOMIC ENVIRONMENT 1. Senegal is situated south of the Sahara Desert on the westernmost point of Africa, bordered by Mauritania, Mali, Guinea, Guinea-Bissau and the Atlantic Ocean. The Gambia forms an enclave between 24 and 50 kilometres wide into Senegalese territory, extending eastward some 470 kilometres along the Gambia river. The two countries formed the Senegambian Confederation from 1982 to 1989.
2. Senegal's surface - nearly 200,000 square kilometres - is generally flat, except in the soutn east near Guinea. The vegetation reflects differences in the availability of water; forests in the South, savannas in the centre and steppes in the North. The rainy season lasts from July until November. Three major rivers flow westward into the Atlantic Ocean; the Senegal (1,700 km), the Gambia (750 km) and the Casamance (300 km). 3. Senegal is largely a Moslem country. Christians and worshippers of traditional religions each account for around 5 per cent of the 8 million Senegalese (Table 1.1). About 70 per cent of the population speaks an indigenous language (Wolof). French, the official language, is understood by around 20 per cent.
Table 1.1 Basic indicators, 1970-91 1970 1980 1990 1991 Population (million) 4.4 5.6 7.3 7.5 Urban population (percentage) 30.0 35.2 39.3 39.7
Work force ...... Female participation 41.3 41.3 39.3 39.1 Employment ...... Birth rate 6.5 6.6 ... 6.5 Infant mortality rate (per '000 live births) 134.8 103.0 80.6 78.4 Life expectancy 44.0 54.0 47.3 47.5
GDP at constant prices (1987 US$ million) 3,007.6 3,673.3 4,964.4 5,023.7
School enrollment ratios Primary School 43.1 48,9 56.7 56.4 Female 33.9 40.1 47.1 47.2 Secondary 2.6 5.3 9.8 10.0
.. Not available.
Source: World Tables 1991/92 (STARS version); Government of Senegal.
4. Population growth is high, estimates range from 2,8 to 3.2 per cent per annum, and life expectancy is relatively low (48 years at birth). More than half of the population is less than 20 years old; about 40 per cent is urban. The capital Dakar, with an estimated 1 to 1.5 million inhabitants, is by far the largest and economically most important agglomeration. The short farming season (three months) for important crops induces substantial migration towards Dakar during the agricultural off-season. Page 2
5. The young and rapidly increasing population adds more than 100,000 entrants to the labour market every year. Estimated unemployment is around 10 per cent for Senegal as a whole, in urban areas the rate may be as high as 25 per cent. Such estimates need, however, to be treated with caution since regular salaried workers (government, public enterprises and the formal private sector) comprise no more than 5 per cent of the working population. Considerable underemployment in agriculture underlines the need to create jobs in other sectors. 6. The informal sector is considered to be one of the most dynamic elements of the Senegalese economy. The authorities appear to have a pragmatic attitude towards this sector, recognizing its importance in the creation of employment and its flexibility in the production of goods and services. The size of the informal sector is unknown, but recent studies provide some indications of its economic importance (Box I.1).
Box I.1 The informal sector inSenegal As in many developing countries, the informal sector appars to account for a substantial share of Senegal's economy; estimatesrange as highas two-thirds of GDP when agriculture, the dominant economic activity largely performed by the informalsector,is in included. Around 3 million Senegalese are reckoned to be economically active. However, formal employment - formalprivate sector and civil service - covers less than 200,000 workers. ln addition to agricuture, the informalsectorisgenerallyassumed to employ some 600,000 persons in urban areas. However, a study carried outby USAID in1989, covering:26 districts in the Dakar area could only identify close to.30,000 "micro-enterprises", employing over 57,000:persons, in the "non-structured modern sector" The informal sector appears to be particularlysignificantincommerce and transportation, which are reckonedto account for main share of value added in services (although little relable information is available). Informal enterprises also appear active in construction and inthe provision of a wide range of personal services (laundry,hairdressing, repair shops, etc.). An official survey has Identified some 120 personsinformally employedin theproduction of goods including handicrafts, clothingand leather items, would, metal and other smal-scale production, Development of the informal sector May be seen -in part at least - as a market respose to high taxation and rigid labour laws. Renumeration in the informal sector is often less than the legal minimum industrial wage, the salaire minimum interprofessionel garanti (SMIG). Amomg domestic taxes which may be evaded are corporate and individual income taxes (35 and maximum 50 per cent respectively); payroll tax (3 per cent); and value-added tax (7 to 30 per cent).
The informal sector is largely able to escape remaining trade and price controls. However, highlevels of import taxes - the cumulation of import duties, taxe d'égalisation, and other internal taxes may reach 115 per cent - provide incentives for all economic agents formal or informal, to engage in illicit trade.
(1) Major Features of the Senegalese Economy
7. Senegal's economic performance since independence in 1960 has been relatively poor. Real GDP has grown at an average of 2.4 per cent per year in the period, less rapidly than population (Chart I. la). Per capita GDP, estimated at US$710 in 1990, has shown substantial fluctuation along a declining trend since 1970 (Chart I. 1b). Economic performance has been in large part determined by external and political factors, as well as by the vagaries of the weather. senegal Page 3
Chart I.1 a) Real GDP in Senegal 1970-91
1987 CFA francs (Billions) gerainfall(mm) 1000 1800 900 1600 800 1400 700 1200 600 1000 500 800 400 600 300 400 Real GDP 200 - Average rainfall 200 100 0 19707172 73 74 75 76 77 78 79 80 81 82 83 84 85 86 8' 88 89 90 91
b) Real GDP per capita in Senegal, 1970-91
1987 CFA francs per cspita (Thousands) Average rainfall (mm) 230 100
220 800
210 600
200 400
190 -- Ral GDP 200 Average ranfalli
180 M If - 1 T i 1 1 1 IT1 0 1970 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 93
Note: The average level of rainfall refers to the period May-October of each year. Source: World Tables 1991/92 (STARS version); International Monetary Fund. C/RM/S/41 Trade Policy-Review Mechanism Page 4
8. Real GDP grew very slowly, at an average rate of 1.3 per cent, between 1967 and 1974. The break-up of French West Africa in the 1960s reduced the effective "domestic" mark-et for Senegalese manufactures, previously sold in an area counting 20 million people; the withdrawal of French troops exacerbated these effects while exports were hit by the abolition of French preferences. Higher commodity prices in the mid-1970s spurred optimism, resulting in an ambitious investment programme and expansion of the public sector; the 1977-1981 Development Plan projected an annual increase in real GDP of 5.8 per cent. However, because of the failure of the groundnut crop, which fell to 192,500 tonnes from an average of 900,000 tonnes in the late 1970s, the economy contracted in 1980 and 1981. At the same time, the terms of trade fell sharply as groundnut prices declined and the price of imported oil stabilized at a high level. The Government introduced an economic stabilization programme for 1979-1982, followed by an economic and financial recovery programme for 1982-1985. 9. During the past decade, economic growth has been erratic. An upturn in 1982 was followed by two successive years of decline in 1983 and 1984, largely due to drought; growth resumed from 1985 onwards until 1989, but has subsequently fallen again. 10. According to the World Bank, Senegal's economic performance since 1960 has been the worst of any African country not affected by war or civil strife. Senegal has, however, received substantial foreign aid, rising from US$59 per capita in 1984 to US$91 in 1989. Per capita aid flows to Senegal are about 2.5 times the average for other sub-Saharan African countries. Some 80 per cent of public investment has been financed from external resources. (i) Agriculture 11. Agriculture (including livestock) is reckoned to provide employment for 60 to 80 per cent of the workforce. Although the sector accounts for little more than 17 per cent ofofficialGDP, agricultural output is the main determinant of overall economic performance, since many important manufacturing activities are agro-based (such as oil milling) or destined as farm inputs, and the demand for services largely reflects local purchasing power derived from agricultural earnings. Agricultural output, in turn, is largely determined by the amount of annual rainfall. 12. Senegal's soil is generally of poor quality. Total area under cultivation, while fluctuating between 2.2 and 2.5 million hectares, has been largely stable in a fifteen-year perspective. About half the land is allocated to millet and sorghum, largely grown for local consumption as basic foods; groundnuts occupy another 35 per cent of the farm land. Other major crops are maize, cowpea (niébé), manioc, rice, sugar and cotton. Government policies focus on crop diversification, seeking to reduce the rôle ofgroundnuts relative to cotton, sugar, rice, fruits and vegetables. The expansion ofthe Sahara Desert has caused a shift in the crop pattern towards the less arid regions in the south of Senegal. 13. Groundnut production has remained the backbone of the Senegalese cash economy, providing employment for up to 1 million people. After rapid expansion in the 1950s, production declined in the late 1960s as France abolished its preferential pricing scheme (le surprix) on imported peanuts and peanut oil. The groundnut harvest has exceeded 1 million tonnes in years of favourable weather conditions; production in the 1991/92 season amounted to 700,000 tonnes.' Producer prices tend to follow world market prices. Differences in producer pricing and exchange rate policies in Senegal and the Gambia have at times encouraged considerable illicit crossborder trade in groundnuts.
'The agricultural season runs from May to April. Senegal C/RM/S/41 Page 5
14. Cultivation of cotton is sensitive to the price differential vis-à-vis groundnuts. The local textile industry is able to absorb only a small share of the cotton harvest. 15. Production of fruits and vegetables has increased steadily in recent years; the authorities consider the outlook for exports of fresh produce to be positive. Senegal has a seasonal advantage in European markets, but faces tough competition from other non-European producers, including other African countries. 16. Rice has become the favoured staple of the urban population. Production has not been able to keep up with the increase in consumption, and Senegal imports substantial quantities of rice, partly in the form of food aid in drought years. Yields of traditional cereals (millet, sorghum and maize), the rural staples, are also very sensitive to climatic conditions. 17. Food security is a major policy objective. The completion of a major dam project (Manantali) and a salt barrage (Diama) is expected to yield a substantial increase in irrigated land. The authorities hope that irrigation shouldpromote cultivation and consumption ofmillet and sorghum and help stabilize rice imports around current levels. (ii) Fisheries 18. Having declined in the early 1980s, Senegal's annual catch is currently back to the levels recorded in the late 1970s. The sector is an important source of foreign exchange but, due to the low value added, it accounts for just 2 to 3 per cent of GDP. The small-scale fishing fleet, comprising around 10,000 vessels with 45,000 fishermen, accounts for around 70 per cent of the national catch. Most of this fish goes to the local market, but small scale fishing also provides about one-third of the exports of shrimps. Export-oriented industrial fishing employs about 10,000 Senegalese, including those working in canneries. Senegal has concluded bilateral agreements with a number of countries allowing foreign vessels to fish in Senegalese waters. Tuna, for example, is caught by Spanish and French trawlers, canned in Senegal and exported to the EC. 19. The sector is currently confronted with several problems. Resource management needs to be improved. Overfishing has been occurring, particularly within the six-mile zone reserved for artisanal fishing. The fleet is aging; fishing is thus frequently interrupted due to the need for maintenance repairs. Several processing plants have closed in recent years, relocating to lower-cost countries such as Côte d'Ivoire. Depending on the outcome of the Uruguay Round, Senegalese fish exports could face tougher competition from South East Asia in the EC market to which it has preferential access under the Lomé Convention. (iii) Mining and energy 20. Senegal has deposits of high quality phosphates, but their development has been delayed by low international prices and environment-related access problems to EC markets, due to the high content of cadmium and aluminium. However, a shift in exports to countries such as Iran and Colombia appears to have allowed production to rebound in 1992. Senegalese phosphates currently account for about 1.5 per cent of global output and 3 per cent of world exports. 21. The south-east of Senegal is rich in minerals, but few are exploited. Marble production and uranium prospecting was terminated in 1986. Exploitation of high-grade iron ore in the east of Senegal would require construction of infrastructure, including railroad and power transmission lines, and is unlikely to be profitable at current world market prices. Gold deposits have also been found. C/RM/S/41 Trade PoIicy Review Mechanism Page 6..
22. Petroleum reserves, mostly heavy oil, have been discovered offshore near the border with Guinea-Bissau. The economic viability of the discoveries is uncertain, but exploration is continuing. A small gas field has been developed to fuel a local power station. Electricity is produced in six thermal stations fed on imported oil. Firewood is used as domestic fuel. Increasing desertification has prompted interest in the development of peat deposits to alleviate some of the pressure on Senegal's forests.2 However, peat appears unable to compete with charcoal at current prices. (iv) Manufacturing 23. The manufacturing sector employs around 38,000 workers and is considered to account for about 20 per cent of GDP in the formal sector. Nearly 80 per cent of industrial production is concentrated in the Dakar region. The manufacturing base is relativelydiversified, originally established to supply a much larger market in French West Africa and subsequently assisted by import substitution policies. Many enterprises are crippled by aging equipment, excess capacity and high production costs by international standards. Capacity utilization is frequently less than 50 per cent. The four groundnut oil plants, for example, have a combined processing capacity of 950,000 tonnes annually, more than a "normal" crop of which only one-third may actually be marketed. 24. Among the major industrial enterprises are the ICS (Industries chimiques du Sénégal), processing phosphates into sulphuric acid, ammonium phosphate and triple superphosphate, the SAR (Société africaine de raffinage) whose refinery is capable of processing up to 1.4 million tonnes of crude oil annually and the sugarcomplex CSS (Compagnie sucrière sénégalaise). The textile industry, accounting for around 10 per cent of industrial value added, consists of four cotton ginning mills and spinning, weaving, dyeing and printing plants. Other major plants produce cement, paints, insecticides, plastics, soap, pharmaceuticals and leather goods. 25. A free zone, established near Dakar in 1974, was intended to draw investment into Senegalese manufacturing. The zone has not lived up to the initial expectations. Twelve companies currently operate in the zone. In 1992, they employed 596 permanent staff and issued over 30,000 one-day contracts. (V) Tourism 26. Tourism is Senegal's third major source of foreign exchange. About 60 per cent of tourists are French. Supply and demand for tourism services have followed different paths since 1985, with hotel capacity increasing by 4.8 per centper annum whilethe number oftourist arrivals has beenfalling. The hotel occupancy rate was estimated at 32.3 per cent in the first four months of 1992, generally the best season for tourism in Senegal. This is most likely below the breakeven point for many hotels in Dakar. 27. Political unrest in the south of Senegal (Casamance), the most important resort for integrated rural tourism, has led to closure ofseveral tourism establishments in that region, accelerating thedecline in tourism revenue in 1992. The Senegalese tourist industry is also affected by the relative strength of the CFA franc, making Senegal an expensive destination compared to African competitors such as Morocco, Tunisia, Kenya, the Seychelles and Egypt. Holiday packages to Senegal are typically twice as expensive as equivalent trips to Morocco or Egypt and 40 per cent more expensive than a stay in Côte d'Ivoire, another member of the CFA franc zone.
2The authorities also encourage consurmption of butane gas to reduce demand for charcoal and wood. SenegalC/RM/S/41 Page 7
(2) Recent Economic Performance 28. In 1985, Senegal introduced amedium and long-termeconomic and financial programme, aimed at addressing some of the key problems in the economy: improving economic diversification through promotion of food self-sufficiency, fisheries and tourism; rehabilitation and modernization of existing production facilities offering substantial immediate returns; increasing the rôle of the private sector; and curbing the expansion of domestic demand. Many of the conditions attached to a Structural Adjustment Loan granted by the World Bank in early 1986 were implemented, notably the adoption of a cereals plan promoting food security, abolition of the import monopoly on rice, rationalization of the system of import protection and phased elimination of quantitative import restrictions. 29. The most recent official estimates indicate substantial fluctuations in economic performance since 1988, mainly reflecting weather conditions (Table 1.2). Official growth estimates for 1992 show a modest increase in real GDP in the order of 2.4 to 3 per cent; other estimates are closer to zero.3 The current account deficit, having declined from US$638.5 million (26 per cent of GDP) in 1981 to US$138 million in 1991 (Table 1.3), is reported to have widened to CFAF 97 billion (over US$300 million) in 1992. Present projections for 1993 indicate a further large deterioration in the balance. 30. The Government budget (on a cash basis) recorded a small surplus in 1991-92. Improvements in the fiscal balance since the early 1980s have largely been achieved through expenditure reduction (although there was a marked, one-time increase in revenue in 1990/91).4 At times, across-the-board cuts in non-wage expenditures have been required to redress expenditure overruns. Frequent fiscal policy changes appear to have destabilized the economic environment and tight fiscal policies limited credit to domestic firms, constraining investment and growth. 31. Trade taxes are an important fiscal instrument in Senegal. Duties, mainly on imports, account for around one-third of government revenue and are the most important source of tax revenue. Given the tenuous fiscal balance, the government frequently faces a dilemma on the revenue side, since increases in import taxes, already high, will encourage tax evasion. Tariffs and taxes were lowered in 1986 and 1988 to reduce smuggling. Revenue increased, but need for further improvement in the fiscal balance has prompted tax increases and the introduction of new taxes since 1989. Tax collections are currently falling short of projections due to rampant smuggling. 32. Persistent fiscal and current account deficits have had virtually no impact on the conduct of monetary and exchange rate policies. These are subject to external constraints resulting from Senegal's participation in the West African Monetary Union (WAMU) and the BCEAO (Banque centrale des Etats d'Afrique de l'Ouest), the regional central bank. The common WAMU currency (the CFA franc), which was until recently fully convertible, has been pegged to the French franc at a fixed parity for some 40 years.5 Credit to the public sector may not exceed 20 per cent offiscal revenue in the previous year.
IJeune Afrique économiqueNo. 169, July 1993. Measurement problems exist since growth in important services sectors (trade, transportation, miscellaneous services) is extrapolated from data in a 1973/75 survey. According to the World Bank, as much as 40 per cent of the total GDP figure is derived from extrapolations of old data. 4The fiscal deficit (excluding grants) amounted to 8 per cent of GDP in 1981-82.
5Convertibility of the CFA franc was temporarily suspended in August 1993. C/RM/S/41 Trade Policy Review Mechanism: Page8 _ _:_:_:_
Table 1.2 Economic performance of Senegal, 1987-92 (US$ million; Index 1987100) ~~~~~~~~~~~~~~~~~~m li lm:
Annual growth rate, per cent Income and absorption Real GNP } at market prices 3,8 5.3 -1.0 5,4 0.8 Real GDP } 4.0 5.1 -1,7 4.5 1.2 , Private consumption 3.7 3.6 -1.1 2.1 0.4 ", Government consumption 4.5 0.3 2,2 1.0 4,8 ... Gross domestic investment 3.1 10.3 -15.9 23.2 1.0 ... Fixed investment 5.9 4.3 0.4 3.2 1.1 ...
US$ million Resource balance -258.2 -212.6 -175.7 -162.3 -161,3 . .. Imports ofgoods + non-factor services 1,407.8 1,419.8 1,428.4 1,400.1 1,454.7 Exports ofgoods + non-factor services 1,149.6 1,207.2 1,252.8 1,237.8 1,293.4 GDP deflator 100 102 104 107 109 ... Consumer price index 100 98 99 99 97 ",
Monetary supply Reserve money* 441.2 438.6 547.1 527.3 564,4 ",
Interest rate Discount rate (% per annum)* 8.5 9.5 11.0 11.0 11,01.0
Fiscal balance Government revenue and grants (CFAF billion) 266.1 271.4 274.2 279.5 327.2 327.5 Government expenditure and net lending 285.8 288.2 305.1 325.9 297.0 323.8 Government balance (commitment basis) -19.7 -16.8 -30.9 -46.4 30.2 3.7 Government balance (cash basis) -46.0 -53.9 -35,3 -29.0 -1.4 6.1
Note: 1987 exchange rate used i.e. 300.54 CFA francs per US$. Figures for the fiscal balance relate to financial year (July-June).
,,, Not available. Source: *World Tables 1991/91 (STARS version); International Financial Statistics, IMF, 1991 Yearbook and February 1993 editions. Senegal C/RM/S/41 Page 9
Table 1.3 Balance of payments, 1980-91 (US$ million, index 1987=100) 1980 1987 1988 1989 1990 1991 Current account balance -386.6 -3t6.5 -261.4 -198.3 -215.6 -137.9 Merchandise trade balance -453.4 -284,9 -277.4 -239.8 -264.4 -283.9 Exports 421.7 670.9 678.6 758,6 911.6 903.2 Imports -875.1 -955.8 -956.0 -998.4 -1,176.1 -1,187.1 Services - net balance 45.5 -62.6 -52 Il -29,1 -9.9 -12,4 Income - net balance -98.6 -193.1 -207.7 -195.3 -235.8 -235.0 Private unrequited transfers - net balance -19.8 6.3 5.9 6,3 29.4 28.4 Official unrequited transfers - net balance 139.7 227.7 270.7 259.7 265.2 265.1
Capital account balance Direct investment, net 12.9 -2.0 0.7 "...... Portfolio investment, net 2.7 0.7 1.1 Other capital, nie. 266.2 210.6 148.0 33.4 4.2 -54.9
Errors and omissions -36.6 -0.2 -3.3 1.6 -16.7 10.9 Overall balance ... -97.4 -114,8 -163.3 -228.1 -281.8 Change in reserves 58.3 0.2 -1.3 -8.5 8.1 -2.3
Memorandum: International reserves, except gold* 8.1 9.2 10.5 19.0 11.0 13.2 Export price index (for merchandisee* 119 100 104 105 129 Import price index (for merchandise)* 113 100 103 102 122 ... Terms of trade* 105 100 102 103 106 ...
,,, Not available. Source: *World Trade Tables 1991/92 (STARS version); International Financial Statistics, 1991 Yearbook and February 1993 editions,
33. Measured by the GDP deflator, annual inflation fell from 9.3 per cent in 1985 to 2.1 per cent in 1991. The two official consumer price indices, one based on an "African" consumption pattern, the other on a "European" basket, point to flat or falling prices in 1991 and 1992. Imported inflation is low compared to many other countries in Africa. 34. Senegal's external debt rose rapidly in the early 1980s, followed by more modest annual increases as the economic stabilization and adjustment programmes began to take effect. Total external debt, just over US$4 billion in 1987 (Table 1.4), has subsequently been reduced by debt cancellations by France. The ratio of external debt to GDP stood at around 60 per cent in 1991, consisting mainly of medium- and long-termn debt contracted by the Senegalese Government with multilateral institutions and bilateral lenders. The share of outstanding commercial debt is low. C/RM/S/41 Trade Pollcy Review Mechanism Page 10
Table 1.4 External debt, 1980-91 (US$ million and per cent) 80 1981 1988 1989 1900 1991 Debt by categories US$ million External debt, total (EDT) 1,472.8 4,034.6 3,896.5 3,286.2 3,737.4 3,522.3 Long tern debt 1,253.8 3,713.3 3,615.7 3,019.5 3,320.0 3,217.3 Bilateral 389.8 1,857.8 1,860.5 1,273.8 1,406.8 1,282.5 Multilateral 262.6 1,149.7 1,166.6 1,195.2 1,357.9 1,412.0 IMF credit 140.1 342.8 318.3 316.0 314.3 327.4 Short term debt 219.0 321.3 280.8 266.7 417.4 305.0
Memorandum: Per cent EDT / (XG+XS)ª 164.3 354.3 331.6 257.7 246.9 234.5 EDT / GDP 49.3 87.7 78.2 70.6 64.0 61.0 a Exports of goods and services. Source: World Bank.
(3) Trade Performance 35. Senegal runs a persistent deficit in its merchandise trade. According to United Nations data, it was in the order of US$780 and 840 million in 1989 and 1990 (Tables I.5 and I.6). 36. Senegalese trade statistics indicate merchandise trade deficits in the order of CFA 70 to 80 billion for the years 1989 to 1991. Imports have grown relatively slowly, as increases in imports ofintermediate goods have been offset by reduced imports of rice and wheat and a lower import bill for crude oil and petroleum products. Export revenues from "traditional" items - peanut oil and cake, phosphates and petroleum products - fell during this three-year period. However, total merchandise exports rose fromCFAF 242 billionin 1989 to CFAF 255 billionin 1991 due to higherexports ofchemical products by the Industries chimiques du Sénégal and a substantial increase in exports ofother goods (not specified). Exports are reported to have fallen by some CFAF 13 billion in 1992,6 37. Trade is hampered by relatively high freight rates. Shipment of canned tuna to France is, taking account of relative distances four times more expensive from Senegal than from Thailand. Rate reductions would necessitate renegotiating basic elements in shipping line agreements with France and West African States. However, Senegal could probably take internal measures to reduce port handling charges.
6Le Figaro, 17 March 1993. Senegal C/RM/S/41 Page 11
Table 1.5 Exports of Senegal by principal destination, 1980-90 (US$ million and per cent) 1980 1986 1987 1988 11989 1909 WORLD (US$ million) 476.7 624.8 604.6 591.2 750.9 782,6 Percentage of total America 0.3 0.3 0.5 0.8 0.6 0.3 United States 0.2 0.2 0.2 0.7 0.1 0.1 Canada 0.1 0.0 0.1 0.1 0.1 0.1 Other America 0.0 0.1 0.1 0.0 0.4 0.0
Europe 52.7 44.4 45.5 57.1 50.9 53.5 EC12 40.0 43.4 45.1 56.0 50.6 53.3 France 32.0 28.8 33.0 37.6 33.4 34.9 Italy 1.9 2.7 3.5 4.1 6.2 7.0 Netherlands 0.4 4.2 1.3 4.1 3.0 5.3 Spain 0.6 2.4 2.9 3.8 4.0 2.9 Germany, FR 2.5 0.6 1.2 1.1 1.1 0.8 Greece 2.3 0.7 0.4 1.3 1.0 0.8 EFTA 2.7 0.4 0.2 0.1 0.0 0.0 Other Europe 1.0 0.6 0.1 0.9 0.3 0,1
Asia & Oceania 5.5 13.6 7.2 16.4 16.5 16.7 Asia East Asia less China 0.7 1.9 3.0 4.5 2.9 2.2 Philippines 0.0 1.2 1.5 3.5 2.1 1.8 South Asia less India 0.9 0.0 0.0 0.0 0.0 0.0 Middle East 0.0 0.0 0.1 0.1 0.4 1.8 Iran 0.0 0.0 0.0 0.0 0.0 1.8 Japan 2.3 2.9 1.2 1.8 3.8 2.0 China 0.4 0.0 0.1 0.2 0.1 0,1 India 1.2 8.7 2.8 9.7 9.3 10.6
Oceania Australia 0.0 0.0 0.0 0.2 0.0 0.0
Africa 30.9 18.4 18.9 30.3 22.6 20.1 Sub Saharan Africa 30.3 18.3 18.5 29.7 22.1 19.5 ECOWAS (CEDEAO) 27.8 14.9 14.9 15.1 18.4 15.7 Guinea 0.4 1.0 1.1 1.1 2.2 2.0 Gambia 1.2 0.5 0.7 0.7 1.2 0.9 WAEC (CEAO) 20.9 11.7 11.9 11.6 12.4 10.9 Mali 5.9 2.7 2.9 4.1 6.5 7.1 Ivory Coast 7.5 4.0 3.8 3.2 2.8 2.8 Cameroon 1.4 2.2 2.6 1.9 2.5 2.5 Other Africa 0.7 0.2 0.4 0.6 0,5 0.6 a Including the territory of the former German Democratic Republic.
