Discussion Paper on EEPC Webinar - August 21, 2020: Opportunities for bilateral cooperation in Engg sector (Medical Devices, auto Parts & Components, Electrical Machinery & Agricultural Machinery)

Contents

Countries of accreditation of Embassy of India in Dakar. 2

EEPC vision. 2

Opportunities in Medical devices. 4

Senegal 5

The Gambia. 5

Cabo Verde. 7

Guinea-Bissau. 8

Opportunities in Auto parts and components. 9

Senegal 10

Cabo Verde. 10

The Gambia. 11

Guinea Bissau. 11

Opportunities in Electrical Machinery. 12

Senegal 12

The Gambia. 13

Opportunities in Agricultural Machinery. 15

Senegal 17

The Gambia. 18

Guinea-Bissau. 18

Cabo Verde. 18

 

 

Countries of accreditation of Embassy of India in Dakar

The four countries of Senegal, The Gambia, Guinea-Bissau and Cabo Verde lie within the jurisdiction of the Embassy of India in Dakar, Senegal. These countries are located in West Africa, and in fact, Dakar is the western-most point of Africa. Of these, Senegal is the largest country with the maximum population, estimated to be 16 million, in an area approx 197000 sq kms. Cabo Verde is the smallest, with an area of 4,033 sq kms and a population of approx 550,000. These countries offer a very diverse environment, whether it is climate, natural resources or the polity.

 

All these countries are heavily dependent upon imports to meet their requirements. These items include food (cereals), processed food, while fish and fish products and fruits and nuts are also exported. With rising incomes, other articles, which till now were seen as non-essential, are also being imported in larger quantities, such as cars, electronics. An indirect effect of import of electrical items has been the rise in demand of electricity, which has always been in short supply in this region, thereby increasing the demand for generators. Africa has always been deficient in the healthcare sector, and thus, now there is a significant potential.

 

The objective of the current webinar is to explore the potential of the following four sectors in the four countries of this Mission's accreditation:

-      Medical Devices

-      Auto Parts & Components

-      Electrical Machinery

-      Agricultural Machinery

 

A brief overview of these four sectors in the four countries is presented below.

 

EEPC vision

How Indian Engineering Sector can engage with economies of Senegal, Gambia, Guinea Bissau and Cabo Verde

India and Senegal enjoy warm and friendly bilateral relations sharing common values of democracy, development and secularism. They are both members of the Non-Aligned Movement and G-15. Senegal is one of the strongest economies in Africa and also stronger by West African standards. Since the end of 1990s India has established its presence in the country by investment and Indo-Senegal trade has grown steadily.

Bilateral partnership spans diverse fields including urban transport, agriculture, fisheries, rural electrification, human resource development, information technology, health etc. Senegal and India also cooperate under the rubric of TEAM-9, the Techno Economic Approach for Africa India Movement that includes India and 8 countries of West Africa.

Economic and Commercial Relations

As per DGCIS, Government of India, overall merchandise exports from India to Senegal in 2019 – 20 touched USD 477 million. The share of engineering items stood at USD 105 million. The main engineering items were – articles of Iron & Steel, articles of Aluminium, Boilers & Mechanical appliances, Vehicles etc.

India is among Senegal’s top trading partners and India’s investment in Senegal is mainly in construction, tourism, retail, trading, phosphates, pharmaceuticals etc. Tata Group (Tata Motors, Tata Unitech), Ashok Leyland, Kirloskar Bros, Ajanta Pharma, Sun Pharma, ShapoorjiPallonji, Kalpataru Power Transmission, KEC Ltd., Promac, SenegIndia etc are present in Senegal. However, there is a lot of scope where Indian companies from the micro, small & medium sector (MSME) can explore business opportunities in Senegal and neighbouring countries in industrial value creation and backward linkages. Many of the engineering items are made by these MSMEs which are among top 25 items imported by Senegal from India.

The relationship between India and Senegal in terms of cooperation not only includes trade and investment but also technical assistance, soft loans or preferential trade treatment.

