The Senegal-Germany relationship has evolved since President Macky Sall entered office in 2012. Changes became visible under Germany’s G20 presidency, under Chancellor Angela Merkel, and its introduction of the Compact with Africa (CwA). The key driver of the project is the desire to enhance economic conditions in countries that sign up for the initiative1. The initiative’s tool for achieving this is to mobilize private investment through improvements of the macro, business, and financing frameworks in partner countries2. Under the current chancellor, Olaf Scholz, Germany has been part of the International Partners Group (IGP) that has been supporting the Just Energy Transition Partnerships (JETP) with several countries, including Senegal. In one particular sense, the JETP is similar to the CwA, in that it also aims to mobilize private and public funds, this time to support the green energy transition in Senegal3.
The larger context of these partnerships is one in which African countries are reshaping their relationships with Germany - from a donor-recipient affair to a trade partnership.
To examine how the relationship has changed from 2012 based on trade and aid indicators, we use official publicly available data on platforms of international organizations such as UN Comtrade, OECD, and Trade Map. In some cases, we compare Germany’s performance to other EU countries or its relationship to other West African economies. As data reported on these platforms is limited and, in some cases, inconsistent and not updated, we selected the indicators with the most recent data and created six charts to illustrate the bilateral relation under Sall’s mandate. In addition, we argue why both German and Senegalese policymakers would benefit from more granular data.
When Macky Sall entered office in 2012, Germany’s imported value of Senegalese goods was USD 8.7M. However, Germany’s position has improved as a trading partner. As of 2022, import values have tripled, and Germany has experienced the largest import growth rate of Senegalese goods after Poland. In relative values, however, German imports correspond to only one-third of France’s and less than 5% of the total EU import values of Senegalese products.
In 2012, Senegalese exports to Germany were dominated by agricultural products. Animal and vegetable fats and oils represented 44% (USD 3.9M) and cotton 17% (USD 1.5M) of the total exports. Changes in the export value of these products are difficult to assess given the number of missing data. However, in recent years, export values for both groups have declined drastically and represent less than 1% of the total exports.
The data shows clear trends in perishable agricultural commodities. Vegetables, fruits and nuts, and fish export shares sharply increased from 2012 to 2016 and remained steady until 2018. In 2019 the share of vegetables decreased sharply from 36% to 18%, whereas the other group items remained unchanged. However, from 2020 onwards the export volumes of these products seemed to recover.
Live plants, flowers, and ornamental foliage were also among the top exported goods. In 2013, this product group reached its peak in 2013 representing 36% of total export values. In the next year, this share dropped to 9% and remained steady during the following years, consistent with the booming market of flowers in the continent.
Besides the heavy dependence on agricultural products, the data also shows that intermediate and industrialized products categorized as “Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof”, HS Code 84, are among the top exported products to Germany. Export values steadily increased until the pandemic in 2020. After the lockdown, export shares slightly recovered and converged towards pre-pandemic levels. Electrical machinery and equipment are also among the exports with the most revenues. Although in recent years this share of exports has been relatively low, in 2016 and 2017 this product group represented 14% on average of the total exports correspondingly.
Electrical machinery and equipment: Compared to the other higher product groups, growth rates don’t follow any trend and differ every year. For instance, in 2016 machinery products increased by 2200% from USD 35K in 2015 to USD 835K in 2016. In 2017, this group kept increasing by 8% and reached the highest export value at USD 902K of the period. From 2018 to 2021, export values decreased drastically and reached their lowest value at USD 1K due to the economic constraints during the pandemic. Exports seemed to catch up already the following year. Exports grew by 2300% and were USD 24K.
Machinery and mechanical appliances and vehicles followed a different trend. While electrical and machinery group products grew exponentially, export values under this category decreased by 93% and 25% in 2016, from USD 467K to USD 31K for machinery and mechanical appliances and from USD 79K to USD 59K for vehicles. In 2017, the export rate increased by almost 700% exponentially followed by periods of unstable growth.
Compared to France, one of Senegal’s main trading partners, Germany’s FDI yearly flow is shallow. FDI flows peaked in 2018 and 2021. In these years France invested around USD 500M whereas Germany less than 50M, just 10% of France’s FDI. This pattern is also similar for Ghana and Côte d’Ivoire, similar-sized economies in West Africa.
Comparing Germany’s FDI in these three countries, the data suggests that Senegal was not among the main destinations for German investment. From 2012 to 2016, FDI yearly flows did not go beyond USD 10M but remained stable.
Despite the launch of the CwA project in 2017, Germany’s share of Senegal’s inbound FDI declined that year and reached its lowest point in 2018 during Sall’s term. Compared to German investments received in Ghana and Côte d’Ivoire, Senegal received the lowest amount. German investments in 2019 reached their peak in Sall’s time in office at USD 6.7M. This amount represents 30% of German investment in Côte d’Ivoire for the same year. Although the pandemic and subsequential economic conditions negatively impacted investments, German FDI flows caught up to pre-pandemic levels in 2021. Investments in Senegal were USD 3.5M, 22% of investments flowed in Ghana, and 8% of flows in Côte d’Ivoire for the same year.
Official Development Assistance (ODA) includes grants and soft loans. OECD measures commitment, donor’s intentions as an indicator of future flows, and disbursement, the actual amount paid every year. Analyzing both metrics provides insights into Germany’s aid delivery to Senegal.
Except for 2012 and 2018, where the disbursement exceeded Germany’s aid commitments, there has been a large gap between commitment and disbursements.
We evaluated Germany’s bilateral relations with Senegal based on publicly available data on exports, trade balance, the export growth rate of industrial products, investments, and aid flows between 2012 and 2022. In terms of trade, Germany has grown in relevance as a trading partner during Macky Sall’s term. Import volumes of Senegalese products to Germany are still below imports into top EU countries such as Spain and France.
Although the available data provides an overall picture of the development of the bilateral relationship during President Macky Sall’s mandate, there is still a huge data gap when it comes to data-based assessment of economic partnerships with single African countries. This makes it hard to analyze in detail the relationship solely based on data.
Available data on trade and statistics tend to only provide a picture of the African economy at the continental level. It also reinforces the common narrative of African countries’ exports depending heavily on raw materials. While this is true, the data also shows that the Senegalese market on electronics and machinery appliances has potential as evidenced by the exponentially growing rate of exports. In addition, it is not possible to quantify improvements in the manufacturing sector as it is not possible to differentiate whether exported goods to Germany are intermediate or finished products.
Policymakers would benefit from understanding Senegal’s service exports as well. According to the WTO, which provides yearly data on trade in commercial services, Senegal services exports are booming. During Sall’s term, they increased by 15%, from USD 10.3B to USD 11.8B.4 Yet the data lacks disaggregation by trading partners and hence it is not possible to assess the magnitude of service exports to Germany.
1https://www.bundesregierung.de/breg-de/aktuelles/compact-with-africa-konferenz-2244438. Accessed on 20 March 2024
2https://www.imfconnect.org/content/dam/Compact%20with%20Africa/Prospectus/G20_Compact_with_Africa-Senegal_v5.pdf. Accessed on 29 February 2024
3https://www.bmz.de/de/aktuelles/aktuelle-meldungen/neue-energiewende-partnerschaft-mit-senegal-beschlossen-157496. Accessed on 29 February 2024
4WTO STATS. International trade statistics. Available at https://stats.wto.org/. Accessed on 29 February 2024
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