The project “Support for local economic development as a basis for the National Local Development Programme” aims at creating an environment conducive to the emergence of decentralization oriented towards local economic development. The strategy aims at providing targeted support for the National Local Development Programme, which is designed to link all the activities of donors and development partners in support of decentralization, devolution and the social, cultural and economic development of local communities in Senegal..

The entry point of this strategy is a dual one that corresponds to the broad outlines defined in the PNDL, namely (1) support for the national authorities so that they take greater account of the economic dimension in Senegal’s public policies, particularly with regard to decentralization and devolution, combating poverty, physical planning, advancement of the rights of women and promotion of jobs and businesses and (2) support for the territorial players in Louga region in the form of capacity-building and provision of financing and methodological support to enable them to conduct economic development activities.

The impacts of the project are : (1) better strategic guidance of local development by the central level ; (2) strengthening of the capabilities of local communities to promote sustainable local economic development ; (3) modernization of the operating procedures of the territorial administration and local communities ; (4) improvement of the supply of basic social services.

The project will operate through capacity-building components, and a Local Economic Development Fund will be established to serve the local communities of the three departments in Louga region and administered as part of the functions of the Louga Regional Development Agency.

Operational management of the project will be conducted in the spirit of the Paris Declaration, with maximum use of national procedures and the national financial circuit. The project will be participatory in approach, drawing on the experience of previous UNCDF/UNDP projects with regard to the involvement of populations in choices relating to investment decisions intended to benefit their community. In the spirit of the UNDAF 2007-2011, particular attention will be paid to the regional dimension of joint economic action and of taking environmental requirements into account.

• This project is justified in the context of the low impact of decentralization policies on the general well-being of the population and the need to give decentralization an economic orientation. Despite the real progress made with respect to the institutional, legal and administrative framework of decentralization, and despite the existence of an integrated strategy for combating poverty and of many development programmes initiated by the State and the technical and financial partners, poverty still persists in both urban and rural areas.
• PADEL/PNDL aims at promoting economic development through an efficient coproduction involving the institutional players, the private sector and associative movements. To achieve this, action is required on two levels :
  • At the strategic level, the aim will be to (i) support the implementation of the PNDL, which is the Government of Senegal's desired integrative framework for all local development projects and programmes ; (ii) support local communes and communities in order to give them a vision of local economic development and promote private initiatives and wealth creation inter alia through revised local investment planning and programming documents ; (iii) strengthen the regional framework for facilitating coordination and ensuring consistency between local economic development initiatives and the partners' projects/programmes ;
  • At the operational level, there will be a need to (i) expand knowledge of the local economic fabric so as to identify investment and promotion channels and the dysfunctionalities of local economic development ; (ii) introduce investment tools suited to the local economic fabric ; (iii) apply mechanisms and approaches capable of contributing to the promotion of local economic development and of advisory support ; (iv) develop cooperation between local communities and microfinance institutions to promote local development, particularly of private initiatives ; (v) strengthen the capabilities of local elected officials to promote participatory development based on a sustainable vision of regional and local economic development ; (vi) train local players in the development of a local citizens' culture and strengthen their capacity for innovation through mobilization projects at the economic level, particularly of women and young people, in order to significantly increase their ability to contribute to and play an active role in local economic and social development ; (vii) encourage a dynamic process of networking and partnerships among actors interested in the concerns of local economic development ; (viii) test new methodologies for the activation and promotion of mechanisms designed to establish lasting mechanisms for consultation and dialogue and create the conditions for ownership of the approach ; (ix) promote a dynamic process of exchange with territories adjacent to the region (for example, Ranérou).

The project will be coordinated by the Executive Secretariat of PNDL and based in the Ministry of Decentralization and Local Communities, which is responsible for supervising the PNDL.

The project initiatives will benefit all of the Senegalese population following the establishment of a new decentralized national economic development framework, and more particularly the 501,863 inhabitants of the Louga region according to the 1988 census (5 arrondissements, 4 communes, 46 rural communities and 2,632 villages in three departments), and will take place over a four-year period for the initial phase.