Source: UNSO COMTRADE data base, 1988 - Direction de la prévision et de la statistique, Sénégal. C/RM/S/41 Trade Policy Review Mechanism Page 12
Table 1.6 Imports of Senegal by principal sources, 1980-90 (US$ million and per cent) 1980 1986 1987 1988 1989 1990 WORLD (US$ million) 1,037.9 960.9 1.023.4 1,079.6 1,534.0 1,620.4 Percentage of total America 9.7 5.1 7.9 9.5 9.0 8.3 United States 4.4 3.8 3.9 6.4 5.9 5.3 Canada 0.7 0.7 2.5 1.1 1.3 1.1 Other America 4.6 0.6 1.5 2.0 1.8 2.0
Europe 55.6 53.8 56.8 55.8 52.4 59.8 EC12' 52.2 51.1 53.6 52.7 49.4 5(.1 France 34.1 30.0 31.5 31.5 28.6 32.9 Italy 3.2 5.0 4.9 3.9 5.0 6.5 Spain 1.4 3.1 3.5 4.7 4.5 4.2 Germany, FR 1.1 2.6 3.4 3.9 3.- 3.6 Netherlands 3.4 4.8 4.6 2.7 2.8 3.6 Belgium-Luxembourg 6.1 1.1 0.9 2.2 2.5 2.9 United Kingdom 6.5 1.9 2.0 2.3 1.6 1.7 EFTA 2.8 1.9 1.9 1.7 1.7 2.1 East Europe & USSR 0.5 0.6 1.0 0.9 0.9 1.2 Other Europe 0.1 0.2 0.3 0.4 0.4 0.3
Asia & Oceania 18.6 9.3 9.8 14.9 13.6 13.6
Asia East Asia less China 7.0 2.4 2.6 3.8 4.7 5.4 Thailand 2.5 3.3 2.7 2.3 3.0 3.1 South Asia less India 1.4 0.7 1.4 3.7 2.5 1.5 Pakistan 1.4 0.7 1.4 3.4 2.5 1.5 Middle East 7.1 1.0 0.1 0.2 0.4 0.6 Japan Ii.2.6 3.4 4.2 3.7 3.6 China 1.9 2.3 1.9 2.2 2.2 2.3 India 0.0 0.2 0.3 0.8 0.1 0.1
Oceania Australia 0.0 0.0 0.0 0.1 0.0 0.0 New Zealand 0.0 0.0 0.0 0.0 0.0 0.0
Africa 14.7 17.4 13.1 21.0 23.4 16r1 Sub Saharan Africa 11.1 11.6 11.8 20.4 22.5 15.7 ECOWAS (CEDEAO) 10.4 11.3 7.4 10.4 12.8 12.4 Nigeria 7.4 7.4 2.8 4.3 8.1 7.5 WAEC (CEAO) 2.9 3.9 4.6 5.9 4.6 4.7 Ivory Coast 2.9 3.8 4.4 5.7 4.4 4.5 Gabon 0.1 0.1 0.1 2.1 7.7 2.7 Other Africa 3.6 5.8 1.3 0.5 0.9 0.4 a Including the territory of the former German Democratic Republic.
Source: UNSO COMTRADE data base, 1988 - Direction de la prévision et de la statistique, Sénégal.
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The United States. represeti Ch;na, Pakistan. Vôetnnm anti Indtim çrnbu '"AIger.li was a leading supplier until 1987. "An agreement concluded in 1992 may make Iran a major destination for phospha.:es. Senegal fxcs mflit police cornpe titon on ofher Asian mnarke(s. "l: EigM. 17 March 1993. rt1-/R1s n the %hori ard mned,;m lerm A ftewmntlu utec atgufnenl it1 hat devalution %woqul c <>nl) ;,nflaionaty etf«et* irnce a'te ÇeS alew ,nduutry «' rteid tr*ke.ift 5 Aftci lhe en earlh IIRea > X. e l`elident c"nfi!reJ uite (jecî,4e'o!a!u4 mn anmia! rçi-44e gAomIth 44 Niwoen (6 am] 10 r centu rrqlting,il, 20.(f) nc j4 cvely >car. T'hi "Maimiienance of the franc zone would imply thai any change in the vahlailon of the CFA franc %liould he made or. a uniform basis. "Le Figaro, 17 March 1993. Page 18 Il TRADEC/RM/S/41POLICY 1tIStk RAMLWORKRK AND u.' Çî. 1 lS of the French Co 55t 'Thee Corisïtilizloi *of Senegal f:mlaol)J7*Xatlwà lWX t %#111S1ù46é|lurrilyS9^ anwmlel. ;<',1wp fcçtt.'lw in September1991. Exceutive power àt ne<- the Pre-ident. who, 1ut ncnibutsticsr f( rtnMliroM Jefenc at ('%tnînund:r of ltie Arncu Fcte 1ifletila clecl'tul.l âgu l ctil eveyv seven s cas ' The curNitlt Presidencecn tas I41cf Iinofle sin« I Janunat I 9R 1. havîlg h«»t cI.(^d un Icjcaian 9I«J1 anl 'ecledcd i% I:chnlur) l1'Rq ari Mhty 1Q9 56 The Presidentappnrf l1w' Niff Nlnierr.m who mu rfUrn a7' S7 L eg:*Iativc )>owcr 1u 1rcscj ij lthc unicsnieral Nati9.mal Astenihlv, whoir% 1J 2< nwsie%%cri serve flve.c ar (erms l.cgislati'on "acd ly the Naîiona Aucinhly io s.ubminrnttuk t1w Pride< f(or prorinulgation. A bill ray kc goirn seàa % trr reading in the Asucrîîbly on tlic murder o(? dh Prcsuident. in which casc a îhre',fl i aj 58. Atne twirinttl i ;cnCinstirnw1oiU unay bcMto:rt4 l hy 8Frcnch West Affica oiniuri%,cud OuineCa. ôd1ivoire.ir D.liît,)riy (})inw 11kini, !okudân (M:ali). Niaurit rw" 1.'w v'w'Jen letts 'iq Ph ( xtWttrvn a 4gi t t Sne"a;1s«O;4ir! :eui nIrr.tc'n £h;rc dtiir iro Y uft z; hItrt « I 2; Sf17tQ'#>tM ,hs»Lbe`IV ;'), j1 vr8uIlu.q;t 689 1»vitln ;cr+il Y'Accordling !irgitl.411tc"n ftnîor tziScq e. tlraàttcl trmK(eO 31a delîcrgort;i. (p4 Th elahtrt;l1rion t(irade rci in; Sencgal insivol er Vàr1atîî prof}rstional ats%4 iat't.osiç, inçlu(ilig frme uIIniO11' arl (rzVlita (et. Scnegal lias rcîablished a national corminittec go vever GA1T1UNCTAD issues. Aitntîg (iii) ggvigw iw 67. Senegal lias no indepecnent statutory body go rcvicw grade and industrial policies. 'Organic Law No. 67-43 or 8 July 1967. 'Article 41 of Decrec No. 89-696of 16 lune 1989. Chambers ofCommnuerce were established during Ille colonial period to (acilitate a dialogue between the authorities and local businesses. Formed according to the French model. the Chambeis received public funding derived tront supplementary trade taxes, but operations were also filnanced by charges for services rendered to members. In the early days, the Chambers or Commerce had purcly consultative functions, but they could submit proposals to the political authorities on any question concerning commerce and industry within their arca of competence. The Cmhabers of Commerce have hcld the right to give independent opinions on many tradderelated questions since 1920. (Le Point économique, No. 43, March 1991.) CrCAEE operations began in 1991. The agency is managed through a steering com.nittec which includes representatives of the private sector, the Government and lhe donors. Thc CAEE is currently financed by France. ($ Senegal has been among the leading countries ini 'tck-Iig rurtiter lcgt.rin i WCe A (hi ics^tQL4LfruQliçS11.E.çk 70. Seieiia'y current %eIiàraWl îtac policy objectives are derived mainly from sectoral development inhiau*eS, (lie New %griculwtra lolicy (NPA). adépird in 1984, and (lic Ncw InduNtrial Policy (Nil). launched loi 1986). As prime objeclive of ;t agricultural policy. Sencgal Govemrnrnt scckx to increase s.cI<.suffici"cncvontsS1 -itffçf 11îrougi> ppro pricing aud inport -ut). iîuîion policies: (li ajmi ik (t, achieCvc deIlI emti ro Co.onC'-Ct llg 80 pet cent of Sencalese coslumptiotn bY year 2(EO. 7I. Thz au:llori(itie 1have allefaIeII>d Io & %.ist li frleîlesi ^cc 61In early 1993, Senegal expressed disappointments at the lack of progress in market access, particularly in the fisheries sector. (GATT document MTN.TNC/29, 3 February 1993.) Ç 1r~SI/94I Trsdc Polky Rcilfw NtIhank Pàge 22. ti'4lySprcferential trading oi0i1on ni the 1 C nurket and Io recent an troion of ihe L.oné (Con ention (,tc S«cion 5qV ) helow> 74; tlErctther with A aiStla nd VrcnttCua. Sctngai ha- Iorv«it; tlh Stc'ring Commintc or "GATT document MTN.TNC/W/32, 12 Noivember !990. 2"GATT document MTN.GNS/'W/151/Rev. 1, 23 August 1993. ,>Piesidential Decrees Nos. 86-241, 86-998, 86-1150, 86-1374, 87-114, 87-702, 87-1532 and 88-161. Senegal C/RM/S/41 Several regulation. including Ordinance No 89.29 andLaw No. 90.05 which provide forminimum tax assesement rates (minima de perception) on some 300 products and for reference prices (valeurs mercuriales for customs valuation purposes"; - Regulation conferring trade privileges. including legal monopolies. on some of the larger domestic enterprises (e g the Société africaine de raffinage (SAR) with respect Io crude oil import, and rcefined product (Decree No. 62-0151 ax amended); Decree No 88.9 providing for export licening on cereals. sugar, certain grounInut and tomato products. and precious metals and jewellery (table AIV.6); - Law No. 65-25 of 4 Match 1963 concerning prices and infringement of economic legislation". Laiw No. 74-06. creating a fret zone in Dakar in 1974 and exempting imported raw materials. semi-manufactures (finished goods or other inputs from allduties and taxes (Section IV.2(xix); Law No. 81.6 1. making industrial, artisanal and commercial activities subject to prior authorization. Industrial establishimnents or traders needvalid importer-exporter card (Decree No. 87-646) to engage in foreign trade. 78. Current import-specific taxes include the tariff. fiscal duty and a stamp duly. Under Article 66 of the Constitution, the President may be authorized to modify the tax base, rates or the manner in which taxes are levied. An enabling law. authorizing the President to modify border taxes during a period oftwo years, was adopted in January 1989 (Law No. 89-11). The current rates of import tariff and fiscal duty and the corresponding product coverage were fixed in 1989 through Ordinance No. 89.29 and ratified by Law No. 89-39. A 3 per cent stampduty was introduced through Ordinance No. 90-26. While Senegal has established a tariff based on the Harmonized System, this has not yet come into force because, apparently. of difliculties in introducing the HS in other countries of the West African Economic Community (CEAO). 79. Overall, the regulatory framework appears complicated and, thus, not particularly transparent. Measures adopted under the structural adjustments programme originally envisaged a simplified and more efficient economic framework, and deregulation in agriculture. privatization and the removal of many import and price controls have helped to improve business climate. Itis generally recognized. however, including by government officials, that much further work is required to improve condition for the private sector in Senegal. The reference prices applicable in 1993 are stayed in an Order of the Minisier of the Economy, Finances and Planning. 31Current price controls cover foodstuffs (rice, sugar, cooking oil, flour, etc.), energy products, transportation, pharmaceuticals and medical services. For rice, price controls art connected to the operation of a price equalization fund (CPSP), based on an import monopoly on broken rice. C/RM/S/41 Trade policy Review Mechanisam Page 24 80. Oruginaly. 81. SegCigal i% n)ot a %ignatory < any of ihe Tok>o Round Codcs. bu( holds observer siatut with re cc- Io thc Agteenien on 'cclinical flarricrs Io Trade. the Agrmlcc -n on lmplkenta 84. Scncgal docs no( participate in ariy international conimodity agreemcnis. 85. Sencgal is a nieniber or flick Organlyâtion of Afrîcan Unity (OAU), lhc Economic Conîmuniuy of We.t African Staits (IECOWAS). fiie West Airican Eeconomic Cornmunity (WAEC/C:EAO), Ilic River Senegal Ilarncssing Organization (OMVS), and Ille West Atrican Monelary Union (WAMU/UMOA). 86. Thel Econoniic Cornnunily of West African States (ECOWAS), foutided in 1975, comprises 16 counurics.Y They scck to establish a cusonms union and rrec movement of industrial asicd agricultural goods, services, labour anid capital within the Community. A irade liberalimztion programme was "GATT, BISD, 121h Supplernent, p. 33. "GATTI, BISD, 37th Supplement, p. 295. "Benin, Burkina Paso, Capc Vcrdc, Ctc d'ivoire, the Gambin, Ghana, Guinea, Guîilea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Siena Leone and Togo. Senegal C/RM/S/41 launched in 1979. aiming for a common customstariff with nottariffon intra ECOWAS made by 1989 However trade liberalizationhas been object to numerous backti" 87 A new Trade Iiberlization Scheme was introduced on1January 1990 in an attend to revelance the Agreement Existing tariffs on 25 approvedindustrial goods produced by enterprise granted ECOWAS (Community statuswere to be phased outover fiveyears.ECOWS status has been granted to five Senegales firmsSNTI Société nationals de tomateindustriell. Senechap. SNCDS SPIA and ICOTAF being. respectively. producers of tomato puree silencersand exhaut pipes canned fish inseecidesi and various textiles fabrics According tothe SenegaIeseauthorities the preferential duty arrangement has however, not yet become operational asthebasic customsdocumentation remains to be agreed upon 88. The West African Economic Community (CEAO) was founded by Benin Burkina FAso Côte d'ivoire. Mali. Maurtania. Niger and Senegal in 1973. The objective of the organization is to promote harmonized and balanced development of economic activitives among its membersthrough a substained policy of economiccooperation and integtation including the development of trade. Trade provisions provide for the removal or non-tariffbarriers. duty free treatment ofcertain raw materials and traditional handicrafts. preferential tarif treatment for specific manufactured products and the gradual introduction of a commonexternal tariff. More than 400 products. produced by over 200 enterprises. have en approved for the preferential scheme and may be traded subject go a regional cooperation tax CCR). 89. In June 1991. the summit meeting of the Organization of Africaa Unity agreed to establish an African Economic Community (AIC). It regarded as an extensions ofthe Lagos Plan of Action (1980) which aimed to create an African Conulon Market by year 2000 . The Community is to be established in six stages of variable duration over a period not exceeding 14 years. ln the first stage (maximum five years) . countries should .seek to strengthen existing regional arrangements. such as ECOWAS. and establish newagreements. The second phase (up to eight year concernsstandarization ot tariffs. customs procedures and internal taxes within regional communits. Free Trade Areas(or intra regional grade and customs unions are go be fromed at the next stage within ten year. The fourth sage two years) is to be develope to harmonization on tarifs among regional groupings with a view to adopting a common external tarinf Next. countries should adopt common sectorsharmonize lautttnite monetary. financial and fiscal policies. and introduce free movement ofperosn (tour years). Within the final five years, the African Common Market is to be consolidated as a single market. implying the free movement of goods. services. labour and capital. 1For example, a Treaty provision granting members most favoured nation treatment was suspended in the earIy 1980s. 'The main requirementsis that [ECOWAS nationals have majority ownership (minium 51 per cent) of the firm. From 1983 to 1989. the minimum ECOWAS ownership requirement was 35 per cent. "See GATT (1992). -Otjer and of the sixth stage are the establishment of aPan-AfricanEconomic and.Monetary Union. including a single currency; the Pan.African Parliament executive organs for theCommunity: and the creation ofAfrican multinational enterprises in all sectors. C/RM/S/41 Tradeflh& Unoit. 4hmhsoo-we Page26 (III) Bilateralagreements V) According toinformation produced bythe authorises Senegal has concluded bilateraltreade agreement with 50 countries (Table 10 Mosttheof agreeements with otherGATTmember on an ni baisi More favourable twin duty free accessare pretende by agreement with Algeru,. Morocco and Tunisa The agreementswith BrazilandKuwait datege ..'u etaufl Utttfntf shoule be at favourable at possiblewhich according in the authorities vimn' mm 91 Senegal is a signatoryto theloane Conventionsbetween the European CommunicationandEC 69 developing countriesinsub-Saharn Africa the Canaidan andthePacificACP urti: th Convertion Senegel is granted(non ''cI duty accessto the ukn6i u'whanpen&fl e' and for agricultural communite not covered the common Agriculture Policy for the products the EC accords more favourable treatment to ACP contentsthanto m f n tupç4êe a 92 The Lone Conventionalso provices for mechanical and ECfinancial acccmlate to ACP countries, National and regional development may be îupwine through grants are States However. the absenceof a Persons Product implies that Senegel does not benefit from gtutateriJ favorable acces conditions in textile EC markets at granted for example underthat hami and sugar prtocolstothe (Convention ) 93. Among developing countries the EC provides ACPandedswtrrneanw ««uuur*t t"hovin generous benefit than suppliers in the GSP schemen This applies withregard to product coverage access opportunities (rules oforigin regional cumulation etc. policyulr'" The EC STABEX) conducted howevertothe Aàffa pusse« (UNI d1 GPA VUrIW1 Iae losses in the Senegaler roudrwuu section ps~~~~~~~~~~~~~~~~~P« 27« t « We 4 awwt Lutinaut Ilm.c4t 44 t -t4t *-u .nnffv frr4n I b.r evt eîww I*et Itart4Ln cnte"alce lIAfwwe fié : tIN tri t* »*$ t 1#kt ¶t n ire 4nJ4Wtfl*Stf N> 4* aw.1tci îs t*lvrNtwf Aif>), îulq*ee#*w septttrestMiev *êtm# R0* tsrnbr wiefltf;Ml I tsete* 1h. ftnw4 t Ihe*iueî me atteêued b> a NaeetinêaI Cvtli< f fl4p4j4!f 4. .-g ."#'w vthtsmeu eMtW eeifln pwçôt I2-wM h ptneish maîpUt rw wewm uqyi«i w ~t1! wf-W* i:4tnt*w #Evq t ltv bu*t %t'wuavy #rÔ%¶h et -cotvllkd N44e0Xitqi #tP i* . 'têt !la* i 10 tr" t i tbo* t ~Nms.~ sn~n~. ." fie *t fliCortt"o t*.st t aW '~~~~~#4%qtf -*,»*k gr.m tobd *.m4l elfgtbltàs«tW h('fe Walli.;l,-WW(IUl'^ "poil 9 ,#.#Srw u lew-cnt tr' ai n ooàttnshs uwaquanWeI Niet Wtold We 3g, t'1* n *un# an~i0.un4t jO *. W M *E f t f féa < f**o< 4r`t:«4nsn *Uut~n 'lu Noflqe>i"teca Ils 4*éOSuuIêhè"*_4éat4 4+v 4tIèS*# .t 4A pa1f.s.twgeatsa th (tA PawIt fl ffan det colonie f 'i.j*wt"*Owit pii& $,.» knu.S*êfrilowt taS iv'l 111 ttnu:ngni WAMU members' external *w..#~** ." eil 1* t# b*,*Wts I4 e l 16AJ*knItaiJ " f Zt.,w4 î4# 5swàbC'> of the two gegiete ( M4e- "European"and "African" t. .,svo 4e r41stth bWMJtI4o,e*!gii wtMO M< Utbased on consumersurveys carried out in le Mi'. C/RM/S/41 Trade Pollcy Review Mechanism Page28 is even more remarkable viewed against other countries in the region. However, while real output expended somewhat faster in the CFA franc zone than in neighbouring countries in the 1980s. the difference is not particularly significant (2.5 per cent versus just under 2 per cent annually). 97. Senegal's policy of a pegged exchange rate and, until recently, full convertibility of the CFA franc differs from the exchange rate policies followed by neighbouring countries Mauritania and the Gambia. Black markets in their non-convertible currencies encourage commodity arbitrage. About two-thirds of Gambia's imports are reckoned to be re-exported to other countries in the region. The relatively strong CFA franc, combined with higher border and internal taxes in Senegal, provides incentives for widespread smuggling of goods. 98. Senegal's real exchange rate appreciated markedly between 1981 and 1987, a period of high inflation caused by an carlier rapid rise in the money supply (Chart III.1). Slowing inflation in Senegal subsequently brought a real depreciation of the exchange rate, notably against the French franc. However, the economic effects need to be interpreted with care. While real depreciation may have helped to support import-competing sectors, export competitiveness may not have improved, since the currencies of some of Senegal's principal export competitors, such as Ghana, Nigeria and China, have experienced larger depreciations. The recent depreciation of the Italian, Spanish and Portuguese currencies vis-à-vis other EC member States (e.g. France and Germany) is likely also to have strengthened industries in these countries, including the fisheries, fruit and vegetable sectors, to the detriment of exports from WAMU members, including Senegal, into the EC. An attempt to stem the erosion of export competitiveness via the granting of export subsidies (Chapter IV) was suspended by the Senegalese authorities in July 1990 due to lack of funds. Chart III.I Real exchange rate for Senegal vis-a-vis selected countries 1096 o 1600 France '00 REER States 60 China 40 Ghana 20 Nigeria 0. -, I 1980 81 82 J3 84 85 86 87 88 89 90 1991 Note: A fail in the index denotes a real appreciation of the Seneglese currency. The Index numbers vis-a-vis Ghana for 1980-1983 were 189, 471, 594 and 1096 respectively, Source: World Bank estimates using modified IMF trade weights. Senegal C/RM/S/41 Page 29 (2) Foreign Exchange Allocation 99. Capital movements are free within the franc zone, comprising France and its overseas departments and territories, Monaco, the West African Monetary Union and seven other countries linked through the Operations Account arrangement with the French Treasury45. Senegalese exchange controls, administered by the Directorate of Money and Credit in the Ministry of Economy, Finance, and Planning, do not apply to any transactions with WAMU countries, or with BEAC countries, subject to a ceiling of CFAF 2 million. All other countries are considered "foreign". 100. Payments for imports canonly beeffected uponpresentationofproperdocumentation regarding customs clearance, except for authorized advance payments. Authorizations to purchase foreign exchange may not be used before the due date of an advance or settlement for already imported goods. Foreign exchange for imports may bx acquired upon presentation of the bill of lading, or up to eight days before shipment if a letter ofcredit is opened. Imports from countries outside the franc zone must be domiciled with an authorized bank if the c.i.f. value exceeds CFAF 100,000. 101. Settlement of current transactions with the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mauritania, Nigeria, and Sierra Leone may be effected through the West African Clearing House arrangement. All transactions with South Africa are prohibited. 102. Payments for invisibles to countries outside the franc zone are subject to approval. Settlement of trade-related invisibles is permitted freely if the underlying trade transaction has been approved or does not require authorization. Senegalese residents may transfer amounts up to CFAF 20,000 outside the franc zone without documentation through authorized banks. Transfers of profits, dividends and royalties to non-residents are permitted, but subject to prior approval by the Ministry of Finance. 103. All exports worth more than CFAF 500,000 must be domiciled with an authorized bank. Proceeds must normally be collected within 120 days after delivery is effected and repatriated through the BCEAO within one month of the due date. Invisibles proceeds originating in the franc zone may be retained. Invisibles income from other countries must be collected and repatriated within one month upon receipt or due date. 104. Capital transfers outside the franc zone require approval ofthe Ministry of Economy, Finance and Planning.46 Borrowing abroad and the issuance, advertising or sale of foreign securities in Senegal are subject to controls. 105. Since August 1993, when BCEAO repurchases of CFA banknotes were suspended, travel-related foreign exchange regulations havedistinguished between resident and non-resident travellers. Residents may carry freely up to CFAF 2 million in BCEAO banknotes to BEAC countries. For travel to other countries in the franc zone (e.g. France, Comoros), the limit is the equivalent of CFAF 2 million in other currencies. Additional amounts are accepted in other means of payment (travellers' cheques, etc.). Leaving the franc zone, residents may acquire foreign currency to the equivalent of CFAF 500,000 for tourism or CFAF 75,000 per day (maximum 30 days - CFAF 2.25 million) for business travel 45Six countries - Cameroon, the Central African Republic, Chad, Congo, Equatorial Guinea, and Gabon - have a common central bank (BEAC) and a common currency (the franc de la Coopération financière en Afrique centrale). Comoros has its own currency fixed at the same parity as the CFA franc. Equatorial Guinea, a member of the zone since 1985, is the only country not having former colonial or close economic ties with France. 46Approval has generally been given; IMF (1992). C/RM/S/41 Trade Policy Review Mechanism Page 30 from authorized dealers.47 Prior authorization (from the Direction de la monnaie et du crédit) is required for purchases of additional currency. Residents must declare all kinds of payments carried by them when leaving Senegal. 106. Export of banknotes by non-resident travellers is limited to the equivalent of CFAF 250,000 without authorization. Higher amounts are accepted provided the money has been declared upon entry to Senegal or the visitor can document purchases of foreign banknotes from authorized dealers. Non- residents may carry freely any other means of payment from Senegal. (3) Foreign Direct Investment and Trade 107. Foreign investment in Senegal began in 1921 with the establishment of the first oil mill. Investors were essentially French companies engaged in extraction and processing of natural resources. After independence, the Senegalese State assumed a leading rôle in economic development. Renewed attention to the private sector resulted from the economic adjustment programmes pursued since the 1980s. 108. As part of the medium- and long-term structural adjustment programme, Senegal's investment regulations were revised in 1987 with the enactment of a new Investment Law.48 For a wide range of economic activities, the law prescribes national treatment of foreign investment, provided equal treatment is granted by the investor's home country (Article 9).49 Investments, minimum CFAF 5 million, must create at least three posts for Senegalese nationals and should be financed by minimum 30 per cent equity (20 per cent for small or medium sized enterprises).50 109. Among important tax incentives attached to the investment régime are exemptions from import duties and taxes on inputs not manufactured in Senegal and VAT exemptions for locally produced goods and services. Regulations provide additional incentives for business investment meeting minimum local content targets or criteria related to technological innovation, regional development and size. Tax exemptions are granted for a limited period and some incentives are reduced gradually during the last three years of the grace period (Table AIII. 1). 110. The 1987 investment law introduced automatic approval of investment, including in existing Senegaiese companies owned and controlled from abroad. All direct investments and liquidations must be reported to the Minister of Economy, Finance and Planning and the BCEAO within 20 days of each 47The limit is applied per person per trip. 48Law No. 87-25 of 18 August 1987. 49The law covers all enterprises engaged in agriculture, fisheries, livestock breeding and activities related to processing, storage or packaging of products of vegetable, animal or marine origin; manufacturing; exploration, extraction or processing of mineral substances; the tourism industry and otherhotel business; and small-business cultural activities defined in Article 17 of the Investment Code. In some additional sectors - health and educational services and industrial equipment assembly and maintenance - the law relates to small and medium-sized establishments only. 50Expansion ofexisting enterprises may also be covered provided the investment exceeds CFAF 100 million, creates at least 50 permanent jobs or provides a minimum 25 per cent increase in the number of permanent employees or fixed assets. Separate bookkeeping must be maintained for such extensions. Senegal C/RM/S/41 Page 31 financial operation.51 The relevant regulations are administered by a special unit (the guichet unique) in the Ministry of the Economy, Finance and Planning.52 The unit also acts as a one-stop service for the completion of administrative formalities concerning the establishment of an enterprise (authorization, registration, etc.). The authorities have a!so created a counselling service for Senegalese and foreign investors (Société national d'études et depromotion industrielle- SONEPI). The institution is authorized to provide Finance or guarantees and assist in the rehabilitation of ailing enterprises. 111. Senegalese investors purchasing existing small or medium sized enterprises under foreign ownership qualify for certain tax exemptions, administered by the Guichet unique.53 Incentives cover acquisitions up to CFAF 500 million in the sectors covered by the 1987 Investment Law. All outward investments by Senegalese residents must be approved by the Minister of Economy, Finance, and Planning. Only 25 per cent of the investment may be financed in Senegal. Prior authorization is required for lending abroad. 112. The Government has created rive industrial zones, in Dakar, Saint Louis, Kaolack, Thiès and Ziguinchor, to attract small and medium sized enterprises. Enterprises operating in these zones must have minimum 51 per cent Senegalese ownership. They benefit from the services of local management companies as well as from the fiscal incentives granted in the Investment Law. 113. A Free Zone was established in Dakar in 1974 for the purpose of attracting exporting labour intensive enterprises.54 Investors are granted full exemption from import duties, taxes on inputs and export charges, if any. Once preferential status has been accorded, firms may be paid a subsidy equal to the amount of withheld payroll taxes on any additional employment.5$ Up to 40 per cent of the production may be sold in Senegal, but Senegalese duties must then be paid on imported components and the products are subject to value added tax and other internal taxes.56 Firms installed in the zone pay an annual charge for the services rendered by the authorities.57 114. The status of Free Zone has been granted for a 25-year period but privileges may be renewed. Applications for establishment in the zone are forwarded to the Managing Director of the Zone and should describe the nature ofthe project, the investor's identity, details concerning the size and financing of the investment, number of jobs to be created and market prospects for the production and the environmental impact. A feasibility study, incorporating the tax benefits, should also be submitted. 