EUROPEAN UNION – WEST AFRICA
AGRO-BUSINESS SECTOR MEETING
STRATEGIC DIAGNOSIS OF THE AGRO-INDUSTRIAL SECTOR
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SENEGAL
Prepared for:PRIMS – CDE
on behalf of the European Commission and ECOWAS
EU/ECOWAS West Africa agricultural industry sector study
This report, and the research behind it, is the work of SOFRECO, France assisted by a team of local consultants in West Africa under contract to Metra Sofres Ltd. of the United Kingdom.The report has been prepared with financial assistance from the Commission of the European Communities. The views expressed herein are those of the Consultant and therefore in no way reflect the official opinion of the Commission.
TABLE OF CONTENTS
1. General country data......
1.1. Key economic data......
1.2. Economic development context......
1.3. Agriculture and livestock rearing husbandry in the economy......
1.3.1Agriculture......
1.3.2Livestock rearing and animal husbandry......
2. Selected agro-industrial sectors......
2.1.1General situation of, and problems facing these sectors......
2.1.2Fleets and landed catches......
2.1.3Utilisation of catches......
2.1.4Professional fisheries organisations......
2.1.5Processing of fish products......
2.1.6Exports and market positioning of processed products......
2.1.8Opportunities and priorities for exporting......
2.2The fruit and vegetables industry......
2.2.1General remarks......
2.2.2Crop ranges and production types......
2.2.3Producer organization in the export sector......
2.2.4Export and market positioning of products......
2.2.5Earnings and profitability of exporters......
2.2.6Constraints and advantages for the horticultural sector......
2.2.7Horticulture based processing industries......
2.3Poultry farming industry......
2.3.1General remarks......
2.3.2Sectoral production data......
2.3.3Production of chicken feeds......
2.3.4Imported meat and poultry goods......
2.3.5Exports......
2.3.6Prices for poultry products......
2.3.7Constraints and advantages of the industry......
2.4Local produced (national) cereals industry......
2.4.1General remarks......
2.4.2Cereal production......
2.4.3Processing......
2.4.4Exports......
2.4.5Export potentials and constraints......
2.4.6Partnership needs......
1. General country data
1.1. Key economic data
Surface area196,192 sq km
Population (2000)9.5 Million
Population growth rate (average1994–2000)2.7 % per year
GDP (2000)4.6 Billion €
GDP/ capita492 € (or 322 730 CFA Francs)
Exchange rate (May 2002)1 € = 655.957 CFA Francs
GDP by sector (2000):
Agriculture18.2 %
Industry and mining26.9 %
Services54.9 %
199920002001
Economic growth, annual variation (GDP)+5.1%+5.5%+5.7%
Inflation (average price index variation) +0.8%+0.7%+3%
External trade account (2000):
Exports FOB1060 Million €
Imports FOB1594 Million €
Main primary product exportsPeanuts, Seafood and processed derivatives
Source: IBRD
1.2. Economic development context
The devaluation of the CFA Franc (FCFA) in 1994, coupled with the introduction of structural adjustment programs, enabled Senegal to increase its economic growth, achieving an average 5.3% per year for the period 1996-2000, and 5.7% in 2001, followed by a forecasted 4.5% to 5% for 2002, using IMF data.
These growth rates however remain insufficient to roll back poverty, the minimum growth rate for this being 7% per year, and to make significant response to ever rising social expectations from the economy, with this becoming acute in the rural sector which has been seriously affected by the major downturn in the peanut-related sector (Senegal’s rural population accounting for over 70% of total population). It is necessary to add that Senegal was categorised, using IBRD classification, as a Least Developed country in 2001, because of its low income per capita and continued degradation of leading socioeconomic indicators.
The economy remains highly dependent on agriculture and primary products, notably peanuts, fisheries and seafood, and extraction of mineral fertilisers.
