(Ecofin Agency) - When taking office last April, President Bassirou Diomaye Faye announced a comprehensive audit of the mining, oil, and gas sectors to renegotiate certain "unfavorable" contracts for the country.

The government of Senegal announced last July 10 the creation of a committee dedicated to reviewing and renegotiating some key agreements previously signed with foreign companies.

"The Prime Minister informed the Council of Ministers of the establishment, by decree dated July 3, 2024, of a committee to review contracts in strategic sectors, following the instructions of the President of the Republic," the government stated.

"This committee's main mission is to analyze these contracts to ensure the central presence of national interest and its safeguarding mechanisms to achieve the necessary balance," the statement added.

Senegal's Minister of Energy and Mines, Birame Souleye Diop, had already announced on April 11 that the executive branch would renegotiate mining, oil, and gas contracts with companies operating in the extractive sector if needed.

A few days earlier, President Bassirou Diomaye Faye announced a complete audit of the mining, oil, and gas sectors, fulfilling a campaign promise to revisit agreements with foreign companies regarding the country's natural resources.

Some local political actors believe that renegotiating contracts in strategic sectors is a risky move for Senegal, as it could create tensions with investors and affect the country's attractiveness.

Former President Macky Sall had previously remarked in an interview published by Bloomberg on March 19 that renegotiating contracts could negatively impact the economy.

"Contracts can be improved, but honestly, thinking that we can change already signed contracts with companies is not possible. It would be disastrous for Senegal," he noted.