51Acquisition of up to 20 per cent of the share capital of a listed company is not considered a direct investment. 52The Guichet unique has ten days to examine and process a request counting from the date it was lodged. The time limit is thirty days for applications involving documents or prior authorizations issued by other institutions. A project is considered accepted if the authorities have not responded within the appropriate time limit according to Law No. 91-28. 53Law No. 89-25 of 6 July 1989 concerning the repurchase of foreign assets by Senegalese nationals. 54Law No. 74-06 of 22 April 1974. 55Law No. 93-25 of 2 September 1993, modifying Laws Nos. 89-32 and 74-06. 56Regulations allow for additional incentives such as the relaxation of labour regulations (permission to issue fixed-term contracts). Exports to other countries in the West African Economic Community (CEAO) may be eligible for preferential tariff treatment (TCR). 57Ministry of Industrial Development and the Environment, Decree No. 76-0084 of 26 January 1976. C/RM/S/41 Trade Policy Review Mechanism Page 32 Authorizations are granted by the Managing Director in consultation with an authorization committee within a statutory period of one month. 115. In 1991, the privileges of the Free Zone were extended to so-called free sectors (points francs), which may be established anywhere in the country.58 Free status is valid for 25 years and may be extended by law. An existing export oriented enterprise may also, in exceptional circumstances, be granted tax-free status even when located outside a free zone or sector. By November 1993, nine enterprises had been accorded free sector status. 116. The Dakar Free Zone has not lived up to initial expectations. Six hundred and fifty hectares were reserved for the project, of which 470 hectares were designated for industrial activities. In June 1990, only 60 hectares had been developed and the actually occupied area totalled 30 hectares. The ten enterprises installed in the Free Zone employed in total 1,085 persons and were mainly engaged in simple processing activities.59 117. Several factors may explain the disappointing performance. Observers have pointed to lengthy start-up periods with an average of several years; to the strength of the CFA franc, high labour costs and rigid labour regulations; and to relatively expensive infrastructure services such as energy, water and telecommunications. Other members ofthe West African Economic Community have either refused to accord preferential treatment to Free Zone products or disputed calculations concerning the local value added.60 118. The contribution ofthe Free Zone to Senegal's balance of payments is considered to have been irregular and marginal. With the exception of processed fish, production has been oriented towards other markets in Africa. In 1992, these accounted for 60 per cent of all exports from the Dakar Free Zone, followed by the EC (30 per cent) and the United States (10 per cent). Pharmaceuticals were the single most important export product. The share of output sold locally appears to have been increasing. Sales to Senegal represented nearly 40 per cent of the combined turnover (CFAF 5.5 billion) of the Free Zone enterprises in 1992. up from 20 per cent in 1988.61 119. The Senegalese manufacturing sector has seen a number of important closures in recent years, notably in fish canning and footwear. The retrenchment is apparently due to lack of profitability. According to IMF International Financial Statistics, Senegal's direct investrnent balance was slightly negative in 1986 and 1987, followed by a small surplus (US$0.7 million) in 1988. More recent data are not available. 58Law No. 91-30 of 13 April 1991. 59None of the firms employed more than 100 workers. Originally, the authorities did not envisage the establishment of firms with less than 150 jobs. Thresholds with respect to investment and employment were removed in 1981. 60Barbier and Véron (1991). 61Statistics provided to the Secretariat indicate shares of local sales varying from 1 to 100 per cent among firms (in volume terms). Local sales above the general ceiling of 40 per cent would be subject to conditions enumerated in Presidential circulars. According to the Senegalese authorities, no firm has exceeded the 40 per cent ceiling. Senegal C/RM/S/41 Page 33 IV. TRADE POLICIES AND PRACTICES BY MEASURE (1) Overview 120. Since the second half of the 1980s, Senegal's trade policy has evolved in accordance with the principles laid down in the Medium- and Long-term Structural Adjustment Plan ( l985-1992), generally focusing on trade liberalization. The authorities have sought to reduce and harmonize tariffs and to rely on price-based measures as the principal protective instrument. Import licensing and the underlying quantitative restrictions were largely phased out between 1986 and 1988. 121. Senegal levies three types of import taxes. A uniform tariff rate of 15 per cent is applied to imports from m.f.n. sources; the rate is multiplied by three for non-m.f.n. suppliers. Extensive product-specific tariff exemptions cover goods representing nearly 40 per cent of total import value. A fiscal duty (droit fiscal) is levied at a "normal rate" of 20 per cent. Different levels of duty are determined for essential items and strategic goods (exempt), raw materials and capital goods (10 per cent), finished products competing with local production (30 per cent) and luxuries (50 per cent). A stamp duty (timbre douanier) was introduced in 1990 to raise additional customs revenue. Only goods to be re-exported, in transit or destined for the Free Zone in Dakar are exempt from this 3 per cent duty. The simple average of all border charges in Senegal is 35.7 per cent. 122. Tariffs and fiscal duties do not apply to specific manufactured imports originating in other members ofthe West African Economic Community (WAEC/CEAO). These imports bear a regional cooperation tax, which varies among WAEC participants; in Senegal, rates range from zero to 41 per cent. Goods accorded community status within the Economic Community of West African States (ECOWAS/CEDEAO) are, in principle, also subject to a special tariff rate. However, this agreement is not yet operational. Tariff exemptions apply to agreed lists of raw materials and crafts originating in ECOWAS States. Bilateral commercial agreements with certain countries, such as Morocco, Algeria and Tunisia, grant exemptions from customs duties for specified imports originating in these countries. 123. Elimination of non-tariff measures on imports began in early 1986, when restrictions were lifted ona number ofgoods not produced locally.62 Further easing occurred in 1987, when restrictions were removed on important consumer products and insecticides.63 The liberalization process appears to have halted in February 1988 when, in particular, footwear imports were derestricted. 1 Goods remaining subject to import licensing or prohibited imports were subsequently enumerated in a circular from the customs administration in February 1989. 62Liberalization was introduced through Decrees Nos. 86-241 of 28 February 1986, 86-998 of 14 August, 86-1150 of 17 September, and 86-1374 of 10 November. The first list included inputs for the textile industry, specific clothing articles, miscellaneous machinery and certain household appliances (refrigerators, sewing machines, video recorders, etc.). The process was continued in the second half of the year with certain agricultural goods (poultry, eggs, fruit, green coffee, tea, oils for industry, tobacco, etc.), iron and steel products, transport equipment, consumer electronics and various other items added to the list of liberalized imports. 63Presidential Decrees Nos. 87-114 of 3 February, 87-702 of 27 May, and 87-1532 of 15 Decernber. Products covered included processed foods (milk and milk powder, margarine, meat preparations, soups and waters), paper products, insecticides and soaps. 64Decree No. 88.-161. C/RM/S/41 Trade Policy Review Mechanism Page 34 124. Preliminary World Bank calculations of average effective rates of protection indicate that the removal of quantitative restrictions and tariff reductions brought effective protection down to half the 1985-level by mid-1988.65Since then, effective protection has been increasing slowly, mainly driven by policy considerations; taxes on international trade represent more than 50 per cent of total tax revenue. The liberalization process appears also to have been reversed by the introduction ofminimum customs tax assessments (minima de perception) and increasing use of reference prices (valeurs rnercuriales) in customs valuation. 125. Preshipment inspection was introduced in late 1991. The inspection system ofthe Swiss Société générale de surveillance (SOS) has been operating since mid-1992. The authorities expect the system to make a lasting improvement in the collection of import taxes, thus allowing the eventual abolition of reference prices and minimum tax assessments. 126. All seaborne imports are charged a maritime tax (0.3 per cent) earmarked to finance activities of a shippers' association (COSEC). Certain imported textile fabrics attract a levy of 1 per cent. 127. Indirect taxes are levied on imported goods at the time of importation. Most important is the value added tax (TVA) levied at a "normal" rate of 20 per cent, but varying between 7 and 34 per cent, with many exemptions. Since wholesale and retail sale trade are not subject to TVA, a supplementary tax (taxe d'égalisation) is levied on imported goods to approximate the TVA that would be due on the importer's profit margin. Certain goods, notably beverages, fats, coffee, tea and cement are subject to excise taxes, levied on imports and local production. The combination of significant border and internal taxes result in taxation levels of over 90 per cent for many consumer and "luxury" items. 128. High taxation, combined with the fixed exchange rate (Chapter III) havestimulated considerable smuggling from neighbouring countries. In addition to causing shortfalls in government revenue, contraband also represents serious import competition for some domestic industries. Measures taken by the authorities to increase taxation on final products and grant exemptions to inputs may, ifanything, have exacerbated the incidence of smuggling. 129. Some large domestic firms enjoy long-term privileges (conventions spéciales) including legal import or export monopolies, as in the case of petroleum imports effected by the Société africaine de raffinage. SONACOS has the exclusive right to import and mark-et vegetable oils and to export groundnut products. All cotton cultivated in Senegal passes through a parastatal enterprise (SODEFITEX), and all imports of broken rice are under the monopoly of a price equalization fund (CPSP), using the profit to subsidize local rice production. A variety of basic products and services are subject to retail price controls. 130. Export restrictions may be applied to avoid domestic supply disruptions, to counter the effects of monetary distortions or in view of "the nature of certain products". Prior authorization is required to export cereals, sugar, peanut and tomato products, precious metals and jewellery. An export duty (droit fiscal) is levied on phosphates and phosphate-based fertilizers; duties of 10 or 20 per cent on groundnut products are temporarily suspended. 131. No export subsidies have been paid since July 1990, due to lack of funds. An export finance and insurance scheme, elaborated in the early 1980s, has never become operational for the same reason. 'Results must be interpreted with care since calculations are based on hypothetical assumptions regarding value added and declared duties for inputs and finished goods. Senegal C/RM/S/41 Page 35 132. Enterprises located in the Dakar Free Zone, originally established to attract export-oriented labour-intensive manufacturing enterprises, are exempt from import duties and other taxes. The 12 enterprises operating in the Zone make a marginal contribution to the Senegalese economy. An increasing share of their production is sold in the Senegalese market; such sales are subject to normal import taxes. (2) Measures Directly. Affecting Imports (i) Registration, documentation 133. Anyone intending to establish industrial, handicraft or commercial activity in Senegal must declare this to the authorities or receive prior authorization.66 Legal or physical persons engaging in international trade in Senegal are also obliged to obtain an importer/exporter card (carte importateur-exportateur).6' Applications are filed with the local Chamber ofCommerce. TheChamber verifies the information and transmits the application to the Ministry ofTrade for signature. Non-card holders need, as a rule, special authorization from the Minister ofTrade in order to import or export. Il 134. The card is valid for four years. The validity can be extended every four years upon application. Card holders seeking renewal must obtain clearance from the tax authorities (quitus fiscal) and attestations of non-violation of customs, foreign exchange and tax regulations from the customs administration and the Direction de la monnaie et du crédit. The renewal fee is CFAF 10,000. The card is withdrawn by the Minister of Trade if the holder is declared bankrupt, liquidates operations or is found guilty of contravening legislation on economic issues. 135. All imported or exported goods, including goods which have been exempted from duties and taxes, must be declared to customs, in accordance with the procedures described in Articles 79 to 87 of the Customs Act. Goods are subject to computerized or manual customs clearance. Computerized clearance is applied to all merchandise imported or exported through the port of Dakar. Lacking computers, other customs offices in Senegal use manual procedures. Both systems require all duties and taxes to be paid before the goods are released from customs.69 Documents required for customs clearance include the invoice, a certificate of origin, foreign exchange documentation (attestation d'importation ou d'exportation), and other papers such as sanitary or phytosanitary certificates. 66Law No. 81 .61/PM/SGG/S.L. of 24 November 1981. Failure to observe this obligation may lead to three to six month imprisonment, a fine of CFAF 100,000 to 10 million, and closure of the enterprise. 67Decree No. 87-646 of 15 May 1987. The requirement is also stated in Article 78 of the Customs Act (Law No. 87-47 of 28 December 1987). A prospective trader must submit a completed application form, including a certified photocopy of his/her Traders Card (Carte de commerçant), a certified photocopy of the registration with the tax authorities, two photographs (for those applying in person) or the company statues and a listing of the major shareholder;, and a stamp (timbre fiscal) to the value of CFAF 10,000. 9'This provision does not apply to non-commercial imports worth less than CFAF 500,000. 69Article 97 of the Customs Act states that all due amounts ofduties and taxes are to be settled on the spot. However, under Article 99, importers may present duly guaranteed acceptances for such payments due within four months. These credits are not accorded for amounts less than CFAF 1 million. C/RM/S/41 Trade Policy Review Mechanism Page 36 136. Imports worth CFAF 500,000 or more (f.o.b.) are also subject to a prior declarationprocedure. The forrn (Déclaration préalable d'importation - DPI), submitted to the importer's bank or any other authorized financial intermediary, must be accompanied by three copies c a proforma invoice, confirmation telex, or similar documentation of the contract. 137. Preshipment inspection is mandatory for all consignments valued (f.o.b.) at CFAF 1.5 million or more, except for specifically listed categories of goods exempted form SGS procedures. All contracts, invoices, order forms, letters ofcredit and other documentation related to such controls must be stamped "Inspection SGS" or "To be inspected by SGS". Settlement of imports worth of CFAF 1.5 million f.o.b. or more can not be effected unless the importer's bank or financial agent receives the clearance form (Attestation de vérification) in original, and the final invoice. The paid amount may not exceed the invoice value certified by Société générale de surveillance. (ii) Tariffs (a) Evolution of the tariff 138. Senegal's tariffselves the dual purpose of raising fiscal revenue andprotecting local producers. Under a major overhaul of the tax system in 1979, Senegal introduced a unique tariff rate (5 per cent m.f.n. and 15 per cent for non-m.f.n. suppliers). This was complemented by a fiscal duty ranging from 10to 75 per cent (Table IV. 1).7 The reform was intended to simplify tax collection and harmonize border taxes following Senegal's accession to the West African Econornic Community. Table IV.1 Rates of main import taxes in Senegal, 1979-90 (Per cent) Type of duty 1979 1983 1986 1988 1989 1990 Tariff (m.f.n.) S 5 15 10 15 15 Fiscal duty (low) 10 10 10 10 10 10 (ord.) 35 40 30 20 20 20 " (high) 45 50 35 30 30 30 (spec.) 75 75 65 50 50 50 Stamp duty - 3 Note: The ordinary m.f.n. tariffis applied to GATT members, unless bilateral or regional agreements provide more favourable treatment. The tariff rate is multiplied by three for other suppliers. Source: Ministère de l'économie, des finances et du Plan, Direction générale des douanes, Dakar. 139. The fiscal régime was adjusted in February 1983 in line with the 1982-83 economic stabilization programme, designed to raise budget revenue and encourage switches in consumption from imported 70Senegal also introduced a 20 per cent export tax. Until then, trade taxes had consisted of customs tariffs differentiating between members and non-members of the EEC, a fiscal charge (5 to 25 per cent), a statistical tax (4 per cent), a supplementary duty (2.1, 22 or 30.9 per cent), a turnover tax (13.5 or 33.33 per cent) and additional internal taxes reaching around 18 per cent of the amount of turnover tax. Senegal C/RM/S/41 Page 37 to locally-produced goods.7' The fiscal duty was increased by 5 percentage points for items which provide a major share of government revenue. Customs revenue rose by more than 15 per cent from 1982-83 to 1983-84, exceeding the budget forecast by a significant margin (Table IV.2). Table IV.2 Customs revenue in Senegal, 198243 to 199091 (CFAF billion) Fiscal year 1982-83 198344 19844S 1M4 19847 1988 98849 1989-90 199091 Actual revenue 82.8 96.2 ... 72.7 88.5 97.7 90.9 95.3 ... (Budget forecast) (60.4) (60) ... (87) (87) (89.6) (92.1) (88.7) Not available. Source: Ministère de l'économie, des finances et lu Plan, Direction générale des douanes, Dakar. 140. The cumulative effect of various import charges arnounted to a border tax varying from 86 to 98 per cent for some goods, providing incentives for smuggling., Customs revenue began to decline significantly in the mid-1980s. The authorities responded by reducing the fiscal duty on items most liable to illicit trading (tea and pepper) from 40 to 10 per cent. Rates were also lowered on a number of popular imported items such as consumer electronics, cooking equipment, tyres and jewellery. However, these measures were not sufficient to halt the decline in tax revenue. 141. Further changes in the fiscal régime in August 1986 signalled the beginning of a three-year schedule for adjusting import taxation to combat smuggling and reduce excessive protection of local industries. At the same time, tariff-based measures emerged as the main trade policy instrument, as import quotas and licences were being eliminated. The tariff was fixed at a single rate (15 per cent), while most fiscal duties were cut by 10 to 15 percentage points. These actions appear to have contributed to higher government revenue; collected duties rose steadily in 1986 and 1987 (Table IV.2). 142. Senegal proceeded with a second round of tariff reductions in July 1988, primarily directed at bringing its tax level into line with neighbouring countries.'I The single tariff rate was cut by 5 percentage points and supplemented by notable reductions in fiscal duties with the top rate falling from 65 to 50 per cent. However, political events and a resurgence in smuggling of certain goods subject to excessively high reference prices (valeurs mercuriales) led to a shortfall in customs revenue in FY 1988-89, conflicting with Senegal's public finance commitments vis-à-vis its international creditors. 143. In response, the 15 per cent tariff was restored in the second half of 1989 to reduce the budget deficit. The structure of fiscal duty rates remained unchanged, but reclassifications in the product coverage led to a significant increase in the number of items taxed at the "high" rate. Additional fiscal measures, consisting of minimum tax assessments (specific taxes based on listed prices) and a stamp 71Changes were apparently also required to make the final adaptation to the CEAO statistical and tariff nomenclature and to correct certain tariff distortions for the textile industry. "This information has been provided by the Senegalese authorities. It is not clear which charges have been included in the calculations. 73The highest rates of border taxes in other countries in the region were around 60 per cent. The 1988 tariff reforms reduced the maximum rate to 68 per cent in Senegal. C/RM/S/41 Trade Policy Review Mechanism Page 38 duty, followed in mid- 1990. Computerization of customs clearance has apparently made tax collection more efficient. 144. High tax rates have put taxpaying enterprises at a constant disadvantage. Customs revenue is seriously depressed by informal practices. The proliferation of smuggled imports has prompted special import measures or specific tax concessions for dornestic industries facing competition from contraband, notably manufacturers of textiles, matches and batteries. (b) Form of tariffs 145. Although Senegal has, in principle, adopted the Harmonized Commodity Description and Coding System since 1 January 1991, it continues in practice to apply the Customs Co-operation Council nomenclature, apparently because ofdelays in other CEAO countries in implementing the Harmonized System.74 According to the Senegalese authorities, full implementation of the Harmonized System may not be achieved before the end of 1994. The current CCCN tariff applied by Senegal has 5,428 lines. 146. Rates ofduty and taxes are ad valorem. The Customs Tariffspecifies minimum levels of fiscal duty (minima de perception), on a per unit basis, for certain items. Minimum assessments were introduced on cigarettes, lighters and matches in July 1989.75 The measure has subsequently been extended to many other products. Minimum assessments appear to have been relatively effective in reducing the scope for underinvoicing, but provide scope for use to protect local industries against imports. 147. Senegal does not apply seasonal tariffs, tariff quotas or variable levies. (c) Level and range of tariffs 148. Senegal applies a flat 15 per cent tariff on imports. The simple average tariff is lower (12.3 per cent) because of product-specific tariff exemptions, covering 966 of the 5,428 tariff lines (Chart IV. 1).76 The additional fiscal duty averages 19.4 per cent, the "normal" rate of fiscal duty (droit fiscal ordinaire) of 20 per cent applies to less than 8 per cent of tariff lines; some 1,357 items are exempt and other rates applied are 10, 30 and 50 per cent. The stamp duty, a 3 per cent import charge levied on a tax inclusive basis", brings the simple average of all three import taxes to 35.7 per cent. "4One CEAO member (Côte d'Ivoire) is currently applying the Harmonized System. 75Law No. 89-29 of 6 July 1989. The minimum fiscal duty is CFAF 80(40) on a 20-(10-) pack of cigarettes, CFAF 350 on lighters and between CFAF 12 and 40 on matchboxes. 76Tariff exempt items represent around 38 per cent of the value of total imports according to World Bank calculations. 77The stamp duty (timbre douanier) came into effect on 1 August 1990 (Presidential Ordinance No. 90-26 of 28 July 1990). Senegal C/RM/S/41 Page 39 Chart IV.1 Distribution of import duties in Senegal, 1993 Number of lines 4,462 4,000 3,000 2,521 ,000| 'clu free 1s tret 10 `l0 3U 50 Tariff FiscaI duty Source: Government of Senegal and GATT Secretariat calculations. 149. The cumulative effect of the three import taxes (plus a 0.3 per cent maritime levy) creates significant duty peaks of almost 70 per cent, High-taxed items include meat and fish products, chocolate, beverages, tobacco products, perfumes, certain passenger motor vehicles, pleasure boats, aircrafts, metal furniture and selected consumer goods (chewing gum, soaps, toys, smoking pipes, works of art, etc.). By contrast, 860 tariff lines enter duty free and 583 items are exempt from all internal and border taxes. As a result, the Senegalese tariffdisplays significant dispersion, with a standard deviation of the "total duty" of 18.8 per cent and notable differences among Tariff Study product categories. Tariff dispersion appears relatively low in wood and cork, furniture and grains and high in mineral products and fertilizers, chemicals and animals and animal products. 150. Escalation in Senegalese import taxes at first sight appears moderate, as the average tax on imported finished goods (38.7 per cent) is not substantially higher than on raw materials (34.6 per cent) or semi-manufactured goods (30..1 per cent). However, as shown in Table AIV. 1, considerable tariff (d) Tariff bindings 151. Senegal is in the process ofrenegotiating its GATT schedule oftariffbindings (Schedule LXIX). originaily bound by France before independence. Following a request by Senegal. theCONTRACTING PARTIES granted a waiver in December 1990." Senegal indicated two reasons (or resting a waiver the undertakings entered into with the IMF and World Bank. which necessiated "a through reorganization of the schedule of duties and taxes in the customs tariff and *precluded the fiscal flexibility that would allow substantial concessions". and Senegal's adoption on 1 January 1991 of the Harmonized System. 152. Senegal has bound all its rates ofduty towards other members of I.COWAS (C AF.» and the Wcst African Economic Community (CEAO>. Prefértntial trade is ino to hc affected hy any future increases in tarif( raises (ECIOWAS) or in fiscal duty (CEAO and IiCOWAS>) (c) Tariff prcleinsces 153. Unmanutacturd goods originating in ECOWAS and WAhC (CEAO) are exem Irxn ail Jutim and taxes in accordance with product tissY The exemption also applies to I COWAS craut lptrdclt (artisanat), whilc the CEAO regime is applied to handinmde articles wiihlwx reference to specific liks. Within thc CEAO. manulactured goods which havc been accorded pre(erenwial status are subicct <0 ai regional cooperation tax (Taxe de coxpération régionale -TCR). suhs 154. The application of a regional cooperation tax results inàa sh"orfail in customs revenue (rf the imnorting country. CEAO înilbers hâve created a Cornrnunity I)evelopmenw I:und (1CI). whote annual budget is madc equal in the comhined revenue short(all of all number States. Thse contriWiut of cach country is a function ot ils cxpgrts of nmnufac GATI-r document LJ6784. 10 D)cember I99I. 'GAT'r iJrscument IJ6732, 4 Octoher 1990. As noid above. tihc IS Tattff eWdukc. whsk "ntd.tit wt yet in application. t)ther ECOWAS raw materials are subject lo a ! pet cent tan((. "The other eniierprises werc lotaied in C'hc d'ivoire t1 19). lluykita !:Sàô (1i>. Nilat<13>. Nigel ni). &\Ii.aritaitia ( 1). C/RM/S/41 Page 41 t. * #vitsbl t>< ofQhoker tax concessions, goodçdenied as 'social products" (including t W Etpthr'è4i. fertiliten. and gasfor household use) are cxempt front customs duties and fi~ ~ ~ 4~v~f tuqrcr-kJ -` All other goods are, in principle, subject to the standard 4wa 4 i t .n ho 1iN cm of fiscal duty is also suspended on "strategic" products considered 4v 4 %4d ' *M U t' the naturaleconomy (crude oil and cereals). Reduced rates of fiscal duty * eêseiil-unulfacvtt and raw materials. t w f#bp5 tu.on1 "y> concessions arealso granted in support of certain industries: «4 ceteak aal taw nateruals for enterprises making fungicides, herbicides. etc., wf euvçw twn1v.-M t taxesto further the development of the New Agricultural Policy. let sWM.wi. nxt agricultural hand tools and machinery enter free of fiscal duties; êmwteI m t foi industries producing textiles. batteries and matches were made tw4f ti? -Jl fiscal duties were suspended, in November 1988. These measures *,#,î t .4eil necessary to support producers most vulnerable to coinpetition from 1gqw*m *ml accessoriesfor exploration and exploitation of hydrocarbons on the ç*i~w~q tWil< areexempt from duties and taxes in accordance with lists issued by e4,tkv k1t JWthat s* t e**à%wuw ists IlèJt ta iwu<1LaI industry are also tax exempt. e1aitsê*,1a5tî *if dt for commercialor industrial use mustbe insured with a Senegalese broker, 4 iot* wv 4 t #wft MWq*te by theauthoritiesor any other agent authorized by the Ministry of Finance 1 e4* '" *, dn~~1; $#«&>%W1 > Iv89 *61Ï4 4,É *: o pWiM>an annual membership fee of CFAF 10,000. C/RM/S/41 Trade Policy Review Mechanism Page 42 to be levied for specified extrabudgetary purposes; however, no detailed information has been provided concerning the use of the funds. 