Indian MSMEs can help Senegal in terms of project exports for setting up small projects and helping Sengalese entrepreneurs. Setting up ancillary units, workshops, garages in automotive sector, setting up units for processing of agricultural products are other areas which can be explored through bilateral cooperation. India can also help in technical upgradation of existing infrastructure and mechanical / engineering activities in Senegal. Subsequently, Senegal can also explore more areas for merchandise exports to India.

Medical Devices is another sector where India can play a major role in creating a sustainable and stronger health care system by providing high quality and technically advance products at a very competitive prices.

The Webinar will help in increasing awareness about business opportunities existing between India and Senegal and to also inform about the opportunities available under the Line of Credits, provided by Exim Bank.

EEPC India with the support from Embassy of India in Senegal is organising this webinar with a vision to:

 

·       Strengthen and increase India's trade in Senegal not only in engineering goods but also in allied sectors like services and consultancy

·       Address the issues and concerns which the Indian business community is facing while doing business in Senegal and nearby countries

·       Increase the presence of Indian MSMEs in Senegal

·       Identify new prospects of partnerships particularly in areas where the two economies offer complementary to each other. For eg: “

- Areas like food processing to ensure better food availability and enhance shelf life;

- improve land productivity by offering suitable agricultural equipments;

- creating an affordable & sustainable health care system

·       Identify new areas of investment

·       Help to create local value chain and capacity building with mutual cooperation

Opportunities in Medical devices

 

It is a well-known fact now that Africa’s healthcare industry is growing and expanding rapidly. The biggest and the obvious question is what are the driving forces behind healthcare industry’s growth? Some of the influencing factors are: Migration: It is one of the biggest factors, which determines the rapid growth of healthcare industry in Africa. Africa is witnessing a huge population shift. More and more number of people are shifting from villages and rural areas to the cities. According to a survey done, by 2025, two-fifths of economic growth will come from 30 cities of two million people or more; 22 of these cities will have GDP in excess of $20 billion. Cities provide the access to better lifestyle, in terms of employment opportunities, healthcare, education, safety, and security. The massive migration of people to cities is encouraging investors and corporate houses to open up new hospitals and provide people the access to world class medical facilities.  

 

Growing appetite of healthcare industry: It wouldn’t be wrong to say that healthcare industry itself is one of the growth driving forces. According to a report published, Africa added 70,000 new hospital beds, 16,000 doctors, and 60,000 nurses between 2005 and 2012. With more and more number of people migrating to cities from villages, investors are stepping into joint ventures and partnerships to open up new hospitals. The growing number of hospitals and the other medical institutes is in turn affecting the healthcare industry in a positive manner, resulting in growth.

 

Favourable business environment: The African governments are trying to create more business friendly environment by controlling the prices and levying import restrictions, hence encouraging the domestic pharmaceutical and medicines manufacturing companies. 

 

Senegal

 

The public health sector is the dominant health provider but owing to increasing demand, there is a flourishing private sector in healthcare, dominated by the Lebanese. However, the private sector is accessible mainly to people in urban areas, with accessibility remaining poor in rural areas. Eighty percent of private sector facilities are concentrated in the capital, Dakar, leaving the interior of the country sparsely covered by the private sector.

 

To address these public health challenges, many donors have aligned around Senegal’s Plan National de Développement Sanitaire (PNDS), part of the Senegal Government's Plan Senegal Emergent (PSE) structured according to the Millennium Development Goals (MDGs). The PNDS discusses the private sector as an important stakeholder and focuses on the following four priorities:

 

1. Reduction of the burden of morbidity and maternal and infant mortality

2. Improvement of the performance of the health sector

3. Strengthening the sustainability of the health system

4. Improvement of the governance of the health sector

 

The following goals are outlined in the PNDS: (1) reduce maternal mortality by 28 percent, (2) reduce under-five mortality by 35 percent, (3) reduce neonatal mortality by 30 percent, (4) increase the modern contraceptive prevalence rate by 50 percent, (5) reduce unmet need for contraception by 50 percent, and (6) reduce the prevalence of underweight children under five by 41 percent.

