Building sustainable income and employment opportunities through micro-enterprises, Dakar, Senegal

Building sustainable income and employment opportunities through micro-enterprises


Icons use case study city info

City

Dakar

Icons use case study main actors

Main actors

City Government, National Government, Supranational / Intergovernmental Institutions

Icons use case study project area

Project area

Whole City/Administrative Region

Icons use case study duration

Duration

Ongoing since 2018/11

The city of Dakar has developed an incubator project to support women and youth.

To combat rising unemployment, the City of Dakar is implementing a project to create decent jobs and sustainable incomes through the promotion of micro, small and medium-sized enterprises and  skills development for youth and women. The project will span five years and focuses on the agricultural and services value chains that will broaden opportunities for both target groups.

Sustainable Development Goals

Ensure healthy lives and promote well-being for all at all ages
Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
Achieve gender equality and empower all women and girls
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
Reduce inequality within and among countries
Make cities and human settlements inclusive, safe, resilient and sustainable
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
City
Dakar, Senegal

Size and population development
The city of Dakar has an approximate population of 1,056,009 inhabitants, according to a UN census carried out in 2011. The Metropolitan area of Dakar, however, has a population of 3,732,284 inhabitants according to Senegal’s National Agency of Statistics and Demographics. In Metropolitan Dakar, 1.85 million inhabitants are male and 1.87 million are female. It has a surface of 547 square kilometres, which indicates a great population density in comparison to the rest of Senegal, since Dakar represents only 0.3 percent of the country’s surface and twenty percent of the total population.

Population composition
There are a great variety of Senegalese ethnicities living in the region of Dakar. The wolofs are the most prominent, but the city is composed of a diversity of pulaar, sérère, mandingue, diola, soninké. There is also a sizeable community of Lebanese descent which dates back to the 1920s, as well as various people of European decent. Around 90 percent of Dakar, as in the whole of Senegal, follow Sunni Islam with Sufi influences.

Main functions
Dakar is the capital and largest city of the Independent Republic of Senegal and one of the chief seaports on the western African coast. It is located midway between the mouths of the Gambia and Senegal rivers on the south-eastern side of the Cape Verde Peninsula and is the westernmost city on the African mainland. The city itself was founded in 1857 and, as of 1902, it became the capital of French West Africa, and the later the capital of the failed Mali Federation, which existed only between 1959 and 1960. Dakar (with the commune of Gorée) played a fundamental role in several different moments of world history: as a port for the slave trade of nations like Portugal, the Netherlands, and France, and as a territory to build a Free French nations stance against the Vichy government during World War II. Nowadays, Dakar is considered part of the World Heritage cities. Culturally, Dakar has more recently been recognized for its Biennale of Contemporary Art called “Dak’Art”. It is also known for the Dakar Rally, a car competition that covered in its first year 10,000 kms, from Paris to Dakar. Until 2008, the rally had taken place between Europe and Africa, but has since moved to South America, retaining the name that echoes the Senegalese finish line.

Main industries / business
As the capital of Senegal, Dakar represents the centre for economic activity and cultural gathering. It is the headquarters of the Central Bank of West African States (BCEAO) as well as of the Fundamental Institute of Black Africa. Economically, it concentrates 80 percent of the activity of Senegal. The traditional main industries of Dakar have been suffering difficulties, with the chemical, textile and wood industries in decline. Some of the problems have been attributed to the importation of products cheaper products from Asia or the acquisition of national companies by Asian conglomerates (e.g. Industries Chimiques du Senegal was bought in 2014 by Singapore-based Indorama). Formal and informal tertiary sector industries are developing more rapidly, with telecommunications, commerce, transportation and construction as the clearest examples of this rise. Dakar is also known for its trade of agricultural and fish products.

Sources for city budget
The city of Dakar receives its budget from the federal government of Senegal. It is comprised of tax revenues, loans and contributions by international organizations, and loans solicited to the banks. The budget is partly decentralized with a portion of it being given to the municipalities for its distribution. The local institutions are meant to use it in matters of public health, education and culture. When the unexpected arises and the budget does not reach the necessary levels, it is complemented with the taxes collected from places such as markets.