160. An import levy of CFAF 93 per litre is collected on refined vegetable oils. (b) Internal taxes 161. The customs administration collects value-added tax (VAT) and excise tax on imported goods on behalf of the Treasury (Direction générale des impôts et domaines). VAT is calculated on the basis of the c.i.f. price, adding payments of tariff and fiscal duty. Most goods are subject to the ordinary VAT rate of 20 per cent (Table IV.3). However, a lower rate (7 per cent) is applied on some agricultural products and low processed goods, while "luxury" items are subject to 30 per cent VAT (taux majoré). Aspecial rat;(34 per cent) is levied oncertain petroleumproducts. 1 Many products, totalling 842 tariff lines, are exempt from VAT. Some items, such as inputs for the textile industry, fertilizers, pharmaceuticals and medical components, are not subject to any import charges or internal taxes. In other cases, notably in agriculture, goods may be subject to border charges, but exempt from VAT, and vice versa. Table IV.3 Coverage of VAT and taxe d'égalisation in Senegal No. of tariff lines VAT rate Taxe d'égalisation (Per cent) (per cent) 842 0 0 588 7 2 2,618 20 4 1,370 30 6 10 34 0 Source: GATT Secretariat estimates. 162. The range of VAT rates and the many exemptions lead to substantial differentials in taxation among sectors. By Tariff Study categories, average VAT rates in agriculture vary from zero on grains to 27.7 per cent on beverages and spirits. In manufacturing sectors, the average VAT rise from 11.6 per cent on pulp, paper and paperboard to 29.6 per cent on furniture (Table AIV.3). 163. Imports are subject to a supplementary tax (taxe d'égalisation), applied on a tariff inclusive basis, which is intended to approximate the VAT applicable on the importer's profit margin. Rates of 2, 4 and 6 per cent are differentiated according to the pattern applying to the value-added tax (Table IV.3). The valuation basis and the coverage of tax exemptions is identical to the VAT régime. 164. Product-specific excise taxes are levied on alcoholic beverages (beer, wine, spirits, etc.), stimulants (coffee, tea, tobacco and cola) and on preserved cream, butter, lard, butyric fats and other oils and fats of animal origin. Excise tax rates on beverages vary according to the alcoholic strength of the product between 24 per cent (sparkling wine), 36 per cent (wine), 42 per cent (beer) and 85The 34 per cent rate covers eight tariff lines within CCCN Chapter 27.10; aviation spirit, petrol (super) and other petrol for passenger vehicles, gas oil, and certain lubricating oils. Senegal C/RM/S/41 Page 43 60 per cent (cider and spirits). The excise tax on butter and cream is 12 per cent, that on coffee and coffee extracts 1 1 per cent and the duty on green and black tea 3.8 per cent. A 5 per cent registration fee on motor vehicles was introduced in March 1993.1 165. Cumulation of import duties and internal taxes can lead to high rates of taxation on many products. For example, duties and taxes on imported pleasure boats declined from 185 per cent in 1985 to 92 per cent in July 1988, but subsequently rose to 117 per cent in 1992. Duties and taxes on major consumer goods such as clothing, footwear, motor vehicles and tea currently amount to 90 per cent of the c.i.f. import value, up from around 70 per cent in 1988. (iv) Customs valuation 166. Senegal is neither. a signatory to, nor an observer in, the Agreement on Implementation of Article VII of the General Agreement (the Customs Valuation Code). Under customs valuation procedures, defined in Article 15 ofthe Customs Act, the Brussels Definition ofValue ("normal" price) is used as the basis for the imposition of customs duties. The CFAF value of an imported good is determined using the exchange rate of the day of registration of the customs declaration. Normal trade discounts and rebates are accepted. The authorities may reject the declared c.i.f. price if good reasons exist to assume that it is incorrect. Reference prices (valeurs mercuriales) are established annually for certain products. The list applicable for 1993, covering 24 (six-digit) tariff line items, is reproduced in Table AIV.2(a). A more extensive set of reference prices is applied to imports originating in other members of the West African Economic Community (CEAO) entering Senegal under the preferential tariffscheme (Table AIV.2(b)). A special unit (Section Valeur) has been established to verify declared values against price information contained in the Customs data base. The Secretariat understands that the position held by SGS prevails in the event of any conflict. 167. Customs decisions may be appealed to a commission (Commission d'arbitrage des litiges douaniers), to the supreme administrative authorities (Minister of Finance, Prime Minister, President of the Republic) or to the courts. SCS representatives apparently participate in weekly meetings of a committee (Comité des litiges) established to discuss specific valuation cases. (v) Minimum import prices 168. Senegal does not appear to prohibit imports entering at low prices unless irregularities are discovered during SGS preshipment inspections (see below). However, in cases where the declared and verified transaction value is lower than established reference prices (valeurs mercuriales), the latter apply in the assessment of duties and taxes. Similarly, minimum amounts of fiscal duty are levied on various goods. The range of valeurs mercuriales is shown in Tables AIV.2(a) and (b). (vi) Pre-shipment inspection 169. In 1991, Senegal decided to contract with the Société générale de surveillance (SGS) to perform preshipment inspections.' According to current procedures, in force since 15 May 1992, importers must declare any transaction of a (f.o.b.) value equal to or exceeding CFAF 500,000. The declaration (Déclaration préalable d'importation - DPI) is submitted to the importer's bank or any other authorized 86Motor vehicles are also subject to an annual tax at rates varying according to engine horsepower. 87Decree No. 91-1221 of 14 November 1991, Ministerial Order No. 10100 of 20 November 1991 and information circular to importers dated 11 May 1992. C/RM/S/41 Trade PolicyReview Mechanism Page 44 financial intermediary before the goods are loaded.81 The declaration is valid for six months and may be extended, once, for a further three months. A new declaration must be completed if the final transaction is concluded with a different supplier or for a different type of product, or if the order is modified with respect to imported quantity or value (price increases up to 10 per cent are tolerated). 170. Any shipment valued at CFAF 1.5 million or more (f.o.b.) is subject to mandatory inspection by SGS officials in the exporting country. Exemptions or limitations to the preshipment inspection requirements are outlined in articles 7-11 of Decree No. 91-1221. SGS inspectors issue a clean bill of findings (Attestation de vérification) which is submitted to the SGS office in Dakar,9 Goods which have been refused by SGS officials (Avis de refus d'attestation) due to irregularities with respect to quantity, quality or suspected overinvoicing can only enter Senegal in transit. (vii) Rules of origin 171. Imports from ECOWAS and CEAO partners must be accompanied by a certificate of origin to benefit from preferential tariff treatment. ECOWAS origin is acknowledged for goods containing Community components representing at least 40 per cent ofthe total cost, or 60 per cent ofthe materials used, in quantity terms, or have value added by the ECOWAS producer reaching at least 35 per cent of the f.o.b. price of the final good.90 172. Goods subject to the regional co-operation tax (TCR) rate in intra CEAO trade must contain minimum 60 per cent CEAO materials, in quantity terms, or the value added by the producer must reach at least 40 per cent of the ex-factory resale price net of taxes. The minimum value added requirement is subject to annual review by the Council of Ministers. (viii) Import prohibitions 173. Imports of arms and ammunition, explosives, drugs and narcotics, and obscene publications are prohibited (Table IV.4). Trade with South Africa is prohibited.9' Conditional import prohibitions have been imposed on second-hand motor vehicles, apparently for safety reasons, since September 1993.9 The measure affects passenger motor vehicles more than three years of age; light commercial vehicles, including public transport (five years); and heavy trucks (seven years). IlImporters are recommended to submit the declaration at least seven days before the shipment date. 89SGS will only issue a clean report if its Dakar office has received a duly registered importer's declaration from the bank or authorized financial intermediary and the SGS office in the exporting country is in possession of three copies of the final invoice. 90Benefitting enterprises are also subject to a minimum national equity criterion. 9'Decree No. 75-095 of 21 January 1975. 9nDecree No. 93-1029. Senegal C/RM/S/41 Page 45 Table IV.4 Goods subject to import prohibition in Senegal Goods Legalreference | Substances classified in Table B: -narcotics Decree of 26 January 1926 drugs N.B. import, export, storage and depositing are - hallucirnogenic products (except for those authorized by the prohibited Ministry of Health) Obscene publications International Conventior, of 12 September 1923 implemented by the Decree of 3 July 1942 Explosives Law No. 64-52 of 10 July 1964 - deadly or incendiary devices N.B. import, manufacture, possession and transport are prohibited Weapons and ammunition except for collectors Law No. 66-03 of 18 January 1966 Products originating in or coming from the Republic of South Africa Decree No. 75-095 of 21 January 1975 repealing and replacing Decree No. 63-524 of 17 July 1963 Source: Ministère du commerce et de l'artisanat, Direction du commerce. (ix) Import licensing 174. Many import licensing requirements (autorisation préalable) were abolished between 1986 and 1988, but licences are still required for a certain lumber of goods, including sorghum, millet, broken rice, maize meal, wheat and flour, seed potatoes, onions, bananas, sugar and tomato concentrate (Table IV.5). Cement has been subject to licensing since 1981, originally in connection with the establishment of a local producer (SOCOCIM). Vegetable oils and sacks made ofjute or polypropylene were added to the list in 1992. The licensing system also serves to implement any import quotas. C/RM/S/41 Trade PoIicy Review Mechanism Page 46 Table IV.5 Good subject to import licensing in Senegal Goods Legal reference Certain cereals: Buckwheat, millet, canary seed, grain sorghum and durra, Decree No. 61-150 of 12 April 1961 other cereals, millet, sorghum Gold jewellery and articles of adomment Decree No. 65-794 of 19 November 1965 Newspapers, periodicals, documentation, catalogues, posters, etc. Decree No, 67-507 of 16 May 1967 (prior declaration) GoId, silver Decree No. 69-1126 of 17 October 1969 Bananas Decree No. 70-1393 o'. 15 December 1970 Tomato concentrate Decree No. 71-1333 of 15 December 1971, amended and supplemented by Decree No. 72-1227 of 16 October 1972 Cola nuts Decree No. 73-977 of 7 December 1973 Lump sugar Loaf sugar Decree No, 73-1005 of 13 November 1973 Powdered, crystallized or granulated sugar Decree No. 74-371 of 19 April 1974 Onions and potatoes Decree No, 75-998 of 25 September 1975 Old clothing Decree No. 78-200 of 8 March 1978 Wheat, maize meal, cereal flours, rice with over 35 per cent Decree No. 81-817 of 14 April 1981 content of broken rice withh the exception of rice for sowing), mineral or chemical fertilizers Cement Decree No. 81-879 of 1 September 1981 (Agreement on the establishment of SOCOCIM, 11 September 1981) Potatoes for planting Decree No. 82-784 of 15 October 1982 Vegetable oils Decree No. 92-958 of 24 June 1 92 Sacks of jute or polypropylene Decree No. 92-1774 of 31 December 1992 Source: Ministère du commerce et de l'artisanat, Direction du commerce. (X) Import quotas 175. Import quota levels for agricultural, goods subject to import licensing are established by a consultative committee involving the Ministries of the Interior, Trade, Agriculture and representatives ofproducers and the principal importers. The annual quota for imported bananas is divided into monthly instalments, announced by order of the Minister of Trade and enforced through import licences.91 Forecasts of the Senegalese harvest play a crucial rôle in the determination of quotas; quantitative restrictions are applied on a seasonal basis on products such as bananas, onions and potatoes. 176. Quota announcements are generally not published but communicated directly to the importers concerned.94Allocations are linked to the marketing of similar Senegalese products. 93Presidential, Decree No. 70-1393 of 15 December 1970. '"Previously, quota announcements were published in the information bulletin of the Chamber of Commerce. Government officials argue that the present method is more practical when the number of beneficiaries is increasing. Senegal C/RM/S/41 Page 47 (xi) State trading 177. From 1979, imports ofrice into Senegal were effected, on a government-to-government basis, by the Caisse de péréquation et de stabilisation des prix (CPSP). A committee (le Comité d'agrément et de suivi des opérations d'approvisionnement de la CPSP), established in 1983, authorized rice imports and selected distributors in the internal market.95 From 1986 to 1988, rice imports were made only by private importers while CPSP held minimum security stocks. Each trader had the exclusive right to import within a specified period of the year. The original system was restored in 1988, 178. For most types of rice, importation was again liberalized in early 1992. Private importers may import whole or intermediate rice against payment ofa levy determined by the Ministry ofFinance. Broken rice remains reserved for importation by the public sector, either by the Caisse de péréquation et de stabilisation des prix or any other public entity designated by the State (Chapter IV.4(iv)). 179. The CPSP is obliged to keep rice stocks covering at least two months' consumption.97 Any domestic merchant prepared to purchase 10 tonnes of rice on a cash settlement basis may approach the CPSP or private importers. The authorities seek to encourage domestic production by keeping domestic producer prices above world market levels. Funding for this operation is obtained from CPSP profits on imported rice. The substantial profit margin on imports allows the CPSP to pay favourable prices for rice purchased from rural development agencies - SAED (Senegal river development agency),, SODAGRI (Société de développement industriel et agricole) and SODEFITEX.9R 180. The Société africaine de raffinage (SAR) is the only refiner in Senegal, having the sole right to import crude oil.99 It is also the main importer ofpetroleum products. Imported products are subject to tariff, fiscal duty, VAT (up to 34 per cent special rate) and taxe d'égalisation (zero to 4 per cent). For SAR output, the authorities have, since January 1990, established ex-refinery prices which incorporate a handling fee to the SAR. The margin takes account of operating inefficiencies, including capacity underutilization. 181. Taxes and levies on petroleum products and "excess profits" earned by the SAR are channelled into the Energy Fund (Fonds d'énergie), established principally to reduce energy costs for phosphate exporters and finance projects which should ease Senegal's dependence on imported oil. However, contrary to the original intentions, around 80 per cent of fund resources have been transferred to the central government budget in recent years. Energy taxes have thus become an important fiscal instrument in Senegal. 95Decree No. 83-721 of 9 July 1983. 'Decree No. 92-155 of 22 January 1992. 97Decree No. 86-137. Security stocks of coarse cereals are maintained by the Commissariat à la sécurité alimentaire (CSA), an agency involved also in distribution of food aid. The CSA monitors prices for coarse cereals and have the right to intervene if local producer prices fall to unacceptably low levels. 981n 1991, the CPSP paid the rural development agencies CFAF 170 per kg rice, these in turn purchased paddy from local farmers at CFAF 85 per kg. In comparison, the wholesale and retail prices for broken rice in Dakar were fixed at CFAF 122.4 and 133, respectively. 9The Government has a 10 per cent stake in the company. The other owners are foreign oil companies such as Elf Aquitaine, Total, BP, Shell, Texaco and Exxon. C/RM/S/41Trade Policy Review Mechanism Page 48 182. According to the Senegalese authorities, there are no other State-trading activities with a significant impact on external trade. (xii) import cartels 183. The Secretariat has no specific information concerning the existence ofimport cartels in Senegal. However, some large firms apparently enjoy legal import monopolies as part of long-term privileges (conventions spéciales) granted in connection with their establishment, as in the case of petroleum imports effected by the Société africaine de raffinage.100 (xiii) Countertrade 184. The Secretariat has no information on Senegal's policy towards countertrade or ofany officially supported countertrade activities. (xiv) Standards and othertechnical requirements 185. The Institut sénégalais de normalisation (ISN) was established in March 1978 in response to requests by industrialists. These producers had underlinedthe importance ofstandards intheiractivities, notably with respect to more efficient utilization of raw materials, choice of appropriate technology, and improved organization of production units and finished goods. The institute has among its main tasks to be a centre for technical information, to provide assistance to local producers, distributors and consumers, and to help improve quality controls on imported goods. (a) Standards, testing and certification 186. The ISN has three functional divisions: electromechanics, building (maçonnerie), construction and engineering; food processing, animal products and fisheries; chemicals, petrochemicals, pharmaceuticals and biology, as well as a division for documentation and information.101 Eight technical committees, divided in subcommittees and working groups, assist the three functional divisions in the elaboration of standards and other technical documents. Committee members represent producers, consumers, the authorities, the scientific community and other interested parties. 187. The ISN conducts annual surveys among producers, consumers. public agencies, scientific institutions, etc. to identify the needs for new standards. Potential areas are subject to feasibility studies with respect to economic impact and to the availability of information and expertise to undertake further studies. Information search includes verification of the existence of foreign or international standards covering the subject. The ISN examines the conformity of any such standards with existing Senegalese standards. 188. First drafts of new standards are worked out in technical subcommittees, comprising about 15 experts. These drafts are submitted to the sectoral technical committees, which adopt draft standards 100SAR obligations and rights are outlined in Decree No. 62-0151 of 12 April 1962. 101The main regulations in this area are Decree No. 78-228 of 14 March 1978 concerning the establishment of the ISN, Decree No. 80-380 of 15 March 1980 on the organization of a State Secretariat for Scientific and Technical Research and the structure of the ISN and Order No. 0141183 of 18 November 1983 redistributing tasks between divisions and offices within the secretariat. Senegal C/RM/S/41 Page 49 by consensus. Draft standards are subsequently subject to hearings involving professionals directly concerned. 189. A catalogue of Senegalese standards is available to the public. The 1992 edition lists 33 standards in the area of construction and engineering; 37 pertaining to food products; 49 covering chemical/environmental subjects; one with respect to low-voltage electrical equipment; and one for the establishment of export documentation. 190. Standards relating to public health, safety and the environment are made mandatory through legislation. Technological developments may cause standards to be revised or nullified. Senegalese standards apply equally to local and imported products. Compliance ofimported goods with mandatory technical regulations standards must be certified by an institution recognized by Senegal. 191. Presidential Decree No. 84-14 of 2 February 1984 prohibits the sale or distribution of any pesticide, herbicide, fungicide, insecticide etc. (agropharmaceutique) which has not been accepted by the authorities. Specific authorization is provided by joint order ofthe Minister of Rural Development and the Minister of Public Health for a limited time. A special commission (Commission nationale d'agrément des spécialités agropharmaceutiques) examines requests for authorizations and makes recommendations to the competent ministries. Products must be tested as to their effectiveness and danger to public health, crops, animals and the environment under conditions of normal use. 192. The ISN is responsible for testing and certification procedures; a national system of quality certification is under consideration. The ISN has prepared three draft texts comprising a standardization and certification law, a decree for the implementation of the law and a decree concerning the creation of national standardization and certification bodies. Legislation is expected to be introduced in the second half of 1993. (b) Sanitary and phytosanitary regulations 193. Senegalese applies phytosanitary controls in accordance with the Phytosanitary Convention for Sub-Saharan Africa. The system provides for absolute prohibitions, prior authorizations issued by the Service de la protection des végétaux du Sénégal, restriction of import authorizations to specified institutions, and free importation. A phytosanitary certificate is required for all plant imports. Quarantine may only be effected in stations recognized by the Interafrican Phytosanitary Commission, including Kew (United Kingdom), Lisbon (Portugal), Paris (France), Ibadan (Nigeria), Stellenbosch (South Africa), and Madagascar. (c) Marking, labelling and packaging 194. The ISN is currently giving priority to marking, labelling and packaging requirements for food products and popular consumer items. The institute has introduced a standard specifically concerning the labelling ofedible oils. Certain domestically made or imported products, notably cigarettes, destined for the local market must be labelled "Vente au Sénégal".102 Such labels must not be used for goods in transit or to be exported or imported by organizations or persons which enjoy tax-exempt status. '02Presidential Decree No 89-1223 of 16 October 1989. Batteries were added to the product list by Presidential Decree No. 90-024 of 17 September 1990. The label must appear both on the packaging and on each single battery. C/RM/S/41 Trade Policy Review Mechanism Page 50 (xv) Government procurement 195. Senegal is neither a signatory to, nor an observer in, the Tokyo Round Agreement on Government Procurement. Basic legal texts covering public procurement comprise the "Code des obligations de l'Administration" 103 and three decrees issued in 1977 and 1982. 'I Regulations cover goods and services delivered to public bodies, i.e. the State, public institutions and rural district authorities. 196. Senegal's public sector purchases goods and services worth approximately CFAF 50 billion annually. Contracts valued at CFAF 3 million or more are subject to public announcement and competition through offers in writing. Additional procedures apply to contracts estimated to exceed CFAF 10 million. Bidding invitations are elaborated by the technical departments of the procuring units, alternatively by the Direction de la construction et de l'habitat or the Direction des études et de la programmation du Ministère de l'équipement. Offers under a tendering procedure are studied by the national or regional audit commissions (Commission de dépouillement). Offers under the "adjudication" procedure are scrutinized by the adjudication office consisting of three members designated by the purchasing authority. 105 Proposed awards are submitted to a national commission (Commission nationale des contrats de l'Administration - C.N.C.A.) or regional commissions (C.R.C.A.s) for comment before final approval. 197. Final approval authority rests with different offices depending on the contract value. State purchases worth CFAF 200 million or more, and contracts of CFAF 100 million or over with other public bodies, are decided by the Secretary General of the Presidential Office. State contracts below these levels are generally approved by the Minister of Finance; those for other public institution purchases, by the President ofthe Administrative Council. Contracts with local government amounting to CFAF 204100 million, having received a negative opinion from the C.N.C.A., are awarded by the Minister in charge of local government. Local governors make the final decision in case a proposed award has been given negative advice by a C.R.C.A.U1 198. Purchases can be conducted under selected or single tendering. Selected tendering applies to the supply of specialized services. Direct negotiation takes place when only one supplier exists, no offers have been received in open tendering and for contracting by the armed forces. 199. Senegal 's procurement regulations are currently being harmonized withWorld Bankguidelines. A preferential margin ofup to 10 per cent has been allowed for suppliers ofgoods or services produced in Senegal since 1982. No particular preferences apply to ECOWAS/CEAO suppliers. '03Law No. 65-51 of 19 July 1965, defining the general structure and execution ofcontracts concluded with the administration. Unless special provisions apply, contracts are governed by the rules of the "Code des obligations civiles et commercialss. 141Decree No. 77-1164of27 December 1977 approving thegeneral conditions governing public works, and Decrees No. 82-690 and 691 of 7 September 1982 concerning procedures for awarding public contracts. 1o)5"Adjudication" is the procedure corresponding to common law. Tendering is only used in instances specified in Article 32 of Decree No. 82-690 (works, supplies of goods and services not exceeding CFAF 20 million, etc.). The announcement period is generally longer under "adjudication" (30 days) than under tendering (20 days). 106The Secretary General of the Presidential Office is the final authority for disputed contracts worth more than CFAF 100 million to local governments. Senegal C/RM/8/41 Page 51 200. Payment procedures, passing through four stages, are known to be slow. At the initial stage (engagement), each expenditure by an executing ministry must be approved by its director of financial operations and the comptroller in the Department ofDebt and External Cooperation (DDCE). Suppliers receive a credit title by the Direction du traitement automatique de l'informatique (DTAI) for approved purchases. The process may take up to four months. 201. The second step (liquidation) involves verification of actual delivery of the agreed goods and services and the amount to be paid. This requires approval of the two previous instances and the Central Accounting Service. The Budget Office then issues a payment order to the Central Accounting Office (l'ordonnancement). Finally, the actual payment (paiement effectif) is made. About eight months may lapse between the initial approval stage and the issuance of a payment order. Additional time passes before the supplier receives the final settlement. 202. Expenditure overruns have apparently become a chronic feature of Senegalese public finances in recent years. Ministries may seek to persuade suppliers to provide goods and services before the entire payment approval process has been completed and budget reallocations typically give priority to procurement units which are running out of funds. In some cases payments may have been made for non-delivered goods, since physical verification is not always carried out in practice. (xvi) Local content requirements 203. Firms enjoying special fiscal advantages under Senegal's investment régime may be required to use at least 65 per cent (in value) intermediate inputs of domestic origin or to ensure that the value of imported components may not exceed 35 per cent of the total cost of the final good (Table AIR. 1). There are no other local content requirements in Senegal according to the authorities. (xvii) Anti-dumping. countervailing duty and safeguard actions 204. Senegal has no specific anti-dumping or countervailing duty legislation. However, reference prices (valeurs mercuriales) may also serve to prevent imports of allegedly dumped goods. (xviii) Measures implemented in exporting countries 205. The Secretariat has no evidence of measures by other countries regulating exports to Senegal. (xix) Free-trade zones, export processing zones 206. The Free Zone in Dakar was established in 1974 under Law No. 74-06. The law grants enterprises located in the. zone full exemption from Senegalese corporate taxes, and from all duties and taxes (including the stamp duty) on imported raw materials, semi-manufactures, finished goods or other inputs.'I0 Declarations for imports into the zone must be submitted in six copies to the customs office in the zone. Goods are landed in the customs area in the Dakar harbour. Distillation equipment, raw diamonds, drugs, poisonous substances, obscene publications or subversive pamphlets may not be brought into the zone, and prior authorization is required for imports of explosives, arms and ammunition, radio transmitters and receivers, cinematographic films and records. '07Enterprises may collect income taxes from their employees on behalf of the Treasury. Operators are assessed an annual contribution to cover the costs of the zone administration. C/RM/S/41 Trade Policy Review Mechanism Page 52 207. Free zone firms are allowed to sell up to 40 per cent of their production in Senegal. 