 

Throughout these national plans, decentralization is a key strategy, with health programs continuing to move from a vertical approach to a more integrated “3D” approach focusing on the district level.

 

As regards medical devices, according to a WHO Report, the density of medical devices (per 1 mn of population) in Senegal in 2014 was very low. For example, for MRI it was 0.142%, for CT Scanner 0.354%, Radiotherapy 0.071%. Although these figures must have certainly changed for the better, it is equally certain that there exists a significant potential for export of medical devices to Senegal.

 

The Gambia

 

The Gambia’s health sector is guided by the Gambia National Health Sector Strategic Plan 2014-2020 and more than 20 other health policy documents. When the NHSSP was created, this strategic plan was linked to country’s national development plan, Vision 2020, in place at the time. According to the NHSSP, the long-term health sector objective is “the provision of adequate, effective and affordable health care for all Gambians.” The overall objective for 2014-20 is “to reduce inequalities in health care services and reverse the downward trend in health-related outcome indicators.” An immediate objective is also articulated: “to improve the administration and management of health services, provide better infrastructure for Referral Hospitals and health facilities and the revitalization and extension of Primary Health Care services to all communities and having a well-motivated and trained staff and establishment of efficient procurement arrangements in order to ensure effective and efficient health services for all.”

 

The strategic plan envisions achieving these goals and objectives “through supporting provision of equitable, affordable and quality health and related services at the highest attainable standards to all Gambians. It targets to attain a level and distribution of health at a level commensurate with that of a middle-income country.” Activities are structured around seven service delivery outcomes and 21 systems investments. The term covered by the current NHSSP will conclude in 2020 and though official activities related to its replacement have not yet commenced, MOH leaders state that deliberations are underway regarding the structure and process of the next iteration of the plan. 

 

Population in The Gambia is growing and urbanizing rapidly. Population growth is especially high in the two coastal regions, with internal and external migration contributing significantly to growth in those regions. High growth and growth differentials will impact planning and resource distribution, both public and private. The country’s health services system also faces substantial demand from cross-border populations, which adds stress on already burdened health services on the one hand, but also provides additional, much needed resources through a user fee structure that charges more to non-Gambians using the country’s health services.

 

The macroeconomic fiscal environments, while improving, are likely in the short-term continue to constrain mobilization of new domestic resources for health needed to adapt to the needs of a rapidly changing population. Constructive recent changes in the political environment provide a backdrop conducive to advancing a health reform agenda, though some are concerned that social expectations for the pace and magnitude of change may outstrip what might be a more reasonable set of expectations. The overarching policy environment for the health sector is generally strong and is supported by an articulated and visionary national development framework and agenda. And the will of international partners is high to be a positive force contributing to advancement of the development and health reform agendas.

 

There is a large demand-supply gap in the Medical Devices sector. For example, Radiology services though has expanded over the years is still limited to few public health facilities (RVTH, Bansang, AFPRC and Sulayman Junkung hospitals) and certain private and NGO health facilities. In addition to the limited services, access and affordability, provision of X-ray equipment and maintenance are still challenges to a majority of Gambians. Therefore, the need for improvement and expansion is critical.

 

Cabo Verde

 

The Republic of Cabo Verde is an archipelago of 10 islands and 8 islets located in the central Atlantic Ocean, approximately 450 km off the coast of Senegal, West Africa. Cabo Verde has relatively well developed healthcare capacities where hospitals, health centres and pharmacies are to be found on all nine inhabited islands. However, there is a shortage of specialist physicians and lack of proper infrastructure as well as technical equipment especially in outlying islands and remote areas. Consequently, patients many times need to travel and seek treatment in main hospitals or even abroad for proper treatment.