A formal evaluation mechanism will be developed as soon as the project commences, in cooperation with SE/PNDL and the other partners. Eventually, it is envisaged that a single mechanism will enable all partners and the national and local players to review and evaluate the PNDL as well as their specific project within it. Without prejudice to such a mechanism, UNCDF/UNDP will conduct a midterm evaluation of the project jointly with the PNDL and the Ministry of Decentralization and Local Communities. A final evaluation will also be conducted in order to measure the impacts and results achieved through the implementation of this support. Annual audits will be conducted of the FDEL financing and the functioning of the local communities so as to institute an ongoing process of rendering of local accounts.

The expected impacts are an improvement in the living conditions of the population and the creation of more dynamic local economies by means of a participatory approach aimed at strengthening the capacity of the population to manage local affairs.

• Resource mobilization

The development objective of the Sectoral Policy Letter Support Programme is to promote increased access by the poor populations and micro, small and medium-sized enterprises to financing services by means of a qualitative and quantitative improvement in the supply of financial products and services through viable microfinance institutions integrated into the financial sector. On the basis of this overall objective and the strategic orientations of CIDA, UNDP and UNCDF, the programme would have the following three specific objectives :

1. Strengthening of the institutional framework of the microfinance sector;
2. Development of a viable and ongoing supply of adapted, diversified and increasing products and services, particularly in areas not yet covered by professional microfinance institutions;
3. Strengthening of relations between the microfinance institutions and banks and other investment funds, with a view to a progressive integration of financial markets..

• Since its emergence at the end of the 1980s, the microfinance sector in Senegal has grown rapidly. Today there are more than 700 recognized decentralized financial structures (grass-roots mutual associations, savings and loan groups and Convention signatory structures). These structures offer financial services and products to economically active populations at various levels and in various sectors of the national economy, thus contributing to economic growth and to combating poverty. Over the period 1993-2003, an explosive expansion of the sector took place in terms of the number of structures and the volume of operations, with an increase from 18 to 724 structures.
• In December 2004, the main players in the microfinance sector in Senegal ratified the microfinance sectoral policy letter (LPS/MF) for the period 2005-2010. This LPS/MF, which includes a strategy and a plan of action, aims at building “ a viable and lasting microfinance sector, diversified and innovative, integrated into the financial sector, ensuring satisfactory coverage of demand in the territory and operating in an adapted legal, regulatory tax and institutional framework”. The estimated cost of the plan of action for the period indicated above is CFAF 20 billion.
• Approved in March 2005, the LPS/MF was the subject in April 2005 of a round table involving the Government, development partners and microfinance institutions. Concerned to assist in the effective and rational implementation of the LPS/MF plan of action, the Microfinance Donors Subgroup (SGBMF) financed two studies of, respectively, the mechanisms for management of the plan of action and the mechanisms for refinancing the microfinance institutions.
• On the one hand, the present programme falls within the framework of the strategic guidelines for the LPS/MF, and on the other it is based on the recommendations of these two complementary studies. It aims at contributing to poverty reduction and the attainment of the Millennium Development Goals (MDGs).

• PA/LPS will be housed within the Microfinance Department (DMF) of the Ministry of Microfinance and Decentralized International Cooperation.
• It will have three organs : the Steering Committee, the Investment Committee and the Programme Support Unit (CAP).

• The beneficiaries of the programme will be on the one hand disadvantaged populations and micro, small and medium-sized enterprises, more specifically in rural areas, and on the other the following players: microfinance institutions and their association (APIMEC), the ministries concerned and the management organs of LPS/MF.
• The programme will cover all regions of Senegal .

• The programme will be the subject of an in-depth external evaluation to assess its overall performance, the results and outcomes achieved in relation to the initial objectives, and the impact achieved or that it may achieve, with emphasis on appropriateness to the national strategy and the management modalities.

• Signature of the programme