108 Goods are subject to normal import duties on imported raw materials and components, stamp duty, value-added tax and any other indirect taxes. The 12 free zone enterprises realized nearly 40 per cent of their combined turnover in the Senegalese market in 1992. 208. Legislation introduced in 1991 allows the possibility to grant "free sector`' status (points francs) to exporting enterprises located outside designated free zone areas. Such firms may enjoy the same import and tax privileges as other free zone enterprises. Nine companies, including the main phosphate producer, are currently covered by the scheme. (xx) Other measures 209. With a view to combatting smuggling, the distribution of certain goods is subject to special conditions. The products covered by these provisions include green orblack tea, drugs, sugar, tomatoes, pure alcohol and alcoholic beverages, tobacco, medicines, cosmetics, matches, foreign banknotes, certain textile fibres, bed linen, secondhand clothes, precious metals and coins, electric batteries, radio accumulators, transmitters and receivers, special purpose automobiles and motorcycles, audio tapes, arms and ammunition.109 Article 208 of the Customs Act obliges these distributors to produce documentary evidence that their goods have been imported or purchased legally whenever required by customs officials. (3) Measures Directly Affecting Exports (i) Registration, documentation 210. Exporters are required to hold a Carte d'importateur-exportateur. Procedures and conditions are identical to those applying for importers (described in Section 2 (i)). The value of all exported merchandise must be declared to customs. (ii) Export taxes. charges, levies 211. Senegal for some time applied a flat 20 per cent export tax, introduced in 1979. Fiscal duty is currently charged on exports of phosphates and phosphate-based fertilizer, at rates of 5 per cent on shipments exceeding 1.8 tonnes and 2.5 per cent on smaller consignments. Export taxes on groundnut cake (10 per cent) and groundnuts and groundnut oil (20 per cent) are suspended. (iii) Minimum prices 212. Article 16:2 of the Customs Act authorizes the Minister of Finance to establish "market values" (valeurs mercuriales) for certain exported products. Currently, unroasted peanuts and groundnut oil are subject to such export reference prices (Table A1V,2(c)). 't°Circular No. 00147 of 19 June 1990 of the Minister of the Economy and Finance. '9Minister of Finance, Order No. 12-588 of 19 October 1988. Senegal C/RM/S/41 Page 53 (iv) Export prohibitions 213. Exports to South Africa are prohibited.110 (v) Exrort licensing 214. Since 1983, exports have been liberalized, in principle, unless restrictions are imposed through application of foreign exchange regulations."' Prior export licensing requirements were, however, maintained for some products to avoid supply disruptions in the domestic market resulting from import restrictions, to counter the effects of monetary policy or to take account of "the nature of certain products". Under the Structural Adjustment Plan, some restrictions were lifted in 1988.112 Senegal now retains prior authorization procedures for exports of cereals, sugar, peanut and tomato products, precious metals, and jewellery (Table IV.6). Licences are issued by the Ministry of Trade. Table IV.6 Products subject to export licensing in Senegal Tariff line number Product description Chapter 10 Cereals ex 12-01-10 Groundnuts, for sowing 12-01-21 Groundnuts for oil milis, unroasted, in shell o12-01-22 Groundnuts for human consumption, unroasted, in shell 12.01-29 Other groundouts, unroasted 12-01-31 Groundnuts for oil milis, not in shell 12-01-32 Groundnuts for human consumption, not in shell 12-01-39 Other groundnuts not in shell 17-01 Beet sugar and cane sugar in sold form (all items under this heading) ex 20.02 Tomatoes, prepared or concentrated, otherwise than by vinegar or acetic acid 20-02.01 Tomatoes in immediate packagings of a net capacity of not less than 900 grammes 20.02-09 Tomatoe purée, otherwise put up 20-02-1 1 Tomatoe purée in immediate packagings of a net capacity of not less than 900 grammes 20-2-19 Tomatoe purée, otherwise put up Chapitre 71 Pearls, precious and semi-precious stones, precious metals, rolled precious metals, and articles thereof: imitiation jewellery Source: Chambre de commerce, d'industrie et d'agriculture, de Dakar, Recueil des textes régissant le commerce extérieur du Sénégal. (vi) Export quotas 215. According to the authorities, there are no quotas on any exports from Senegal. "'Article 3 of Presidential Decree No. 88-956 of 12 July 1988. l"Presidential Decree No. 83-1056 of 1 October 1983. l"Presidential Decree No. 88-956 of 12 July 1988 removed prior licensing for peanut oil and cake, animal feed, phosphates, cement, fertilizer, ferrous minerals, arabic gum, fresh and chilled tomatoes, tomato juice and cigarettes. C/RM/S/41 Trade Policy Review Mechanism Page 54 (vii) State trading 216. Some larger finis with State participation apparently are the only exporters ofspecific product. Thus, SONACOS, whose main shareholder is the price equalization fund, is the sole exporter of groundnut products; SODEFITEX handles ail colton produced in Senegal. The authorities note that these are not legal monopolies. (viii) Export cartels 217. The Secretariat has no information regarding the existence or non-existencc of export cartels in Senegal. (ix) Voluntary restraints, surveillance and similar measures 218. Senegal does not participate in the Multifibre Arrangement (MFA) nor in any commodity agreements. (x) Exportsubsidies 219. Policies to encourage exports of manufacturers through explicit subsidies date back to l980."' Product coverage was originally limited to five categories (canned fish. (ertilizer. textiles aid cluhing. footwear and agricultural machinery and tools), but modifications in 1983 enlarged the produet range significantly. In addition, the rate oflsubsidization was increased from 10 to 15 per cent ofthe (o.h. value if the finished product. By 1986, the authorities considered the measures had contributed to export growth, although they had benefitted mainly products with little local value added. 220. Under the New Industrial Policy of 1986, protection was to bc ratiunàlized on the lauis of tariffs providing relatively uniform assistance to industries producing for the local rnarkct. Ilowever, continued sheltering of the home market was expcctcd to discourage cxport production. To counterbalance these effects, a more generalized subsidy scheme intended not Io discriminate among sectors, based on calculations of industrial value added. was introduced in June 1986."' Its stayed objective was to eliminate any discrimination between industries. Since July 1990. aIl payments have been suspended because of the Governmen:'s financial difficulties. 221. Firms requesting payment ofexpoit subsidies were Io submit a copy ofthe tratuaciion invcuce. an exit declaration covering customs inspection and loading, a banker's contirmation oi effective repatriation ofthe proceeds, a certificate ofmanufacture, and copies ofcustionm declxratiowts for importce inputs subject to the drawback or temporary admission régimes: invoices werc I Ie prcscnied (or other inputs of foreign or local origin. 222. Excluded from the scheme werc unprocessed nuterials. peanut products. exports to the West African Econonsic Community tCEAO) subject to the preferential tariff (TCR). refined petroleum (Chapter 27 of the Custems 'rariff), and output of thle cotton ginning and mining indusirics. "3Law No. 80.38 of 15 August 1980. "'Law No. 86-23 of 16 June 1986. C/RM/S/41 Page 55 221 I)tw-whbck facilities for customs duties are available only to firms which have been granted elUaggloty ieatu% by the Ministry of Finance."5 Such status can only be conferred on firms which are c«»4 227 The authorities established an export finance commission (Commission nationale du crédit à l'exportation et de l'assurace-crédit) in 1981.117 The tasks of the commission include participation on the policy-making area, advice on the pricing of credit and insurance and examination of exporters' eligibility (or export finance and insurance at preferential rates. Interest rates, set by the commission, are ired. if necessary, on a monthly basis. The Agence sénégalaise d'assurance au commerce extérieur (A S A C E.) serves as secretariat for the commission. (xiii) Export insurance and guarantees x8 A.S.A.C.E. has managed the export insurance scheme since 1981. Exporters, banks and other financial institutions are insured against political and commercial risks in export operations against I!lnterministerial Order No. 5136 of 30 April 1986. "'Law No. 87.47 or 28 December 1987. "The authorities also foresaw the creation of a fund (fonds de bonification) to finance the subsidy element in export credits and the establishment of an export credit finance agency (AFINACE), primarily engaged in the management of the fund. Although CFAF 140 million were raised for the special fund (the target was CFAF 240 million). the system never worked. Subsequently merged with SONAGA, a company financing purchases of motor vehicles, the credit financing scheme was terminated in 1990 as SONAGA went into liquidation. C/RM/S/41 Trade Policy Review Mechhanism Page 56 payment of a premium."8 The value of transactions guaranteed by A.S.A.C.E. fell from CFAF 14 billion in 1988 to CFAF 600 million in 1991, but business appears to have improved in 1992. (xiv) Export promotion, marketing assistance 229. Current export promotion policies are implemented by the International Centre for External Trade of Senegal (CICES) and by the Chambers ofCommerce, Industry and Agriculture. CICES does not provide financial assistance; its principal tasks are to inform interested enterprises ofopportunities abroad through market studies, prepare businessmen for trade missions and participation in trade fairs abroad, and to identify potential exporters and their needs for assistance. The authorities also try to encourage business contacts through the organization of trade fairs in Senegal. 230. The tenth "Foire de Dakar" took place from 26 November to 7 December 1992. Foreign participation in the fair is apparently declining although Nigeria and India were represented by strong delegations. The organizers reportedly detected a tendency among businessmen to prefer specialized fairs to trade fairs of a general nature such as the Foire de Dakar."9 (xv) Free-trade zones export-processing zones 231. Enterprises in the Dakar Free Zone are exempt ,rom all export taxes and are, in principle, eligible forpreferential tarifftreatment incountriesbelonging to the West African Economic Community (CEAO). However, firms have apparently had difficulties in obtaining "Comnmunity status" as other CEAO members have resisted according trade preferences to free zone output. (4) Measures Affecting Production and Trade (i) Adjustment assistance 232. The Government has established an Industry Restructuring Fund (or "Ligne APEX") with support from the World Bank. Under this programme, US$3 million has been made available to retrain and reemploy industrial workers made redundant.'20 A further US$2 million, managed by the Commissariat à l'emploi, may be used to finance projects for redundant industry labour. Despite numerous requests for finance, project funds remain unused, as Senegalese banks have been reluctant to finance their share of such ventures. 233. Labour laws protecting workers against dismissal render retrenchment in response to falling demand difficult for formal-sector enterprises. Public sector reforms have also met considerable resistance from labour unions, presumably because liquidation or efficiency drives imply reductions in relatively highly paid employment. 121 "8Currently, the premium is 0.66 per cent of the insured amount. "9Entreprendre. No. 0, November 1992 . 120By the end of 1992, 172 workers hfd completed such training. '21The level of salaries paid to civil servants in Senegal influences the determination of wages in the formal sector, which are much higher than in neighbouring (non-CFA) countries. Salaries in formal enterprises are typically multiples of the official minimum wage in contrast to remuneration in the informal sector, frequently below the legal minimum. Senegal C/RM/S/41 Page 5 234. Senegal's investment legislation provides tax concessions for small and medium sized enterprises (Table AIR. 1). The statistics indicate a stagnating or contracting large-scale formal sector, with employment in large enterprises (annual turnover exceeding CFAF 500 million) falling from nearly 31,000 in 1983 to 26,700 in 1988. Labour creation has therefore mainly taken place in the informal sector, which, reflecting its lack oflegal status, does not qualify for incentives to establish new ventures. (ii) Assistance for research and development 235. The Senegalese Government and foreign donors fund an agricultural research institute (ISRA), covering agricultural crops, livestock fish and forestry. Priority is given to crop research, receiving more than CFAF 2 billion of the CFAF 4.5 billion ISRA budget in 1991. 236. Expenditures for research and development in alternative renewable energy sources are, in principle, eligible for finance from the Energy Fund (Fonds d'énergie; Chapter IV.2(ix)). During fiscal years 1988-1990, the fund steering committee recommended projects in alternative energy research and rural and urban electrification amounting to CFAF 9.9 billion. However, only CFAF 1.7 billion were allocated to such projects, representing just over 1 per cent of the resources made available to the fund over the period. (iii) Production subsidies. tax concessions 237. The Compagnie sénégalaise des phosphates de Taiba (CSPT) accounts for nearly 85 per cent of the consumption of high-voltage electricity in Senegal. The Government subsidizes the CSPT and specific users of petroleum products through reimbursements from the Energy Fund. 123 Payments to the phosphate industry amounted to CFAF 14.6 billion from 1987 to 1990, consumers of petroleum products received another CFAF 8.1 billion. According to Ministry of Industry officials, reimbursements to the CSPT currently amount to CFAF 6 billion annually. 238. Fuel subsidies to fishermen reduce the price of petrol and diesel fuel considerably, from CFAF 400 to CFAF 172 per litre. The Secretariat has no further information concerning input subsidies. (iv) Pricing and marketing arrangements 239. Basic legislation concerning regulation of prices dates back to 1965.124 Price controls have been removed on important goods in recent years, but are still maintained on a number of "strategic" or basic items. At present, producer prices are fixed for groundnuts, cotton, paddy (rice) and fresh tomatoes. Regulated retail prices cover broken rice, sugar, locally made or marketed cooking oil, charcoal, water, electricity and petroleumproducts. Certain services charges (transportation, doctor's fees, clinic and hospital charges) are also fixed. 240. Strict certification requirements (prix homologués) apply on the prices of imported cooking oil, millet and wheat flour, tomato concentrate, bread, butane gas, cement, locally manufactured '22Separate data for research and electrification is not available. '23Senegal's two phosphate producers and the Industries chimiques du Sénégal (ICS) have purchased energy at internationally competitive prices since July 1987. '24Law No. 65-25 and Presidential Decree No. 65-125 of 4 March 1965. Regulations were revised on 29 December 1988 through Presidential Decree No. 88-1744. C/R/S/14 Trade Policy Review Mechanismi Page 58 pharmaceutical products, and vehicle storage, transit and towing. The accepted price is calculated on the basis of each component incorporated in the good or service.125 Justified requests to modify prices must be submitted to the Minister of Trade. The request is considered accepted if the authorities do not respond within two months. 241. Imported pharmaceutical products are subject to controls on the profit margin. The authorized margin system is more flexible than the price fixing régime applying to the only domestic producer of pharmaceuticals (SIPOA, a Rhône-Poulenc subsidiary located in the Dakar Free Zone), according to Ministry of Industry officials. 242. The regulated retail prices for petrol, kerosene, gas oil and fuel oil are relatively high by world standards'26. A new calculation system was introduced in May 1991, which was intended to adjust domestic prices every three months in line with movements in world market prices. The first, and so far only, (downward) adjustment was made in July 1991. 243. SENELEC holds a monopoly on production, transportation and distribution of electricity in Senegal.'27 Electricity is generated in thermal power plants. SENELEC purchases 240,000 tonnes of crude oil annually from the Société africaine de raffinage, at a preferential price, for this purpose. 128 The electricity tariff structure is determined by Interministerial Order, involving the Ministries of Energy (Mining and Industry) and Economy (Finances and Planning). The structure differentiates between low-voltage (households), middie-voltage (industries) and high-voltage consumers. Price equalization aims to prevent regional price differentials within each user group. 244. The Senegalese authorities established the Caisse de péréquation et de stabilisation des prix (CPSP) in 1973. Its operations are supervised by the Ministry of Finance. In the past, CPSP involvement extended to regulation and stabilization of consumer and producer prices for some of the major commodities in Senegal (rice, flour, tomatoes, cotton, sugar and groundnuts). Reforms under the new agricultural policy have reduced the scope of CPSP operations. The CPSP withdrew from marketing and imports of vegetable oils in 1985, groundnut exports in 1986, and subsequently ceased interventions in markets for tomatoes (1989), cotton and sugar (1990). 245. The groundnut sector has traditionally been subject to government intervention. Groundnut processing and marketing, including exports, are effected by SONACOS (Société nationale de commercialisation des oléagineux du Sénégal). Rapidly increasing consumption of vegetable oil has, however, resulted in steady expansion of artisanal processing of the groundnut harvest. Despite its considerable processing capacity, SONACOS is presently handling no more than one quarter to one third of the groundnut crop, resulting in substantial idle capacity. '25Article 16 of Decree No. 65-125. '26For example, the retail price for one litre of premium petrol is fixed at CFAF 335. '2'The oil mills and the Compagnie sucrière sénégalaise use production waste to generate electricity for their own consumption. Ministry of Industry officials estimate that these companies have economic electricity generating capacity exceeding their needs but commercialization would infringe upon the monopoly rights of SENELEC. 128The price of fuel oil for electricity generation has been fixed at just under 60 per cent of the fuel price paid by other major consumers since July 1991. Senegal C/RM/S/41 _a______P.ige 59 246. Groundnuts for consumption (arachides de bouche) are collected by a marketing company (SEPFA - recently privatized and renamed NOVASEN). Producer prices for groundnuts were reduced in 1988/89 in line with the decline in world market prices to allow SONACOS to make a profit. However, an increase in producer prices for oil groundnuts in April 1991, primarily implemented to raise the share of the crop processed by SONACOS, resulted in renewed losses for the enterprise. 247. A guarantee fund (FGPA - Fonds de garantie pour l'arachide) was set up in 1986 to cover losses in the groundnut sector. Initially financed by the EC (STABEX) and SONACOS contributions, the fund ran out of money in 1990/91. 248. All cotton cultivated in Senegal is collected, processed and marketed by a parastatal enterprise (SODEFITEX) which also provides credit and extension services to farmers. Subsidies to cotton production are being phased out. The Secretariat was unable to establish the extent to which the 1 per cent import levy on imported textile fabrics is earmarked for sector-specific uses. 249. Sugar cane is produced and processed at a large complex (Compagnie sucrière du Sénégaï) in the North of Senegal. Production has risen steadily since 1979 and reached 770,000 tonnes in 1990. Sugar prices have not been regulated since 1987. (V) State-owned enterprises 250. Senegal had 85 public enterprises in 1986, accounting for a high share in employment (17 per cent) relative to their contribution to GDP (7 per cent).'29 The sector operated at a net loss amounting to 9 per cent of total government revenue (or 2 per cent of GDP). Attempts to reform the public sector began in late 1970s, but little progress was made before 1985. Current reforms aim to pull the Government out of activities which private operators manage better and to improve efficiency in remaining public enterprises. The objectives are pursued through privatization or liquidation. introduction ofmanagement contracts and improved monitoring ofpublic enterprises. The Government has in some cases preferred privatization of management as an alternative to transfer of ownership. 251. Eleven enterprises had been liquidated as ofOctober 1991. Direct budget subsidies to the sector have been reduced, but still amounted to CFAF 11.8 billion in 1990/91. Stricter controls also apply on indirect subsidies (tax concessions, subsidized credit, etc.), and a programme to cancel cross-debts between the Government and public enterprises is being implemented. In mid-1993, 26 entities had been privatized with another ten enterprises awaiting privatization. Revenue amounted to CFAF 3 billion, most ofwhich has been transferred to the government budget. Investors may be offered tax concessions but not with respect to import taxes. (vi) Regional assistance 252. Investment regulations differentiate between four regions with respect to the tax incentives offered; in general incentives increase with the distance from Dakar (Table AIl. 1). The Secretariat is not aware of any other specific schemes to support regional development. FHowever, given the importance of road infrastructure and transportation costs in rural areas, it is likely that allocations from the Road Fund (Fonds routier) and regulated transportation fares take account of regional development objectives. 129Twenty five of these enterprises were classified as administrative or non-commercial entities. Public enterprises also absorbed a disproportionately high share of Senegalese investment (29 per cent). C/EMS/41 Trade PoIicy Review Mechanism Page 60 (vii) Other measures 253. Twenty per cent of the revenue from sanctions of infringements against economic legislation (fines, confiscated property, etc) is channelled into a special fund (Fonds d'aménagement de l'équipement des services du contrôle économique).130 Expenditures from the fund, mainly used to finance a car pool for tax inspectors, are authorized by the Minister of Finance. "0Presidential Decree No. 70-1403 of 19 December 1970. Senegal C/RM/S/41 Page 61 V. TRADE POLICLES AND PRACTICES BY SECTOR (1) Introduction 254. Senegal has traditionally been a relatively developed commercial centre in West Africa. In the colonial period, the designation ofDakar as the administrative capital ofFrench West Africa spurred local development of infrastructure and industrial activities for the whole French-speaking region. However, withthe creationofseveral separate States inthe region, and theemergence ofinward-oriented development strategies, Senegalese producers began losing some of their traditional markets in neighbouring countries, 255. After independence in 1960, Senegal's first two economic and social development plans (1961-69) were based on an import substitution approach and relied on large public enterprises with significant capital needs. Emphasis switched to the development of small and medium-sized enterprises in the third plan (1969-73). An industrial development organization (Société nationale d'études et de promotion industrielle) was established to deliver technical and financial assistance to the private sector. Public funds were made available to provide equity and financial guarantees. 256. The establishment of a free zone in Dakar in 1974 signalled increasing attention to export-oriented activities as a perceived means to create employment, encourage technology transfer and relieve pressures on the trade balance by adding more value to local materials. However, initiatives did not live up to original expectations; most Senegalese industries continued to focus on the domestic market and operate at low capacity. 257. Higher international prices for groundnuts andphosphates, Senegal's major export commodities sparked an expansion in domestic demand in the second half of the 1970s. However, this proved short-lived. Less favourable terms of trade had a severe impact on public finances and the level of foreign debt. In 1979, the Senegalese Government launched a stabilization programme, followed by an economic and financial recovery plan (1980-84). However, as these initiatives proved insufficient to halt the deterioration in Government finances, attention shifted to the underlying structural and institutional rigidities considered to affect the performance of the economy. 258. The Adjustment Programme for the period 1983-92 focused on policies to strengthen macroeconomic performance; encourageprivate investment and improve investment efficiency; reduce the deficit of the Governrnent sector and parastatal enterprises; and define a consistent pattern of sector-specific approaches. The Adjustment Programme was complemented by the promulgation of a New Agricultural Policy in 1984 and a New Industrial Policy in 1986. (2) Agriculture. fisheries, forestry and related industries 259. Reforms under the New Agricultural Policy were designed to extend the scope for private initiative and refocus the rôle of the State on providing an appropriate legal framework, improving agricultural extension services andproviding infrastructureservices. The functions ofrural development agencies were scaled back, leaving most decisions regarding production, storage and distribution to farmers or their associations. Other elements of the plan concerned a strengthening of the supply of agricultural inputs and a change in pricing policies with a view to encouraging consumption of locally produced cereals. Marketing and pricing ofcoarsegrains were liberalizedand fertilizer subsidies phased out. C/RM/S/41 Trade Policy Review Mechanism Page 62 260. The reforms have reduced the rôles of the Commissariat à la sécurité alimentaire (CSA) and the price equalization fund (CPSP - Caisse de péréquation et de stabilisation des prix). Previously involved in consumer and producer price stabilization for many important commodities, current CPSP interventions are limited to rice and wheat (see below). 13 The CSA is involved in food aid distribution, price monitoring and maintenance of security stocks for coarse grains. Minimum producer prices are fixed for groundnuts, cotton and paddy (rice). The CSA may intervene should producer prices for coarse cereals decline to excessively low levels.'32 Food aid covers about 10 per cent of Senegal's cereal imports in a "normal" year. 261. The present import tax structure and other trade measures are discussed for specific product groups in the subsections below. Details with respect to 1990 import data, current import taxes and other economic and trade measures are presented for each Tariff Study category in Table AV. 1. (i) Crops (a) Oilseeds 262. World demand for groundnut oil contracted slightly between 1961 and 1987. However, while competitors in South America and Asia managed to increase their exports by 400 per cent, Senegal's world market share in groundnut products (in oil equivalent) declined from an average of 23 per cent in the period 1961-65 to 14 per cent in 1986-88.'33 263. In 1990, Senegal's exports of oilseeds, fats and oils and their products amounted to US$178.3 million, mainly comprising groundnuts and related products (oil and cake). Export earnings have fluctuated in recent years, affected by substantial variations in the Senegalese harvest and world market prices (Chart V. 1). 