 

The doctors are mostly educated and trained abroad, mainly in Portugal and in Brazil. Factors described above and hostile geography – large distances between the islands and extreme isolations, significantly impede provision of high quality care and makes the accessibility of health care services at the community levels very difficult, if not impossible at times.

 

A combination of country specifics, lack of specialists, long distances between the islands and major health care needs in the country, and a relatively well-developed telecommunications network on the other hand makes Cabo Verde an ideal place for implementation of technically advanced solutions in the field of telemedicine and e-health with the purpose to enhance the healthcare sector and provide to approximately 500,000 Cabo Verdeans adequate, good quality and accessible health services.

 

With donation provided by the Ministry of Foreign Affairs of the Republic of Slovenia ITF enabled two new telemedicine centers in May 2018, thereby concluding the third and last phase of the Cabo Verde Integrated Telemedicine and e-Health Program - in Santa Cruz (isalnd Santiago) and Tarrafal de São Nicolau (island São Nicolau). The two healthcare facilities are thereby integrated in the national telemedicine network linking their referring telemedicine centres with consulting centres in tertiary healthcare facilities in the capital city Praia and city of Mindelo in São Vicente island.

 

Nonetheless, Cabo Verde presents an opportunity for medical devices.

 

Guinea-Bissau

 

About 50 per cent of the population live in urban areas, with significant variations of health outcomes, and access to care. Over 40 per cent of the population still lives five kilometres away from the nearest primary health care facility. There are few tertiary services available; the few people with financial means seek access to higher-quality services in Senegal, Portugal or other countries. A part of the health care budget finances health treatments abroad of up to 300 Bissau-Guineas per year.

 

The National Public Health System: The Ministry of Public Health (MINSAP) is part of the State Secretariat for the management of hospitals and the Government Department responsible for formulating, proposing, coordinating and executing the Government policies on health and the fight against epidemics. MINSAP includes a general secretariat; a general inspectorate of health activities; the National Institute of Public Health (INASA); the Office for the Central Purchase of Essential Medicaments (CECOME); 11 regional directorates for public health; and general directorates for the prevention and promotion of health, the administration of the health system, and the administration of health care institutions.

 

The health care administration system is ostensibly decentralized, with MINSAP assuming responsibility for central policy formulation and planning, as well as coordination of placement and payment of health care workers throughout the country. In each of the health sector regions, a health team formulates its own regional plan in consultation with MINSAP. The regional teams conduct a number of activities including financial management, procurement coordination, outreach and sensitization, and maintenance of facilities. However, regional health offices are severely under-resourced. Their activities are funded through a five per cent levy taken from health care posts within the relevant region (15 per cent levies are also taken from hospitals). The only funding received from MINSAP for regional activities is for specific programmes, such as vaccination campaigns.

 

Availability of health care physical infrastructure is reasonable in Guinea-Bissau but equipment, trained staff and drugs are frequently unavailable. For example, Guinea-Bissau sorely lacks radiological capacity, despite donations of computerized tomography scanners (CT scanners) from the Kingdom of Morocco, as staff are yet to be trained on the use of these machines. Similarly, one dialysis machine is available, but not yet use in the national reference hospital Simão Mendes also because of gaps in technical capacity.

Opportunities in Auto parts and components

 

Africa’s automotive market is relatively small. In 2014, there were just over 42.5 million registered vehicles in use in Africa – a continent of approximately one billion people. As a result, the motorisation rate on the continent is only 44 vehicles per 1 000 inhabitants. This is far below the global average of 180 vehicles per 1 000 inhabitants, and lower than other developing regions such as Latin America (176) and Developing Asia, Oceania and the Middle East (79).  Between 2005 and 2015, registrations and sales of new vehicles (passenger and commercial combined) increased by a compound annual growth rate (CAGR) of 3.6% on the continent. While coming from a low base and although slightly higher than the global average of 3.5%, total sales growth in Africa was significantly slower than other emerging regions such as Asia and the Middle East (8.9%), and Latin America (4.2%). Both the lower motorisation rate to date and new vehicle sales and registrations reflect the still relatively low purchasing power of African consumers relative to their emerging market peers. More importantly, the sizeable latent potential of the continent’s automotive market in the long term. Due to limited disposable income and the high cost of new vehicles, secondhand vehicles dominate the continent’s automotive retail sector. These are mainly imported.