The changeover of presidential power in March 2000 was accompanied by the introduction of liberal economic policies notably oriented to placing a priority on private sector growth through a number of initiatives, including the NEPAD or New Partnership for African Economic Development. We may also note the creation of a new agency for investment promotion, the Investment and Major Works Promotion Agency or APIX, directly answerable to the Presidential office, and which has the twin mission of facilitating inward investment (one-stop documentation and formalities, localisation and set-up aids, rationalised administrative relations for the investor, on line strategic economic data availability, showcasing of Senegal as a regional African economic center) and of providing lead-agency functions for the President’s own projects (developing concepts, assigning and distributing responsibilities, signature of contracts and awarding of concessions for these projects, and coordination with other ministries and agencies).
The above projects are highly ambitious, seeking to reduce concentration around Dakar, but within a general policy of freeing up economic and transportation linkages, and are set within the ongoing programs of modernising national transportation routes, building new bridges across the Senegal River, refurbishing and standardising rail routes and their gauge, and uprating national airports (these programs and projects being operated by the Transport and Development Ministry and overseas investment funding agencies). In particular the following projects are focused:
-Creation of a national level food products market, similar to that of Rungis outside Paris, and located around 50 kms from Dakar;
-Construction of a new international airport, the Dakar Kheur Massar project, which will draw on private sector financing and major international partners. At this stage the IBRD has undertaken to finance the feasibility study for this airport;
-Creation of a business-oriented quarter, the West African Business Center (Cité des Affaires de l’Afrique de l’Ouest) in the present airport area after its conversion and modernisation and the commissioning of the Kheur Massar international airport;
-Building of the Dakar Thies toll highway linking the new airport to the West African Business Center, an initial step in the ambitious Europe-Africa highway project linking Mali, Senegal, Mauritania and Europe;
-Development and extension of Dakar’s port facilities at the Dakar Autonomous Port;
-Doubling freight and passenger capacity, in the longer term, on the Dakar-Bamako railroad.
Current national strategy focuses development of exports and decentralisation and, like preceding economic policy, is largely based on fiscal stimuli for business creation and expansion, with a major role for partnering of local players with foreign business interests.
1.3. Agriculture and livestock rearing husbandry in the economy[1]
1.3.1Agriculture
a. General Remarks
Agriculture occupies some 70% Senegal’s economically active population and still provides about 20% of GDP output. It remains a key factor for national development. In total, Senegal has about 437 000 agricultural establishments operating over about 2 Million hectares.
Recent changes in agricultural production by area and type of activity are shown in the Table, below:
Variation in cash and food crop production by area and type
PERIODS / 2000 / 2001 / 2001 / 2002 / Variation %area / yield / prod. / area / yield / prod. / area / Yield / prod.
TOTAL AREA / 2 488 491 / 2 316 769 / -6.9
Agro industrial production / 1 117 656 / 1 015 758 / -9.1
Total peanut / 1 095 391 / 969 / 1 061 540 / 984 257 / 959 / 943 837 / -10.1 / -1.0 / -11.1
Peanut oil / 1 030 946 / 973 / 1 003 506 / 920 634 / 964 / 887 356 / -10.7 / -1.0 / -11.6
Edible peanut / 64 445 / 901 / 58 034 / 63 623 / 888 / 56 481 / -1.3 / -1.4 / 2.7
Cotton / 22 265 / 915 / 20 378 / 31 501 / 1 087 / 34 238 / 41.5 / 18.8 / 68.0