264. Cultivation of groundnuts is the dominant activity in the Senegalese economy, providing work for up to i million people. Production is very sensitive to rainfall. The area devoted to groundnuts exceeded l million hectares until 1984. Dry weather in northern Senegal then caused a shift in production towards the South, and the total groundnut area declined to less than 900,000 hectares. The annual harvest has exceeded 1 million tones under favourable weather conditions; in the 1991/92 season, it reached 724,000 tonnes. 265. The total area allocated to groundnuts has also been affected by the farmers diverting land to food crops and cotton in response to relative price changes.'34 3lImports and marketing of vegetable oils were transferred to SONACOS in 1985. The CPSP subsequently moved out of groundnut exports (1986), the tomato market (1989), and cotton, sugar and imports of whole and intermediate rice in 1990. '32Guaranteed floor prices for coarse grains and a complex system of licences, grain movement restrictions and price supports were eliminated in December 1988. '33fBadiane (1993). '34The Government establishes minimum producer prices for groundnuts. Producer prices for oil groundouts were reduced from CFAF 90 to CFAF 70 per kg in 1988/89, but raised by CFAF 10 per kg in 1991, which apparently brought losses to the procuring companies. A premium ofCFAF 4 per kg (CFAF 5 before 1991/92) is paid to producers of confectionery groundnuts. ------ Senegal Page:63 Chart V.A Groundnut production in Senegal, 1985-93 1100 1100 1000 1000 900 900 80 800 700 700 600 600 500 500 400 400 Note: Marketing of the groundnut harvest takes place in the first months of the calendar year. Source: UNCTAD, Monthly Commodity Price Bulletin; Ministère du Développement Rural et de l'Hydraulique, Unitéde Politique Agricole. 265. The total area allocated to groundnuts has also been affected by the farmers diverting land to food crops and cotton in response to relative price changes.134 266. The Government has traditionally kept groundnut processing and marketing under tight controls. SONACOS (Société nationale de commercialisation des oléagineux du Sénégal) was established in 1975 and entrusted with groundnut marketing and milling, domestic sales and exports.135 The company also imports unrefined vegetable oil for processing and distribution to the public.136 Private traders have, however, been allowed to purchase groundnuts since 1985/86. Fixed collection points are operated by rural cooperatives and private agents under supervision of SONAGRAINES (Société nationale des graines), a subsidiary of SONACOS. Confectionery groundnuts (arachides de bouche) are collected by a marketing company (SONASEN, previously SEPFA) which was privatized in 1991.137 '"The Government establishes minimum producer prices for groundnuts. Producer prices for oil groundnuts were reduced from CFAF 90 to CFAF 70 per kg in 1988/89, but raised by CFAF 10 per kg in 1991, which apparently brought losses to the procuring companies. A premium ofCFAF 4 per kg (CFAF 5 before 1991/92) is paid to producers of confectionery groundnuts. '35The Government and the Caisse de péréquation et de stabilisation des prix (CPSP) own 86 per cent of the company shares with another 5 per cent being held by public sector enterprises. 136Imports of products within this Tariff Study category amounted to US$37.3 million in 1990. '37SONASEN is also involved in trade in groundnut seeds. C/RM/S/41 Trade Policy Review Mechanism Page 64 267. SONACOS remains a major purchaser of oil groundnuts, but its share has declined steadily in recent years because of increasing competition from small scale (artisanal) oil processors. Capacity utilization in SONACOS oil mills has been declining; SONACOS' total milling capacity is estimated at 950,000 tons of groundnuts annually. 268. A guarantee fund (FGPA - Fonds de garantie pour l'arachide) was set up in 1986 to finance losses in the groundnut sector. Initially financed by the EC through STABEX with some contributions from SONACOS, funds have been depleted since 1990/91. (b) Grain 269. Senegal's imports ofgrain reached nearly US$175 million in 1990; exports were close to nil.138 Seed maize and rice are tariff exempt, and other grains are either exempt from fiscal duty or subject to the low rate (10 per cent). The average of all import taxes on grain amounted to 22.7 per cent. Millet and sorghum - basic food grains grown for local consumption - and certain other cereals are subject to import licensing. Rice, the favoured staple ofthe urban population, dominates cereal imports. 270. Domestic production, mainly millet and sorghum, has covered around 60 per cent of Senegalese consumption of grains in recent years. The Government's Cereals Plan aims to increase this share to 80 per cent by theyear 2000. Measures to encourage local production include liberal nation ofpricing and marketing, promotion of local processing and increased crop diversification. 271. Governmental price intervention has been reduced since 1988, when all cereals prices were regulated. Currently, the CSA (Commissariat à la sécurité alimentaire) monitors prices on coarse grains and is authorized to intervene to prevent serious declines in producer prices. However, minimum producer prices (CFAF 85 per kg) and wholesale and retail prices continue to be fixed for rice. Government pricing policy aims to encourage rice cultivation while limiting the costs to consumers. The task is entrusted to the price equalization fund, CPSP, which uses profits on imports of broken rice to finance a premium paid to Senegalese rice farmers. 139 The CPSP also maintains a security stock (60,000 tonnes) of rice covering approximately two months' consumption. 272. Around 20 to 25 per cent of Senegal's rice consumption is covered by domestic production. Irrigation has assisted in increasing the local rice harvest, notably in the River Valley where the Senegal river development agency (SAED) processes paddy and sells the production to the CPSP. Other rural development agencies - SODAGRI (Société de développement industriel et agricole) and SODEFITEX - also sell rice to the CPSP since the fund has monopoly rights on wholesale trade in locally grown rice. The CPSP import monopoly on whole and intermediate rice was removed in 1990. 273. Wheat imports are effected by two millers; Grands Moulins de Dakar (GMD) and Les Moulins Sentenac. Bids and reference sales prices are controlled by the CPSP. Wheat is subject to price stabilization: flour and bread prices are regulated by the Government. 133All exports of cereals are licensed. 139The fund has the sole right to import broken rice. Senegal C/RM/S/41 Page 65 275. Senegal's imports offruit and vegetables amounted to nearly US$24 million in 1990, as compared with exports ofsome US$2 million. Local production is assisted by import quotas on bananas, onions, potatoes (including seed potatoes) and tomato concentrate. Tomato imports have apparently been reduced to zero for the last two to three years in view of abundant supplies on the domestic market. Average import taxes rise from 44 per cent on fresh vegetables to 48.5 per cent on preserved items. 276. The Société nationale de la tomate industrielle (SNTI) plays a key rôle in the marketing and processing of tomatoes in Senegal. Il Established in the north of the country, SNTI enters into production contracts with local farmers. The guaranteed producer price has been unchanged at CFAF 25 per kg for several years. Fresh tomatoes are transformed into tomato purée at the SNTI plant. Clandestine entry of large quantities of foreign-made tomato concentrate in 1991/92 caused major problems for the marketing of local output. SNTY initially withdrew from the 1992/93 season, but subsequently contracted a smaller area for tomato production. Marketing ofthe 1993 harvest, about halfthe quantity of the previous year, began in March.141 Certain preserved tomato products are subject to export licensing. 277. Western Europe could be a potentially important market for Senegalese vegetables grown during the off-season for European produce. However, there is tough competition from other African producers. - Sugar and confectionery 278. Sugar cane is grown and processed by a private company, Compagnie sucrière sénégalaise (CSS), at Richard Toll in the North of Senegal.'42 Production of sugar cane exceeded 700,000 tonnes in 1991/92. The company supplies the whole of the domestic market, protected by import licensing on sugar in lump, loaf sugar, powdered, crystallized or granulated sugar, and export licensing on all raw and refined sugar. The average of import taxes rises from 26.3 per cent on sugar to 54.5 per cent on confectionery. In addition, reference prices have been established for imports of chewing-gum and other sweets from CEAO exporters. 279. The potential for further expansion of CSS production appears limited; its monopoly position in the domestic market is fully utilized and export opportunities are limited by relatively high production cost.'43 Senegalese exports of sugar and confectionery amounted to nearly US$4 million in 1990. (d) Cotton 280. Cultivation ofcotton as a substitute cash crop for groundnuts began after independence. Acreage under cultivation, primarily in Eastern Senegal, varies substantially as farmers canswitch easilybetween groundnut and cotton production in response to changes in producer prices. Output is also highly sensitive to weather conditions. Production rose from 29,000 tonnes in 1989/90 to 53,700 tonnes in 1992/93, but unexpected problems have arisen as a new higher-yielding variety produces cotton of 140the SNTI is now a private company, having been State-owned until 1981. It has about 50 permanent employees and hires another 400 seasonal workers during the harvest. 141Le Soleil, 21 May 1993. 142CSS is a subsidiary of Mimran (France). 143Economist Intelligence Unit (1992), p. 19. C/RM/S/41 Trade Policy Review Mechanism Page 66 279. The potential for further expansion of CSS production appears limited; its monopoly position in the domestic market is fully utilized and export opportunities are limited by relatively high production cost.143 Senegalese exports of sugar and confectionery amounted to nearly US$4 million in 1990. (d) Cotton 280. Cultivation ofcotton as a substitute cash crop for groundnuts began after independence. Acreage under cultivation, primarily inEastern Senegal, varies substantially as farmers canswitch easilybetween groundnut and cotton production in response to changes in producer prices. Output is also highly sensitive to weather conditions. Production rose from 29,000 tonnes in 1989/90 to 53,700 tonnes in 1992/93, but unexpected problems have arisen as a new higher-yielding variety produces cotton of variable quality. The reduction in cotton quality appears to have caused some friction with textile manufacturers as these are charged world market prices for locally grown cotton.144 281. SODEFITEX, a parastatal enterprise, provides credits and extension services to farmers and controls all collection, processing and marketing of cotton in Senegal. Input subsidies are currently being phased out. The Government establishes minimum producer prices for cotton. The guaranteed price for prime quality cotton remained unchanged at CFAF 100 per kg from 1985/86 until the 1993 season, when it was reduced. to CFAF 85 per kg. 282. SODEFITEX output ofcotton fibres amounts to about 20,000 tonnes annually. The local textile industry absorbs about 5 per cent of the production, the rest is exported. Production of cotton yarn is assisted by high tariffs; the average tax (45.6 per cent) is substantially higher than on other yarns. The average import tax on cotton fabrics is also high (41 per cent). Reference prices apply on various yarns and fibres imported at the preferential tariff rate (5 per cent) from other members of the West African Economie Community (Table AIV.2(b)). (e) Tobacco 283. Senegal imported tobacco, mostly in unprocessed form, worth US$21.5 million in 1990. Import taxes escalate by stage ofprocessing, the average rising from 43.2 per cent on unmanufactured tobacco to 66 per cent on tobacco products. Specific minimum rates of fiscal duty have been established for cigarettes. 141 284. Imported and locally made tobacco are also subject to VAT at 20 per cent, taxe d'égalisation at 4 per cent and excise tax. The rate of excise tax is 32.4 per cent on both raw tobacco and finished goods; the tax is reduced to 6 per cent on tobacco (four tariff lines) imported by the only local manufacturer. Local production exceeded 3.5 billion cigarettes in 1989. (ii) Livestock 285. The livestock sector has been expanding more rapidly than the rest ofthe economy and currently accounts for around 7 per cent of GDP. Senegal's herd of sheep and goats almost doubled from 1982 144Economist intelligence -Unit (1992), p. 19. 144According to one manufacturer, Senegalese cotton is two to three times more expensive than Russian cotton sold to textile mills in the North of France. 145Law No. 89.-29 of6 July 1989 fixed a minimum rate ofCFAF 80 (40) for a package of20 (10) cigarettes. Senega1 C/RM/S/41 Page 67 to 1991, totalling more than 6.6 million head. The expected expansion of the cattle herd, however, could not be achieved because of drought. Improved feeding contributed to higher production of milk and beef. Introduction ofmodern poultry farming has also boosted meat production, but high population growth has prevented an overall increase in per capita output of meat. The stock ofhorses and donkeys has risen significantly over the last ten years, reflecting increasing use oftraction animals in agriculture. 286. Senegal imports frozen meat from the EC and Argentina and live cattle mainly from Mali. Domestic milk production covers only the needs ofthe rural population; supplies to cities are ensured through imports. 287. In 1990, Senegal imported animals and animal products, including dairy products, worth US$53.2 million. Exports amounted to less than US$2 million. The main import item is concentrated milk and milk powder. Import taxes escalate from 26.9 per cent on milk to 49.4 per cent on cheese; milk imported for sale in pharmacies is exempt from import and internal taxes. Butter and butter oil are subject to a 12 per cent excise tax. Import taxes on animals and meat increase from 20.1 per cent on live animals to 60.7 per cent on meat preparations.146 Reference prices have been established for certain meats and milk concentrates. (iii) Beverages 288. Senegal has one producer of beer and soft drinks.147 It is shielded from import competition by high fiscal duty on imported beer (50 per cent) and mineral waters (30 per cent).'48 However, high import taxes also apply to beverages not produced locally; for example, the average import tax on wine is 70 per cent. Imports of beverages amounted to only US$9 million in 1990. 289. Beverages also attract top rates of VAT, taxe d'égalisation (30 per cent and 6 per cent, respectively) and excise taxes. Excise rates generally vary according to alcoholic strength (Chapter IV.2(iii-b)). (iv) Fish. shellfish and products 290. With an export value of US$216 million in 1990, fish has become Senegal's most important export commodity, overtaking theposition ofgroundnuts since 1985. Crustaceans and fresh fishaccount for two-thirds of the export value, and the remainder is made up mainly by canned tuna. Even though the sector accounts for well over 20 per cent of merchandise exports, its contribution to GDP is no more than 2 to 3 per cent, reflecting the relatively low value added in fisheries activities. Import protection is substantial, based on an escalating tariff structure from an average of 49.3 per cent on fresh fish to 64.3 per cent on preserved or prepared fish.149 146Tariff and tax exemptions apply on breeding animals. 147The firm has not made any production data available since 1988. 1481n addition, a reference price ofCFAF 312 is applied on 1.5 litre containers ofnon-gaseous mineral water originating in other CEAO countries. 1490nly sardines enter free of duty. Fish preparations are subject to 50 per cent fiscal duty, the rate on all other fish items is 30 per cent. C/RM/S/41 Trade Policy Review Mechanism Page 68 291. Direct and indirect employment in the fisheries sector amount to some 150,000. The artisanal fleet comprises some 10,000 small boats manned by more than 40,000 fishermen. Their catch is mainly consumed by the local population, but artisanal fishing vessels also account for around one-third of Senegalese shrimp exports.150Fresh fish for exports is caught by the industrial fleet, consisting of around 250 vessels with a crew totalling about 10,000. Their operation is hampered by frequent interruptions for maintenance and repairs. In recent years, problems of overfishing have arisen. particularly within the six-mile coastal zone dominated by traditional (artisanal) fishing.151 292. The Senegalese canning industry has contracted, by nearly 50 per cent between 1986 and 1990, as five freezing and canning firms have closed. One firm, Saupiquet, moved operations toCôte d'Ivoire. apparently aimed at cutting costs and profiting from more flexible labour regulations. Senegal's share in French imports of canned tuna fell from 53 per cent in 1986 to 20 per cent in 1992, ceding ground to producers in Côte d'Ivoire, Madagascar and the Seychelles.152 293. Manufacturing wages for skilled and semi-skilled workers arc high in Senegal compared to other developing countries. For example, an ILO study found that, in 1986, wages in all manufacturing sectors in Senegal exceeded those in Malaysia; and unit labour costs in tuna canning have been estimated to be five times higher in Senegal than in Thailand.153In addition, Senegalese tuna exporters apparently pay higher shipping charges for cargoes to France than their Asian competitors, despite the significantly shorter distance to Europe. Port charges in Senegal also make a significant contribution to export costs.154 294. The fishing industry was one of the major beneficiaries of an export subsidy scheme in the 1980s. Payments were suspended in 1990, due to financial difficulties. However, the authorities continue to provide subsidized fuel to the fishing fleet at less than halfthe price paid by other consumers. In addition, the Government aims to assist artisanal fishing by providing new equipment (motors and nets), credit facilities, technical assistance and supporting infrastructure, and by encouraging the development of producer groups. 295. Foreign vessels currently account for more than 40 per cent of the industrial catch landed in Senegal for processing or re-export. Their catch, recorded in Senegal's import statistics, reached US$47 million in 1990. 296. The Government has concluded fishing agreements with foreign enterprises as well as with other governments and agencies. Agreements with the EC have been effective since 1979. Under the current agreement (October 1992 - October 1994), the EC pays ECU 16 million per annum in 150Some of the artisanal catch is dried or smoked and exported to other countries in West Africa. 151Overfishing appears linked to the lack ofcoordinated resource management. Effective measures to prevent overfishing would need to include a strengthening of the navy, currently consistent, of two coastal patrol boats. 152Since 1986, Thailand has replaced Côte d'Ivoire and Senegal as the most important supplier of prepared or preserved tuna to the EC market as a whole. Exports from the Philippines and Colombia have also risen markedly. 153ILO (1991) and Logeay (1990). Senegalese workers clean on average 50 kg of fish per hour compared to 130 kg per hour in Côte d'Ivoire. 154Dockers in Abidjan move twice the volume, of goods per hour compared to their colleagues in Dakar (Logeay, 1990). Senegal C/RM/S/41 page 69 compensation for the right to fish in Senegalese waters.155The previous agreement stipulated that 70 Spanish and French tuna boats could fish along the Senegalese coast provided they landed 12,000 tonnes per annum of the catch in Senegal. (V) Forestry 297. Senegal's forests, currently covering about 20 per cent of the territory, are shrinking at a rate of 1.2 per cent per annum. This may reflect climatic changes as well as overexploitation as forestry productsmeet an estimated 63 per cent of the country's energy requirements. 298. Senegal imported produces of the wood and paper industries (Tariff Study categories 3 and 4) worth US$76.6 million in 1990. Import taxes are below the average for the manufacturing sector, amountingto 28.9 per cent on wood and cork and 29.9 per cent on pulp, paper and paperboard. Certain paper and packaging materials for specific uses, for example by the medical industry or by the press, are generally free oftaxes and other charges. Some paper products originating in other CEAO countries are subject to reference prices. The domestic industry focuses on printing and packaging. (3) Industry 299 The 1986 New Industrial Policy (NPI) was intended to disengage the State from activities considered as hampering private sector growth and to scale down direct and indirect subsidies. Higher productivity, improved resource allocation and export promotion were expected to improve Senegal's economic performance. Additional clements in the NPI were a focus on increasing local value added and promoting regional development. 00. Plalnned actions under the NPI included rationalisation of industry protection, reinforced export promotion,a more attractive investment regime, and reduced administrative red tape. While the NPI inspiredcertain trade reforms in recent years, the authorities admit that its overall execution has been limidEmployers continue to complain about compliated administrative procedures and inflexible labour market conditions (despite the introduction of fixed-term contracts, acceptance of dismissals motivated by business conditions, and lower payroll taxes introduced by the 1989 Investment Code). 301 Manufacturing is estimated te account for around 20 per cent of Senegal's GDP, providing formal employment for some 38,000 workers in around 350 enterprises. Most of these firms were establishedit the 1960s. Two or three enterprises tend to dominate each subsector. About 80 per cent of the 's<,nof ^dUSty value added originates in the 40 largest enterprises. The chemical sector comprisesp)eu~ *refït>ry (SAR), a fertilizarand chemicals complex (ICS) and a number ofsmaller Cftcprses ti.^i Weiesk chemicals, plastics, soap, paint, and pharmaceuticals. Other important industrial activitiesinclude naval repair, cement production, printing and packaging, and electricity generation and destribution. 302 Food processing. in particular oil milling, sugar refining and fish canning, accounts for more than 10 per cent of industrial output, followed by phosphate mining (16 per cent). Official sources "the compensationpayment represents an increase of 11 per cent compared to the previous agreement. TheEC also provides ECU 800.000 to finance scientific programmes and study grants. The approval of the new agreementby the EuropeanParliament was not without controversy. Orponents argued that the new pact would dïsturib the ecological balance in tlhe region as the EC catch would increase by 57 per cent, causing further damage toa Senegalese fish stocks(European Report, No. 1876, 17 July 1993). C/RM/S/41 Trade Policy ReviewMechanism Page 70: _ _:_::_:_:__ _ also indicate output shares of above 10 per cent for the chemical and textiles industries, although production in the latter has declined markedly in recent years. 303. Costs of important inputs such as labour, water and electricity, which Senegalese industrialists claim are three to four times higher than for other Africanproducers, seem to represent serious handicaps for local producers. Reduced charges for electricity and telecommunications have, however, recently made small contributions to the cost structure of Senegalese enterprises. 304. Scarcity of up-to-date and reliable information renders any analysis of industrial performance difficult. National accounts indicate an expanding manufacturing sector between 1985 and 1991, while production indices for individual subsectors signal declining output in many industries. (i) Coal. petroleum and natural gas 305. Senegal has some deposits of oil and natural gas. The Société des pétroles du Sénégal (PETROSEN), a State-owned enterprise, was formed in 1981 to participate with foreign oil companies in the exploration and exploitation ofoffshorepetroleum reserves. Theireconomic viability is, however, uncertain. Some locally extracted natural gas is used in electricity generation. 306. Senegal's fuel imports, worth US$258.7 million in 1990, are mostly effected by the Société africaine de raffinage (SAR). 156 The company is the monopoly importer of crude oil and also imports most refined products. Its refinery at M'bao has capacity to process around 1.3 million tonnes of crude oil annually; the output includes petrol, kerosene, jet fuel, distillate fuel oils and residual fuel oils. 307. Petroleum products are subject to value-added taxes at rates of up to 34 per cent. Imported petroleum attracts import taxes averaging 33 per cent.157 Certain lubricating oils are subject to reference import prices. 308. The Government fixes retail prices of various petroleum products. Prices are generally set high for fiscal reasons and to stimulate energy conservation and efficiency. 158 However, specific users such as the electricity generating company (SENELEC) and certain exporting industries (chemicals, phosphates and fish) benefit from price concessions. 309. Under the current pricing arrangement, ex-SAR refinery prices are set at import parity plus a handling charge taking into account operational inefficiencies, including capacity underutilization, at the refinery. An adjustment mechanism designed to align domestic with world market petroleum prices was introduced in 1991. However, price adjustments have been made only once (in July 1991). 310. Senegal exported petroleum products worth US$96.7 million in 1990. Its traditional markets in neighboring countries, in particular Mauritania and Mali, have proved less lucrative in recent years. Mali has apparently shifted to less expensive suppliers, since 1985, and Mauritania has started relying entirely on a domestic refinery. 156The company was established in 1964. Foreign companies own 90 per cent of the company shares, the remainder is held by the Senegalese State. 157Imported crude oil is exempt of fiscal duty. 158Theretail price of petrol (super) is, for example, CFAF 335 per litre. Senegal C/RM/S/41 _a____1__ ~~~~~~~~~~~~~~Pige.7 (ii) Ores and metals 311. Senegalese imports of ores and metals, mainly iron and steel and manufactured articles, amounted to US$122 million in I990159 Import taxes average 40.6 per cent, ranging from 28.8 per cent on aluminium to 45.2 per cent on cutlery. Reference import prices have been established for certain iron and steel profiles, tubes and some manufactured articles. (iii) Precious stones and precious metals 312. Gold, silver, gold jewellery and articles of adornment are subject to import licensing; the average import tax is 45 per cent. All products falling under CCCN Chapter 71 - i.e. all precious stones - are covered by export licensing. Official trade statistics indicate virtually no trade in precious stones and precious metals. (iv) Raw hides and skins. leather and furskins. footwear and travel goods 313. Senegal recorded a small trade surplus in these products in 1990; exports of US$8 million compared with imports of US$5. 1 million. Production of leather goods has fallen sharply since 1988 following the cessation ofdomestic shoe production. (In 1984, two shoe factories produced 1.3 million pairs.) New owners (Afripac) have taken over a Bata shoe factory, closed in 1988, but production has not resumed yet. 314. Import taxes on hides and skins rise from 32.9 per cent on raw materials to 51.8 per cent on manufactured articles. Import taxes are also relatively high on footwear (43.6 per cent) and travel goods, etc. (55.2 per cent). Reference prices have been established for certain footwear originating in other CEAO countries. (v) Textiles and clothing 315. The Senegalese textile industry was given a two-year period to prepare for full liberalization of imports at the introduction of the New Industrial Policy in 1986.160Increased competition from imports revealed the inefficiency of local producers, which had apparently failed to use previous rents from import protection for modernization and product development. The share of the textile sector in industrial production fell from 8.25 per cent in 1985 to 4.4 per cent in 1989. The decline in employment and value added was even more pronounced.161 In 1990, out of 17 enterprises established in the sector, five were closed and four worked at low capacity. 