Press release number: IFAD 28/05

Rome - 7 June 2005 - A new development project will help rural entrepreneurs in eight regions of Senegal to gain skills and access to financial and other services that will help them to increase profits and incomes from their businesses. It will also support the development of new micro- and small enterprises in rural areas.

The seven-year project is being supported by a US$13.08 million loan from the International Fund for Agricultural Development (IFAD), out of a total project cost of US$18.75 million. The loan is also receiving cofinancing from the West African Development Bank. The loan was signed today at IFAD headquarters by IFAD President Lennart Båge and Ambassador of the Republic of Senegal to the United Nations organizations in Rome, Momar Gueye.

Despite healthy economic growth over the last decade, poverty remains widespread in rural areas of Senegal, where 72 to 88 per cent of the population is poor. Most families in these areas rely on agriculture to earn a living but are constrained by erratic rainfall and falling commodity prices. The project will help diversify the ways people earn income in rural areas.

“Many young people are migrating to urban areas only to find that there are not enough jobs to go around,” said President Båge. “This project will help create employment in rural areas, reversing the flow of people to already overburdened cities.” Rural economies will also become stronger as people spend income on rural goods and services.

Five other IFAD projects are currently active in Senegal, boosting agricultural production and strengthening community development. The new project will complement those activities and promote synergies among different sectors, contributing to the growth of the local economy and helping the activities to be sustainable.

The project will promote new opportunities in agribusiness, from supplying inputs to processing agricultural products. A strong focus will be on building the capacity of entrepreneurs, and in particular women, who make a significant contribution of labour and cash to the household yet have less access than men to education, information and financial services. At least half of the assisted businesses will be run by women.

Efforts will be made to strengthen the ability of local public agencies, professional associations and private consultants to provide business development services. Farmers and entrepreneurs will gain better market information through information centres. Exchange visits will encourage entrepreneurs to learn from each other. Funds will be made available to support business development, for instance offering matching grants to pay for the development of a business plan. A rating system will be created to promote service providers who provide satisfactory services to entrepreneurs, encouraging good practice.

With this loan, IFAD has provided the Government of Senegal with funding for 13 projects since 1979, for a total amount of US$127 million.

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IFAD is a specialized agency of the United Nations dedicated to eradicating rural poverty in developing countries. Seventy-five per cent of the world’s poorest people – 800 million women, children and men – live in rural areas and depend on agriculture and related activities for their livelihoods. Through low-interest loans and grants, IFAD works with governments to develop and finance programmes and projects that enable rural poor people to overcome poverty themselves.

There are 192 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.5 billion. IFAD has invested about US$2.8 billion in these initiatives. Cofinancing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help more than 100 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested almost US$8.7 billion in 690 projects and programmes that have helped more than 250 million poor rural men and women achieve better lives for themselves and their families. Governments and other financing sources in the recipient countries, including project beneficiaries, have contributed about US$8.4 billion, and multilateral, bilateral and other donors have provided about US$6.9 billion in cofinancing.