TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

SENEGAL
Trends and impacts of foreign investment in
developing country agriculture
economy. Foreign investors have participated
actively in the agriculture production with some
producing primarily for export. Horticulture is very
illustrative of this orientation whereby companies
such as GDS and SOCAS are among the best
known, non-traditional product exporters. Until
recently, in this area, Senegal had gained ground
by increasing significantly its exports of nontraditional
products in the period 2000–2005,
thereby contributing to the increase of export
earnings over the period under review. As shown
in Figure 1, the country saw its tomato exports
growing on average 40 percent per annum over
the last ten years to reach about 18 000 tonnes
in 2008/2009. In the same vein, the volume of
mango exports grew remarkably well – almost
ninefold from 1999/2000 to 2008/2009. This
situation was very encouraging in helping the
country to diversify away from its traditional
export products such as groundnuts and fisheries.
There is little doubt that the tax revenues from
the various production, processing, exporting and
sales activities over a wide spectrum of investors
involved with the food industry contributed to
some extent towards improving of the levels
of structural imbalances shown below in the
government fiscal accounts (Table 7).
FIGURE 1
Trend in export volumes of selected Senegal
non-traditional export products in tonnes,
1998–2008
276
metric tonnes
25 000
20 000
15 000
10 000
5 000
1998
2001
2003
2005
2007
2009
Mango Tomato Fresh green beans
Source: Direction del l’Horticulture, MInistere agriculture,
Senegal
4.2 Some economic impacts of FDI
in Senegal’s agricultural sector,
including food security
There is a fair number of FDI related companies
that are actively involved with the Senegal food
industry. The review of the portfolio of activities
of these companies suggests a wide range of
agricultural outputs and services being carried
out, and to which FDI have been contributing
positively in the supply of some high quality fresh
and processed food products in the country.
In the same vein, FDI related companies have
created large number of jobs suggesting an
improvement in the levels of incomes distributed,
as well as improved purchasing power on the part
of concerned stakeholders. Assuming that these
jobs did really materialize across the various food
supply chains, the participation of FDI in Senegal’s
agricultural production system can be said to
be positive. These improvements are the natural
result of the wide diversity of operations and
the high export orientation of many of foreign
investors involved.
In the case of the tomato industry (discussed
below), it is the only sector known to be
operating on the basis of mutually beneficial
arrangements for all involved. The industry has
been very successful in attracting several billions
of FCFA in foreign investments to increase the
production levels of fresh as well as processed
tomato. There is enough supporting evidence
provided by this industry to demonstrate how
beneficial this orientation has been in raising
and stabilizing incomes earned at the farmgate
or in exports. No doubt the resulting
increase in the purchasing power of the various
tomato stakeholders involved – including the
State – has meant greater demand for available
food products, hence improved levels in food
accessibility in the food industry.
Furthermore, investing in one hectare of land
in the rural areas of Senegal with the view of
producing high quality fresh tomatoes to supply
nearby tomato processing plants of the kind
operating in the Senegal River Valley is proving
beneficial in terms of levels of income distributed
along the tomato value chain. This shows tomato
production related activities as a profitable