316. The textile industry appears, however, to be recovering slowly as old enterprises are revived and new ones formed by domestic and foreign investors. New investment is supported by fiscal incentives under Senegal's Investment Code. In addition, the textile industry benefits from exemption of import taxes on numerous raw materials and semi-manufactures (fabrics, colouring materials and 159Exports reached US$11 million. 160Decree No. 86-241 of 28 February 1986 abolished import restrictions on many textile materials and finished goods maintained under Decree No. 78-200. Two more items were liberalized through Decree No. 86-998. The liberalization was completed by Decree No. 88-161 of 13 February 1988, leaving only second-hand clothing subject to import restrictions. 161lndustry employment fell from nearly 5,200 in 1983 to less than 3,600 in 1988. C/RM/S/41 Trade Policy Review Mechanism Page 72 chemical products).162 Low taxation on inputs and high tariffs on imported finished goods (43 per cent on average) lead to significant levels of tariff protection on the industry's value added. 317. To support local producers, the rate of value added tax has been reduced to 7 per cent on sacks and bags of textile materials. Other items are subject to 20 or 30 per cent VAT.163 The cumulation of import taxes and VAT frequently represents 75 to 85 per cent of the c.i.f. value of an imported product, creating significant incentives for smuggling.164 The value of illicitly imported textiles has been estimated at CFAF 20 billion in 1990, nearly twice the level of official textile imports in that year.165 According to industry sources, fierce competition, particularly from Asian producers, at times results in smuggled finished articles reaching the market at prices lower than those of imported fabrics. 318. In addition to general measures such as strict customs controls, the authorities have attempted to fight smuggling by introducing labelling requirements ("Vente au Sénégal") on popular items.'" Imports of second-hand clothing are limited to 3,000 tonnes annually and subject to a reference price. The local market is under regular surveillance; evidence of oversupply may lead to the suspension of import licenses even if the 3,000 tonne ceiling has not been reached.167 (vi) Mineral products and fertilizers 319. Extraction of phosphates is the principal mining activity in Senegal. The main producer of lime (calcium) phosphate is the Compagnie sénégalaise des phosphates de Taiba (CSPT), whose output reached 2.1 million tonnes in 1992, up 36 per cent on the previous year. The second phosphate mine, Société sénégalaise des phosphates de Thiès (SSPT), also extracts calcium phosphates, but on a much smaller scale (0.18 million tonnes in 1991 and in 1992).168SSPT also produces clinker phosphates, but production declined sharply from 1991 to 1992. Production of aluminium phosphates was stopped in 1989 for environmental reasons. Output of attapulgite (fuller's earth) is reported to have exceeded 100 million tonnes in 1992. 320. The phosphate producers have been able to purchase energy products at competitive prices since July 1987; current prices for diesel and fuel are set at import parity level. Subsidies are provided "A 1 per cent levy is applied on imported textile fabrics. 163Inputs to the textile industry not subject to import taxes are also exempt from VAT. 164A survey of the textile industry in Le Soleil (27 May 1993) states that taxes on imported textiles are considerably higher in Senegal than in Côte d'Ivoire (59 per cent), Nigeria (27 per cent), Guinea (25 per cent), Togo (23 per cent) or Benin (20 per cent). 165Le Soleil. op. cit. 166Decree No.89-1223 of 16 October 1989, introducing mandatory labelling on imported cigarettes and alcohol. The regulation has apparently been extended to cover eleven or twelve textile items, but local textile producers complain that the decree is not being enforced. Merchants oppose the regulation strongly, arguing that foreign manufacturers are reluctant to attach additional labels to satisfy Senegalese requirements given the low volume of trade involved. 167The Minister of Industry, Trade and Crafts, interviewed in Le Soleil, 27 May 1993. 168The Senegalese State has a 50 per cent stake in both companies. Senegal C/RM/S/41 Page 73 in the form of reimbursements on SENELEC electricity tariffs. Financing is provided through the Energy Fund. 321. Exports of mineral products and fertilizers, principally crude and manufactured fertilizers (phosphates), amounted to US$101 million in 1990. Senegal has encountered major problems in Europe, its traditional export market for phosphates, because of a high content of radio-active cadmium. Plans to extract cadmium are apparently being studied, but their economic viability is undermined by low world market prices for phosphates. Meanwhile, Senegal appears to have had some success in developing alternative markets, notably in Iran and Colombia. Domestic fertilizer consumption has declined substantially following the removal of fertilizer subsidies in 1987. 322. Senegal imported mineral products and fertilizers worth US$62 million in 1990; imports were not concentrated in any particular product group. Imported manufactured fertilizers, exempt from tariff and fiscal duty, are only subject to the 3 per cent stamp duty. 323. Production of construction materials is dominated by a cement factory (SOCOCIM). The company is among the 26 public enterprises/joint ventures recently privatised by the Government. Imported cement is subject to licensing in accordance with the initial conditions for the establishment of SOCOCIM (in 1981). All cement other than grey Portland cement is subject to a 25 per cent excise tax. 169 Cement products originating in other CEAO countries are subject to reference prices. (vii) Chemicals 324. Senegal is a net importer of chemicals (US$70 million in 1990). Import taxes are relatively moderate (23.8 per cent on average). (a) Chemical elements and compounds 325. The Industries chimiques du Sénégal (ICS) uses imported sulphur and Senegalese phosphate to produce sulphuric acid, phosphoric acid, ammoniurn phosphate and triple superphosphate. The company is owned by the Government of Senegal (23 per cent) and an international consortium including the Governments of Nigeria, Côte d'Ivoire, Cameroon and India. Production began in 1984, but the company is reportedly still operating at a loss even after being recapitalized in 1986 and having received financial support from France and the European Investment Bank. I7 According to official trade statistics, the share of ICS in Senegal's total merchandise exports exceeded 11 per cent in 1992 and a further rise was expected for 1993.171 326. Imported inputs for the production of pesticides and paints are tax exempt. (b) Medical and pharmaceutical products 327. The National Pharmacy (PNA) remains an important supplier ofmedicines to public facilities. However, while public sector distribution of drugs has been stagnating, the private pharmaceutical market - comprising two Senegalese manufacturers, three importers/wholesalers and 120 pharmacies - 169VAT and the taxe d'égalisation are reduced to 7 per cent and 2 per cent, respectively, on all types ofcement. 170Economist Intelligence Unit (1992), p. 24. 171Rapport sur les perspectives, DPS (September 1992). C/RM/S41 :ra PolicyââdeiINPiy:Rnvsmw Mechakibi Page 74 has been expanding rapidly. Pharmacies supervise 140 distribution points where pharmaceuticals are sold together with other commercial products. 328. Reflecting exemptions from tariffs and fiscal duty, the average import tax on medical and pharmaceutical products is 6 per cent. Components for local manufacture of pharmaceuticals are exempt from both import and internal taxes. (c) Other chemical products 329. The Senegalese chemical industry also includes some smaller plantsproducing cosmetics, soaps, paints and plastics. Reference import prices exist for certain soaps, candles, aerosol insecticides and PVC compounds originating in other CEAO countries. Polypropylene sacks are subject to import licensing. Excise taxes of 10 or 12 per cent are levied on some cosmetic products. (viii) Machinery and equipment 330. In 1990, Senegal imported electrical and non-electric machinery worth US$234.6 million. There are few tariff exemptions, but fiscal duty is reduced to zero on various non-electric machinery, particularly tools and goods destined for agriculture and the metalworking, construction, mining, paper and printing industries. Average import taxes are thus lower on non-electric than onelectrical machinery (30.6 per cent versus 40.1 per cent). (ix) Transport equipment 331. Imports of transport equipment, mostly motor vehicles, amounted to nearly US$111 million in 1990. Reference import prices have been established for certain motorcycles, bikes and bicycle parts. A 5 per cent registration fee on motor vehicles was introduced in March 1993. Motor vehicles are also subject to an annual tax according to engine horsepower. A prohibition on imports of second-hand motor vehicles - more than three to seven years of age, depending on the type of vehicle - was introduced in September 1993. (x) Other products 332. In 1990, Senegal imported US$57.6 million worth ofgoods not falling within the manufacturing Tariff Study categories mentioned above, notably manufactured rubber articles (US$19.8 million), furniture(US$12.6 million) andprofessional,scientificandcontrollinginstruments (US$9.6 million).172 Average import taxes range from 40.5 per cent on office and stationery supplies to 67.4 per cent on arms and ammunition. 173 Metal-framed bed bases and batteries manufactured in other CEAO countries are subject to reference import prices. 172Other products" comprise Tariff Study categories 2, 14 and 16 to 23. 173Importation of arms is prohibited. Senegal C/RM/S/41 ge: = ~~~~~~~~Pae75: VI. TRADE DISPUTES AND CONSULTATIONS (1) GATT Dispute-Settlement 333. Senegal has never been involved, as a complainant or defendant, in any GATT dispute settlement procedures under Articles XXII and XXIII. Senegal is not a signatory to any of the Tokyo Round agreements and does not participate in the Multifibre Arrangement. 334. Senegal made a submission as an interested third party to the GATT panel, established in 1991 under Article XXIII:2, examining U.S. import restrictions onMexican tunafish. Noting the importance of tuna in its national economy, Senegal argued that the dispute had negative effects on its export revenue. Mexican exporters, affected by the United States embargo, had diverted tuna to Senegal's traditional markets, provoking a fall in prices.174 (2) Other Disputes 335. Any dispute concerning the interpretation or application of the Lomé Convention may be referred to the Council of Ministers established under the Convention. It is made up of the members of the EC Council, members of the EC Commission and a representative of each ACP Government.175 If no solution is achieved in the Council, it may initiate a good offices procedure or an arbitrationprocedure at the request of either party. Each party is obliged to comply with the arbitrators' decision.176 336. No arbitration procedures have been initiated to date. According to the EC Commission, participants prefer to reach solutions at the political level rather thanresorting to formal dispute settlement mechanisms. 177 337. A Tribunal to be created under the ECOWAS Treaty for settling disputes has yet to be established. 338. Bilateral institutions for the management of trade disputes apparently exist between Senegal and Côte d'Ivoire. A joint committee comprising trade experts of the two countries meet once a year to discuss bilateral problems, more frequently if necessary. The Directors of the trade departments in the Ministries of Trade may also be in direct contact to settle routine matters. 339. Joint committees have also been created with important partners such as France, Germany, Italy and Belgium. However, the sessions are typically business meetings without the participation of ministry officials. 174GATT document DS21/R, 3 September 1991. 175A Committee of Ambassadors is involved between meetings of the Council. 176The Council of Ministers initiates the procedure upon request. Each party appoints one arbitrator. The two members choose a third arbitrator or, ifthey do not agree, the co-President ofthe Council ofMinisters selects an "eminent independent person". Arbitrators' may take decisions by majority vote. 177GATT (1991), Trade Policy Review - European Communities, Geneva. e:Tradl Policy eechanismM.4fMi Page76 REFERENCES O. Bardiane (1993), External Trade Pessimism and the Role of Regional Markets in the Groundnut Trade by AGC Countries, Journal of African Economies. Vol. 2, No. 1,. J.-P. Barbier and J.-B. Véron (1991), Les zones franches industrielles d'exportation,(Haïti, Maurice. Sénégal,Tunisie), Editions Karthala, Paris. J.M. Boughton, The CFA Franc: Zone of Fragile Stability in Africa, Finance and Development, December 1992. Bureau International du Travail (1991), Coûts salariaux, classifications professionelles et système de fixation des salaires, Geneva. Chambre de commerce, d'industrie et d'agriculture de Dakar (1992), Recueil des textes régissant le commerce extérieur du Sénégal, Dakar. Direction de la prévision et de la statistique (September 1992), Rapport sur les perspectives, Dakar. The Economist Intelligence Unit (1992), Senegal Country Profile 1991-92, London. Entreprendre Novembre 1992. European Report. No. 1876, 17 July 1993. Le Figaro, 17 March 1993. GATT Document DS21/R, 3 September 1991, Geneva. GATT Document L/6732, 4 October 1990, Geneva. GATT Document Li6784, 10 December 1990, Geneva. GATT Document MTN.GNS/W/15 1/Rev. 1, 23 August 1993, Geneva. GATT Document MTN.TNC/29, 3 February 1993, Geneva. GATT Document MTN.TNC/W/32, 12 November 1990, Geneva GATT (1992), Trade-.Policy Review. - Ghana, Geneva. GATT (1991), Trade Policy Review, - European Communities, Geneva. GATT, Basic Instruments and Selected Documents, 12th Supplement, p. 33, Geneva. GATT, Basic Instruments and Selected .Documents, 37th Supplement, p. 295, Geneva. IMF (1992), Exchange Arrangements and Exchange Restrictions, Annual Report, Washington D.C. Senegal -.../.. 1 .C/RM/S41- Page 77 June Afrique économique, No. 169, July 1993. D. Logeay (1990), L'industrie sénégalaise: ses perspectives, après la nouvelle politique industrielle (cas des-conserveries de thon et du textile), Caisse Centrale de Coopération Economique. Le Soleil, 21 May, 27 May and 9 June 1993. UNCTAD (1990), Country.Presentation Gambia, Geneva. APPENDIX TABLES Table AG.1 Bilateral trade agreements concluded by Senegal Country Agreement/date Scope Treatment agreed Duration Algeria Trade agreement of l February 1967 in Originating products from both m.f.n.-exempt from customs One year with tacit renewal Algiers countries - Lists A. B and S dunes in conformity with the trade annexed ta the agreement are agreement of7.10.1981 indicative Argentina 25 February 1980 in Dakar Originating products from both m.f.n One year with tacit renewal countries Bangladesh Dakar. 17 May 1974 Originating products; from both m.f.n. One year with tacit renewal countries Benin Dakar, 23 February 1963 Originating products from. both m.f.n. One year with tacit renewal countries Brazil Trade agreement of 23 September 1964 in Originating products from both Most favourable treatment possible One year with tacit renewal Brasilia countries - Lists A and B annexed ta the agreement are indicative Bulgaria Dakar, 1 August 1970 Originating products and products m.f.n. One year with tacit renewal from both countries Cameroon Trade agreement of 10 January 1974 in Originating products from both m f.n. One year with tacit renewal Yaoundé countries Cape Verde Trade agreement of 9 September 1979 in Originating products from bath m.f.n. Two years with tacit renewal Praia countries - Lists S and C annexed ta the agreement are indicative Central African Republic Trade agreement of 6 June 1973 in Dakar - Originating products from bath Current regulations Three years with tacit renewal Protocol countries Chad Trade agreement of 6 September 1972 in Originating products from bath m.f.n. One year with tacit renewal N'Djamena countries China Trade agreement of 23 November 1973 in Originating products and products m.f.n. Beijing from both countries Congo - Trade agreement of Originating products of both m.f.n. One year with tacit renewal 15 February 1971 in Dakar countries - Trade agreement of 26 February 1974 and - Trade agreement of 11 May 1987 in Brazzaville Côte 15 December 1971 d'Ivoire C/RM/S/41Page81:> Table AII.1(Cont'd) Country Agreement/date Scope Treatment agreed Duration Czechoslovakia Dakar. 26 February 1975 Originating products from both m.f.n One year with tacit renewal countries Denmark II April 1962 in Copenhagen Originating products from both m.f.n. One year with tacit renewal countries Egypt 16 February 1967 in Cairo Originating products from bath m.f.n. One year with tacit renewal countries Ethiopia Trade agreement of 28 lune 1971 in Addis Originating products from both m.f.n. One year with tacit renewal Ababa countries - Lists A and B annexed to the agreement Gabon Dakar, 19 February 1972, abrogated Originating products from both m.f.n. One year with tacit renewal Libreville by the trade agreement of countries under current regulation 10 December 1981 Gambia Dakar, 26 June 1970 Originating products from bath m.f.n. One year with tacit renewal countries Ghana 20 March 1967 in Dakar Originating products from bath m.f.n. One year with tacit renewal countries Guinea (Conakry) 9 lune 1961 in Dakar Originating products from both m.f.n. countries - Lists A and B annexed to the agreement are indicative Guinea Bissau 8 January 1975 in Bissau Originating products from bath m.f.n. One year with tacit renewal countries Hungary Budapest. 27 April 1969 Originating products from bath m.f.n. One year with tacit renewal countries India 22 May 1974 in New Delhi Originating products from both m.f.n. One year with tacit renewal countries Current regulations Republic of Korea 15 April 1975 in Dakar Originating products from both m.f.n One year with tacit renewal countries Democratic People's Trade agreement of 16 May 1974 in Originating products from both Current regulations Three years with tacit renewal Republic of Korea Pyong-Yang countries Kuwait 7 March 1972 in Kuwait Originating products and products Most favourable treatment possible One year with tacit renewal from both countries Lebanon 22 lune 1963 Originating products from bath m.f.n. One year with tacit renewal countries Table AILI (cont'd) TradePolicyReviewMechanism Country Agreement/date Scope Treatmet agreed Duration _ _. __~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. Liberia Trade agreement of 30 May 1962 in Originating products from both m.f.n. One year with tacit renewal Monrovia countries Libya 11 April 1976 in Libya Originating products from both m.f.n. One year with tacit renewal countries Madagascar Trade agreement of 29 June 1961 in Originating products from both m.f.n. One year with tacit renewal Tananarive countries Mali Trade agreement of 8 June 1963 Originating products from both m.f.n. countries Moracco - Trade agreement of 26 March 1981 Originating products from both m.f.n. - exemption from customs One year with tacit renewal countries - Lists A and B annexed duties and charges having to the agreement are indicative. equivalent effect Products contained in Lists A and B - Additional protocol of 26 March 1981 Mauritania Trade agreement of 2 December 1969 in Originating products from one Preferential treatment One year with tacit renewal Dakar country, one third of products from one of the two countries Nigeria Trade agreement of 5 September 1964 in Originating products from both m.f.n. One year with tacit renewal Lagos countries Trade agreement af 25 February 1980 Originating products from both m..f.n. One year with tacit renewal countries Poland Trade agreement of 18 June 1962 in Originating products from both m.f.n. One year with tacit renewal Warsaw countries - Lists A and B annexed are indicative Portugal Trade agreement of 30 January 1975 in Originating products from both m.f.n. - current regulations One year with tacit renewal Lisbon countries Romania Signed in Bucarest on 29 April 1969 Originating products from both m.f.n. One year with tacit renewal countries Sierra Leone Trade agreement signed on 11 October 1962 Originating products from both m.f.n. in Freetown countries Spain Trade agreement of 15 November 1978 in Originating products from both One year with tacit renewal Madrid countries Sudan 14 Novernber 1975 in Khartoum Originating products from both m.f.n. One year with tacit renewal countries Table ALL.1 (Cont'd) C/RM/S/41Page83 Country Agreement/date Scope Treatment agreed Duration Sweden Dakar. 24 February 1967 Originating products from both m.f.n. One year with tacit renewal countries Switzerland Agreement of 16 August 1962 in Berne Originating products from both m.f.n. Two years with tacit renewal countries Syria 4 November 1975 in Damascus Originating products from both m.t.a Five years with tacit renewal countries Thailand Trade agreement of 21 October 1981 in Originating products from both m.f.n. One year with tacit renewal Bangkok countries Togo Trade agreement of 19 December 1964 in Originating products from both m.f.n. Five years with tacit renewal Dakar countries Tunisia Trade agreement of 30 March 1962 in International trade Exemption from, customsdues Duration of life of company Tunis supplemented by additional protocol for products contained in Lists S under Senegalese legislation signed 3 February 1986 and T Yugoslavia Belgrade. 6 April 1962 Originating products from both m.f.n. One year with tacit renewal countries Zaire Trade agreement of 15 February 1971 in Originating products from both m.f.n. One year with tacit renewal Dakar countries Source: Ministry of Trade and Crafts. Dakar. TradePolicyReviewMechanism Table AIII1 tuno ~~~~~~~~~~~~~~uu - I EM.qo... fAa". 2years for mff and redmm enterprises pm.Juce;d fa< manufacturedinScmte and whick are destined3 years forlarge cpnsc VfWforpmmSia or operationswdtm theframework of *Tax on w#aba addik m e4 by Iocalsupplers of goods. services and works required for the regulation oftheapproved Import dutes and taxes including VANon theservicevehicles m theapproved investment programme Import duucs anddus on spare partsconsidered as specific for the production 2mchaws importedbut not excecdàr 20 per cent oftheduty for purchase of the said machines Advantages attached to operations Exemption from: Zone A ZoneB ZoneC ZoneD *Registrationfees for thetransfer of land and buildings required5years 7years 10years 12 years for the ceauiaào of the approved programme *Duties on dccs siring thecup of enterprises andthe increaseof capital of theapprovedprogramme *Registration fees forthetransfer of business Flatrace contributions paid inSenegales employees by employers an part of their salaries Presentation: - Presentation of counter values of duties and taxeson salaries as subsidy for the creation ofjobs Table AIII.1 (Cont'd) System Criteria Advantage Duration Supplementary specific advantages Decreasing exemption Zone A Zone B ZoneC Zone D Small and investment of less than CFAF 200 million - Exemption of "the minimum flat rat- tax" 3rd year 5th year 8th year 10thyear medium sized Creating at least three permanent jobs for - Exemption from payment of licence (Zones B. C and D) 75% 75% 75% 75% enterprises Senegalesc nations - Departure from the law relating to redundancy for economic (SME) reasons - Possibility of renewing work contract after 5 years for a specific duration Enterprises 65 per cent (in value) of intermediate Exemption from minimum fiat rate tax 4th year 6th year 9thyear 11th year utilizing local consumption should be of Senegalese origin -Exemption from payment of licence fee 50% 50% 50% 50% resources or the cost of imported products should be less than 35 per cent of the total of products obtained after processing Enterprises 1 per cent cf turnover invested in research Same advantages as for SME 5th year 7th year 10th year 12th year promoting or utilization of research results of a 25% 25% 25% 25% technological Senegalese body ar researcher innovation Decentalised 90 per cent of the stafff working in the areas The duration of the advantages attached to operations vary enterprises located outside Zone A according to the place of installation (7 to 12 years, with decreasing advantages during the last 3 years) Note: Zone A: Dakar, Pikine, Rufisque and Bargny Zone B: Sangalkham. Sebikotane and Thiès Zone C: Diourbel, Louga and Kaolack Zone D: Fatick. Kolda, Tambacounda, Ziguinchor and Saint-Louis. Source: The Support Unit for the Promotion of enterprises (CAEE), Investing in Senegal. TradePolicyReviewMechanism Senegal / -: 1 CIRM/S/4C Table AIV.1 Import taxes by stage of processing in Senegal Study Productgroups and Processingstage Mean Category : 01 Raw hides and skins, leather and furskins -- Raw materials 32.9 8.2 28.8 49.3 -- semi-manufactured 49.3 0.0 49.3 49.3 -- finished goods 51.8 6.6 49.3 70.0 02 Rubber -- Raw materials 47.5 5.9 28.8 49.3 -- semi-manufactured 41.6 11.2 18.4 49.3 -- finished goods 43.8 10.0 3.0 49.3 03 Wood and cork -- Raw materials 28.8 0.0 28.8 28.8 -- semi-manufactured 28.6 3.9 3.0 49.3 finished goods 29.8 4.5 28.8 49.3 04 Pulp, paper and paperboard -- Raw materials 28.8 0.0 28.8 28.8 -- semi-manufactured 25.6 18.3 3.0 49.3 -- finished goods 32.8 18.6 3.0 49.3 05 Textiles - Raw materials 27.2 22.2 3.0 49.3 -- semi-manufactured 39.2 16.0 3.0 49.3 -- finished goods 43.3 9.2 3.0 70.0 06 Mineral products and fertilizers -- Raw materials 26.7 21.6 3.0 49.3 -- semi-manufactured 18.6 21.0 3.0 49.3 -- finished goods 38.7 17.1 3.0 49.3 07 Precious stones and precious metals -- Raw materials 49.3 0.0 49.3 49.3 -- semi-manufactured 44.2 8.9 28.8 49.3 -- finished goods 42.0 17.5 3.0 70.0 08 Ores and metals -- Raw materials 48.1 6.2 18.4 49.3 -- semi-manufactured 40.5 14.1 3.0 49.3 -- finished goods 39.7 14.4 3.0 49.3 09 Coal, petroleum, natural gas -- Raw materials 35.4 18.1 3.0 49.3 -- semi-manufactured 35.8 20.3 3.0 49.3 -- finished goods 31.2 21.0 3.0 49.3 Table AIV.1 (Cont'd) C/RM/S/41 Trade Policy Review Mechanism ~~~ ~~~~~~~~~~~~~~~~ ~ ...... 10 Chemicals -semi-manufactured 23.1 20.1 3.0 49.3 f --finished goods 25.3 23.7 3.0 70.0 11l Non-electrical machinery -- finished goods 30.6 13.1 3.0 49.3 12 Electrical machines and apparatus -- finished goods 40.1 11.8 3.0 49.3 13 Transport equipment -- finished goods 41.3 17.6 3.0 70.0 14 Professional, scientific and controlling instruments, photographic apparatus, clocks and watches -- finished goods 46.7 8.2 3.0 49.3 15 Footwear and travel goods -- finished goods 47.1 10.1 28.8 70.0 16 Photographie and cinematographic supplies -- finished goods 44.4 11.3 18.4 49.3 17 Furniture -- finished goods 49.8 5.2 28.8 70.0 18 Musical instruments, sound recording or reproduction apparatus -- finished goods 43.4 8.7 3.0 49.3 19 Toys -- finished goods 50.1 14.2 3.0 70.0 20 Works of art and collectors pieces -- finished goods 56.2 9.7 49.3 70.0 21 Firearms, ammunition, tanks and other armoured fighting vehicles -- finished goods 67.4 6.8 49.3 70.0 22 Office and stationery supplies -- finished goods 40.5 8.6 28.8 49.3 23 Manufactured articles not elsewhere specified -- finished goods 40.9 18.1 3.0 70.0 24 Foodstuffs -- Raw materials 47.8 7.5 3.0 70.0 -- semi-manufactured 37.1 20.1 3.0 70.0 -- finished goods 45.9 15.3 3.0 70.0 Table AIV.1 (Cont'd) Senegal C/RM/S/41 Shudy Product group and processing stage Mean Std Category deviation 25 Grains -- Raw materials 22.7 6.8 3.0 28.8 26 Animals and products thereof -- Raw materials 20.1 12.2 3.0 33.9 -- finished goods 56.0 9.6 49.3 70.0 27 Oil seeds, fats and oils and their products -- Raw materials 42.0 11.6 3.0 49.3 -- finished goods 36.4 17.5 3.0 49.3 28 Cut flowers, plants, vegetable materials -- Raw materials 36.1 20.2 3.0 49.3 29 Beverages and spirits -- finished goods 61.5 13.3 3.0 70.0 30 Dairy products -- Raw materials 49.3 0.0 49.3 49.3 -- finished goods 31.2 18.2 3.0 49.3 31 Fish, shellfish and products -- Raw materials 49.3 0.0 49.3 49.3 -- semi-manufactured 49.3 0.0 49.3 49.3 -- finished goods 66.0 15.8 3.0 70.0 32 Tobacco -- Raw materials 43.2 8.2 28.8 49.3 -- finished goods 66.0 8.1 49.3 70.0 33 Other agricultural products of animal origin -- Raw materials 39.9 14.5 3.0 49.3 34 Other agricultural products of vegetable origin -- Raw materials 39.0 16.9 3.0 49.3 -- semi-manufactured 49.4 -- finished goods 34.3 10.2 3.0 39.1 Industry -- Raw materials 30.4 17.9 3.0 49.3 -- semi-manufactured 29.7 19.5 3.0 49.3 -- finished goods 36.9 17.3 3.0 70.0 Agriculture -- Raw materials 39.9 15.5 3.0 70.0 -- semi-manufactured 38.4 19.4 3.0 70.0 -- finished goods 48.1 19.0 3.0 70.0 Table AIV.1(Cont'd) C/RM/S/41 Trade Policy Review Mechanism Study Product group andprocessing stage Mh Ma Category Total Raw materials 34.6 17.5 3.0 70.0 --semi-manufactured 30.1 19.6 3.0 70.0 --finished goods 38.7 18.0 3.0 70.0 Note: Import taxes comprise the m,f,n, tariff, fiscal duty and stamp duty. Source: GATT estimates based on data provided by the Senegalese authorities. Table AIV.2(a) Reference prices applicable to import for the year 1993 Tariff Product- description Valuation Reference nomenclature unit price number (CFAF) 02.01.00 Ment of bovine animais NK 800 02.01.03 Meat of swine NK 950 02.01.04 Ment of sheep and goats NK 800 02.02.00 Dead poultry and edible offals thereof (except liver), fresh, chilled or frozen NK 800 02.04.00 Other meat and edible meat offals, fresh, chilled or frozen NK 800 04.02.29 - Concentrated or evaporated milk: NK 315 Sweetened Other Not sweetened 04.02.39 Other NK 300 04.02.51 - Milk in powder or granules, put up in packages of not less than 2.4 k.g. 100 K 6,0001 04.02.59 Other milk in solid form 100 K 6,0001 04.02.69 Other milk in powder or granules, of which the immediate packagings have a NK 602 capacity of not more than 2.5 k.g. 04.02.90 Other milk in solid form NK 602 EX 21.06.10 Fresh yeasts NK 190 EX 21.06.90 Dried yeasts NK 725 EX 21.07.70 Prepared milk, in powder form, for use as infant food or dietetic purposes, in 100 K 6,000 packages less than 2.5 k.g. sold exclusively by chemists 27.10.69 Other lubricating olis NK 500 - In packagings of more than 5 k.g. KN 1,340 - In packagings of 1 to 5 k.g. EX 34.03.10 Synthetic oils for vehicles NK 300 63.01.10) Old clothing NK 400 63.01.90) EX 82.01 .00 Shovels Each 548 EX 83.02.00 Door angles 25 units 1,545 EX 83.02.00 Bed mountings, connecting screws or adjusting screws 4 units 635 EX 83.02.00 Door hinge-plates - 80 12 units 1,023 - 95 12 units 1.021 - 110 12 units 1,213 - 14,0 12 units 1,664 - Anchor bolts 12 units 1,874 - Grating 12 units 2,185 - Mixed l0 units 2,186 Table AIV.2(a) (Cont'd) C/RM/S/41 Trade Policy Review. Mechanism Tariff Product description Valuation Reference nomenclatureunit price EX 87.09.21 Motoicycles fitted with an auxiliary engine of a cylinder capacity of less that Each 200, 000 50 cc EX 87.10.00 Cycles, not motorized Eaclh 50,000 EX 87.12.10 - Bicycle frames Each 25,000 * Painted mudguards for bicycles Each 1,300 * Bicycle forks Each 1,300 EX 87.12.10 Mattresses with metal frames Each 30,000 Each 25,000 1 Excluding milk powder for milk-producing industries (excluding milk co-operatives) for which the reference price is set at 1,100 F per 100 kg. 2 Duties and taxes are calculated on the basis of the reference price even if it is lower than the c.i.f price. 