In January 2022, I signed a partnership agreement with Locafrique. The ambition of this agreement was to transform the Senegalese economy in a sustainable way, by virtue of alternative and innovative financing solutions adapted to the needs and specificities of Very Small Enterprises (VSEs/SMEs). More than ever, I wish to serve our country and its autonomy in the agri-food sector, in the face of a changing international context.
Consequences of the war in Ukraine on Senegal
No one is unaware of what is currently happening in Europe with the Ukrainian crisis. Beyond the divisions within the international community on how to react to the situation, the question of the sovereignty of nations is more than ever at the center of the game – energy sovereignty on the one hand, but also food sovereignty on the other. Only a few days after the conflict, the international community was already fearing a surge in wheat prices (an essential raw material for livestock feed). Indeed, this is what happened very quickly: by Friday, March 4, the price per ton had risen to 400 euros.
On the African continent, the repercussions of the conflict are also being felt. The surge in prices has had a direct and brutal impact on the agricultural commodities market. Senegal, which imports more than half of its wheat from Russia, is one of the countries most affected. The increase in the price of bread, visibly noticed by the population, is one of the consequences of this situation. In Senegal, the baguette is a symbolic reference regarding this crisis, since it has been carefully regulated by the government for many years. Currently, the state caps the price of a baguette at 175 CFA francs, or 0.27 euro cents. The dilemma is not knowing how long our leaders can maintain this fragile balance.
Locafrique’s previous actions in favor of food independence
The Senegalese state is, of course, not alone in managing the sensitive issue of food sovereignty. There are the driving forces of our country, most often made up of enthusiastic entrepreneurs, who work tirelessly in various leading sectors (we are thinking in particular of the fisheries sector, but also the agri-food sector).
For my part, as a business leader responsible for the activities of the Locafrique company, I fight endlessly to help develop our economy and strengthen our food sovereignty. My actions have been testifying in my favor for many years: already in 2013, I entered into a partnership with the Feed the Future initiative, over a period of 10 years, with the aim of boosting agriculture and financially helping producers.
Today, my action in favor of food sovereignty in Senegal takes on a whole new dimension. As a result of a unique partnership between the U.S. Agency for International Development (USAID) and the leasing company Locafrique, made possible through the West Africa Trade & Investment Hub, we will be able to provide the agricultural sector with $24 million (13 billion CFAF). This initiative will allow us, in the long run, to accompany our country in the sustainable transformation of its economy.
Partnership details between West Africa & Investment Hub and Locafrique
This economic partnership, which is unique in the history of Locafrique, aims above all to breathe new life into the vital forces of our country, which are most often represented by very small structures (mainly VSEs and SMEs). These companies are often excluded or poorly served by the traditional banking system. Indeed, it is considered that only a very small part of the rural population (less than 10% in Africa) has recourse to a loan or credit for agriculture. In Senegal, bank loans to agriculture represent less than 5% of the total sectors benefiting from loans.
It is therefore important that our fellow citizens most in need have access to alternative and innovative financing solutions. The solutions, of course, must be adapted to the needs and specificities of each company. Hence the interest of this partnership, which will serve to develop this idea dear to our hearts: the financial inclusion of agribusinesses in the Senegalese economy.
The co-investment partnership is supported by a grant of 1.5 million dollars US (813 million CFAF) from the trade hub. The other part comes from Locafrique’s private capital and resources, for a total amount of 22.7 million dollars (12 billion FCFA). Now, owing to this type of joint action, Senegalese entrepreneurs are no longer left to their own devices. A new era of the agri-food economy is being written for Senegal and its inhabitants, with the certainty of a better tomorrow for the most disadvantaged populations.