Member States : Republic of Senegal
Republic of Senegal
Senegal maintained its image as a beacon of peace and stability and a model for democratic governance in West Africa. Yet the country’s peace and democratic credentials were seriously tested by a tense political and constitutional situation in the earlier part of 2012, provoked by a dispute over the eligibility of the incumbent president, Abdoulaye Wade, to seek another term.230 This resulted in a series of violent protests that threatened to undo much of the country’s progress.231 The country returned to normalcy after the president was defeated in a run-off by the opposition candidate Macky Sall in March 2012232. The new president’s coalition, Benno Bokk Yakaar (United in Hope), subsequently won parliamentary elections by landslide in July 2012.
A glimmer of hope for national reconciliation and particularly for the pacification of the rebellion in the south (Casamance) was shown as the Movement of Democratic Forces of Casamance (MFDC) freed eight (8) Senegalese military hostages who were detained for more than one year. His Excellency, President Macky Sall, while welcoming the freed officers, affirmed that he has taken cognisance of the signal sent by the separatist movement and will work towards restoring lasting peace.
Economic and Financial Situation
The Senegalese economy was expected to grow by 4.2% and 4.7% in 2012 and 2013 respectively, compared with 4% in 2011. These projections were slightly higher than 3.7% and 4.3% projected by the International Monetary Fund for 2012 and 2013 respectively. The expected growth was largely attributable to higher private consumption, driven by remittances from Senegalese working abroad, and by expansion in the industrial and service sectors. Meanwhile, the rate of growth in the primary sector was expected to decline from 10.8% in 2011 to 8.9% in 2012. Industrial agriculture was expected to grow by 28.4% in 2012, following a 41.3% decline in 2011. Subsistence agriculture is also expected to grow by 9.8% in 2012, after a 10.3% decline in 2011. This is primarily due to evenly distributed rainfall, as well as state assistance to producers.
The Financial sector of Senegal is promising with a lot of potential; it is however dominated by banks. There are 19 deposit money banks that makes up for over 80% of the sector’s total assets and represents about 29% of GDP in 2010. Remittances inflows according to World Bank estimates in 2011 amounted to USD 1.48 billion, which represents about 10.3% of GDP. These calls for close monitoring of remittances inflows as they have AML/CFT implications.
The secondary sector was estimated to experience a slow growth of 2.7% in 2012 after performances of 5.5% and 7.2% attained respectively in 2010 and 2011. This is attributable not only, amongst others, to the slowdown in the sub-sectors of construction equipment manufacturing and of the fishing industry; but also particularly to the counter-performance of the edible oils sub-sector that suffered a drop in the harvesting of groundnut production which in turn had a negative impact on the production of crude and refined oils. The sub-sector, globally, recorded -51.1% in 2012 against -21% in 2011. The tertiary sector showed the same outlook with a growth of 2.9% in 2012 against 4% attained in 2011. Inflation as measured by the Harmonized Consumer Prices Index (HCPI) was maintained at 2% on average against 3.4% in 2011.
With regard to public finances, the government received 1,723.2 billion FCFA while its expenditures amounted to 2,148.7 billion FCFA. Public deficit amounted to 425.4 billion FCFA which is 5.9% of GDP in 2012 against 455 billion FCFA, which was 6.7% of GDP in 2011.
Total outstanding public debt increased by 12.5% from 2,704.2 billion FCFA in 2011 to 3,041.1 billion FCFA in 2012. As a percentage of GDP, public debt increased slightly from 39.7% in 2011to 42.1% in 2012. This figure is well below the West African Monetary Union (UEMOA) standard criterion of at most 70% of GDP.
The World Bank’s latest Doing Business Report ranked Senegal 154th in 2012, compared with 157th in 2011. This is attributed to efforts by the government to improve the business climate by focusing on modernization and competitiveness. The country scored 36 out of 100 and was ranked 94th in the 2012 TI Corruption Perception Index, compared with 112th in the previous year240. It also scored 56.2 out of 100 and was ranked 16th out of 52 countries in the 2012 Mo Ibrahim African Governance Index241.
In the meantime, Senegal continued to face a series of socio-economic challenges as sustained growth has not translated into broad-based prosperity. Unemployment in particular remains a major problem, not least because the employment rate of the youth is 25% below that of adults. Inequalities remain widespread as social protection initiatives are limited to wage earners in the formal sector who constitute less than 20% of the population. Nonetheless, Senegal’s president announced the government’s plans to increase public sector wages by reducing taxes by 29 billion FCFA, as well as create 5,000 jobs in the public service.
