The Dakar Integrated Special Economic Zone Project
Free trade zones are special economic areas where businesses operate with tax benefits and a number of other favourable regulations. During the 1980’s there was a large boom in the number of these in existence around the world. As globalisation took route, many nations sought out the benefits of these zones in the developing world. As Western European businesses moved for lower wages, Africa and Asia stood to gain the most. There are 29 free zones today in 11 West African countries, which can be broken down into free trade zones and export processing zones. Some free zone benefits are also extended to individual production sights, or “free points”; 450 of these zones are also located in West Africa. Many of these projects were thought to have minimal impact on West Africa, until the late 2000’s.
Senegal has always benefited from a now long history of relative stability and peaceful transfers of power. This has resulted in strong ties to those present and involved in its independence. France is the most significant of these nations. Paris has always been financially involved with many of its previous colonies. The west African francophone nations have all had strong relations with France. Senegal, because of its stability, has always been a top beneficiary of France’s financial generosity. It was thanks to this relationship that Senegal beat many of its regional neighbours to a free trade zone in 1974, inspired by a 1970 project in Mauritius, and made advances towards Mbao, and the greater west African coast, for its proximity to Europe.
However, the legacy of the Mbao project is not so positive. Considering the initial aims of the project, the plan appears to have failed. The Mbao project only attracted 15 firms and failed to recruit businesses relocating out of Europe during that time. Multiple factors may have caused the project's flop, however some point to the general post-independence economic strategy of focusing on maximising export of raw goods over domestic manufacturing or resource processing. Other projects from both Senegal’s “Free Point” system and Dakar Industrial Free Zone have struggled with attracting activity due to over-administration, excessive red tape, an overly cautious approach on the part of the authorities with respect to their special status, inordinate delays in issuing licenses, and rigid labour legislation. This left these projects with a bad reputation.
After a period of review in 1996, little changed in the free trade program in Senegal. In 2006, work began on a new project. Paused due to the financial crash, Senegal now has plans for a much more holistic plan in its new Dakar Special Economic Zone (SEZ), incorporating both the basics of a Free Zone and the high tech logistical spaces required for modern businesses. It will include an industrial park, service spaces, offices, and a logistics platform. There are plans to later incorporate a commercial area, tourist complexes, and residential areas. With a fiscal incentive scheme set in stone, it aims to go above beating its failed attempts prior to this project. Diamniadio Park, located 35 kilometres southeast of Dakar, opened in November 2018, was the first part of the SEZ project. It now has seven operational investors. The Government of Senegal invested $44 million into this phase of the scheme.
Nonetheless, this latest project has seen a lot of involvement from new players, keen to see their influence in West Africa. China has promised to invest $100 million for the second phase of the project, aiming to end up employing 23,000 people once completed. The UAE is also involved in the project. Jebel Ali Free Zone Authority of Dubai executed the engineering, and invested $800 million into the project.
Considering the size of this project, Senegal in the 21st century will probably be the only location in West Africa that could pull off a project of this size. Considering Senegal's track record for both proactive but underachieving Free Trade Schemes, the potential for this project’s failure is high. Monetary endorsements from the UAE and China are not made solely because of their belief in the success of the SEZ, but also to influence and grow their power in the region.