Press release number: IFAD 03/01

Rome, 16 January 2001 - The International Fund for Agricultural Development (IFAD) and the Republic of Senegal signed a loan agreement today on highly concessional terms, with a view to financing Phase II of the Village Organization and Management Project, an IFAD initiative with a total cost of USD 21.5 million. The agreement was signed at IFAD headquarters in Rome by its President, Mr Fawzi Al-Sultan, and H.E. Mama Balla Sy, Ambassador of the Republic of Senegal to Italy.

The IFAD loan is for USD 13.7 million, or 64% of the total programme cost. The contribution of the Government of the Republic of Senegal will be about USD 2.7 million (12.5%), and the beneficiaries of the project will provide the equivalent of USD 3.1 million (14.5%). The West African Development Bank (BOAD) is planning to cofinance the village infrastructure component for a sum of USD 2 million (10%).

The general objective of Phase II of the Village Organization and Management Project is sustainable improvement in the living conditions and income of rural inhabitants. In pursuit of this aim, the project will provide capacity-building support to village organizations. It will also encourage sustainable agricultural systems and diversified profit-making activities through technical support, management assistance and improved access to markets and financial services.

IFAD will provide support to about 500 village communities in the Senegalese groundnut basin, covering the three regions of Fatik, Koalack and Thiès. According to official estimates, 40 to 50% of the rural population of the project area live in poverty. However, a further 30 to 40%, which are dependent on rainfed agriculture on small farms in difficult climatic and commercial conditions, could also sink into permanent poverty. The project’s target group will thus be made up of 30 000 small farming households, for a total of about 200 000 people. Women and young people, the groups most at risk in rural communities, will be the focus of specific support activities.

The general aims of IFAD interventions in Senegal are poverty reduction and protection of the environment. Two other current projects being financed by IFAD in the same area—the Rural Micro-enterprises Project (PROMER) and the National Rural Infrastructure Project (PNIR)—should allow complementarity and synergy. IFAD has extensive experience in rural community development, with the beneficiaries and their local organizations being seen as the main driving forces in the development process. Local capacity-building is a vital element in ensuring effective implementation of projects and guaranteeing their sustainability. IFAD is also helping Senegal to develop a national action plan to combat desertification, within the framework of the United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification.

To date, IFAD has financed ten loans on highly concessional terms, for a total investment of USD 101.7 million in Senegal, making it the Fund’s fourth largest beneficiary in Africa.

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IFAD is a specialised agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 578 projects in 114 countries, allocating almost US$ 7 billion in the form of loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty.

IFAD makes the greater part of its resources available to low-income countries on very favourable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.