Gambiaj.com – (DAKAR, Senegal) – Senegalese Prime Minister Ousmane Sonko has unveiled an ambitious government plan to renegotiate contracts in key sectors of the economy, arguing that the reforms are necessary to recover lost public revenues, strengthen state control over natural resources, and redefine the country’s economic sovereignty.
According to him, some of the conventions were signed “in a rush” without sufficient safeguards for the state.
“We are dealing with the management of our public finances and our natural resources,” Sonko said, explaining that the committee was established to review and, where necessary, renegotiate contracts concluded in sectors such as energy, infrastructure, telecommunications, mining, and hydrocarbons.
Recovering lost revenues and correcting “imbalanced” deals
The committee, composed of government officials and sector experts, examined a number of major agreements and identified significant financial losses to the state through unpaid taxes, unpaid royalties, and excessive tax exemptions.
One of the most striking findings concerns the case of Industries Chimiques du Sénégal (ICS), a major phosphate producer.
Investigations by the government and the state inspection body revealed that Senegal may have lost an estimated 1.075 trillion CFA francs due to tax irregularities and exemptions granted without proper legal authorization.
Sonko said the government has therefore decided not to renew three mining concessions and an industrial convention linked to phosphate exploitation. The move is intended to allow the state to recover the assets and redesign a national strategy around phosphate production.
The strategy aims to expand fertilizer production and position Senegal as a supplier to the regional agricultural market.
Cement sector tax reforms
The government is also targeting the cement industry, where the contract review committee found that four cement companies collectively deprived the state of about 418 billion CFA francs in revenue due to unpaid taxes, royalties, and what authorities described as unjustified fiscal advantages.
To address this, the government plans to harmonize the fiscal regime across the entire cement sector, removing certain tax exemptions and ensuring that all producers operate under the same taxation framework.
According to Sonko, the reform aims to eliminate preferential treatment, improve tax compliance, and boost government revenues from the industry.
Restructuring the oil and gas sector
A major part of the government’s reform agenda focuses on hydrocarbons.
Sonko announced that several oil and gas exploration blocks have already been cancelled following the contract review. These include Djifer Offshore, Kayar Offshore, Rufisque Offshore, and Diander, among others.
The government also plans to recover the strategic Yakaar-Teranga gas field, saying Senegal intends to regain control of the asset “within weeks” without compensation payments.
The move is part of a broader plan to reorganize governance of the hydrocarbons sector through the national oil company Petrosen.
Sonko also indicated that contracts linked to the cross-border gas development project Grand Tortue Ahmeyim (GTA), shared with Mauritania, could be renegotiated to secure greater domestic gas supply.
While the project is estimated to generate around $40 billion in value, Sonko said the direct financial benefits to Senegal remain limited under the current arrangements.
Renegotiations could allow the country to secure gas for the domestic market and generate up to 1.9 trillion CFA francs in additional revenue between 2025 and 2040, while also lowering the price of cooking gas for households.
A shift toward economic sovereignty
Through these measures, the Senegalese government says it intends to redefine the contractual framework governing the exploitation of natural resources.
Sonko stressed that the goal is not to accuse foreign investors of wrongdoing, noting that businesses naturally seek to maximize their gains when agreements allow it.
However, he said the state must ensure that contracts signed in its name protect national interests.
“We will no longer sign contracts and leave them unchanged for decades,” he said, adding that authorities are also considering a parliamentary inquiry into past management of oil and gas resources.
How realistic are the reforms?
Sonko’s strategy reflects a broader political commitment by Senegal’s new leadership to reclaim greater control over strategic industries and increase state revenues.
Analysts say the plan could potentially deliver significant fiscal gains if renegotiations succeed and the government manages to enforce stricter tax regimes.
However, renegotiating contracts in sectors such as mining and hydrocarbons can also trigger legal disputes, arbitration cases, or investor uncertainty, particularly if companies challenge cancellations or revised terms.
The success of the reforms will therefore depend largely on the government’s ability to renegotiate agreements while maintaining investor confidence.
If implemented effectively, the reforms could reshape Senegal’s economic governance by increasing public revenue and strengthening state influence over its natural resources, two objectives Sonko says are central to the country’s long-term development strategy.
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