Building sustainable income and employment opportunities through micro-enterprises

Dakar, Senegal

The city of Dakar has developed an incubator project to support women and youth.

To combat rising unemployment, the City of Dakar is implementing a project to create decent jobs and sustainable incomes through the promotion of micro, small and medium-sized enterprises and  skills development for youth and women. The project will span five years and focuses on the agricultural and services value chains that will broaden opportunities for both target groups.


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City information
City
Dakar

Size and population development
2011: 3,035,000; 1990: 1,405,000; 2025: 5,064,000; 2010-2015: +3.69%/year

Main functions
economic, cultural and political centre of Senegal

Main industries / business
NTIC, chemicals, textiles

Political structure
Mayor and City Council

Administrative structure
the city is both a commune and a departement with four arrondissements and 19 communes d'arrondissement

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Background and objectives

Since 2000, Senegal has been experiencing an unemployment crisis that predominantly affects women and youth. In Dakar, the capital city, the overall unemployment rate is 14.9%. The private sector offers limited employment opportunities and many people are self-employed or under-employed. As a result of this, there is a growing entrepreneurial movement that invests in establishing small businesses. However, the mortality rate of these businesses is very high and  according to the Direction des Petites et Moyennes Entreprises (DPM), between 60 and 65% of small businesses cease operating  two years after they open.

Additionally, many young people and women are confronted with:

  • illiteracy
  • lack of practical information and benchmarks to implement their projects
  • lack of adequate technical support
  • lack of knowledge of the most basic regulations for starting a business
  • lack of financial capital and entrepreneurial know-how

The general objective of the project is to reduce the unemployment rate and provide sustainable incomes for youth and women in Dakar, by creating and consolidating micro and small businesses.

Implementation

The project is structured around 3 phases:

  1. A company incubator: support before the creation with an activity test phase
  2. The creation of a micro-finance fund open to other partners (micro-credit agencies, banks, companies, international donors.)
  3. Monitoring activities and finances once businesses are open to increase long term sustainability of the business and help attract investment.

1st Phase: support before the creation of the company

  • awareness-raising and identify entrepreneurs
  • pre - reception and orientation of entrepreneurs
  • reception and diagnosis
  • support during the project assembly process

2nd Phase: the activity test: the incubator

The incubator is managed by a board of directors and supported by an administrative office. The technical operations are managed by a committee who is responsible for reviewing the files of candidates who will be trained and funded.

The period of access to the incubator programme is twelve months from the actual start of activities. The maximum term, including renewal, may not exceed three years.

3rd phase: post-creation follow-up

This phase allows new entrepreneurs to:

  • access to information and training
  • consolidate their business
  • assess their entrepreneurial skills

The incubator is primarily aimed at hard-to-reach groups:

  • young graduates wanting to start a business
  • young people over 20 years of age who do not have a diploma but have skills
  • young people from vocational training
  • women with a project to create viable income-generating activities
Financing and resources

The project receives financial support from the City of Dakar, the City of Marseille and the International Association of Mayors and Leaders of Partially or Fully Francophone Capitals and Metropolises (AIMF).

The African Development fund (UA 21.19 million) and the Government of Senegal (UA 2.35 million) are the major financial donors.

Results and impacts

Expected results

The incubator will provide participants with:

  • general support in setting up their business when they leave the incubator.
  • specific support and guidance from  tutors, sponsors and advisors associated with the project.

Pilot phase

A pilot phase was initiated for the enterprise incubator system with the following results:

  • 40 project leaders received funding.
  • Almost 50% of the beneficiaries were women.
  • At the end of the pilot phase, and in order to sustain the actions undertaken by the project, the strategy will consist, among other things, of: 
    • provision of  an annual budget from the city of Dakar to finance the incubator
    • creating a focal point for the project in each commune of the city of Dakar.
    • setting up a quota system for the number of participants  from each commune
Barriers and challenges

The main challenge for the project is to secure long term financial and resource commitment from government agencies and sponsors and buy in from citizens.

Lessons learned and transferability

Financing, even on better loan terms, does not provide the budget needed to promote the development of good entrepreneurship among young project promoters in the city of Dakar.

The following measures are essential to establish the basis for a viable small business:

  • access to skills training in the specific area of business
  •  management and marketing training
  •  supervision and monitoring of activities
  • mediation services in case of problems
References

African Development Fund report: PROJECT TO SUPPORT THE PROMOTION OF EMPLOYMENT FOR  YOUTH AND WOMEN (PAPEJF), OSHD, September 2013