Coming from elsewhere a few weeks ago, the Coronavirus hit us hard. The whole world is concerned and must face this real pandemic. Senegal is not spared and sees the number of cases increase every day. The fight against the virus is organized throughout the country: measures to be respected by all, hygiene measures, ban on gatherings, social distance, confinement, closure of schools, universities and places of worship etc. The air and land borders were closed on 19 March and a state of emergency was declared on 23 March 2020.
We welcome all the measures taken to protect people. Nevertheless, they have a direct impact on all our companies: TPEs, SMEs, SMIs, large groups… The impact on the private sector and on employment is enormous and to be prevented.
In this context, as actors in the Senegalese economy, we wish to make our effective contribution to the fight against the virus and its direct consequences on the national economy. To this end, we propose concrete measures that can be taken by the Government of Senegal.
Indeed, only rapid, bold and effective concerted action will reduce the short-term risks associated with this pandemic for workers and the medium- and long-term costs to businesses and the country’s economy.
The measures taken on 21 March by the Central Bank of West African States to support the economies of the UEMOA area and to enable us to continue to supply the economic system with substantial financial flows and to support businesses in this critical phase of the crisis are an important first step for the survival of our economies. Among these 8 key measures are:
- increasing the financial resources available to banks to THE tune of FCFA.340 billion as well as refinancing mechanisms;
- Raising awareness among banks for greater use of the resources of the Special Credit Refinance Window for Small and Medium-sized Enterprises (SMEs/PMIs);
- organising credit deadlines for companies, including SMEs and …….
These measures could avoid a lack of liquidity in the interbank system.However:
- We appeal to the spirit of solidarity of commercial banks so that they can also make these resources available to the economic system and in particular to the SMEs and SMIs of Senegal;
- We urge to relax the conditions for granting credit and overdraft lines for a period of 3 to 6 months for all companies in order to be able to manage the crisis and to consider more serenely the period of recovery of economic activity;
- We urge BCEAO to review its key interest rates in order to better boost the provision of funds for the economic system.
In addition, we urgethe Government to take the following steps at the national level:
- In terms of the economic situation
- Strengthen the sense of belonging and national solidarity of the citizens and send them different messages to mobilize them around the main values that unite us;
- Define this crisis as a case of force majeure that will allow companies to put in place appropriate internal management measures. Indeed, this unprecedented crisis has the defining characteristics of a case of force majeure, namely: the external nature of “the event which must escape the control of the party that can no longer carry out its obligations”, the irresistible nature of the event “which cannot be avoided” despite the efforts made to achieve the execution of the obligations of the contract, the unpredictable nature of the event;
- Quickly clarify the mechanisms and operational procedures for supporting families and businesses in order to anticipate the flow of requests and better organize the response;
- In terms of short-, medium- and long-term forecasts
- Establish different crisis scenarios by identifying all the possibilities and their consequences in order to better anticipate the actions to be carried out in a coordinated way by the different structures of the State. It could be envisaged at least three scenarios depending on the duration of the crisis: short (1 month and a half), long (3 months), very long (more than 3 months);
- Anticipate economic recovery and exit patterns in order to be properly prepared for all eventualities as a sovereign state;
- Consider rapidly developing an amending Finance Act based on the various forecasts;
- On the tax front
- Postpone tax and social deadlines to relieve businesses and avoid the risk of bankruptcy: the tax and social maturities of the next 3 months (Corporate taxes on 30 April and 15 June 2020, withholding tax on wages) could be deferred to a later date to be determined, taking into account the period of recovery of activity allowing companies to meet their social obligations and preserve jobs by Depending on the state’s budgetary possibilities;
- Suspend all tax and social proceedings against companies, including third-party notices and ongoing tax adjustments, in connection with item 7 above;
- In terms of financial support for businesses
- Clearing the government’s domestic debt to businesses in order to facilitate the flow of financial flows and the replenishment of corporate cash;
- Provide a state guarantee to commercial banks for the easing of credit conditions by mobilising, among other things, the refinancing lines of BCEAO;
- Provide from the Force Covid Solidarity Fund19, as part of the fight against the economic consequences of the Covid-19 pandemic, the allocation of support funds for existing companies through the financing of their working capital needs in a range ranging from de 1 million CFA francs to 15 million CFA francs per company;
- Mobilize the expertise required for appropriate support for companies, especially for requests to defer tax and social charges as well as financial support and forecasting operations and cash in order to get through this period of crisis more serenely; ;
- In terms of Continuity of Services
- Ensure in collaboration with the companies concerned the absolute continuity of basic services: water, electricity, banks, shops for the supply of populations and especially telephone and internet to ensure a quality service and sufficient bandwidth to allow telework;
- Secure all the country’s procurement processes and set up enough security stocks to hold on for the next 6 months;
- Promote local consumption and strengthen short-cycle production capacity with better supervision of local producers, especially those that can directly contribute to the production of “made in Senegal” products that will help combat COVID-19. These products could include health and safety supplies and equipment such as personal protective des equipment, des disinfectants, diagnostic and testing products, and disease monitoring.
These fifteen concrete measures could make a significant contribution to cushioning the shock of the economic crisis linked to COVID-19.
Of course, we remain fully mobilized and available to contribute to the implementation of concrete actions in this war against the Covid-19 pandemic.
We stand with the Government of Senegal to face and move together towards an inevitable economic recovery that will need to be achieved to reinvigorate entrepreneurial activity and dispel the devastating effects of this unprecedented crisis.
Together, we will defeat Covid-19.
Ndèye Marième FALL,
(President Oft Entrepreneurship Network Dakar and CEO Firm G and G – Accounting Expert))
Salif KANDE, IML Consulting
Ibrahima DIAGNE, Gainde 2000
Ndongo CAMARA, NKAC Audit and Consulting
Papa Landing MANE, LQT Consulting
Mamadou FOFANA, DINAFOF Biz