ECOWAS Commissioner Sédiko DOUKA, responsible for Infrastructure, Energy, and Digitalization led a high-level mission in Dakar from May 11 to 12, 2023, to advocate with the Government of Senegal regarding the establishment of the Fund for the Development and Financing of the Transport and Energy Sectors in West Africa (FODETE). This mission, organized by the Project Preparation and Development Unit (PPDU) in collaboration with the ECOWAS National Office in Senegal, provided an opportunity to meet with several officials, notably Minister Mamadou Moustapha BA, Senegal’s Minister of Finance and Budget.
The main objective of this advocacy mission was to raise awareness among key ministers of the Government of Senegal regarding the FODETE initiative, to demonstrate the benefits offered by FODETE as a sustainable and long-term infrastructure financing mechanism, and to discuss the timeline for the relaunch and implementation of FODETE, which had been delayed in the meantime due to the COVID-19 pandemic. This mission, which followed the one conducted in Abidjan, Côte d’Ivoire, also provided an opportunity to inform Senegalese authorities about upcoming data collection missions to update the study on FODETE, as well as to inform them that the results of this study will be presented to ECOWAS’s statutory bodies in December 2023.
On Thursday, May 11, the ECOWAS mission was received in an audience by Mr. Issa DIONE, Chief of Staff to the Minister of Petroleum and Energy of Senegal, in the Ministry’s conference room. Following the various presentations, Mr. DIONE acknowledged the importance of FODETE, an initiative already supported and championed by H.E. Macky SALL, President of the Republic of Senegal, during major meetings held in Dakar on infrastructure financing in Africa. After committing to report back to his Minister, the Chief of Staff noted that FODETE is a commendable mechanism that will enable ECOWAS member states to take charge of their own transportation and energy infrastructure.
The meeting with H.E. Mr. Mamadou Moustapha BA, Minister of Finance and the Budget, took place on Friday, May 12, in the office of Senegal’s Minister of Finance. In his presentation, Commissioner Sédiko DOUKA outlined the operational mechanism of FODETE, which is based on the principle of levying contributions on revenues generated from exports of various petroleum, gas, mining, and agricultural products, as well as other economic activities of member states. The ECOWAS Commissioner also emphasized that all ECOWAS member states have given their agreement in principle to the establishment of FODETE, but the initiative launched in June 2009 by the Heads of State and Government has been slow to materialize formally due to the lack of an official act authorizing the commencement of levies.
Before concluding his remarks with an appeal to Senegal’s Minister of Budget and Finance for support in establishing FODETE, Commissioner DOUKA noted that studies and simulations have shown that it is possible to generate up to 350 million U.S. dollars annually from export revenues generated by ECOWAS member states through the sale of various products.
After acknowledging that FODETE is fully aligned with the objectives and six priorities of his government’s Emerging Senegal Plan (PSE), Minister Mamadou Moustapha BA invited ECOWAS to take into account several factors when updating the ongoing studies, notably the tax burdens imposed by each member state, the foreign exchange reserves available to the states, and how they utilize these reserves, particularly in the context of international trade (exports and imports).
Finally, he stressed that the ongoing studies should take into account, above all, the legal framework and economic profile of the member states, as well as the current global economic crisis caused by the COVID-19 pandemic and the Russia-Ukraine war.
As a reminder, the Fund for the Development and Financing of the Transport and Energy Sectors (FODETE) was approved at the 36th Summit of ECOWAS Heads of State and Government in June 2009. The ECOWAS Commission and the ECOWAS Bank for Investment and Development (EBID) are responsible for its implementation.
Following the presentation of the participatory feasibility study at the 30th session of the ECOWAS Administrative and Financial Committee (CAF/AFC), held from November 14 to 20, 2016, in Abuja, Nigeria, the CAF requested a broader consultation, which was organized in November 2019 in Lomé, followed by national consultations involving the relevant ministries, departments, and agencies in each member state. In March 2022, a regional consultative meeting was held in Dakar to present the results of the national consultations and reach a consensus on the levy rates and governance structure of FODETE.
The main recommendations from this regional consultation concern updating the macroeconomic and financial component of the FODETE study and the ECOWAS conducting an advocacy mission to the four member states (Côte d’Ivoire, Ghana, Nigeria, and Senegal) that will contribute the most to FODETE.
