Milking it

There’s no God-given right for small businesses to succeed but there are occasions when their failure to do so makes you wince. Such is the case with the Laiterie du Berger, which has been trying to make a go of it in the Senegalese dairy sector.

The company was set up in 2006 to try and exploit Senegal’s dependence on imported milk powder. The country had no effective industry as the hundreds of small scale producers struggled to sell to the wider market and, by and large, kept their milk for local consumption. And while their milk was drunk in the villages, the sacks of milk powder kept flowing into the ports in the capital, Dakar.

There was an opening there for an enterprising team to exploit and a group of young vets and entrepreneurs, headed by Bagore Bathily, decided to give it a go. They raised capital, some of it on the international stage, invested in a plant in the north of the country where the majority of the dairy farmers were based, organised the collection of fresh milk and processed it. The end products – milk, butter and yoghurt — were shipped south to Dakar and the other main urban centres.

As many as 600 farmers signed up, and began to benefit from having a proper partner who could do the hard work – getting their goods to market. For eighteen months all looked good. But the odds were stacked against them. The milk importers were given a VAT rebate on their foreign goods, while Laiterie du Berger had to carry the tax on its locally-produced product. With such a competitive disadvantage, it has been struggling in recent months to build on its original successes.

All sorts of issues are raised by protectionism. But almost all the experts I have spoken to over the past week, from management consultants to agricultural advisers, have told me that the African farming industry needs help in the face of international competition. Whether it be rice or onions or milk, the small-scale producers in Senegal need some breathing space to build from the subsistence level to the national level. And until Africa can feed itself, the continent will struggle to take the next step forward. All these issues remain on the table at the ongoing round of World Trade talks.

The answer to Senegal’s prayers

The celebrations of the birthday of the prophet Mohammed are a big deal in Senegal, where almost all of the population are devout Muslims. Hundreds of thousands of people are congregating in the town of Tivaouane for prayers on Monday to mark what they call Gamou.

For the people of Dakar, the journey to Tivaouane – just a few kilometres — is long, slow and arduous. That’s because the capital’s infrastructure – barely able to cope with its daily workload — seizes up when faced with a mass movement on this scale. Dakar is at one end of a peninsula, and all traffic out of the capital is funnelled through a spit of land.

Every time we’ve tried to leave the centre of town, we’ve had to sit and suffer in the back of a taxi or car and admire the driver’s adroitness in beating his rivals to the few metres of spare tarmac that’s open. As the masses begin to make their way to the traditional holy site where the prayers will be said, the competition for that space has been hotting up. And it’s only going to get worse.

The government is pumping money into Dakar’s road network. Tunnels were built before last year’s Organisation of the Islamic Conference summit – but that meeting had been delayed for two years because the preparations overran. And a brand new road is being built for a brand new airport – the road is badly needed but many question the wisdom of the airport project.

But much more is needed, particularly in less sexy projects if the country is to run efficiently. It’s estimated that thirty per cent of the agricultural produce goes to waste because of the lack of proper storage capacity. And many producers struggle to get their goods to market, especially in the rainy season.

Taxing the touts?

You can’t escape the informal economy in African cities. On every street dozens of men, women boys and girls are out hawking everything from newspapers and batteries to tourist souvenirs and football shirts.

Their noise and vivacity are part of the make-up of Dakar, here in Senegal, but equally in Nairobi, Luanda, Dar-es-Salaam and Lusaka. They’ve been there for all the years I’ve been visiting and working in Africa. All that’s changed is the wares; mobile phone cards are now the most common item on the moving shop front of the sidewalk.

What’s been challenging governments and economist for almost as long is how to reap the benefit of their endeavours, how to grab a slice of the illicit action. Channel just a few small percentages of that action into the national economy and the amount available to spend on hospitals and education – or on the grand projects that some leaders are fond of — could increase considerably.

Numerous courses of actions have been considered. One that is currently under the review here in Senegal is to levy a small flat annual fee on the traders. How practical or enforceable it would be is uncertain. One can foresee many difficulties in gathering such a revenue, and of ensuring that all proceeds accrued to the national coffer.

Certainly the traders would be reluctant to pay – Dakar is one of the forty most expensive cities in the world. Senegal is one of the eighteen poorest countries and surviving here is an art for many.

Senegal — disappearing traditions

Every country’s economy is unique, and fragile in its own way too. What’s becoming clear from my visit to Senegal is just how fragile this country is. It’s always been one of the poorer nations in Africa – with precious few natural resources – but many people have been voicing their real concerns that the options available to the government are now few, and becoming fewer by the day as the currents stirred by the global economic crisis threaten to wash over Senegal’s coast. Read more

Senegal — past and present

Goree Island is a reminder of an earlier economy in Africa – that of slavery.  Just off the coast of the Senegalese capital, Dakar, the island witnessed the passage of hundreds of thousands of slaves from the 15th to the 18th century. Read more