Construction Sector Crisis in Senegal: Analysis, Challenges, and Paths to Revitalization for a Vital Industry
The Construction and Public Works sector (BTP) occupies a central place in Senegal’s economy. It shapes our cities, underpins critical infrastructure, and supports tens of thousands of jobs. Yet, for nearly two years, the sector has been experiencing a deep crisis that is destabilizing companies, workers, and financial institutions.
This situation calls for a clear-eyed assessment, a thorough understanding of its root causes, and a pragmatic reflection on potential solutions. In this article, we provide a precise and actionable analysis aimed at decision-makers, industry stakeholders, and economic partners.
A Key Sector Facing a Sharp Slowdown
The dynamism of Senegal’s construction sector has long relied on a combination of ambitious public projects, foreign investment, and a growing private real estate market. However, since the political transition, the sector has faced a major shock:
the suspension or revision of several public construction projects,
in-depth audits of ongoing projects,
temporary reductions in the government’s financial commitments.
While these measures are driven by a desire for transparency and good governance, they have caused a significant loss of visibility for companies. In a sector built on long project cycles and substantial cash flow requirements, this lack of operational continuity has had an immediate impact: a shrinking order book, halted works, underutilized equipment, and paralyzed teams.
Domestic Debt: A Cash Flow Bottleneck
The second aggravating factor is the accumulated delays in payments owed to companies. Professional organizations in the construction sector estimate these unpaid claims at around 250 billion CFA francs, or even significantly more according to other sources.
For companies, these delays have several direct consequences:
the inability to finance purchases of cement, steel, or bitumen,
difficulty in paying employee salaries,
suspension of construction projects due to lack of funds,
strained relationships with banks.
Operating on an advance-based cash flow model, the construction sector is particularly vulnerable to irregular payments, which can quickly jeopardize even the most financially stable companies.
Banks Tighten Their Grip
Faced with the financial fragility of companies, banks have tightened their requirements:
reduction or temporary suspension of credit lines,
reassessment of risks,
increased collateral demands.
This tightening creates a vicious cycle: companies, already weakened by unpaid claims, find it even more difficult to access the liquidity needed to sustain their operations.
Significant Social Repercussions
Beyond economic indicators, the construction sector crisis has a major human impact.
Trade unions report that more than 10,000 jobs are directly at risk. Paused construction sites lead to:
temporary layoffs,
dismissals,
slowed on-the-job training,
loss of skills that are difficult to recover.
For a sector that plays a crucial role in employing young people and low-skilled workers, this situation exacerbates social and regional vulnerabilities.
Root Causes: An Overreliance on Public Funding
While the current shock is cyclical, it also exposes structural vulnerabilities:
A historical dependence on public investment
A large portion of the sector’s activity relies on government-funded contracts. When this funding slows, the entire industry contracts.
Insufficient diversification toward the private sector
The private real estate market is growing but remains too limited to absorb a shock of this magnitude.
Recurring budgetary pressures
The prioritization of major projects and the staggered payment schedules have created an accumulation effect in domestic debt.
A sensitive supply chain
Fluctuations in cement prices, rising costs of imported materials, and reliance on foreign currency — all these factors weigh heavily on company margins.
How to Revitalize the Sector? Concrete and Realistic Solutions
The crisis is serious, but it is not insurmountable. Several levers can be activated simultaneously to stabilize and then revitalize the sector.
Establish a Public Payment Schedule for Domestic Debt
A clear, staggered but guaranteed disbursement plan would allow:
restoration of confidence,
improved access to bank credit,
the resumption of construction projects.
Visibility is the first driver of recovery.
Strengthen Public-Private Partnerships (PPPs)
Senegal can mobilize the private sector more effectively to finance:
regional roads,
social infrastructure,
affordable housing programs,
urban renovation projects.
More attractive and faster contractual frameworks would encourage investors.
Diversify Construction Sector Opportunities
The sector can strengthen itself by developing:
green construction (stabilized earth, local materials),
energy-efficient rehabilitation,
community infrastructure,
privately funded real estate projects.
This reduces dependence on public contracts.
Implement Temporary Banking Support Mechanisms
Several instruments can be considered:
state or FONSIS-backed guarantee lines,
BTP stabilization funds,
cash flow refinancing.
The goal: prevent bankruptcies caused solely by payment delays.
Accelerate Digitalization and Transparency of Public Markets
A modernized system, with publication of approved projects and tracking of payments, would provide essential visibility to the sector and strengthen the confidence of all stakeholders.
A Possible Recovery, An Opportunity to Seize
The construction sector crisis in Senegal is deep, but it can also become an opportunity for transformation. By strengthening transparency, diversifying funding sources, and providing greater visibility to companies, the country can reposition this strategic sector on a more solid foundation.
Construction remains a key driver of employment, economic growth, and territorial development. With targeted measures and strengthened dialogue between the government, companies, and financial institutions, recovery is not only possible — it is within reach.