Senegal Plans New City to Ease Gridlock, Woo China Investors

On a plain dotted with rotund baobab tree trunks Senegal is planning its future.

The government of the West African nation is laying the groundwork for a new city near the town of Diamniadio that’s meant to ease congestion in the seaside capital, Dakar, home to almost a quarter of the country’s 14 million people. With plans for a new airport nearby, a university, state ministries and a 50-hectare (123-acre) industrial park funded by China, it’s the most ambitious infrastructure project yet of President Macky Sall, who’s pledged to double growth by 2020.

Sall, in office since 2012, uses the slogan "Emerging Senegal" to define his policy of attracting foreign investment to reduce the country’s dependence on fishing, agriculture and tourism and make Senegal a hub for French-speaking West Africa. Cairn Energy Plc has found an oil reserve off Senegal’s coast that may produce as much as 100,000 barrels a day when it’s fully developed.

“It’s the first time we are developing a project of this size,” Ousmane Kasse, who heads the state agency in charge of the Diamniadio project, said in an interview. "We’re preparing the site, and making land available to investors who wish to come here.”

Diamniadio, a town of about 30,000 people, is expected to expand tenfold by 2018. The idea is to ease the urbanization pressure on Dakar, which was designed by the French colonial administration on a peninsula. Its narrow streets in the center haven’t changed since the 1960s and can’t cope with the amount of daily traffic, Ale Badara Sy, an urban planner, said in a phone interview.

China’s CGC Overseas Construction Group is building the industrial park, and Chinese companies may set up operations in the area, Xia Huang, the Chinese ambassador in Senegal, said in an interview. Senegal has strong economic ties with China, with trade reaching $633 million in 2013, U.K.-based risk advisory group Maplecroft said in a report last week.

With the nation’s economy forecast by the International Monetary Fund to expand at least 5 percent this year, up from 4.5 percent last year, the pressure on Dakar is only expected to intensify.

“There’s no space to build new schools or other public buildings,” Sy said. “More and more companies want to leave the center and move to residential neighborhoods.”

MAP: Diamniadio

Soaring real-estate prices have made housing “inaccessible” for middle class Senegalese and caused a shortage in Dakar, Sall said in a March interview. Average rent in the city tripled between 1994 and 2009, according to a 2012 survey by Senegal’s statistics agency, the most recent data available. Last year, Sall’s government passed a rent-control law in a bid to curb prices.

The government hopes the construction of golf courses, fountains and shopping malls in the Diamniadio area will lure residents from Dakar. Relocating as many as 12 government ministries to the area, including energy and mining, should also help cut costs according to Dieynaba Diop, an urban planner at the project.

“The state doesn’t have the means to have all its ministries in Dakar –- they are renting and it’s expensive,” Diop said.

Senegal’s first highway connecting Diamniadio to Dakar opened last year, as well as a conference center that hosted the annual summit of French-speaking nations. Next up is a $400 million regional express train that will connect Dakar to a new international airport that’s being built in Diass, near Diamniadio, and will be finished at the end of next year.

The Diamniadio project has attracted “hundreds of bids” from local and international companies since the plan was approved in 2013, including Germany’s state-owned KFW development bank, which plans to fund a $50 million solar plant in the area, according to Kasse.

Some residents of Diamniadio have expressed concern that they will lose their farmland to investors and real-estate developers.

“There’s a lot of speculation, with people buying the land, but the question is whether they will actually start building,” Sy said. “In itself, it’s a good project. But there’s always the risk they are creating a ghost city.”