The modern business sector in Senegal recorded moderate growth in 2023, marked by a 2.1% increase in turnover, reaching 21,032.9 billion CFA francs compared to 20,594.0 billion in 2022. However , this performance masks financial fragilities and signs of slowdown in several key indicators.
According to the report from the Economic and Financial Data Bank of the National Agency for Statistics and Demography (ANSD), national economic growth stood at 4.3% in 2023, after 3.9% in 2022. and 6.5% in 2021. This progression is based on the good performance of the primary (+5.9%), secondary (+5.2%) and tertiary (+3.8%) sectors.
For formal businesses, “production increased slightly by 0.8%, reaching 14,427.1 billion CFA francs in 2023 compared to 14,307.3 billion the previous year. However, this increase was accompanied by a drop of 2.7% in value added, which went from 3,625.6 billion to 3,527.2 billion CFA francs, causing the rate of value added to fall at 24.4% (-0.9 points).”
Profitability under pressure
According to the document, corporate profitability showed worrying signs in 2023. “The net profit recorded a spectacular fall, going from 615.6 billion in 2022 to only 112.0 billion CFA francs in 2023. Likewise, the “cash surplus fell by 13.7%, standing at 1,465.9 billion against 1,697.8 billion the previous year”, informs the report.
In terms of operations, companies are facing aging of their equipment. The accounting obsolescence rate increased slightly by 0.1 point, reaching 35.8% in 2023. Furthermore, payment terms have lengthened. The average time granted by suppliers increased to 147 days (+1 day), while that of customer payments reached 76 days (+5 days).
A weakened financial situation
The financial structure of companies shows a continuous increase in the weight of debts. This ratio increased from 30.9% in 2022 to 32.6% in 2023, continuing an upward trend since 2019. This increase in debt (+13.3%) was accompanied by a drop in capacity debt repayment, which fell by 3.0 points to 14.3%.
The financial autonomy of companies also fell by one point, reaching 45.4% in 2023. However, the solvency ratio increased slightly (+0.4 points) to reach 14.8%. The working capital ratio, for its part, stabilized at 88.9%.
Productivity and profitability in decline
Productivity and profitability indicators also show a certain deterioration. Economic profitability fell to 5.0% in 2023 from 7.6% in 2022, while financial profitability fell drastically to 2.0% from 12.3% the previous year, according to the report.
Labor and capital productivity also declined, standing respectively at 1.7 (-0.2 points) and 2.1 (-0.4 points).
Despite signs of economic recovery in 2023, Senegalese companies face major challenges related to debt, profitability and productivity. The increase in debt and the decline in repayment capacity underline the need for strengthening financial management and investments in the modernization of equipment.