Cereals / 1 166 613 / 879 / 1 025 921 / 1 153 524 / 834 / 961 720 / -1.1 / -5.2 / -6.3
Millet / 842 124 / 713 / 600 221 / 801 074 / 587 / 470 105 / -4.9 / -17.7 / -21.7
Sorghum / 165 394 / 869 / 143 750 / 174 724 / 804 / 140 477 / 5.6 / -7.5 / -2.3
Maize / 70 715 / 1 111 / 78 593 / 88 399 / 1 204 / 106 422 / 25.0 / 8.3 / 35.4
Rice / 86 252 / 2 345 / 202 293 / 87 944 / 2 773 / 243 907 / 2.0 / 18.3 / 20.6
Fonio / 2 128 / 500 / 1 064 / 1 383 / 585 / 809 / -35.0 / 17.0 / -24.0
Tuber crops / 173 643 / 118 479 / -31.8
Cowpea / 146 464 / 323 / 47 290 / 90 685 / 350 / 31 720 / -38.1 / 8.3 / -32.9
Cassava / 27 179 / 4 888 / 132 859 / 27 794 / 4 961 / 137 893 / 2.3 / 1.5 / 3.8
Other crops / 30 579 / 29 008 / -5.1
Water melon / 7 449 / 14 838 / 110 527 / 8 511 / 14 956 / 127 294 / 14.3 / 0.8 / 15.2
Sesame / 7 850 / 457 / 3 591
Bissap / 12 787 / 463 / 5 926 / 3 857 / 411 / 1 584 / -69.8 / -11.4 / -73.3
Gumbo / 2 237 / 8 401 / 18 794 / 1 286 / 10 922 / 14 046 / -42.5 / 30.0 / -25.3
Squash / 1 276 / 28 066 / 35 812 / 1 013 / 25 765 / 26 100 / -206 / -8.2 / -27.1
Diakhatou / 177 / 7 424 / 1 314 / 768 / 10 000 / 7 680 / 333.9 / 34.7 / 484.5
Voaandzou / 327 / 321 / 105 / 260 / 350 / 91 / -20.5 / 9.0 / -13.3
Tomato / 1 427 / 10 838 / 15 466 / 1 239 / 13 547 / 16 785 / -13.2 / 25.0 / 8.5
Béref / 4 626 / 208 / 963 / 3 813 / 425 / 1 621 / -17.6 / 104.2 / 68.3
Aubergine / 273 / 9 722 / 2 654 / 411 / 9 886 / 4 063 / 50.5 / 17 / 53.1
Source: Ministry of Agriculture Area / hectares Yield / ha Production / tons (metric)
Areas sown for the production period 2001/2002 therefore cover 1.3 Million hectares for food crops and around 1 Million hectares of cash crops (of which 98% was peanuts and 2% cotton).
Only maize output (+36%), cotton (+68%) and rice (+21%) have shown major growth in the last agricultural season, other crop types having experienced relatively large falls.
It is however necessary to mention that peanut production, which fell slightly in 2001/2002 (-11%), had strongly rebounded in 2000, for a total output exceeding 1 Million tons, this being the best harvest for 15 years. This increase was however not able to mask the fact that the overall peanut sector and related industries have experienced major difficulties since the mid-1990s and especially since complete de-regulation of the industry in 1997. While the peanut industry has traditionally been the mainspring of national economic growth (providing up to 8% of national export and the majority of rural revenues) the industry has been hit by a series of difficulties since the 1990s, notably due to the following:
Badly distributed and failing rainfall since the early 1990s;
Continuing and increasing soil erosion and loss of soil quality;
Generally poor management of the peanut-related industry, with failure of the financing needed for the campaign to develop peanut seedplant quality, erosion of producer prices for peanuts and related products, and late harvesting increasing wastage;
Continued erosion of world prices for peanut products;
Tightened European legislation regarding aflatoxin levels on peanut products.
The context of crisis affecting the peanut industry has led Senegal in the last 10 years to make concerted market diversification efforts, with the horticultural sector being a focus of this effort (see Chapter x). Already a major market player for French beans and mangoes, Senegal is now targeting cherry tomato production and export (2000 tons per year), water melons, basil, green asparagus, onions, potatoes, aubergines and other cash crops.
b. Agricultural Policy
The agricultural sector is constantly focused by the State and international financing institutions but sector contribution to the economy and development remains largely unsatisfactory, with output growth trailing demographic expansion (of 2.7% per year on average). This has led to a situation of increasing precarity for national food supply, where some 50% of needs are met by imports, and to continuing fall in rural incomes.
