Business Magazine

Achieving Impact in Senegal

Posted on the 01 May 2013 by Center For International Private Enterprise @CIPEglobal


My recent visit to Dakar, Senegal, where I met with longtime CIPE partner, l’Union National des Commercants et Industriels du Senegal (UNACOIS) was very informative and revealed how much impact a good CIPE partnership can bring to bear.

The decade-long partnership between CIPE and UNACOIS – a Senegalese private sector association with 70,000 members who operate small and medium enterprises, mainly in the informal sector — is proving increasingly consequential within Senegal’s civil society circles. CIPE and UNACOIS have partnered on three programs whose core objective was to enhance UNACOIS’ internal governance capacity.

Throughout the partnership, CIPE has provided assistance on various aspects of association management such as the role of an association in a democracy, the governance structure of an association, membership development and retention, and basic advocacy. UNACOIS has implemented concepts that it acquired from CIPE’s programs and its organizational capacity is now strong enough that it has become a leading private sector association in Senegal, often at the forefront of policy dialogues that affect its members and the broader private sector.

In the recent CIPE program, UNACOIS used public-private dialog (PPD) sessions to propose tax reform recommendations which were then approved by the executive branch of Senegal’s government and eventually passed into law by the National House of Assembly. The legislation included a set of reduced tax rates for small and medium enterprises (SMEs) that was more proportional to their profit margins.

During the PPD discussions, the government expressed concerns about the anticipated declines in its revenue because of the reduced tax rates that UNACOIS was advocating for. UNACOIS and the government reached a compromise that, to compensate for the government’s anticipated loss in tax revenues, an additional 3 percent tax will be levied on “occasional imports” – defined as products that are imported by non-regular importers, such as a one-off car purchase from Germany, or a one-time home furniture purchase from Dubai.

However, the legal text on this particular section of the law is vague enough that the Senegal’s customs authorities have been assessing the additional 3 percent importation fee on all imports. Essentially, the government is reinstating whatever tax reductions it gave the SME sector in the form of an import  levy, fully cognizant of the fact that Senegal’s SME sector is heavily dependent on imports for most of its operational needs.

When I arrived in Dakar, Senegal, UNACOIS was in crisis mode. To attest to UNACOIS’ raised profile within Senegalese policy-making circles, the Federation of Importers and Transporters had approached UNACOIS, suggesting that both associations adopt a collective action approach on the importation fee issue. I attended a working session between the management teams from both associations – UNACOIS and the Federation of Transporters and Importers – during which we carefully reviewed the legal text to ensure that we understood it.

The following day, we held another meeting. In attendance was a retired senior customs officer, who has since established a consulting company and had been hired by UNACOIS to provide technical expertise and assistance in designing an effective advocacy strategy. Both meetings lasted over three hours and by the end of the second meeting, both management teams were ready to present the matter to their board members, along with recommendations on how best to proceed. I attended UNACOIS’ meeting between the management team and the board members, during which UNACOIS Permanent Secretary Ousmane N’Diaye presented the issue, its consequences, and recommended the measures that UNACOIS should take to address the issue.

The board members approved the management team’s recommendations. The following day, N’Diaye and I met with UNACOIS’ legal counsel and communications director to discuss a strategy for a press release and press conference on the issue. Every initiative was coordinated with the Federation of Importers and Transporters for effective collective action.

It was professionally fulfilling to witness the efficacy and sophistication with which UNACOIS proceeded on this issue, especially since it made evident the progress that UNACOIS has achieved: initially, a near-moribund association, but now one with organizational and advocacy capacities so improved that the association now counts as a credible voice in Senegal’s national politics. As proof, other private sector associations, besides the Federation of Importers and Transporters, seek UNACOIS’ involvement or support in addressing policy issues that may be common to them.

In addition, UNACOIS is very effective in communicating its arguments during public-private dialogues. Permanent Secretary Ousmane N’Diaye and I participated in a working session organized by the Ministry of Justice on the implementation of the Organization pour l’Harmonization du Droit des Affaires (OHADA), a regional legal and regulatory framework aimed at standardizing business practices across Africa so as to facilitate economic integration.

The working session consisted of twenty-four participants, including judges, lawyers, customs officers, Members of Parliament from the Committees on Trade, Commerce and Industry, and representatives of private sector associations. The objective was to discuss effective ways to implement the OHADA frameworks within Senegal’s domestic context.

All through the various sessions, N’Diaye was successful in representing the interests of SME and informal sectors. It was pleasant to see customs officers and judges nod in approval as N’Diaye presented arguments from the perspectives of the SME and informal sectors. What was even more impressive was when some participants came over to N’Diaye and requested that he elaborate a particular point or argument further, or inquired whether a meeting for further discussions was possible. He accepted every single proposition for further dialog.

Also, I participated in meetings between UNACOIS and Senegal’s Direction des Petites et Moyennes Entreprises (PME) and the Bureau National de la Mise a Niveau. The former is responsible for designing the strategies to fulfill the government’s plans for the SME sector. Presently, it intends to conduct public-private dialogues across all fourteen provinces in Senegal, so as to receive information from the business communities in each province that it can utilize to design more relevant strategies to fulfill the government’s plans for the SME sector. PME approached UNACOIS with the proposition of a partnership, hopings to leverage UNACOIS’ grassroots reach and national scope. The meeting focused on the modalities of such a partnership.

The latter group is responsible for implementing programs that provide business development skills for business operators in the SME sector, as part of broader program to formalize informal businesses within the SME sector. The Director, Ibrahima Diouf, discussed various ongoing programs that his agency currently runs.

Finally, N’Diaye and I had a meeting with Ameth Gaye, the CEO of MSA.i. MSA.i is a Senegalese information technology and media firm that UNACOIS has hired to help launch UNACOIS’ magazine, CommerceMag, along with the magazine’s website. CommerceMag will offer economic information and analysis from a perspective that is relevant to the SME and informal sectors. The magazine and its website – which will be directly linked to UNACOIS’ official website – will sustain consistent communication between UNACOIS and its members, provide an additional source of revenue for UNACOIS through membership subscriptions and advertisement fees, and raise UNACOIS’ profile in Senegal and throughout West Africa.

UNACOIS plans to launch the magazine in July 2013 with an initial print runof five thousand copies, and Senegal President Macky Sall has agreed to author the magazine’s first editorial page. UNACOIS has already confirmed Chief Editors for each magazine section that will focus on a particular economic sector. After our meeting, all three of us met with UNACOIS President Idy Thiam to present the project’s most recent developments to him.

UNACOIS is well on its way to becoming an effective contributor to the policy-making process in Senegal. My sojourn in Senegal introduced me to an organization that has transitioned from needing CIPE assistance mainly in association management to needing assistance mainly on effective advocacy on specific policy issues.

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