In Senegal, many businesses fail before reaching maturity. Indeed, while 86.6% of newly created businesses manage to survive their first year, only 53.87% remain alive beyond their 5th year.

These figures were unveiled this Thursday by the National Agency for Statistics and Demography (ANSD) in the report of its brand new national survey on the demography of businesses in Senegal (ENDES), which took 2018 as the reference year to track their evolution.

A closure rate of 27.4%

The report shows that at the national level, the overall business closure (or cessation) rate stands at 27.4%. “This means that almost three out of ten businesses created in 2018 have permanently ceased operations,” she says.

The regions of Dakar (30.8%), Thiès (28.7%), and Kédougou (26.7%) recorded the highest closure rates. According to legal structure, businesses with "legal entity" status had a higher closure rate (30.8%) than those with "natural person" status (26.7%).

Strong textiles, fragile transport

Companies operating in the "Transport and Telecommunications" sector are also more vulnerable. "This branch of activity, at the start-up stage, has a closure rate of 39.7%, while it is below 30% in other sectors," indicates Endes.

Indeed, the closure rate is 27.4% in the hotel, bar, and restaurant sector, 25.3% in the food industry, and 24.8% in retail. The most resilient sector to have recovered is the textile industry, which has the lowest closure rate (4.2%).

The darkest years

Endes also reports that business closures after five years of operation were concentrated mainly between 2019 and 2021, peaking at 25.3% in 2020. This was followed by 2019, which recorded a closure rate of 20.7%, and 2021, with a closure rate of 15.5%.

“These three years account for more than 60% of business closures,” the report states. Recent closures are relatively less frequent, with 14.9% in 2022, 11.6% in 2023, and only 3.1% in 2024. Furthermore, 62% of business closures occur before the third year.

The causes of the closures

As for the causes of these closures, difficulties in accessing financing are cited by 34.6% of businesses. “This constraint severely limits the ability of economic actors to invest, renew their equipment, or maintain their cash flow,” reports Endes.

Adding to this cause is the loss of markets, cited by 31.2% of closed businesses. COVID-19 is also among the most frequently mentioned reasons for closure (27.1%).

What the CEO of Apix says about it

“Apix has already begun the phase of identifying difficulties based on the data we already have. We have a partnership with the ANSD which provides us with enough data on the situation of companies and also through the diagnosis we have carried out on the business environment,” says the Director General of Apix.

Bakary Séga Bathily, who participated in the report's release ceremony, emphasized that the Endes is a tool that will support businesses in the productive sector. He believes the survey also reveals that our economy remains heavily oriented towards the service sector.

“Like a communication deficit”

Regarding the difficulties related to financing, the CEO of Apix points out that several structures such as Adepme, Fongip, and Fonsis offer resources to companies.

“But it’s as if there is a lack of communication and awareness so that these companies can have good information on access to financing,” he said.