Senegal cash locked in private investments
By Mark Ashurst
In Senegal

In the heart of Senegal's capital Dakar, you will find street hawkers, tables laden with clothes, sunglasses, fruit and flip-flops.

On the corner above the crowds a window display shows a smiling face on a silhouette of Africa advertising the presence of a branch of the international money transferring company Western Union.

Inside people queue to collect money sent from abroad.

Money transfer is a booming business in Africa as ex-pats in the diaspora send money home.

Their contributions make up a growing share of Africa's wealth and Senegal is no exception.

There are 2,200 branches of Western Union in Senegal - a relatively small west African state with a population of about 10 million.

Building frenzy

According to government figures, remittances from abroad make up 9% of Senegal's gross national product (GNP).

Most of the money arriving at the Western Union offices is sent from France, and much of that money is invested in the building boom in Dakar.

Buildings are going up everywhere and you can see men digging foundations and pouring concrete all over the city.

Infrastructure, roads, ports and new industrial zones are priorities for Senegal and for the donor countries which pump more than half-a-billion dollars into Senegal's economy every year.

local resources

Among industrialised nations, foreign governments are discussing plans to boost financial aid, but that does not mean there are no local resources to fund development.

Olivier Cardinet, director of the American aid agency USAID, says one of the encouraging things in the franc monetary region is that significant private funds could be tapped to support growth more effectively.

"We estimate that there is $1.2bn invested in pension funds, insurance companies and bank deposits," he says.

"We hope in the future that Senegal will be able to get more sophisticated in how it uses more modern financial technology to mobilise these private funds."

Those new financial instruments are complex, but over time they could offer new ways for government and local authorities to borrow, and create a growing role for private companies to help manage the supply of water and services.

All these developments are taking root in Senegal, so in the years to come the ability to unlock local capital in the banks and insurance companies in West Africa may prove a more accurate measure of Senegal's development than the tally of financial help from abroad.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/events/4648977.stm

Published: 2005/07/06 23:04:51 GMT

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