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SENEGAL
Activity Data Sheet
>> AFR Regional Overview >> Senegal Overview PROGRAM: Senegal
TITLE & NUMBER: Sustainable Increases in Private Sector Income-Generating Activities in Selected Sectors, 685-001
STATUS: Continuing
PLANNED FY 2001 OBLIGATION AND FUNDING SOURCE: $4,462,000 (DA)
PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: $4,700,000 (DA)
INITIAL OBLIGATION: FY 1998 ESTIMATED COMPLETION DATE: FY 2006Summary: The objective of this activity is to increase private sector activity, especially small and micro-enterprise, by addressing key impediments to market-based growth in Senegal in the areas of policy, finance and business practices. This objective provides a comprehensive and continuous approach to: (1) improved legal, regulatory and policy environment; (2) increased access to financial services; and (3) improved technical and managerial practices. USAID's ultimate customers include women and men entrepreneurs, business associations and their members, and financial institutions. This activity contributes to the Mission Performance Plan's economic development goal.
In FY 2001, $4 million in economic growth funds under the Development Assistance (DA) account will be used for activities in all three key results described above, and $462,000 in agriculture funds will support activities to improve technical and managerial practices of small agribusinesses.
In FY 2002, $4.7 million (DA) is requested for implementing reform measures under the Government of Senegal (GOS) Action Plan for removing administrative barriers to investment; management training for small scale businesses; and expansion of the Loan Portfolio Agreement (LPG) which will enable small and medium-sized businesses to obtain credit.
USAID's new assistance strategy is demand-driven. It was developed in response to the expressed needs of Senegalese partners and is implemented through activities identified and requested by these partners. The demand-driven approach emphasizes customer-partner ownership of the results and seeks to involve customers in all aspects of activity design, implementation, monitoring, and evaluation. This objective is in its second year of implementation with microfinance and small enterprise activities launched in four geographic zones and most performance targets met or exceeded. USAID was instrumental in encouraging the GOS to implement 28 out of the 34 actions of its Plan of Action to eliminate administrative barriers to private investment.
Key Results: Businesses have difficulty enforcing contracts and resolving disputes in Senegal's slow-moving judicial system. The Dakar Center for Arbitration, Mediation and Conciliation (CAMC), Senegal's first commercial alternative dispute resolution center, was created to provide businesses with an alternative to the judicial system. With USAID's support, the CAMC has designed rules and procedures, formulated and started implementing an operational plan for training mediators and arbitrators and increasing public awareness of alternative dispute resolution. In early 2000, the CAMC received and resolved the first two arbitration cases, both business disputes. Resolution of the cases within six months compares favorably with a period of two to three years for similar cases in the courts.
Increasing small and micro-enterprises' access to credit, especially outside of urban centers, is key to their ability to grow and be sustainable. During FY 2000, USAID competitively selected three microfinance (MFI) networks, representing 68 branch offices out of the 488 in the country, for institutional strengthening to enable them to expand and provide better quality savings and lending services. These three institutions serve 10,214 clients of whom 82% are women.
To build the capacity of private businesses, associations, and groups, USAID has introduced a new approach to Senegal: fee-for-service training with a 100% refund offered to anyone not satisfied with the quality of the training. The training, conducted by Senegalese firms, included marketing for women entrepreneurs, how to set-up cybercafés, Y2K preparedness and general business practices. 119 people, 90 of whom are women, requested and paid for training, more than double the target. The enthusiastic response and the fact that none of the entrepreneurs requested a refund attest to the demand and willingness to pay for quality training.
Access to appropriate technology and the skills to produce quality products are also a constraint to business development. With USAID support, a business chain comprised of ceramic liner makers, ceramic liner retailers, scrap metal dealers, blacksmiths, and stove retailers has been developed to expand production and sales of fuel efficient stoves. As a result, the number of stoves sold (5,204) exceeded the initial target (5,000) in the first seven months of the activity.
Performance and Prospects: The GOS has to accelerate policy reform to attract new investment needed to stimulate economic growth. In FY 2000, USAID continued to coordinate the private sector donor-working group in engaging policy dialogue, and coordinating various donor-support programs to strengthen the enabling environment for the private sector. A USAID-funded study on the tax burden on businesses conducted by the World Bank's Foreign Investment Advisory Services Group identified key distortions in Senegal's tax system and opportunities for streamlining tax incentives and procedures.
To speed up customs clearance procedures, USAID supported training on the computer-based "Orbus-2000" program for more than 200 people involved in customs clearance. Five simulations concluded that the clearance process could be completed within one hour compared with two days for the manual process. USAID will follow-up the implementation of: (a) the GOS commitment to reduce the number of forms required for customs clearance procedures; and (b) the Senegal Trade Point and GOS Customs Department partnership agreement to link their computer systems into a single one to reduce the average time for completing customs clearance.
USAID will continue to support the GOS's full implementation of the remaining reform measures under its Action Plan to remove administrative barriers to investment and anticipates providing institutional support to Senegal's recently created Investment Promotion Agency. One of the objectives of the new agency is to improve the enabling environment for private investment.
