By Cheikh Fall, Third Path Africa
Senegal has drawn a bold line in the sand, announcing that French multinationals operating within its territory must now contribute directly to Dakar’s treasury—not Paris’s coffers. For a continent long mired in neocolonial fiscal architectures, this marks a watershed moment, signaling not just policy reform but the dawn of a new era in African self-determination.
Historic Shift: From Paris to Dakar
In a decisive move under President Bassirou Diomaye Faye, all French enterprises operating in Senegal are now compelled to pay corporate taxes directly to the national treasury, severing a decades-old arrangement that funneled these revenues abroad. This policy doesn’t just tweak the law—it dismantles a vestige of neocolonial fiscal extraction, where profits generated by African labor and resources were siphoned away under the cover of historical bilateral agreements. In practice, this means that value created on Senegalese soil is finally accounted, taxed, and reinvested at home.
Why This Matters: The End of Fiscal Colonialism
For years, foreign multinationals minimized local tax liabilities through transfer pricing—artificially inflating costs of imports from subsidiaries and underreporting local sales—while declaring profits in France. Companies like TotalEnergies, Orange, and Vinci extracted billions each year, with only a fraction booked in Africa. Senegal’s move is historic and long overdue, reclaiming economic autonomy for a nation, and a continent, too long deprived of the tax revenues essential for development, infrastructure, and self-determination.
The CFA Franc and Economic Dependency
This decision cannot be disentangled from the broader monetary landscape. The CFA franc, a currency used by 14 African nations and guaranteed by the French treasury, requires that 50% of member reserves are deposited in Paris earning zero interest—a forced, interest-free loan to France that ensures euro convertibility for French exporters while locking African central banks into monetary policies that stifle local growth. Even as France’s share of African trade declined from 50% in 1960 to 10% today, its profit repatriation and monetary dominance grew. As economist Ndongo Samba Sylla has shown, French companies extracted €30 billion in profits from the CFA zone in a single year, most of which was booked, not locally, but in France.
Senegal’s Model: Details and Transformative Potential
Senegal’s landmark decree overrides problematic provisions in the longstanding France-Senegal double taxation treaty, closing loopholes that enabled billions in annual revenue leakage. It introduces binding enforcement mechanisms—annual transfer pricing returns, strict audits, and hefty penalties for evasion—setting a new standard for taxation fairness.
This isn’t just symbolic. Senegal stands to reclaim €500 million to €1 billion annually, up to 10% of its current fiscal intake, unlocking expanded investments in education, health, and public works without increasing domestic tax burdens. Crucially, this action emboldens tax authorities across West Africa. Already, regional forums like ECOWAS cite the Senegalese decree in harmonization talks; Côte d’Ivoire, Mali, and Burkina Faso are drafting similar revisions, with estimates that continent-wide recovery could reach €5-10 billion.
Regional and Continental Ripples
Senegal’s reform marks the emergence of a template for Francophone neighbors to renegotiate unfair treaties and demand profit allocation based on real local economic activity. Countries like Cameroon and Gabon can now insist that sales, payroll, and assets in their borders are taxed locally. ECOWAS’s engagement signals broader continental momentum: a push to close transfer-pricing loopholes and possibly replace the CFA franc with a fully sovereign currency, like the delayed Eco. Burkina Faso, Mali, and Niger—having already exited the CFA zone—view Senegal’s move as validation that control of taxation is as vital as control of money. This fiscal rebellion accelerates a continental reckoning: development must be powered by African wealth, not foreign interests.
Addressing Risks and Counterarguments
Critics may warn of investor flight, but facts suggest otherwise. Transparent, rule-based taxation is more attractive to long-term investors than opaque loopholes. Ghana’s renegotiation of mining taxes saw investment rise, not fall, as firms valued stability over privilege. Concerns about French economic withdrawal are also misplaced—France remains deeply dependent on African profits for its current account and GDP. The real risk lies in Africa maintaining the status quo; sovereignty, exercised judiciously, brings sustainable growth.
Diplomatic and economic pushback from France is possible, and local business groups may fear disruption. Senegal’s law, however, incorporates OECD-aligned base erosion and profit shifting measures, modernizes documentation standards, and institutes robust audit protocols—demonstrating preparedness and international best practice.
Concrete Gains: What Can Recovered Funds Achieve?
An additional €1 billion per year could double Senegal’s budget for schools or clinics, fund nationwide clean water projects, or provide capital for new industries. Region-wide, the reclaimed billions could underwrite transformative development, from highways to hospitals, and reduce dependence on foreign aid.
Call to Action: A Blueprint for Africa
• To African nations: Audit your tax treaties, close loopholes, and adopt Senegal’s model. Start with French multinationals—then apply best practices across all foreign firms.
• To policymakers: Make tax justice foundational to economic planning. Publish audits, renegotiate every outdated agreement, insist on local profit retention.
• To citizens: Demand transparency in where new revenues go. Participate in budget allocation; hold leaders accountable. Advocacy, visibility, and vigilance must not stop.
• To regional organizations: Push for interstate compacts so no country is isolated. ECOWAS and the African Union must codify anti-evasion standards, backing sovereign reforms with collective defense.
Vision for the Future
Senegal’s tax revolution is the opening act of Africa’s economic emancipation. From Lagos to Nairobi, nations are watching and learning: wealth created in Africa must fuel African futures. By writing new laws and enforcing them with clarity and strength, Africa is closing the era of silent extraction and igniting the age of ownership. This is not merely fiscal adjustment—it is a declaration of dignity, the dawn of prosperity built by Africans, for Africans.
May Senegal’s example inspire every nation to tax their own value, invest in their own people, and reclaim their destinies. The age of African ownership has begun.