 

Based on in-market research, Deloitte estimates that  at least 8 out of 10 imported vehicles are used vehicles. This is a common trend across the region given that Africa imports four times more automotive products than it exports, with automotive imports worth US$48 billion in 2014 and exports worth only US$11 billion that year. Key sources of used vehicles are the United States (US), Europe and Japan. The Middle East for example serves as a notable transit route for vehicles into East Africa. Imports of vehicles grew rapidly from 2003 onwards, coinciding with GDP per capita growth and a growing middle class on the continent. 

 

Despite its highly fragmented nature, the African automotive aftermarket is among the most promising in terms of potential growth. There’re nearly 22 million vehicles on the continent’s roads today, creating demand for parts and accessories worth more than US$8 billion per year.  It’s therefore become an increasingly significant market for global manufacturers of accessories and engine components such as bearings, brake pads, spark plugs and filters 

 

Senegal

 

Senegal has been one of the most stable countries in Africa. Its current President, Macky Sall has been elected in March 2012. In 2016, its political system was strengthened by a constitutional referendum that slashed presidential mandates from 7 to 5 years. After decades of very modest growth, particularly from 2007 to 2013, in 2014 the Government of Senegal adopted the new Plan Senegal Emergent (PSE) designed to help the country get out of a cycle of low-growth and weak poverty reduction. Greater competitiveness, punctual progress in structural reforms, and a favorable external environment all mean economic growth has recently accelerated, reaching about 6.5% in the past 2 years and making Senegal one of the best performing economies in Sub-Saharan Africa.

 

Within the national development plan it was foreseen to progressively switch the mobility offer, actually concentrated on pre-owned imported vehicles, in favour of new, low emission and low consumption vehicles. This plan is supporting the development of a new vehicles market, with strong perspective for the next decade.

Indeed, after years of stable demand around the 5.000 annual units, in the recent years the new vehicles market started growing, hitting the All-time record in 2017 with 8.339 sales, including 7.005. However, in 2018 the market has interrupted the previous years’ positive trend, falling suddenly down 16.2% with registrations at 6.985.

 

In 2019, the market kept declining, selling 5.959 units and losing 5.8% from 2018. However, considering the increasing number of second hand vehicles, the market for auto components is expected to only rise.

 

Brand-wise, Toyota widened the gap from the followers, reaching 27.4% of share. Behind, Mitsubishi ended at 17.1% of share, while Citroen gained the market podium holding 8.1%.

 

The automotive market value in Senegal is USD 100 million. Import of used cars is growing by 8% annually. The survey conducted by the Polish Foreign Trade Office among car users and store owners with autoparts, showed that the biggest problem is the availability and quality of components. 70% users buy and deliver parts on their own.

 

Cabo Verde

 

Cape Verde Cars sales in 2019 have reported a very strong growth. Indeed, Full-year sales have been 750, up 66.7% from the previous year. Renault led the market, holding near 30% of the share, currently ahead of the historic leader, Toyota and Suzuki.

 

Economic Environment

Cape Verde’s economic growth momentum remains strong with real GDP growth estimated at 5% in 2019, thanks to robust activity in industry, fisheries, commerce, and tourism. Public investment’s impact on growth underperformed its potential due to inefficiencies in the large parastatal sector, which resulted in high public debt. Fiscal consolidation was put in place to counter debt, including a 3% of GDP cap on domestic borrowing.

