The Emerging Senegal Plan created a lot of jobs during the 2014-2018 period. Now, efforts should focus on supporting the private sector and the entrepreneurial fabric, a study concludes.
A study conducted by the AfDB (African Development Bank) and the State of Senegal draws up a rather encouraging and demanding assessment of the Emerging Senegal Plan, dear to President Macky Sall. In fact, during its first phase (2014-2018), the PSE would have created 187,000 jobs.
Nevertheless, the authors consider that from now on, private investments must win out over public investments, which create less jobs. And that Senegal, today, does not have the profile of an entrepreneurial country. Balance sheet In balance, the study looks at the effects of specific ADB support.
Senegal invested 235 million euros in priority market sectors over the period. The contribution of the ADB, one of the Senegalese government’s leading partners, to this investment amounts to 103.5 million euros, representing some 44% of the overall cost.
“Agriculture and agribusiness are the sectors that provide the most jobs, helping to reduce poverty and expand the middle classes,” the study said. Investments in priority sectors within the framework of this plan have thus made it possible to create 186,932 direct and indirect jobs, in particular in the service sector where the greatest job creation has been recorded.
“The AfDB’s contribution to these job creations is 15%, or 28,852 jobs created, of which 35% are occupied by women and 54% by young people. However, these jobs remain mostly unskilled,” notes the study, cited here by the AfDB.
According to its authors, 73.2% of jobs due to the Bank’s contribution are held by unskilled workers, compared to only 3.5% for higher education graduates (graduates from Bac + 2 to doctorate). The trend is expected to reverse in the coming years, with the PES forecasting the creation of 600,000 jobs by 2024.
ICT is swarming job creation!
To achieve this objective, the authors use a “realistic” scenario which would consist in the Bank balancing the disbursement of the previous period and disbursing only 50% of its new commitments. “The direct and indirect impacts of the scenario are 101,703 jobs,” according to the document.
Infrastructure, according to the study, is the sector with the highest share of employment for young people, followed by agriculture. In relative terms, mining and industry as well as agriculture and agribusiness are the sectors, in which investments will generate the most jobs for young people and women.
“In the more realistic scenario, job creation through ADB investments is estimated at 51,863 direct and indirect jobs,” the study predicts. Who continues: in general, the weakness of the investment / employment elasticity demonstrates the need to place employment as a transversal objective at the macroeconomic and sectoral level in order to create enough jobs to absorb the increasing number of arrivals on the labor market and consolidate the country’s emergence process. During the first phase of the PES implementation, economic growth strengthened from 6.6% in 2014 to 7.15% in 2017 and 7% in 2018.
This economic dynamism was driven by growth in the primary sector (7.8%), thanks to agriculture and related activities. The secondary sector recorded a growth of 6.9%, mainly due to the sub-sectors of mining, agrifood and construction. For its part, the growth of the tertiary sector reached 6.7%, notably thanks to the retail trade.
For the current period, the authors consider that the return on capital decreases in the public sector, while it increases in the private sector. This, because of the cost of past investments. Also, they conclude that for most industrial sectors, “a private investment would have more positive impacts than a public investment of the same amount”.
What local content for large investments?
Referring to the specificity of ICT (Information and Communication Technologies), the authors note that this sector is the most job-creating sector, along with agro-industry, for CFAF 1 billion invested.
In ICT, 99% of jobs created are indirect jobs, “which shows the diffusion effect of this sector on the rest of the sectors of the economy”.
In contrast, investments in infrastructure have a limited impact on employment in the short term. Moreover, these data raise the question of the “local content” of infrastructure investments, which are often made by multinationals which mainly import materials and inputs, with a weak spillover effect on the economy and employment.
In Senegal, the majority of jobs remain unskilled and have poor social coverage, economists deplore. According to whom 78% of the job supply over the period 2019-2023 would go to the uneducated.
Yet Senegal creates a lot of formal jobs, but around 16% of workers benefit from social contributions. “Although the bulk of Senegalese businesses are small businesses, this setting does not reflect a pattern of successful entrepreneurship.”
Almost 87% of start-ups have no education, for example. “The most qualified young people do not enter into business”, note the authors, who point out that in general, companies led by the most qualified are the most sustainable and able to create jobs.
Only the sectors of mining and industry (91%), agriculture and agro-industries (55%) and telecommunications (45%) generate the majority of jobs for graduates of higher education (46%). Therefore, it becomes “imperative” for Senegal to “update the skills offered to the young workforce” if the country wants to cross the line of emergence.
In the short and medium term, agriculture and agri-food are the most strategic investment options to absorb the excess unskilled labor in the labor market, reduce poverty and increase the workforce. the middle class.
For their part, ICTs create a diffusion effect in the economy and should therefore be integrated transversally into sectoral projects.
‘To do this, the State should consolidate measures that stimulate private investment, strengthen the institutions that support SMEs, in order to create a network of efficient SMEs that create qualified jobs.
The PSE provides for the implementation of the reform on access to finance for SMEs and VSEs. “This reform requires a close partnership with all players in the financial system, whether they are commercial banks, investment funds, micro-finance institutions and guarantee funds,” the economists conclude.
Reference: https://magazinedelafrique.com/african-business/le-senegal-en-quete-dentrepreneurs/
