Senegalese Economic Resiliency Plan (PSE): what contribution from the national private sector

24 February 2017

Moustapha Guirassy, Chairman of the African Institute of Management (IAM)

As a major player in private higher education, IAM (African Institute of Management), which I chair, is very interested in the Senegalese Economic Resiliency Plan (PSE). PSE aims to bring Senegal into the ranks of the emerging countries by 2035.

We have also endorsed the proclamation of the Minister of the Economy, Finance and Planning of Senegal, Mr Amadou BA in the direction of the Private sector, which stated that the private sector must be at the forefront of job creation and wealth in implementing the Senegalese Economic Resiliency Plan (PSE). Involvement of the private sector also concerns foreign non-state actors. The sectors targeted for cooperation with countries abroad are the agri-food, the industry, construction, and the pharmaceutical sector. The PES comprises a total of 27 projects and 17 flagship reforms covering several sectors. The implementation of these reforms has enabled Senegal to be in the top 10 of the best reformers in the world. A total of 60% of PSE funding is expected from the private sector. In a context of globalization of the world economy, it is the domestic private sector, but also the foreign private sector, that will make a difference. But how can we ensure that 60% of PSE funding comes from the private sector? This is the great equation of the. Looking at the sector that concerns us, education, some of the PSE's achievements in this area are the construction of the Amadou Moctar MBOW University, the Diamniadio City of Knowledge, and University Sheikh Ibrahima NIASS of Kaolack which are in progress. The program for the establishment of the network of vocational institutes (Isep) is continuing with the Isep of Thiès, which is already operational and others in construction, alongside the construction of two vocational training schools in Sandjara and Fatick. Codesria, a non-state actor, decided to build its new headquarters in the City of Knowledge. The Amadou Mactar Mbow University is considering setting up partnerships with private teaching institutes. But we should go further: the private sector calls for the promotion of joint ventures that would allow it to build structuring infrastructures within the framework of the PSE. These would be joint ventures between schools from the South or between schools both the South and the North, to help create national champions that will compete in Senegal, regionally, and internationally, because growth must come also from outside operations carried out by our companies outside the country.

In another sector, housing, a new urban center is being erected in Diamniadio with a housing supply of 40,000 housing units, a first industrial park intended to house light industries, oriented towards Export, a digital technology park ... Opportunities that seem to be available in the housing sector. Apart from cement, almost all other products are imported. That is a big shortfall. If the private sector is really involved and encouraged, all the building materials can be manufactured nationally level and the income will stay with us. But what is basically done to promote the birth of manufacturers of plumbing, electrical equipment, tile equipment? Firms in the domestic private sector firms are not accompanied by lack of long-term resources available on the credit market.

Yet in 2016, in the initial Finance Law, of 3022.6 billion CFA, 1595 billion CFA represented business opportunities for the local private sector. But private enterprises must be given productive capacities to absorb these public resources. The State must promote local enterprises. For this purpose, the definition of a national enterprise should be reviewed: it should be owned by nationals up to at least 51% of the shares, nor should the state compete with its own national private sector. Indeed, there is an increasingly important financial market and the State of Senegal is present in this market through resource mobilization instruments enabling it to compete with the private sector and this can adversely affect market share for domestic companies. The crucial question for investment is how to mobilize long-term resources for the private sector. Many instruments allowing us to move towards greater savings are on the market. But, whether it is savings by Senegalese people from here or from the diaspora, there is an important work in terms of mobilization to make it the sustainable resources that the economy needs. Regular citizens must also be engaged through financial instruments such as investment securities that can be transferred to them in the management of motorways, the regional express railway, etc. We must move towards a real shareholder base.

Tracing everything back to the sector that is of interest to us, education and chiefly higher education, we have seen since a couple of a new trend of public-private (PPP) partnership between the government of Senegal and institutions of higher education. The state of Senegal subsidizes students’ tuition fees, so that they can go to those private institutions of higher learning. In return, those private schools agree to charge a discounted tuition for them. My thinking is that the government should take that initiative farther by creating joint ventures in the higher education sector in the framework of PSE.