 

The Gambia

Annual Vehicle Sales

Year

Sales

Growth

2015

377

4.72

2016

91

-75.86

2017

86

-5.49

2018

111

29.07

2019

105

-5.41

 

 

Guinea Bissau

 

Annual Vehicle Sales

Year

Sales

Growth

2013

108

-25.00

2014

108

0.00

2015

72

-33.33

2016

87

20.83

2017

84

-3.45

 

Opportunities in Electrical Machinery

 

Senegal

The value of imports of commodity group 8485 "Machinery parts, not containing electrical connectors, insulators, coils, contacts or other electrical features, not specified or included elsewhere in this Chapter." to Senegal totalled $ 34 million in 2019. Sales of commodity group 8485 to Senegal went up by 7.68 thousand% compared to 2018: imports of commodity group 8485 "Machinery parts, not containing electrical connectors, insulators, coils, contacts or other electrical features, not specified or included elsewhere in this Chapter." went up by $ 34 million (the value of imports of commodity group 8485 to Senegal was equal to $448 thousand in 2018)

Imports of commodity group 8485 "Machinery parts, not containing electrical connectors, insulators, coils, contacts or other electrical features, not specified or included elsewhere in this Chapter." accounted for 0.428% of total import flow to Senegal (in 2019, total imports to Senegal amounted to $ 8.14 billion). The share of commodity group 8485 in total imports to Senegal increased by  0.422 p.p. compared to 2018 (it was 0.005% in 2018 and cumulative imports to Senegal were equal to $ 8.07 billion).

Imports of commodity group 8485 reached 4.76% of total imports of group "" to Senegal in 2019 (imports of commodity group to Senegal totalled $731 million in 2019). The share of purchases of commodity group 8485 in total imports of commodity group to Senegal increased by 4.69 p.p. compared to 2018 (it was 0.073% in 2018, and imports of commodity group to Senegal accounted for $608 million).

Top trading partners (import of "Machinery parts, not containing electrical connectors, insulators, coils, contacts or other electrical features, not specified or included elsewhere in this Chapter.") of Senegal in 2019:

 

Imports structure of 8485 - Machinery parts, not containing electrical connectors, insulators, coils, contacts or other electrical features, not specified or included elsewhere in this Chapter. - to Senegal in 2019 represented by the following main commodity groups:

 

 

The Gambia

The value of imports of commodity group 85 "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles" to Gambia totalled $ 34 million in 2019. Sales of commodity group 85 to Gambia went up by 84% compared to 2018: imports of commodity group 85 "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles" went up by $ 15.7 million (the value of imports of commodity group 85 to Gambia was equal to $18.5 million in 2018)

Imports of commodity group 85 "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles" accounted for 6.94% of total import flow to Gambia (in 2019, total imports to Gambia amounted to $ 494 million). The share of commodity group 85 in total imports to Gambia increased by  3.86 p.p. compared to 2018 (it was 3.08% in 2018 and cumulative imports to Gambia were equal to $ 601 million).

Top trading partners (import of "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles") of Gambia in 2019:

 

Imports structure of 85 - Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles - to Gambia in 2019 represented by the following main commodity groups:

Opportunities in Agricultural Machinery

Overview of Agricultural Mechanization in West Africa

Farm power in West Africa relies to an overwhelming extent on human muscle, based on operations that depend on the hoe and other hand tools. Such tools have implicit limitations in terms of energy and operational output, particularly in a tropical environment. These methods place severe limitations on the amount of land that can be cultivated per family. They reduce the timeliness of farm operations and limit the efficacy of essential activities such as cultivation and weeding, thereby reducing crop yields.

Types of Agricultural Machinery in Use

The most commonly used agricultural machinery includes tractors, combine harvester, thresher, manure spreader and fertilizer distributor, plow and cultivating machines, seeder and planters. The data for most recent years are unavailable from FAO, however.

How does West Africa compare with other countries in Africa or Asia? As per UN Comtrade data on the use of “tractors” across countries, it was found that Kenya, South Africa and Morocco are the leaders in tractor investment in 2012, far higher than countries in West Africa. Two small Asian nations, Cambodia and Vietnam are at comparable levels with Ghana and Nigeria.

If we look at regional averages, we find that Sub-Saharan Africa (SSA) has the lowest percentage of engine power in total power for land preparation. 