3 Mattresses more than 100 cm wide and 190 cm long. 4 Mattresses between 50 and 100 cm wide and 190 long. Senegal C/RM/S/41 Page 93 Table AIV.2(b) Annex 1. Reference prices of products liable to the TCR (regional co-operation tax) within the West African Economic Community (CEAO) Tariff Product description Valuation Reference nomenclature unit. price number (CFAF) 17.04.10 Chewing-gum NK 1,200 17.04.90 Other sugar confectionary NK 1,400 18.06.41 Sugar confectionary with the addition of fatty substances replacing cocoa butter NK 1,400 18.06.42 Sugar confectionary without the addition of fatty substances replacing cocoa NK 1,200 butter 19.03.01 Couscous Tonne 300,000 19.03.09 Other Tonne 300,000 19.08.40 Dry biscuits, containing no cocoa and 15% or less of sugar NK 550 19.08.90 Biscuits, not specified NK 900 EX 21.05.01 Broths NK 750 22.01.12 Natural spare waters, not aerated, put up in containers of more than one litre 1.5 1. 312 but less than two litres. 34.01.02 Ordinary soap, hard, in bars, slabs or cakes NK 300 34.01,03 Ordinary soap, hard, in shavings, flakes, powder, etc. NK 300 EX 34.06,.10 Candles NK 570 31.11.29 Insecticides in aerosols NK 1,200 EX 39.02.22 PVC compounds in the forms mentioned in note 38 to chapter 39, NK 1,096 39.02.25 39.02.26 PVC tubes and pipes NK 1,364 39,02.29 EX 46.02.30 Chinese matting - 1 m. to 1.75 in. Each 1,510 - 1.40 m. to 2.20 m. Each 3,500 - 1,80 m. to 3.50 m. Each 8,10û -2.70 m. to 3.50 m. Each 11,400 48.1.5.10 Other paper and paper boaed, cut to size or shape, toilet paper in rolls or NK 1,000 sheets, EX 48.18.21 Exercise books NK 975 EX 48.18.30 Office files ,with perforator Each 800 EX 48.18.30 School files 17 x 22 cm. Each 700 EX 48,18.30 School files 17 x 29.7 cm. Each 700 EX 48.18.30 Kraft file-covers with straps Each 450 EX 48.18.30 Kraft file-covers with flaps Each 450 EX 48.18.40 Notepads 15 x 21 cm. Each 150 EX 48.18.40 Notepads 15 x 29.7 cm. Each 250 EX 48.18.40 Notepads 21 x 29.7 cm. Each 250 48.21.50 Paper handkerchiefs NK 1,170 EX 48.21.60 Sanitary towels and baby diapers (other than with elastic) NK 1,950 EX 48,21.90 All-purpose wipes and table napkins of cellulose wadding NK 1,170 Table AIV.2(b) (Cont'd) C/RM/S/41 Trade Policy ReviewMechanism Page. 94 ...... - .. - . - - - - _ - _~~~~~~va. Tariff Product decription Valuation Reference nomenclature unit price number (CFAF EX 55.05. 10 Single yarn, of uncombed fibres NK 900 EX 55.05.10 Single yarn, of combed fibres NK 1,000 EX 55.05.10 Multiple (folded) or cabled yarn, of uncombed fibre NK 1,100 EX 55.05. 10 Multiple (folded) or cabled yarn, of combed fibres NK 1,300 EX 55.05.90 Cotton yarn, carded, dyed 1,700 EX 55.05.90 Sewing thread, dyed, cotton yarn put up for retail sale 3,500 EX 55.06.10 Fishing yarn 1,300 Cotton yarn put up for retail sale EX 55.06.90 Unbleached yarn, in hanks or skeins or in skeins sub-divided into hanks NK 1,300 EX 55.06.90 Sewing thread, dyed, in reels, of a unit weight of 2 to 9 grammes NK 8,500 EX 55.06.90 Sewing thread, dyed, in reels of a unit weight of 10 to 40 grammes NK 4,500 EX 55 06.90 Yarn for knitting and for needlework, fancy, dyed NK 4,500 EX 55.06.90 Yarn, other than fancy, dyed, in hanks, skeins or skeins sub-divided into hanks. NK 2,000 55.09.21 Other cotton fabrics, containing 85 per cent or more by weight of cotton, NK 1,650 unbleached or bleached: Plain-woven, of a width exceeding 115 cm 55.09.22 - Plain-woven, of a width exceeding 115 cm. NK 1,650 55.09.24 Dimity and ihe like (excluding unbleached dimity and tie like) NK 4,500 55.09.28 - Otherwise woven, of a width not exceeding 115 cm. NK 1,650 55.09.29 * Otherwise woven, of a width exceeding a width of 115 cm. NK 1,650 55.09.41 Dyed dimity NK 5,500 55.09.51 Printed: plain-woven, weighing not more than 200 S. ml and of a width NK 8,500 exceeding 155 cm. 55.09.52 Other NK 8,500 55.09.53 Plain-woven, of a width not exceeding 115 cm. NK 4,300 55.09.54 Plain-woven, of a width exceeding 115 cm. NK 6,900 55.09.56 Otherwise woven, of a width exceeding 115 cm. NK 4,300 EX 56.05.10 Yarn of these synthetic fibres, dyed NK 2,700 EX 56.06.10 Yarn of these textile fibres, dyed, in reels of unit weight of 2 to 9 grammes. NIC 9,000 EX 56.06.10 Yarn of these textile fibres, dyed, in reels of unit weight of 10 to 40 grammes NK 6,000 56.07.41) Products of these headings NK !,900 56.07.42> EX 59.(4. 10 Twine, cordage, ropes and cables, plaited or not: not plaited, of polypropylene NK 1,500 EX 59.04.20 Plaited, of polypropylene NK 1,500 EX 59.05.01 Knotted fishing nets, of nylon cabled yarn NK 3,000 EX 59.05.01 Other knotted nets and unknotted nets, textile fabrics impregnated, coated or NK 3,000 covered with cellulose derivatives or other artificial plastic materials and textile fabrics laminated with these same materials 59.08.21 Textile fabrics, coated, covered or laminated with PVC NK 350 64.01.21 Sandals obtained in a single piece by moulding or injection Pair 800 Table AtV.2(b) (Cont'd) Senegal C/RM/S/41 Page 95 Tariff Product description Valuation Reference nomenclature unit price 64.01.27 Obtained otherwise than by moulding or injection, and where the inner soles Pair 1,500 have a length of: -Less than 24 c.rn. 64.01.28 Not less than 24 c.m. Pair 3,000 64,01.31 Other footwear obtained in a single piece by moulding or injection Pair 2,000 64.01.37 Obtained otherwise than by moulding or injection, and where the inner soles have a length of: -Less than 24 c.m. 64.01.38 -Not less than 24 car. Pair 3,000 EX 68.12.01 -Articles of asbestos-cemnent, of cellulose fibre cernent or the like: to EX 68.12.90 -Articles of fibrocement (conugated plates, panels and various accessories> Tonne 190,(000 EX 73.11.01 Angles, shapes and sections, cold fonnd or finished, of a thickness of between NK 700 73.11.02 Oand 4mm. EX 73.14.00 - Binding wire NK 270 - Annealed wire NK 245 EX 73.18.29 Round locksmith's iron tubes NK 874 EX 73.18.31 Seamless or welded tubes: of square or rectangular cross.-section NK 874 EX 73.26.00 Barbed wire NK 350 EX 73.27.00 Grill fencing NK 350 EX 73.27.00 Welded netting NK 230 EX 73.31.10 Nails NK 270 85.03.20 Electric batteries: type R20 Each 68 C/RM/S/41 Trade Policy Review Mechanism Page 6 Table AIV.2(c) Reference prices applicable to exports for the year 1993 Tariff Product description Valuation Reference nonmenclature unit price number (CFAF) Unroasted groundnuts: In shell: for oil mills 12,01.21 - Other than from Casamance NT 22,000 EX 12.01,21 - From Casarnance NT 19,000 For human consumption 12,01.22 - Other than from Casamance NT 32,740 EX 12,01.22 - From Casamance NT 28,045 Not in shell: for oil mills 12.01.31 - Other than from Casamance NT 31,000 EX 12.01.31 From Casamance NT 27,000 For human consumption 12.01.32 - Other than from Casamance NT 44,730 EX 12.01.32 - From Casamance NT 39,075 Groundnut oils: Crude: From the crushing of groundnuts other than from Casamance EX 15.07.31 - In bulk NT 63,500 EX 15.07.31 - In barrels NT 67.000 From the crushing of groundnuts from Casamance EX 15.07.31 - In bulk NT 56,300 EX 15.07.31 - In barrels NT 59,700 Purified or refined: Prom the crushing of Senegalese groundnuts other than from Casamance EX 15.07.34 - In bulk NT 67,000 EX 15.07.34 In packagings NT 70,350 23.04.01 Prepared animal fodder - Oilcake of groundnuts NT 23,610 General remarks 1. The weight of packagings subject to their own duties must never be included in the weight used to determine the reference price of die contents. 2. In the case of goods for which a reference price applies to the net weight, the taxable value of the goods and the packagings subject to the same treatment as the goods is obtained by adding the value of the packagings to the reference price of the goods. 3. ln the case of goods forwhich a reference price applies by weightwithout any other indication (e.g. 100 k.g., tonnesetc.), the reference price covers the goods and the packagings subject to the same treatment as the gods; the. weight to be taken into consideration to determine this value is therefore the weight of the goods and the packagings. 4. In the case of imports, where the real c.i.f. value of the goods is higher than the reference price, the duties and taxes are applied to the c.i.f. value, except in the case of milk powder. 5. In the case of exports, the duties and taxes are applied to the reference value in ail cases. Source: Ministry of the Economy, Finance and Planning. Senegal C/RM/S/41 Page 97 Table AIV.3 VAT and other indirect taxes (Percentage average) T.S. Number 3) (6) (7) (5) Code of lines VAT Suppl. Excise Textiles average duty tax tax average average average Total 5,428 18.0 3.7 0.8 0.0 Total (sans les 9 lignes qui n'ont pas de concordance TS.)S 5,419 18.0 3.7 0.8 0.0 Industries 4,474 18.2 3.7 0.1 0.0 01 Raw hides and skins, leather and furskins 61 27.2 5.4 0.0 0.0 02 Rubber 84 26.4 5.3 0.0 0.0 03 Wood and cork 227 20.0 4.0 0.0 0.0 04 Pulp, paperand paperboard 213 11.6 2.4 0.0 0.0 05 Textiles 568 21.5 4.3 0.0 0.3 06 Minerai products and fertilisers 337 13.9 2.9 0.3 0.0 07 Precious stone and precious metals 33 25.5 5.1 0.0 0.0 08 Ores and metals 398 14.2 3.1 0.0 0.0 09 Coal, petroleum, natural gas 66 17.3 3.3 0.0 0.0 10 Chemicals 1,017 13.3 2.7 0.4 0.0 Il Non-eler.tric machinery 580 20.9 4.2 0.0 0.0 12 Electrical machines and apparatus 169 21.8 4.4 0.0 0.0 13 Transport equipment 287 20.7 4.1 0.0 0.0 14 Professional, scientific and controlling instruments, 94 28.4 5.7 0.0 0.0 photographic apparatus, clocks and watches 15 Footwear and travel goods 46 27.2 5.4 0.0 0,0 16 Photographic and cinematographic supplies 25 17.6 3.5 0.0 0.0 17 Furniture 47 29.6 5.9 0.0 0.0 18 Musical instruments, sound recording or reproduction 34 25.9 5.2 0.0 0.0 apparatus 19 Toys 20 21.5 4.3 0.0 0.0 20 Works of art and collectors pieces 6 30.0 6.0 0.0 0.0 21 Firearms, ammunition, tanks and other armoured fighting 24 29.6 5.9 0.0 0.0 vehicles 22 Office and stationery supplies 14 12.1 2.4 0.0 0.0 23 Manufactured articles not elsewhere specified 124 19.4 4.0 0.0 0.0 Agriculture 908 i7.6 3.6 4.3 0.0 24 Foodstuffs 324 19.1 3.9 1.9 0.0 25 Grains 39 0.0 0.0 0.0 0.0 26 Animais and products thereof 62 12.7 2.8 0.0 0.0 27 Oil seeds, fats and oils, and their products 153 13.5 2.9 0.1 0.0 28 Cut flowers, plants. vegetable materials, lacs, gums 59 13.6 2.7 0.0 0.0 medical herbs etc. 29 Beverages and spirits 115 27.7 5.5 21.7 0.0 30 Daisy products 33 13.6 3.0 1.8 0.0 31 Fish, shellfish and products 47 19.9 4.1 0.0 0.0 32 Tobacco 26 19.9 4.0 27.2 0.0 33 Other agricultural products of animal origin 23 27.7 5.6 0.0 0.0 34 Other agricultural products of vegetable origin 27 15.2 3.3 0.0 0.0 Fuels 37 13.2 1.2 0.0 0.0 Source: GATT estimates based on data provided by the Senegalese authorities. Table AV.1 Trade measures applied in Senegal, 1993 T.S. No. (1,) (2) Total Imports Exports Trade measures Industries 4.513 12.1 18.0 34.0 18.4 3.0 70.0 1.152.046 359.872 0l Ravi hides and skins, leather and 61 15.0 26.7 46.0 9.3 28.8 70.0 781 3.890 furskins 01.01 Ravi hids and furskins 15 15.0 [4.0 32.9 8.2 28.8 49.4 1 3.79! j 01.02 Semi-irnnufctured products 29 15.0 30.0 4904 0.0 49.4 49.4 496 87 J 01.03 Manufactured articles 17 15.0 32.4 51.8 6.6 49.4 70.0 2S4 12 02 Rubber 84 14.8 24.6 43.6 10.1 3.0 49.4 20.430 2,320 02.01 Raw rubber Il i5.0 28.2 47.5 5.9 28.8 49.4 614 100 02.02 Semi-manufactured products 24 15.0 22.5 41.6 1i.2 [8.5 49.4 - - 02.03 Manufactured articles 49 14.7 24.9 43.8 10.0 3.0 49.4 19.816 2.220 03 Wood and cork 227 14.9 10.2 28.9 3.0 3.0 49.4 21.780 249 03.01 Wood and cork inthe rough 109 15.0 10.0 28.8 0.0 28.8 28.8 3.219 43 03.02 Wood based panels 6 12.5 8.3 24.5 9.6 3.0 28.8 4.782 15 03.03 Semi-manufacured products 73 15.0 10.1 28.9 2.7 1&.5 49.4 9.656 86 03.04 M.anufacrured articles 39 15.0 11.0 29.8 4.5 28.8 49.4 4.123 105 04 Pulp. paper and paperboard 213 10.2 15.9 29.9 18.4 3.0 49.4 54.789 6.843 04.01 Piper pulp and paper waste 10 15.0 i0.0 2X.E 0.0 28.8 28.8 432 0 04.02 Paper and paperboard 82 9.5 12.4 25.6 18.3 3.0 49.4 24.556 46 Table AV.1 (Cont'd) (1) a> T4t_ hmp tq1 TM _ T S l:it~~~ am ~~~au.. do.y Lt.^l. *&,. Aà&b« lm t 04 4) pw1 6 1 2 19' 1 0 *494 13.8' 41. hmpfO&IbEaWI. -P "-rMc rX cm %4pobwxw*4wg ti g19 2 y'; î*ê ,o 44 15.911 6.75 1 Res.CEpn= CEAO) C-li tqtàkp. 44 12 * 0 lx8 16` 30 7U0 63.4): 19.56: r. 7t* i £4S *P15il 7 2 3 4914 1).M6 10.338 RIk*ce p=ce.%iotfIhccns: t~«o -6a .kcbtig> 2o:c c....f t4 ' 5 t65 '<`lu 494 ma4*mgoeaoopcLu >.5+:8 Sx _*d~4me« s t'. 4 .11% * 1 -fï .1 0 49,4 z.: e LaC. sS*:'îM io ' 3O.0* 494 cm ;cu i w' 13 :1 * 276 158 JS!OG9.4 yw%4 X.9,*:w7 R :9. .a: 49l4 3.116 6:1 i1SO:aIS: 9c*4: £t 1 <7S& 28.8 Z.IO 3.0 49.4 a: ceC. 15t 1to IS6) 56 69 8.8 49.4 Rdrencc peices ICEA0) o>t ¢d aSui cm S 2 tq 6 5 I $ .13z.0 49.4 Rc#«mnce prices (CEAO, oIOÔLl h 75 ts0 :61 !3.2 Ya 4q.4 a: < tv iqsr.i« ItI la I 16.4 2) 2:3.1 3.0 49.4 e>2o < I 107 15 * »: 17$S 3.0 49.4 0,0) F*}ia~st~p~utt87 1)5 235 4*.1 13.7 3.0 49.4 26,.50 5.861 Rdfcn=c prs(CCEAO) O1cs , Soi $ 15.0 10.0 49.4 0.0 49.4 49.4 «St30 Cé 15 1't 23.8 41.0 14.9 3.0 49.4 Rcrnccpric(CEAO, 3$ Q J a :a (*i $7U 1)0 17.) 34.2 12.3 3.0 39.t Rcfcttwc paiccs (CEAOG ¶ ci 0£ m andt m:5. b= 0m 1 '5,0 30.0 49.4 0.0 49.4 49.4 M*ci.$ Ots t&c %=k 9 5.0 23.3 42.5 4.9 39.l 49.4 es o> ce O& 14-4 it.9 4t.6 8.8 3.0 49.4 Rccrw pnci (CEAG Tabie AV. (CoOE'd) &t T.S. No.. (1 2 Total Imports ExportsTrade mesures c Tariff Fb 1990 1990 mm av. duty Av. Std. min Max. ~~~~~~~~~~~~r - - -. &. 0 04 ma& aC1Ct i teh pedum 125 I4.5 24.9 43.6 11.3 3.0 7(0.0 15.465 2.791 Reference prices (CEAO). import lensing (jutc çsacLs) eso C M 9d :c acon29 15.0 23.8 430 5.0 39.1 49.4 4.685 251 C6 %4=cnd peÔsoe. sud (enduen 337 9.7 16.7 30.3 21.2 3.0 49.4 62.161 100.856 0O1 Sao. u amgraict 1 10.7 20.0 34.6 21.0 3.0 49.4 2.026 175 06 02 Fctmcrs a8 2.1 .4 11.8 17.2 3.0 49.4 62 56.9%2 0601Ot f cn MMM1S 98 9.8 15.7 29.3 20.9 3.0 49.4 28.219 f2f967 06,14 ttlncnfcmt 26 0.0 0.0 3.0 0.0 3.0 3.0 8.39 28.647 0 Q5 Cmb«MOCI.amz 07 P"XcM sauooe amuP $ autIs 33 14.1 26.7 45.0 12.6 3.0 70.0 344 12 07 1 Pcwguis s.pah¶s IE 15.0 30.0 49.4 0.0 49.4 49.4 0 0 07 02 Laudtoi *m wc d S 15.0 25.0 44.2 8.9 28.8 49.4 159 0 Lmpont Iiceising ptccKus malS 0' Ci Arkct Md pXUS aO«xs Md xcxmls 14 12.9 25.0 42.0 17.5 3.0 70.0 185 12 Import licensing. export licensing os O=s m MCUs 398 14.2 t2.2 40.6 14.0 3.0 49.4 121.751 11.120 ce Ol SOesmcuUd le 24 15.0 28.8 48.1 6.2 18.' 49.4 7 913 et 02 l moe d 90 15.0l 22.1 41.2 12.2 18.5 49.4 64,912 401 S09oe l UWOtL 9 15.0 27.8 47.1 6.5 28.8 49.4 m ou 02 cz Fk«o-.aflat 2 !5.0 30.0 49.4 0.0 49.4 49.4 a u 02 03 Sem-muceued pmm&c 79 15.0 21.3 40.4 12.6 18.5 49.4 Reference prices (CEAO) 0 O? %IQC.(errors mkus 104 14.0 21.7 39.8 15.4 3.0 49.4 6.742 1.950 : Tabe AV.1 (Cont'd i. 08.03.01.0OS 0301 07 TuiLCM=th 2 15.0 30.03500 49.44494 0.0 489449.4 49.4 08,03.01.01 ZWIc 2 15.0 30.0 49.4 0.0 49.4 49.4 08 03.02. oA.(minvuil 4nn r>dcs 13.8 20.9 38.8 6.3 39.0 4894 &OS 01)3 0 LCop 24 15.0 20.4 40.4 14.0 49.4 49.4 06.C3.u1.0 Z mck 2 15.0 30.5 49.4 13.0491.4 49.4 0e.03.01.el Anuusn26 11.0 17.3 32.4 20. 3.0 49.44- 08.03.020 L'0--Cid St pdcs8 15.0 24.0 438.2 16.4 38. 49.4 OSÂ03.0 OS Zcl 14 15.0 21.4 37.0 15.0 18.5 49.4 080C3.%Z020 Nitci 4 15.0 24.0 41.2 13.4 18.5 49.4 06.03 Z07 Odic 09.040.03 HOdàcbo cqmuitpmrcac -ifctd 27 15.0 22.4 42.5 8.48 28.5 49.4 08.040 %ict coaoencr 160 103 216.7 31.0 20.4 3.0 49.4 5.9 .5 09.01C03. UCc ou 27 15.0 24.3 41.5 8.4 28.8 49.4 09.02 G&s Ild 9.5 18.2 31.6 20.6 3.0 49.4 9.842 63 Tabîe AV.1 (Cont'd) T.S No. (1) 2) Total Imports Exports Trademeasures Code of Tariff Fiscol 1990 1a av. duty Av. Std. Min. Max. av. imp. dev. tax 09.03 Crude petroleum E 15.0 0.0 18.5 - - - 130,473 O 09.04 Productdetived fmmcal. pemoeuwn R6 10.5 18.0 32.3 20.8 3.0 49.4 118.155 96.705 Reference prces| or tas 10 Chemicals 1.0!7 7.7 12.5 23.8 21.3 3.0 70.0 160.825 90,797 !0.01 Chemicai elementsand compounds 405 6.4 9.9 19.8 20.2 3.0 49.4 29.906 74.484 100CI.01 Organic chemical 210 6.3 10.7 20.5 20.3 3.0 49.4 Excise taxes 10.01.0 Chemical elementsinorganicacids. [15 6.0 9.0 18.4 27D.4 3.0 49.4 ozides am halogens 10.01.0 Other inorganicproducts 80 7.3 9.1 19.9 19.4 3.0 49.4 1O.02 Dyeing. tumàin and colouring materials 74 10.3 E6.8 30.9 20.1 3.0 49.4 12.668 3.9%68 !0.02.0: Tarningmeterials 4 5.0 20.0 39.1 10.3 28.8 49.4 10.02.02 Colouring meterials 36 9.2 14.4 27.3 20.8 3.0 49.4 10.02.03 Pains. varnished ex 34 [[.0 [8.8 33.7 19.5 3.0 49.4 10.03 .medical and pharmacuitical product 88 1.4 [.6 6.0 10.3 3.0 49.4 46.048 3,344 Import prohibition (narcotics) 10.04 Plastics 205 10.6 14.6 29.0 [7.3 3.0 49.4 44.492 3.965 Reference prices (CEAO) 10.04.01 Plasticmaterials [45 [1.2 13.6 28.5 15.9 3.0 49.4 10.04.02 Articles thereof 60 9.3 [7.0 30.0 20.3 3.0 49.4 Import Iicensing (polypropylene sacks) 10.05 Essential oils perfumematerials 115 9.5 21.7 35.1 25.6 3.0 70.0 10,297 2,990 preparations soaps 10.05.01 Essential oils perfume material 39 ia.0 19.0 32.8 21.6 3.0 49.4 10.05.02 Pcrfuecy. coumcacs. soaps. cleaning 76 9.3 23.0 36.3 27.4 3.0 70.0 Reference prices (CEAO), excise taxes preparationset. 10.06 Otherchemicals 130 8.4 14.2 26.3 21.7 3.0 49.4 17,414 2.046 10.06.0! Semi.manufactured product 73 7.2 12.1 22.8 21.6 3.0 49.4 10.06.02 Finishedproducts 57 10.0 16.8 30.6 21.1 3.0 49.4 Reference prices (CEAO). import prohibition (explosives) Table AV.1 (Cont'd) lu T.S. No. (1) (2 Total imports Exports Trade measures Code of Tariff . Fiscal 1990 1990 am av. duty Av. Std. Min. Max. av. imp. dev. tax il Nor-electric machinery 580 14.8 12.0 30.6 13.1 3.0 49.4 159,580 4.417 11.01 Power generating machinery 79 13.9 19.2 37.1 10.5 18.5 49.4 23.973 681 11.02 Agriculturali machinery 17 15.0 2.9 21.5 4.7 18.5 28.8 3.341 1.519 11.03 Office machines IS 15.0 12.0 30.8 7.7 18.5 49.4 17.234 265 11.0S Metalworking machinery 38 15.0 0.8 19.3 2.8 18.5 28.8 1.249 16 11.05 Textileand Ieathermachinery 37 15.0 11.6 30.4 14.3 18.5 49.4 2.242 49 11.06 Construction. mining and handling 58 15.0 7.9 26.6 11.1 18.5 49.4 33.233 337 equipment 11.07 other machinetools 26 15.0 2.7 21.2 4.6 18.5 28.8 956 4 E1.08 Pumps 73 15.0 20.0 39.1 12.1 18.5 49.4 17.627 332 11.09 Hexting and cooling equipment 38 14.2 20.3 38.5 12.4 3.0 49.4 11.927 203 11.10 Pulpand piper machinry 6 15.0 3.3 21.9 4.9 18.5 28.8 667 1 11.11 Bookbinding and printing machinery 17 15.0 2.9 21.5 4.7 18.5 28.8 1,333 46 11.12 Other machines 146 15.0 9.4 28.1 13.2 18.5 49.4 13,183 609 11.13 Parts andaccessories 30 14.5 18.7 37.2 15.4 3.0 49.4 32.615 355 12 Electrical mechines and aiacus 169 14.6 21.4 40.1 11.8 3.0 49.4 75.050 7.029 12.01 Electrical machineryfor industry 37 15.0 14.3 33.2 12.6 18.5 49.4 30,-93 562 12.02 Tecomunications appartus 43 14.3 21.9 40.2 9.9 3.0 49.4 14.894 3.568 12.03 Tools and other electrical apparatus 29 15.0 29.3 48.6 2.7 39.1 49.4 9,246 30 :2.04 Electricalequipment and parts 61 14.5 21.6 40.2 12.6 3.0 49.4 20.117 2.869 Reference prices (CEAO) 13 Transport equipment 287 14.0 23.2 41.3 17.6 3.0 70.0 110,956 7.084 13.01 Motor vehicles 153 14.7 22.4 41.2 11.1 3.0 70.0 98.320 5.896 Reference prices. import pmhibitîons (second-hand vehicles) 13.01 Aircraft 37 1i.8 50.0 66.6 6.4 54.5 70.0 44 394 Tabkl AV.1 (Cont'd) No. (1) (2} TOaW sportss Expotl Temde measures or Tzrif Fcl 1_990 lm -Ie aY. duty Av. Std. Min. Max. av. imp. dev. 13.03 Shipsbndbos 62 13.1 12.9 29.7 21.1 3.0 70.0 3,693 113 13.04 (Xcr anspor: cquipmene 35 14.6 16.9 35.4 14.2 3.0 49.4 8,899 681 14 Pmfessional. scientific zid contm1ling 94 14.7 27.8 46-7 8-2 3.0 49.4 12.422 364 irutxumexMs. phatogiphzc apparins. cklds and waches 14.01 Phoogmphic and opcicai apparacus 49 14.4 28.8 47.5 9.2 3.0 49.4 2,596 121 14.02 Profeseion. scienffic ul contrulting 26 15.0 25.8 45.0 8.2 28.8 49.4 9,555 229 14.03 Waiches va clocks 19 15.0 27.9 47.2 4.2 39.1 49.4 271 14 Es Foowear &M mrivel goods 46 15.0 27.8 47.1 10.1 28.8 70.0 4.334 4.156 15.01 Foonwear 32 15.0 24.4 43.6 8.1 28.8 49.4 3.008 4.00 Reference prices (CEAO) 15.02 Tmvel goods. handbags ec 14 15.0 35.7 55.2 9.3 49.4 70.0 1.326 156 16 Phoogrphic wx! cincmatographic 25 15.0 25.2 44.4 11.3 18.5 49.4 2.814 153 supplies 17 Fuitumre 47 15.0 30.4 49.8 5.2 28.8 70.0 12.595 200 Reference price 18 Musical inscuments. sound recoiding or 34 14.6 24.7 43.4 8.7 3.0 49.4 1,781 84 mpmducrion aMaus 18.01 Souan rcorders and scund recordings 21 15.0 22.9 42.0 4.7 39.1 49.4 1.658 80 18.02 Musical instnumenns 13 13.8 27.7 45.8 12.4 3.0 49.4 123 4 19 Toys 1014.3 31.5 50.1 14.2 3.0 70.0 1.567 124 20 Works of an dm collectors pieces 6 15.0 36.7 56.2 9.7 49.4 70.0 90 8 Table AV.I (Cont'd) T.S. . (i (2) Totat Imports ExpottS Trde mea esuæ code or Tariff FÏçCa1______1990 1990 lins av. duty Av. Std. i. Max. av. tup. dey. 21 Firams. amununiton. tanks and other 24 15.0 47.5 67.4 6.8 49.4 70.0 476 I Import prohibition armoured fighting vehicles 22 Offic and srarionery supplies 14 15.0 21.4 40.5 8.6 28.8 49.4 2.030 3 23 Manufactured articles not clsewhere 124 12.3 24.4 40.9 18.1 3.0 70.0 3.379 3.532 Reference prices (CEAO) specifzcd Agrculrure 10 13.5 26.5 44.2 18.1 3.0 70.0 468,377 422.724 24 Foodstuffs 324 13.9 26.9 45.1 14.2 3.0 70.0 122.597 14.972 24.01 Ftuit aM edible nuts. fesh or dricd 39 15.0 30.0 49.4 0.0 49.4 49.4 1 l.395 893 24.01.01 Bananas aln certain other tropical fruit EX 15.0 30.0 49.4 0.0 49.4 49.4 Import quota and ours 24.01.02' Othcr f jitan edible nuts. fresh or 25 15.0 30.0 49.4 0.0 49.4 49.4 dricd 24.92 Fruit. prepared or preserved Il 15.0 30.0 49.4 0.0 49.4 49.4 834 108 24.03 Vcgctabks. fmsh or dried 27 13.9 25.9 44.0 13.5 3.0 49.4 12.771 1.342 Import licensing (onions, potatoes) 24.04 Vegetabios, prepared or reserved (except 25 15,0 29.2 48.5 4.0 28.8 49.4 4.296 271 Impont licensing (tomato, concontote). dried) export licensing 24.05 Coffee. tea ani =at 57 15.0 29.6 49.0 1.9 39.1 49.4 26.575 4.676 24.05.01 Coffee S' 15.0 30.0 49.4 0.0 49.4 49.4 Excise taxes 24.05.02 Teé man e 3 15.0 23.3 42.5 4.9 39.A 49.4 Excise raxes 24.05.03 Coffec and o extracts 3 i5.0 30.0 49.4 0.0 49.4 49.4 Excise taxes 24.06 Spices 14 15.0 21.4 40.5 3.6 39.1 49.4 2,587 569 24.07 Cocoa and co, i ptpaianons 24 15.0 40.8 60.5 10.3 49.4 70.0 1.085 1 1 24.07.O0 Coca beans 6 15.0 30.0 49.4 0.0 49.4 49.4 24.07.02 Coco paste. butter &M powder 5 15.0 30.0 49.4 0.0 49.4 49.4 Table AV.I (Con'd) T.S. No. (1 (2 Total lmports Exports Trade measure Code of Tariff Fiscal 19901990 Rit" h Y. duty Av. std. Mim Max. av. lmp. dev. tax 24.07.03 Chacolace and athor prepatations 13 15.0 50.0 70.0 0.0 70.0 70.0 Referenrce prices (CEAO) conuinung cocoa 24.08 Sugar and confectioncry 36 8.8 16.9 29.5 23.6 3.0 70.0 36,514 3.917 Reference prices (CEAO> 24.08.01 Sugaus 32 8.0 14.7 26.3 23.0 3.0 70.0 Import licensing. cxportiicensing 24.08.02 Sugar confectionery 4 15.0 35.0 54.5 8.9 49.4 70.0 24.09 Products of the milling industry. 52 13.6 22.7 40.3 15.0 3.0 49.4 6,994 485 Reference prices (CEAO) preparations of cerCeals 24.09.01 Flour and worked cereal grains 18 IC.0 28.9 48.2 4.7 28.8 49.4 Import licensing 24.09.02 Malt. starches. gluten and inulin 12 8.8 8.3 20Q6 17.0 3.0 49.4 24.09.03 Prepantions of cercils. flour or starch 13 15.0 22.3 41.4 10.0 28.8 49.4 24.09.04 Bkers waws 9 15.0 30.0 49.4 0.0 49.4 49.4 24.10 Otber foodstuffs 39 14.6 26.4 45.3 13.7 3.0 70.0 19,546 2.700 24.l0.O Eggs 4 15.0 35.0 54.5 8.9 49.4 70.0 24.10.02 Nacral haney 2 15.0 50.0 70.0 0.0 70.0 70.0 24.10.03 Other 33 14.5 23.9 42.6 12.6 3.0 70.0 Reference prices. excise taxes 25 Grains 39 14.2 4.9 22.7 6.8 3.0 28.8 174.848 1 Inpart iicensing, price equalization (rice), export licensing 26 Animais and pmducts thrceof 6;2 12.3 23.4 39.8 20.9 3.0 70.0 6.726 301 26.01 L[vc animais 28 9.1 7.5 20.1 12.2 3.0 33.9 524 22 26.02 M«at. fresh. chied or frzen 14 15.0 30.0 49.4 0.0 49.4 49.4 5.309 265 Reference prices 26.03 Mfett. pmpared or preserved. amd ather 20 15.0 41.0 60.7 10.2 49.4 70.0 8Ç3 14 meat products 27 Oil sueds. fats and oils. and thcbj 153 12.3 20.8 _7.1 17.0 3.0 49.4 37.342 178,293 products 27.01 Vcgetable oils and seeds. odlcake 110 11.3 21.3 36.6 18.0 3.0 49.4 27.305 177.599 Tble AV.1 (Cont'd T.S. No. (1) (2) Total Imports Exports Trade measures Code of Tariff Fiscal 1990 199 Hnes av. duty Av. Std. Min. Max. av. hnp. dev. tax 27.01.01 Oil seeds anid oleaginous fruit, flour or 19 9.5 28.4 42.0 11.6 3.0 49.4 Reference prices (export>, export licensing nmcals 27.01.02 Vegetable oils 80 11.4 20.1 35.5 20.0 3.0 49.4 Reference prices (export>. import licensing (monopoly) 27.01.03 Oilcake ad other residues 11 13.6 17.3 34.8 5.7 23.6 39.1 Reference prices (export) 27.02 Other fats. oils. waxes and products 43 14.7 19.8 38.5 13.8 3.0 49.4 10,037 694 Excise taxes 28 Cut flowers. plants, vegetable materials, 59 10.9 21.2 36.1 20.2 3.0 49.4 397 6,369 lacs, gums medical herbs etc. 28.01 Cut flowers 2 15.0 30.0 49.4 0.0 49.4 49.4 58 6 28.02 Other 57 10.8 20.9 35.6 20.4 3.0 49.4 339 6,363 29 Beverages ard spirits 115 14.7 42.1 61.5 13.3 3.0 70.0 9,214 1,995 29.01 Fruit and vegetable juices 2i 15.0 29.0 48.4 4.4 2-8.8 49.4 1,357 168 29.02 Wine 35 15.0 50.0 70.0 0.0 70.0 70.0 4,783 654 Excise taxes 29.03 Other beverages and spirits 59 14.5 42.0 61.2 15.3 3.0 70.0 3,074 1.173 Reference prices (CEAO), excise taxes 30 Daiuy products 33 13.2 16.4 33.4 18.0 3.0 49.4 46,454 1,638 30.01 Fluid milk. fresh or preserved 22 12.3 10.9 26.9 17.9 3.0 49.4 38,)88 697 Reference prices 30.02 Butter 4 15.0 22.5 41.6 13.4 18.5 49.4 6,252 834 Excise taxes 30.03 Cheese 7 15.0 30.0 49.4 0.0 49.4 49.4 2,114 10I 31 Fish, shellfish mdl products 47 14.7 36.2 55.4 12.4 3.0 70.0 47,362 216,041 31.01 Fish 27 14.4 37.8 56.8 14.6 3.0 70.0 46,734 181.303 31.01.01 Fish. frsh. chilled or frozen 8 15.0 30.0 49.4 0.0 49.4 49.4 31.01.02 Fish. saited. in brine. driad or smoked 6 15.0 30.0 49.4 0.0 49.4 49A4 31.01.03 Fish, prepared or preserved 13 13.8 46.2 64.8 17.8 3.0 70.0 31.02 Cnsceans 20 [5.0 34.0 53.5 8.2 49.4 70.0 628 34,738 Table AV.I (Cont'd) T.S. No. (1i (2) Total Imports Exports Trade muasures I n Code or Tariff Fiscal 1990 1990 lines av. duty Av. Std. Min Max . av. lmp. dev. tax 31£02.01 Cîustaceans andi molluscs, fosh. chilled. 16 15.0 30.0 49.4 0.0 49.4 49.4 frozen, salted. in brine or dried 31.0202 Crustaccans and molluscs, prepared or 4 15.0 50.0 70.0 0.0 70.0 70.0 preserved 32 Tobacco 26 15.0 41.9 61.6 12.1 28.8 70.0 21.478 1,427 32.01 Unmanufactured tobacco 5 15.0 24.0 43.2 8.2 28.8 49.4 20,009 239 Excise taxes 32.02 Manufactured tobacco 21 15.0 46.2 66.0 8.1 49.4 70.0 1.469 1,188 Excise taxes. minimum fax assessment h Other agricultural products of animal 23 13.7 22.2 39.9 14.5 3.0 49.4 276 114 ij orgin 34 Other agricultural products of vegetable 27 13.3 20.0 37.3 14.3 3.0 49.4 1,683 1,573 o.rigin_ Note: 'Me average import tax comprises the tariff (15 per cent or exempt). tie fiscal duty and the stamp dury. Source: GATT Secretariat estimatesciall in