While the overall policy measures put in place (including restructuring and privatisation of rural development agencies, increasing the self reliance of agricultural producers, increased sectoral organization, removal of subsidies, free market pricing, etc) have in the main been positive, a number of constraints still hamper progress, and notably:
Increasing rainfall variability, with Senegal experiencing 11 droughts in 20 years leading to degraded productivity for at least 50% of land resources;
Small cultivated areas per farmer (from 0.25 to 1 hectare on average);
Falling farm incomes (leading to falling agroindustrial inputs being purchased, causing further falls in output and revenues);
Difficulties regarding access to loans;
Insufficient supply of seeds and seedplants;
Insufficient replacement and modernisation of equipment;
Lack of infrastructures for the sale and distribution of output.
Given this situation the government of Senegal has decided to base its agricultural policy[2] on the three following elements:
Reinforcement of rural agricultural organisations;
Promotion of the private sector in agriculture;
Reinforcing and re-entering the State’s role as a provider of public services to the sector.
This new approach to agriculture has led in 2001 to certain initiatives among which we can note the following:
The establishment of a special program to restore and sustain peanut and related industrial production;
A large scale program to renew and improve farm equipment;
A short term program to construct water retention facilities in order to improve water management;
Setting of the PNIR or National Rural Infrastructure Program, and the PSAOP or Program for the Support of Peasant Farmer Organisations;
Strengthening of the ANCAR or National Agency for Rural and Agricultural Consulting.
Concerning agricultural loans and credits, the State has lowered interest rates from the previous level of 10% to 7%, while cutting the required personal contribution from 30% to 10% of the loan amount.
The above however leaves untouched the problem of land ownership, where the State is undertaking a revision of existing law, with consideration of new legislation to improve access to land ownership.
1.3.2Livestock rearing and animal husbandry
Animal rearing represents about 35% of output in the primary sector, and 7.4% of national GDP, and has experienced growth rates of above 5% per year through 1995-1999. In total some 3 Million persons are active in this sector, this activity providing over one-half of rural incomes in the pastoral regions (North and Center of country), and about 40% of incomes in the ‘agropastoral’ region of peanut production and the Casamance area.
Average numbers of livestock per household on a national basis are 18.3 animals and 23.3/household in rural areas. For 1999 the breakdown of livestock by type was as follows (see Table, below).
Livestock numbers by type (‘000 of head)
Year / Cattle / Sheep / Goats / Pigs / Donkeys / Poultry / Horses1997 / 2898 / 4198 / 3578 / 191 / 375 / 18074 / 444
1998 / 2912 / 4345 / 3703 / 214 / 376 / 20342 / 445
1999 / 2927 / 4497 / 3833 / 240 / 377 / 22987 / 446
2000 / 3073 / 4542 / 3879 / 269 / 399 / 24495 / 471
2001 / 3227 / 4818 / 3995 / 280 / 410 / nd / 492
Source: Livestock Ministry
Productivity and output, notably of cattle, sheep and goat herds, remains low, with average live weight production respectively being of 30, 11 and 10 kgs per head per year. Daily milk production per milk cow is estimated at between 1 and 2 litres for an annual average period of 160 days.
In response to the numerous difficulties and constraints faced by this sector (including animal feed supply and quality, animal health, cow species and their milk output, weak investment, organisational impediments) and which limit livestock development, the government has voted an action plan for the period 1998-2003, based on the following targets:
Improved competitiveness and productivity for all livestock professions;
Development of the role of personal initiative;
Amelioration of the savings and loans structures financing development;
Reinforcement of rural infrastructures;
Sustainable natural resource management and practices;
Reinforcement of the role of the Livestock Ministry.
2. Selected agro-industrial sectors
Detailed analysis of the agricultural and food sectors has led to our identification of the following as sectors where Senegal has significant comparative advantages and potential for added value:
Sea fishing and related industries;
Fruit and vegetables industries;
Poultry farming industries;
Local (national produced) cereals and related industries.