 

The four countries of Senegal, The Gambia, Guinea-Bissau and Cabo Verde  are heavily dependent upon agriculture as their primary industry, and source of employment, as the majority of the farms are family owned. The agro-industry in this region here is limited because the vast majority of the perishable farm produce, vegetables and fruits virtually have no value addition after their production, owing to lack of availability of food processing or storage. The agricultural produce is mostly consumed / exported in their primary condition and being perishable, a lot of the agri produce is wasted.

 

In recent years, there has been a drive to innovate and transform Africa’s agricultural value chains in order to meet the food security, peace and prosperity targets set out by the Malabo Declaration and the Sustainable Development Goals. A key element of African countries’ agricultural transformation strategies involves integrating technologies along the value chain to improve productivity and efficiency. There have been some success stories of adaptation of agri machinery for greater good. Established in the Senegal River Valley in 1953, a family-owned rice mill has benefitted from the promotion of mechanization. The mill uses machines to separate husks, bran and rice. The husks are made into pallets as a source of energy for a local cement factory, while the bran is used as animal feed. The company’s 18 full-time employees and 20 part-time staff support the processing of 15,000 tons of rice per year and maintenance of the machines. Beyond providing jobs for these employees, the mill’s increased processing power, as a result of the machines, has benefitted the livelihoods of its local farmer suppliers. 

 

Senegal

 

The development of agriculture is at the heart of the Senegal Emergent Plan (PSE) through the program component of Recovery and Acceleration of the Agricultural Cadence in Senegal (PRACAS). This component stipulates rice self-sufficiency through irrigated and rainfed rice production, peanut production as part of a value chain approach and the development of market gardening and horticulture, a segment dedicated mainly to exports.


The agricultural potential of this Sahelian country, member of the West African Economic Monetary Union (UEMOA) and the Community of West African States (ECOWAS) is varied. The exploitable lands are vast especially in the Senegal River Valley and in Casamance, privileged areas of rice cultivation, but also in the region of Baol, the historic peanut basin. Value chains are being set up and important processing industries are already operational. The country has the capacity to move from a net importer of food to an exporter.


In this context, the PSE is accompanied by a number of reforms including the facilitation of access to land and the establishment of a legal framework adapted to exporting companies. The purpose of cereal cultivation is to satisfy national needs and the groundnut sector is backed by local mills.


The PSE foresees the establishment of 100 to 150 integrated farms, particularly in the field of horticulture, cereal crops and poultry farming. In the end, the aim is to reorganize the production around the agro poles in order to develop processing and agri-food through mechanization.

 

Senegal imports almost 70 per cent of its food and people go hungry even though 60 per cent of the workforce are engaged in food crop production. Yet only 65 per cent of Senegal’s 3.8 million hectares of arable is farmed and 30 per cent of irrigable land used. Small rainfed subsistence farms are the norm.Farm productivity is held back by several factors, and includes

·        inadequate or irregular rainfall;

·        soil degradation;

·        lack of good-quality seeds and fertilizers;

·        use of traditional techniques and lack of technical support services;

 

The Gambia

 

With a population of only 1.8 million people, The Gambia, nestled right in the center of Senegal, is Africa’s smallest mainland country. It is a low-income country, but one with noticeable declines of overall poverty in the last decade and an increase in economic performance in recent years.

 

Agriculture retains a crucial role in economic growth in the Gambia, even as the share of services in GDP is increasing. Agriculture and related industries contribute to economic growth, employment, poverty reduction, food security, and nutrition. Agriculture employs nearly half—46 percent—of the labor force and is the source of livelihood for 80 percent of the rural population, according to the 2015/16 Integrated Household Survey (IHS). For about 72 percent of poor households and 91 percent of extremely poor rural households, agriculture is the main source of income. The sector contributes 17 percent of GDP and 30–40 percent of all foreign exchange earnings from exports.