Prevalence of Predicate Crimes
Predicate crimes, particularly drug trafficking, remained major challenges in Senegal in the reporting year. In August 2012, for instance, Senegalese law enforcement officers dismantled a vast network of counterfeit traffickers and arrested two Lebanese-Syrians. Significantly, a Senegalese member of the network was a close associate, a Politically Exposed Personality (PEP) in the country. Searches and seizures by the national police led to the seizure of black banknotes of 500 Euros and 100 USD to be washed. Law enforcement officials also arrested a popular show promoter, a hotel manager, an unknown number of custom officials for their alleged involvement in extortion and cocaine trafficking officers in the beach resort town of Saly. A search by two Senegalese Customs officers led to the discovery of thirty-nine (39) pellets of cocaine in the areas searched. All the persons involved in this case have been arrested and questioned as investigations into the case continue.
It is, equally, worth highlighting the actions of the services of the Central Office for the Repression of Illicit Drug Trafficking (OCRTIS) which, after seizing 3 kg of cocaine from a Guinean singer, dismantled a vast network on international drug trafficking which uses Dakar as a transit point. In the pursuit of its activities, OCRTIS made another seizure of not less than 2 kg of cannabis after a body search on a suspect while he was living in a rented room which served as his depot. This search led police officers to discover a plastic sachet on his person containing the “grass”.
From January to June 2012, the FIU received 58 suspicious transactions reports (STRs), forwarded 4 reports to the Ministry of Justice and filed 13 cases. Predicate crimes at the origin of these STRs involved fraudulent offenses, forgery, corruption, drug trafficking and advance fee fraud (419). During the same period, the following legal decisions were recorded at the Ministry of Justice: Liberation (2); Dismissal (1); Conviction (1).
During the period under review, Senegal took important legislative and regulatory measures to render its AML/CFT regime more efficient, particularly on the fight against illicit enrichment. Thus, to enforce the law on illicit enrichment, the President issued Decree No. 2012-502 of May 10, 2012, designating members of the Headquarters, the Trial Court and the Committee in charge of Investigations, of the Court of Repression of Illicit Enrichment.
In addition, the government submitted bill No. 13/2012, for the creation of the National Commission for the Fight against Fraud and Corruption (OFNAC), which was adopted by the National Assembly during its December 19, 2012 session.
The OFNAC was created from the defunct National Commission on the Fight against Non-Transparency, Corruption and Extortion (CNLCC). The OFNAC is made up of 12 members nominated by decree for a mandate of 3 years, renewable only once. The new law empowers, once more, the Anti-corruption Agency to confiscate assets (Article 12) and to forward a report to the prosecutor on corruption charges and connected offenses (Article 14), amongst others.
Under the conduct and coordination of the FIU, Senegal continued with the expansion of its AML/CFT national strategy document which, due to some delay, was not finalized at the end of September 2012 as originally planned. Nevertheless, the process is in its final phase and has benefited from the contribution of the civil society.
The FIU continued its training activities for magistrates and criminal investigators on topics linked to “financial investigations methods and the organisation of investigation files”, “accounts review and detection of fraudulent movements”, etc. In addition, the FIU organized training workshops for legal auditors, chartered and auditor accountants, bank compliance officers and representatives of decentralized financial systems in support of the Professional Association of Decentralized Financial Systems (AP-SFD).
The FIU also continued training its staff on “use of the Analyst’s Notebook tool” as well as on “financial investigations on complex data”, the State’s financial operations and on “investigations of fraud at work, misuse of public property etc”. These trainings will certainly contribute towards improving the quality of analyses carried out so that quality reports could be forwarded to the Courts.
On 24 May 2012, the Director General paid a courtesy call on His Excellency, Macky Sall to congratulate him on his well deserved popular election and to draw his attention to the insufficient prosecution of money laundering cases despite the good number of cases referred to the government investigator/prosecutor by the FIU. Even where such crimes have been prosecuted, the outcomes were seriously challenged by lawyers and the international community. In his response, the President informed the DG that his government was based on transparency and accountability and that he had directed the establishment of an Asset recovery Commission, and assured that justice will be done in all cases.
Senegal requires technical assistance in the areas of Training of magistrates and judiciary police officers, technical support for the management of transportation of cash and BNIs across its borders, reports of control and establishment of a national database on financial and economic crimes, including ML/TF. The country is also in need of support for it to implement its National AML/CFT strategy which is being finalized.
In the light of legislative and regulatory acts undertaken by the new Senegalese authorities, it is clear that Senegal has shown a firm desire and determination to fight corruption, check embezzlement of public funds and above all eradicate mismanagement. The country needs to be supported in this drive by its technical and financial partners so that these actions will be crowned with success. When some people read our previous reports, they asked questions as to whether the proliferation of real estate in Senegal does not imply money laundering. It should be noted that money laundering is defined in the source, origin, ownership, movement, purpose of wealth, and not by speculation on the size and how the wealth is handled.