WASHINGTON LAUNCHES US$2 MILLION PRIVATE-PUBLIC INITIATIVE IN SENEGAL

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Almost lost amongst the drumbeats for war, the US Government has recently announced a modest initiative aimed at closing the digital divide in Africa: the Digital Freedom Initiative. The aim is to "is to promote economic growth by transferring the benefits of information and communication technology (ICT) to entrepreneurs and small businesses in the developing world". Why did it start in Senegal? According to the scheme’s promoters, Senegal is "a democratic secular country in which the majority of the population is Muslim (94%), and, if successful, could be rolled out to 20 countries in the next five years". The Senegal pilot project will place more than 100 volunteers.

The key elements of the DFI include: (1) placing volunteers in small businesses to share business knowledge and technology expertise; (2) promoting pro-growth regulatory and legal structures to enhance business competitiveness; and (3) leveraging existing technology and communications infrastructure in new ways to help entrepreneurs and small businesses better compete in both the regional and global market place. Achieving the objectives of the DFI will require substantial support from the U.S. private sector. President Bush and Secretary Evans will lead the call for U.S. private sector guidance and resources to match the overall US$6.5 million committed to the programme. Companies already have begun joining the project and they include: Hewlett-Packard; Cisco Systems; IBM; Summit Ventures and Voxiva.

The initiative sees technology as "the rocket fuel of entrepreneurial performance". It believes Senegal is particularly well suited to be the pilot country for the DFI, as it was among the first Sub-Saharan countries to make significant investments in technology, and is currently benefiting from a relatively high rate of penetration and growth of technology-related services. A submarine cable system, for example, was inaugurated by President Wade in May 2002, connecting Senegal to the world network of high-speed fiber optic cable systems. Moreover, Senegal enjoys one of the strongest domestic backbones in the developing world, with a high-speed IP network linking all of Senegal’s major population centers (see ADSL announcement in Telecom News below.

DFI Senegal has identified three specific types of SMEs. First, there are the classic "End User SMEs" such as farmers, artisans, fishermen, manufacturers, transport drivers, small shopkeepers and the like. Many of these participate in the micro-finance industry, as borrowers, savers or both, and most face significant problems in using modern information technology and business practices to strengthen their bottom line. Second, thanks to Senegal’s policy of leveraging the private sector to bring telecommunication to its people, more than 10,000 telephone centers ­ neighborhood telephone shops paid on a unit basis ­ are in operation across the country. Further, almost 200 cyber-cafes have emerged, although cost and training remain a barrier. Both the telephone shop and cyber-cafe operators represent a second group of Information Access SMEs. With the right kind of assistance, these centers have the potential to emerge as sustainable, growth-oriented small businesses. Third, there is a burgeoning community of IT developers and service providers. All of these fit the SME profile ­ energetic, committed owners struggling to build a place for their products and services.

In keeping with the DFI partnership philosophy, the main implementing mechanism for the DFI Senegal Pilot will be the DFI Solution Team. A DFI Solution Team joins the stakeholders of a specific group of "End User SMEs", the telephone shop and/or cybercafe owners and the IT industry along with the U.S. volunteers (from Peace Corps, Geekcorps or elsewhere as appropriate) to identify and prioritize the business process problems and potential for IT-based solutions. Based on this priority list, the DFI Solution Team will then begin to develop the IT solution and set about re-engineering the business processes to accomplish the desired outcomes.

The DFI Senegal will focus on three broad areas of activities:

- Promoting productivity and business process innovation

This will focus on improvements in supply chain information, particularly in agricultural sectors. Productivity and Business Process Solutions Teams will be aided by specific U.S. and Senegalese volunteers from the DFI partners (eg- Department of Commerce, USAID, Peace Corps, Hewlett-Packard, Cisco, Technology and Consulting Practices Partners)

- Supporting entrepreneurship through an efficient financial infrastructure

The DFI Senegal could contribute in many ways to strengthen the access to capital that is essential to stimulate economic growth. For instance, focused ICT applications could result in clearer credit administration and a "Real Time" credit processing system, more efficient loan monitoring, stronger financial management and reduced loan losses. Designed properly, a system could be envisaged whereby a neighborhood shop owner could visit a neighborhood cyber-cafe, file an application for a new micro-credit loan, make a payment on an existing loan or otherwise conduct her business, thereby extending the reach of critical financial infrastructure and creating an additional line of business for the cyber-cafe, itself a small business.

- Building foundations of growth and ownership

DFI believes technology can play a critical role in bringing efficiency to the property-ownership architecture in developing countries like Senegal. For example, DFI Solution Teams could design a system capable of delivering land registration and sales through cyber-cafes. Other municipal or state land and building - related functions could be similarly computerized, bringing new business opportunities to cyber-cafes and easing critical elements of the collateral system.

- A modern policy and regulatory environment

Led by the Department of State and USAID, the DFI staff, and volunteers will support these existing efforts aimed at improving the regulatory framework . Specialized technical assistance will be sourced from several U.S. institutions, including the USG, universities, National Association of Regulatory Utility Commissioners and other entities to support the evolution of an enabling regulatory environment.

The DFI will ask private sector partners to be part of a Leadership Roundtable that will:

- Participate in working group meetings leading to the Senegal launch of the DFI (hosted by the U.S. interagency team) scheduled for June/July 2004 to define projects and deliverables under each of the major DFI objectives. The findings of the round table will be announcement at the Senegal launch event in June, 2003;

- Develop a white paper to align the resources of DFI partners, Senegalese collaborators and U.S. Government entities to effectively accomplish the specific projects articulated through the design conference;

- Provide resources (e.g., volunteers, software, hardware) to support success on the ground;

- Monitor progress throughout the pilot project and contribute to a report on the results of the Senegal project after one year; and

- Assist in planning the next phases of the DFI, including future partner countries.

Whilst any direct engagement by the American government of this kind must be applauded, the scale of resources committed can only be seen as rather modest. Perhaps looked at optimistically, this will allow the initiative to "find its legs" in a way that a larger launch initiative might struggle to do. However at least one other high-profile project in Senegal has experienced considerable problems and this should perhaps serve as warning. That said, an organisation like Geekcorps has the "on-the-ground" experience that may help it avoid the kinds of problems experienced by others.