 

Guinea-Bissau

 

Guinea-Bissau has rich resource endowments and an advantageous geographical location, suitable for a diversified range of agricultural production across the country.

 

The agri-food sector plays a central role in Guinea-Bissau’s economy, comprising almost half of GDP, the vast majority of the labor force and is critical to addressing both poverty and food insecurity, especially for the 120,000 small-scale farmers in the country.  Agriculture comprises between 40 and 50 percent of GDP and employs 80 percent of the labor force.

 

Cabo Verde

 

Typically, commercial crops have been planted in the few irrigated lands, while subsistence crops are planted in rainfed areas. The introduction and implementation of tropical crops as staple crops, namely maize, beans and manioc from the New World, bananas from Africa, and rice from Asia, occurred soon after island settlements in the 16th century. Due to economic interests, and since the beginning, maize and other subsistence crops were established in rainfed areas while sugarcane, coffee and cotton occupied irrigated areas.

 

The Cabo Verde agrarian sector has always been greatly vulnerable, due to a number of constraints, such as shortage of rainfall, prolonged droughts, scarcity of resources (water and soil, low soil quality, and relatively small farmland), small territory, and poor technological knowledge  As a result, the current exploitation system is essentially oriented towards subsistence agriculture. Despite its fragility, the agricultural sector is still the support of a large number of families whose livelihoods are closely associated with land.

 

The agricultural sector in Cabo Verde plays an important role in the country’s economic and social development, since it is not possible to predict, in the short term, another form of occupation for about 60% of the country’s population, who live in rural landscapes. Data from the 2005 Household Food Vulnerability Tracking Survey (ISVAF) show that 81% of rural households in the country are involved in primary sector activities directly linked to agriculture and livestock.

 

Forecast Agri machinery

 

The African agricultural machinery market is projected to register a CAGR of 5.8% in the coming years. In 2019, tractors dominated the agricultural machinery market. Individual ownership, collective ownership, fee-based service delivery, and leasing are the types of machinery usage systems followed in the region. The rising demand for mechanization and the increased number of medium-scale farmers owning tractors have created private mechanization hiring market in the region, especially in Ghana. As a result, the mechanization level is projected to increase in the future, thereby driving the growth of the market.

 

Key Issues and Challenges in Mechanization

One of the biggest challenges for successful mechanization in West Africa is access to finance. The cost of tractors and agricultural machinery is far beyond the reach of most farmers. Farmers typically lack collateral for bank loans. This severely holds them back from investing in machinery. Collective ownership can be a solution. However, this requires time for members to accumulate adequate funding, as well as strong cooperative management and training in machinery use.

Another challenge is the availability of well-adapted machines for local production systems. Locally produced machinery is usually low in quality and high in price. Provision of spare parts, advice and other services is often underdeveloped, particularly in remote areas. Adaptation of machinery to current production systems and farmers’ needs is badly needed. The private sector also needs to step up its efforts to provide adequate maintenance and repair services.

Land security poses an additional challenge to mechanization. Many farmers lack land tenure or longterm land use rights. They therefore tend not to invest heavily in their farms, or in preventative measures against degradation (e.g. grubbing, anti-erosion methods). In addition, with little extension support, farmers in West Africa lack the knowledge and skills to operate mechanized equipment. This can lead to misuse and mismanagement of machinery, especially of more sophisticated items.

Major Drivers and Trends in Mechanization

Funding of agricultural mechanization in West Africa remains a major challenge. Existing financial models include leasing, grants, government subsidies, joint ownership, and lease-to-own financing. In “lease-toown”, farmers make regular payments (through a loan or cash) over a set period, and take ownership once the payments are complete. Some models have demonstrated success like CUMA in Benin (albeit still at limited scale), which was replicated in Mali in 2001 and Burkina Faso in 2004. However, where conditions for profitability are missing, failures abound. Successful mechanization depends, for example, on its suitability for the soils, physical geography (e.g. slope) and crops, as well as on the intensity of work, purchasing costs, and functioning of equipment and usage rates.

 

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