To support rural stakeholders and address food security challenges, the President of the Republic, His Excellency Bassirou Diomaye Diakhar Faye, has placed the development of agricultural and agri-food value chains at the heart of the National Economic Development Strategy. Upon assuming the highest office, he committed to promoting modern and competitive agriculture through mechanization, the development of agribusiness to reduce post-harvest losses, and the modernization of irrigation infrastructure to sustainably increase agricultural productivity.

Through this vision, the State of Senegal reaffirms its commitment to achieving food sovereignty through intensified agriculture, better water management and the promotion of good agricultural practices.

However, financing remains one of the main obstacles to the development of agricultural and agri-food value chains. Although the agricultural sector occupies a strategic place in the national economy, it receives only 3 to 5% of total outstanding credit. This low mobilization of financial resources, combined with the limitations of financing policies implemented to date, continues to affect the sector's performance and, consequently, the country's economic growth.

In addition to this financial constraint, there are several structural factors: low agricultural productivity linked to climatic hazards, irregular rainfall, insufficient structuring of certain value chains, the absence of integrated financing models, the lack of guarantees, and the weakness of agricultural risk management mechanisms.

Certainly, instruments such as FONSIS and FONGIP have been put in place to facilitate access to financing, but the deficit of bank credit in the sector remains a concern.

Furthermore, the low profitability of some agricultural operations, market instability and recurring losses have severely degraded the quality of the portfolios of financial institutions operating in rural areas.

Today, many family producers are accumulating unpaid debts, leading to breakdowns in relationships with financial institutions and sometimes legal debt recovery proceedings.

Faced with this situation, the State must, in consultation with all stakeholders, urgently strengthen the financing mechanisms of public and semi-public banks while encouraging other financial institutions to invest more in the agricultural sector. At the same time, it is essential to promptly settle outstanding debts owed to private storage operators after the input distribution campaigns. Such a measure will not only allow for effective preparation of future agricultural seasons but will also free up resources for other sectors such as trade and transportation.

In this context, a thorough reform of agricultural financing policy now appears essential. This reform must be closely aligned with national agricultural and agri-food production objectives, while fully integrating the contribution of the private sector.

Moreover, the strategic orientations of the National Development Strategy confirm the authorities' desire to make agriculture and agro-industry essential drivers of the country's economic transformation.

The objective is clear: to achieve food self-sufficiency and to sustainably reduce dependence on imports, particularly rice and horticultural products.

However, several strategic industries, such as SONACOS, SODEFITEX, and certain agribusinesses in the rice and peanut sectors, are struggling to meet their collection targets and modernize their equipment. These difficulties limit the sector's competitiveness and reduce producers' repayment capacity, further hindering financial institutions' commitment.

To achieve food sovereignty and contribute to job creation for young people, the State must strengthen the capacities of specialized financial institutions such as the Agricultural Bank (LBA), the National Bank for Economic Development (BNDE), the DER/FJ, and other existing financing mechanisms. In parallel, the involvement of the national private sector must be facilitated through the development of effective and sustainable public-private partnerships (PPPs).

These partnerships could foster the development of innovative financing mechanisms based on strengthened guarantee funds, concessional credit lines, and long-term financing for the acquisition of agricultural infrastructure and equipment. More broadly, establishing a financial ecosystem based on a value chain approach would allow for better risk distribution and strengthen investor confidence.

Within this context, mechanisms such as third-party warehousing, warehouse receipts, and factoring deserve further development. While some initiatives have demonstrated their effectiveness, their long-term viability remains hampered by several constraints, including weak producer organization, insufficient storage infrastructure, and the seasonal availability of certain products.

This support should also lead to the creation of specific investment loan programs designed to support more efficient agriculture in economic, agronomic, environmental, and commercial terms. Similarly, to reduce the risks associated with natural disasters and other agricultural losses, the National Agricultural Insurance Company of Senegal (CNAAS) must receive enhanced support to develop insurance products tailored to the realities on the ground.

In reality, analysis of the current system shows that short-term crop loans have reached their limits. When a producer experiences a poor harvest, their ability to continue collaborating with financial institutions becomes extremely limited. Existing support mechanisms often remain inadequate, inefficient, and rarely sustainable.

Several questions therefore arise. What is the current level of debt among agricultural producers? What volume of defaults is recorded in the portfolios of financial institutions? What strategy should be implemented to restore trust between agribusinesses and financial institutions? What innovative mechanisms will reach all actors in the value chains? How can the stable resources of financial institutions be strengthened? How can the profitability of farms be improved to guarantee a return on investment? Finally, what strategies should be adopted to facilitate access to climate finance and green funds?

These are all questions that require concrete answers if Senegal truly wants to democratize access to agricultural financing, develop its value chains and ultimately achieve food sovereignty.

Mr. Djibril BA

Agronomist-Financial Analyst

Expert in the development of agricultural businesses and value chains.

Coordinator of the Communication Department of the Diomaye Coalition President – Thiès