To increase the population's access to financial services, USAID has begun work with microfinance institutions (MFIs) in the remote regions of Kolda and Tambacounda and anticipates expanding to the regions of Thies and Ziguinchor in FY 2001, although the extent of activities in the Casamance will depend on security conditions. USAID conducted the first census of existing MFIs using geographical information system technology. The information is being used by USAID, other donors and the GOS to make strategic decisions about developing the microfinance sector. USAID and the GOS Ministry of Finance jointly sponsored information sessions on GOS registration procedures and financial reporting requirements for MFIs, resulting in several MFIs becoming registered for the first time and thus becoming eligible to participate in USAID's program. More accurate MFI financial reports will help monitor and improve the quality of financial services and allow potential problems to be identified quickly. To help increase client awareness of financial instruments, SO1 will host a microfinance donors group to seek collaboration among donors. This will become increasingly important as donors seek possible interventions in the Casamance to leverage economic growth. Also in 2001, USAID intends to support the Consultative Group to Assist the Poorest (CGAP) microfinance training for the benefit of institutions in the region.
The Loan Portfolio Guarantee (LPG) program helps small and medium-sized enterprises to obtain credit. A local commercial bank underwent an intensive management restructuring in FY 2000 and is now fully prepared to implement the program. The bank has reported its first loans under the guarantee, expects more transactions in the near future from Dakar clients and is exploring the possibility of marketing the program in rural towns and communities. In an effort to reduce financial risks, USAID will work with the bank to train its staff and to extend the outreach of the LPG activities to secondary cities. USAID has also identified three other commercial banks and will attempt to bring at least one of them into the LPG program.
Possible Adjustments to Plans: None anticipated at this time.
Host Country and Other Donor Programs: A private sector donor-working group chaired by the U.S Ambassador coordinates donor assistance for private sector development in Senegal. The World Bank, the International Monetary Fund (IMF), the European Union, United Nations Development Program (UNDP), France, and USAID are the leading donors supporting Senegal's private sector development. The World Bank finances programs that encourage investment, trade liberalization and tax reform and supports public entities tasked with regulating utility services (electricity, telecommunication and water supply). The other donors include the African Development Bank, the West African Development Bank, Canada, Germany and Italy.
Principal Contractors, Grantees or Agencies: Chemonics International, EnterpriseWorks, The Center for Arbitration, Mediation and Conciliation (CAMC), Senegal Trade Point Foundation, and the World Bank's Foreign Investment Advisory Services (FIAS).
FY 2002 Performance Tables
Performance Measures:
Indicator FY97 (Actual) FY98 (Actual) FY99 (Actual) FY00 (Actual) FY00 (Plan) FY01 (Plan) FY02 (Plan) Indicator 1: Number of fuel efficient stoves sold NA NA NA 5204 5000 10000 NA Indicator 2: Number of small-medium enterprises (SMEs), associations, or groups in targeted zones that purchased quality business services to improve their operations NA NA NA 119 50 150 220 Indicator 3: Number of individual branch offices of microfinance institutions (MFIs) in target areas that received USAID assistance NA NA NA 68 50 150 300 Indicator 4: Number of cases resolved by the Center for Arbitration, Mediation and Conciliation (CAMC) NA NA NA 2 0 5 15 Indicator Information:
Indicator Level (S) or (IR) Unit of Measure Source Indicator Description Indicator 1: IR Absolute number Source: EnterpriseWorks Absolute number of stoves produced and sold in the Dakar region. The business chain which is instrumental in reaching the number of stove sold is comprised of two ceramic liner makers employing two dozen employees of whom more than half are apprentices; 3 ceramic liner retailers, several scrap metal dealers; 39 blacksmiths; and 63 stove retailers. Indicator 2: IR Absolute number Source: Chemonics International Absolute number of micro, small and medium entrepreneurs, associations and groups in the targeted geographic zones that have paid a nominal fee for the training received. Quality is measured by the percent of trainees reclaiming the 100% money-back guarantee if they are not satisfied with the quality of the training provided. The types of business services include but are not limited to, marketing, human resource management, accounting, stock management, cybercafe set-up. Etc... Indicator 3: IR Absolute number Source: Chemonics International Absolute number of all MFI branch offices in the targeted regions that received technical, managerial or other assistance from USAID. Branch offices include individual offices within microfinance networks as well as individual (i.e., non-network affiliated) institutions. The types of assistance include, but are not limited to, technical, managerial and computer training, computer procurement, office equipment and grants. Indicator 4: IR Absolute number Source: Center for Arbitration, Mediation and Conciliation (CAMC) The term "cases" refer to disputes to be resolved through the Alternate Dispute Resolution (ADR) system which is categorized as negotiation, conciliation, mediation and arbitration. The two cases submitted to the CAMC during the reporting period include one dispute which was resolved through a formal arbitration process, and another dispute which was resolved through negotiation.
U.S. Financing
(In thousands of dollars)
Obligations Expenditures Unliquidated Through September 30, 1999 13,015 DA 203 DA 12,812 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 100 DFA 0 DFA 100 DFA Fiscal Year 2000 6,073 DA 3,747 DA 0 CSD 0 CSD 0 ESF 0 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 19,088 DA 3,950 DA 15,138 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 100 DFA 0 DFA 100 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 4,462 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 4,462 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 4,700 DA 42,288 DA 70,538 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 100 DFA
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Last Updated on: May 29, 2002 |