Political structure
Dakar is understood differently from a political than from an administrative perspective. Its political structure is that of a commune de ville. It is governed by an elected municipal council that is chosen every 5 years, which itself chooses the maire (mayor), who will serve as its head. In its current state, the mayor is Soham El Wardini, the first female mayor to Dakar in the history of the Independent Republic of Senegal.

Administrative structure
As one of Senegal’s 14 regions, the region of Dakar is divided into 4 arrondissements: Almadie, Dakar-Plateau, Grand Dakar, and Parcelles Assaines. Each arrondissement encompasses a number of the 19 communes d’arrondissements that serve as political structures of the city. The region approximately makes up the city, as well as its various banlieues, or to inexactly translate the word, suburbs.

Since 2000, Senegal has been experiencing an unemployment crisis that predominantly affects women and youth. In Dakar, the capital city, the overall unemployment rate is 14.9%. The private sector offers limited employment opportunities and many people are self-employed or under-employed. As a result of this, there is a growing entrepreneurial movement that invests in establishing small businesses. However, the mortality rate of these businesses is very high and  according to the Direction des Petites et Moyennes Entreprises (DPM), between 60 and 65% of small businesses cease operating  two years after they open.

Additionally, many young people and women are confronted with:

  • illiteracy
  • lack of practical information and benchmarks to implement their projects
  • lack of adequate technical support
  • lack of knowledge of the most basic regulations for starting a business
  • lack of financial capital and entrepreneurial know-how

The general objective of the project is to reduce the unemployment rate and provide sustainable incomes for youth and women in Dakar, by creating and consolidating micro and small businesses.

The project is structured around 3 phases:

  1. A company incubator: support before the creation with an activity test phase
  2. The creation of a micro-finance fund open to other partners (micro-credit agencies, banks, companies, international donors.)
  3. Monitoring activities and finances once businesses are open to increase long term sustainability of the business and help attract investment.

1st Phase: support before the creation of the company

  • awareness-raising and identify entrepreneurs
  • pre - reception and orientation of entrepreneurs
  • reception and diagnosis
  • support during the project assembly process

2nd Phase: the activity test: the incubator

The incubator is managed by a board of directors and supported by an administrative office. The technical operations are managed by a committee who is responsible for reviewing the files of candidates who will be trained and funded.

The period of access to the incubator programme is twelve months from the actual start of activities. The maximum term, including renewal, may not exceed three years.

3rd phase: post-creation follow-up

This phase allows new entrepreneurs to:

  • access to information and training
  • consolidate their business
  • assess their entrepreneurial skills

The incubator is primarily aimed at hard-to-reach groups:

  • young graduates wanting to start a business
  • young people over 20 years of age who do not have a diploma but have skills
  • young people from vocational training
  • women with a project to create viable income-generating activities

The project receives financial support from the City of Dakar, the City of Marseille and the International Association of Mayors and Leaders of Partially or Fully Francophone Capitals and Metropolises (AIMF).

The African Development fund (UA 21.19 million) and the Government of Senegal (UA 2.35 million) are the major financial donors.

Expected results

The incubator will provide participants with:

  • general support in setting up their business when they leave the incubator.
  • specific support and guidance from  tutors, sponsors and advisors associated with the project.

Pilot phase

A pilot phase was initiated for the enterprise incubator system with the following results:

  • 40 project leaders received funding.
  • Almost 50% of the beneficiaries were women.
  • At the end of the pilot phase, and in order to sustain the actions undertaken by the project, the strategy will consist, among other things, of: 
    • provision of  an annual budget from the city of Dakar to finance the incubator
    • creating a focal point for the project in each commune of the city of Dakar.
    • setting up a quota system for the number of participants  from each commune

The main challenge for the project is to secure long term financial and resource commitment from government agencies and sponsors and buy in from citizens.

Financing, even on better loan terms, does not provide the budget needed to promote the development of good entrepreneurship among young project promoters in the city of Dakar.

The following measures are essential to establish the basis for a viable small business:

  • access to skills training in the specific area of business
  •  management and marketing training
  •  supervision and monitoring of activities
  • mediation services in case of problems

African Development Fund report: PROJECT TO SUPPORT THE PROMOTION OF EMPLOYMENT FOR  YOUTH AND WOMEN (PAPEJF), OSHD, September 2013

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