2.1.1General situation of, and problems facing these sectors
Sea fishing industries of Senegal have experienced spectacular growth in the last 30 years. Landed catches, which in 1965 were around 50 000 tons, increased to 450 000 tons in 1997, that is an increase of about 600%, or an annual growth rate of about 7% for the entire period. We note however that since 1997 annual catches have significantly fallen with landed catches in 2000 being less than 395 000 tons.
The fisheries sector, today, is Senegal’s chief source of export revenues, with an estimated 185 Billion CFA Francs, for about 12% of primary sector output and 2% of national GDP in 2001. Halieutic activity contributes a national annual per capita consumption of about 26 kgs of fresh weight fish products, providing the major source of animal protein to the population, for an estimated 70% average of human animal protein supply. Direct and indirect employment due to the fisheries industries is estimated at some 600 000 jobs, of which some 67% are employed in the low technology, artisanal sector. Overall added value in this sector is estimated at being about 60% for catch-related activities, and 40% for onward transformation (both industrial and low technology).
The sea fishing sector received a notable boost with the 1994 devaluation of the CFA Franc, but since that time has experienced significant degradation and is today in a crisis situation, essentially due to the continuing, and recently drastic fall in catches, which is however no more than a logical result of overfishing for many years. The result has been a fall of 30% in export volumes, and especially of higher value fish species, with a major fall in tuna catches and landings supplying the canning industry, which today finds itself with significant overcapacity and consequent under-utilisation.
Low technology and traditional fisheries has retained some dynamism, permitting a maintenance of local food supplies, but the industrial sectors relying on fish catches have become troubled, with both catches and output revenues in continual fall. Relative to 1999, overall revenues fell by 4.5% in 2000.
This is occurring at a time where external markets are becoming ever more competitive.
We must also note that since January 1, 2002 all EU fishing vessels have ceased to operate in Senegalese waters due to decision made to not extend the Senegal-EU fishing agreement which expired on December 31, 2001 and which had begun with agreements going back to 1979. At the time of writing, negotiation is under way between the Commission and Senegal to renew fisheries agreements.
2.1.2Fleets and landed catches
Two types of fleet operate off of Senegal – artisanal or traditional fishing vessels, and the industrial fleets split between the sardine, trawling and tuna fishing fleets.
At the last sectoral census in 1997 some 10 707 fishing canoes (90% motorised), of which more than 70% were operating in the maritime area, were counted.
In 2000, the industrial fleet was operating as indicated in the Table, below:
While artisanal fishing was responsible for less than 75% of landings in 1995 this figure had
attained some 85% by 2000, lower technology fishing having experienced continued and steady growth for the last 5 years.
The evolution of Senegalese fisheries since 1993, as indicated above (annual tonnage by type of fleet), has notably experienced two distinct phases of development:
A period of major takeoff through 1993-97, with fisheries-wide growth rates being about 30% for the period, and with peak catch being attained in 1997 at 450 000 tons;
A new period, of decline, starting in 1997 with current decreases in catches at about 15% overall, while industrial fleet catches have fallen by more than 50%.
The split for total landings is about 85% from artisanal fishers, and 15% from industrial fleets, with value by type being some 60% artisanal and 40% industrial, this being due to industrial activity focusing the higher value fish species (deepwater and bottom dwelling species).
In that which concerns landings by traditional or artisanal fishers it can be noted that their total catch increased about 8% in 2000 from the previous year, essentially due to catches of inshore and pelagic species (including pilchards, shads and sardines), with the increase in catch being some 19% on 1999 levels. In total we can note that inshore and pelagic species account for about 70% of catches by traditional fishers.
Concerning industrial fisheries activities, total landings experienced a 36% fall in 2000 relative to 1999, with total take or catch falling some 40%. This sector-wide fall appears to be due to several evident factors, including the abandonment of Russian fishing off Senegal, ageing of the Senegalese home fleet with numerous outages of trawlers for repair or maintenance, and the virtual collapse of squid and octopus catches, falling from the exceptionally high level of over 370 000 tons in 1999 to 6 000 tons in 2000.