Unlocking the digital economy in Senegal

Unlocking the digital economy in Senegal

8 October, 2021    

The Mastercard Foundation has set an objective to enable 30 million young Africans, especially women, to secure employment that they see as dignified and fulfilling by 2030. In Senegal, MCF aims to create dignified and fulfilling work for 3 million young people over the coming decade.

This study aimed to understand the role that digitalisation can play in supporting this objective and to identify specific opportunities for development partners, public and private sector to support the creation of dignified and fulfilling work for young Senegalese women and men. In Senegal, the digitalisation of the economy represents a significant opportunity to catalyse gains in productivity and level the playing field in terms of access to opportunities. This definition includes a consideration of the ways in which digital technology can enhance the efficiency and productivity of traditional economic activities.  

To fully understand the employment dynamics associated with the digital economy, this study had a broad focus. To understand how digital innovation manifests and the opportunities that it creates in Senegal, the study focused on four key sectorsEducation, Agriculture (Groundnuts), Textiles and Apparel, Tourism) to unpack opportunities created by digital innovation and to identify trends, opportunities and risks that apply across the economy more broadlyIn addition, the in-depth analysis of Senegalese youths’ realities and expectations unpacks youths’ perspectives on the digital economy; employment expectations, needs and gaps; perceived and experienced risks, and tested their appetite for digitally enabled job creation and employment.  

Four key cross-cutting opportunities arising from digitalisation were identified:  

  • Adaptation of local business practices. Senegalese youths tend to equate digitalisation with social media, both as a channel for societal engagement and to market and sell products. To a lesser extent, they also engage with the emerging e-commerce platforms. This, however, misses the bulk of opportunities that can be derived from digital innovation. Improved understanding of the breadth of applicable digital innovation for individual businesses and the adoption of appropriate digital tools in different value chains therefore constitutes a major opportunity to improve efficiency and productivity across sectors. Those Senegal businesses engaging with global customers – such as in the tourism sector – have the most urgent need to adapt their operations and ensure that they can entice, engage and sell effectively to global consumers through online channels and platforms. This is not only an opportunity to reach new customer markets; it is also an imperative to stay in business. Regardless of whether Senegalese businesses do effectively adapt, the trend towards consumers’ engaging with enterprises online will continue, meaning that a failure to adapt will result in an inability to compete for customers globally, leaving local businesses behind.
  • Efficient logistics and coordination to support digitalised value chains. Digital innovation means that products can be marketed, sold and paid for remotely. However, physical products cannot be transmitted. Providers of physical goods still require an effective solution to get goods into the hands of customers. Transport and logistics have always been key to the functioning of all goods value chains; the digitalisation of commerce only makes this more important. The ability to coordinate, communicate and track goods and vehicles in real time means that digital innovation is creating major opportunities for enhanced efficiencies in the logistics sector. For agriculture sectors, improved logistics not only means that produce can reach the end buyers more quickly and efficiently; it also reduces the need for costly and scarce storage and minimises spoilage. The implication is that improved efficiency, reliability and speed in the logistics sector resulting from digitally enabled coordination have the ability to reduce loss substantially and therefore to enhance productivity across a vast number of economic sectors.  
  • Application of digital technology to improve production practices. Digital technologies can enhance the yield of agricultural products and the efficiency in manufacturing goods. Precision Agriculture can enable farmers to monitor crops precisely, reducing the misapplication of inputs and increasing crop efficiency through increased yields with less wastage. Similarly, in the manufacture of apparel, digital design tools, for example, help apparel designers to create efficiencies such as minimising fabric waste and more easily and consistently re-creating designs. 
  • Carefully targeted education and skills training to build those skills most needed to support the digitalisation of priority sectors. Senegal currently faces a significant skills mismatch. While there is a high level of graduate unemployment and underemployment, key growth sectors struggle to find candidates who have the skills that they require. There is therefore a significant opportunity to build on existing programmes to develop the key skills required in priority sectors through targeted training courses aimed at young Senegalese men and women. Digital skills would be an important skill to incorporate in these training courses to equip youth job-seekers with the requisite skills to help local businesses and sectors adapt to the digitalised economy. But they should not be the only skills targeted: STEM skills and soft skills such as customer service skills and language skills are equally important. The greater adoption of digital learning tools through blended online/offline learning programmes offers significant opportunities for local learners to access global content and teachers while still benefiting from offline engagements through mentoring and tutoring relationships. 

Unlocking the full impact of digitalisation, therefore, requires the combination of both public and private innovation support imperatives. Under a scenario where public- and private-sector interventions mutually reinforce one another to reach the optimal employment impact, we estimate that up to 1.58m new dignified employment opportunities could be generated via the digital economy, of which the majority would be youth jobs (just more than 1m) and close to half (at an estimated 723,000 jobs) would be female. It is clear that persistent advocacy and market engagement will be needed to reap medium-term gains up to 2030. 

View the report Size 2.84 MB
View the executive summary Size 1.8 MB
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