COOPERATIVE IS BEAUTIFUL: The rise of cooperatives as a tool for formalising the informal sector in Senegal

The cooperative, in the spotlight of the Senegalese economy, is becoming an essential instrument for formalising players in the informal economy.

News | 11 January 2024
Victorine Anquediche Ndeye, Ministre de l’Economie Sociale et Solidaire, Dramane HAIDARA, Directeur BIT, Maura PAZZI, Représentante Agence Italienne pour la Coopération lors de la cérémonie de remise des FRA aux bénéficiaires de Promefi.
With, among other things, the adoption in 2010 of the Uniform Act of the Organization for the Harmonisation of Business Law in Africa (OHADA) on cooperative societies, and the support of the International Labour Office (ILO) through the Project for the Promotion of Formal and Innovative Entrepreneurship in Senegal and The Gambia (PROMEFI), this business model is enjoying renewed interest.

Numerous initiatives have been launched to organise agricultural stakeholders in the form of cooperatives. This form of organisation appears to be an appropriate way of formalising activities in the informal sector. This article explores the key stages of the project and its impact on the formalisation of economic activities, highlighting several successful initiatives.

ILO in action

Formalisation through cooperative entrepreneurship: ILO action in Senegal

The cooperative, as an autonomous economic entity, has gained in popularity in Senegal, particularly in the agricultural sector. The ILO, capitalising on its cooperative expertise, has implemented the PROMEFI project, financed by the Italian government. The main objective is to promote decent work, the development of sustainable enterprises and the formalisation of activities in Senegal and Gambia.

Strengthening apexstructures

Delivery of the presentation certificate by the master trainer to a trainer at the end of the workshop on the ILO's tools, Think.COOP, Start.COOP and My.COOP.
The first crucial stage of the project was to strengthen the apexstructures supporting cooperative societies. Through detailed mapping, seventeen (17) cooperative support organisations were identified, bringing together around one hundred cooperative societies in the project area. Twenty (20) trainers from these umbrella organisations, trained in ILO cooperative development tools such as Think.COOP, Start.COOP and My.COOP, were certified after being coached following the training, creating a network of experts ready to support the formalisation of cooperatives throughout Senegal.

Creation of agricultural and poultry cooperatives

The study of value chains carried out by the ILO identified ten (10) groups of agricultural and poultry operators with over 1,500 members (30.35% of whom were women). With the support of certified trainers, these groups have been transformed into cooperatives. The immersion in formalities led to the official registration of these cooperatives, offering significant advantages such as training in cooperative management and governance.

Innovation and market access

Chilli and bissap processing workshop.
Formalisation has also paved the way for innovation. Fifty (50) women farmers, mostly from cooperatives, have been trained in bissap and chilli processing techniques. This initiative has enabled the Maison de la Femme in Camberène to be equipped with a shared production unit, facilitating market access for groups that do not have suitable processing premises.

Upgrading to standards and access to national and foreign markets

Participation of ILO-supported cooperatives at IFADK2023.
As part of this marketing support, twenty-five (25) formal structures, including three (3) cooperatives, were selected to receive assistance in bringing their products up to standard. Thanks to this approach, they have obtained the necessary authorisations (FRA ), barcodes, logos, labels, packaging and equipment, thereby enhancing their quality, attractiveness and productivity.

“Obtaining the FRA and the barcode is a step that calls for the strengthening of organisations towards the establishment of robust value chains and synergy at the level of the groups, federations and cooperatives that have been set up”, declared Mrs Victorine A. Ndeye, Minister for the Social and Solidarity Economy, who presided over the ceremony to hand over this support to Promefi beneficiaries.

Three (3) cooperatives even successfully took part in the Dakar International Fair (FIDAK), demonstrating their access to the external market.

Transformation of solid waste reclaimers

A remarkable example is the transformation of the solid waste reclaimers at the Mbeubeuss landfill site in Dakar into an officially registered cooperative. This has enabled more than 714 waste pickers, 61.3 % of whom are women, to become legal entities. The cooperative obtained Social and Solidarity Economy (SSE) accreditation, guaranteeing significant advantages in terms of tax, market access and financing, thanks to in-depth training in cooperative organisation and governance. In addition to legal protection, this has enabled them to obtain personal protective equipment, benefit from mutual social protection and improve their income by setting up a formal economic marketing scheme and a plastic processing line, through the acquisition of shredders.

Through these different areas of intervention, the PROMEFI project, which focuses on the strategic use of cooperatives, demonstrates the full potential of cooperative entrepreneurship to support the formalisation of informal activities, facilitate access to finance and markets, and ultimately improve the socio-economic conditions of the target populations.

These successes illustrate that the cooperative is more than ever a relevant tool for sustainable and inclusive development, and that this approach can be a model for other countries seeking to formalise their informal economy.