Since the arrival of the new authorities, communication within the ministry responsible for telecommunications seems focused on a single, certainly important, issue: the formalization of the press profession. However, this focus is to the detriment of strategic sectors with high potential for value creation, which are today left unresolved. Certain crucial issues, although essential to support the ambitions of the Senegal 2050 framework, require urgent attention. The lack of overall coherence, as well as often conflicting missions between the different actors, risks compromising the overall effectiveness of a key sector for the digital transformation and economic development of the country.
National Broadband Project: In December 2021, ADIE became SENUM.SA, with the ambition of making major investments made in digital infrastructure profitable. However, several previous political choices have diverted SENUM SA from its true missions in relation to law no. 2021-39 of December 13, 2021 authorizing the creation of the limited company called “Sénégal Numérique (SENUM SA)” and decree no. 2022- 247 of February 15, 2022 approving the statutes of the Société nationale Sénégal Numérique (SENUM SA). Its missions should rather concern the implementation of the State’s computerization policy as well as the management of the State’s digital infrastructures through the dematerialization of administrative procedures, the reform of civil status, the interconnection of public buildings etc.
Among these superfluous choices, the construction of 6,000 km of optical fiber, the equivalent of 14 times the round trip between Dakar and Saint-Louis (approximately 420 km per trip) as well as the construction of a latest generation data center built on 1 hectare in Diamniadio, mobilized nearly 52 billion FCFA. These investments could have been optimized through strategic collaboration with telecom operators, thus avoiding unnecessary costs and structural redundancies. The same goes for other projects such as the acquisition of a bandwidth of 100 Gb/s expandable to 16 Tb/s on the SHARE submarine cable over a distance of 720km, the distance between Dakar and Praia, for an estimated cost of 95 billion FCFA. These massive investments, although promising on paper, have unfortunately not produced the expected results in terms of improving the quality of life of citizens or strengthening Senegal’s competitiveness in the digital economy. Furthermore, there appears nowhere any prerogative of ADIE or SENUM in the operationalization and/or provision of the Internet in Senegal, while the missions assigned to it are very far from being carried out. ..
Another project, eponymous “Broadband Telecommunications Network”, this time concerns the National Electricity Company (Senelec). As part of its development strategy, Senelec has taken the option of diversifying its portfolio of activities by becoming a telecoms infrastructure operator.
However, this choice raises questions, particularly with regard to the structural challenges the company faces. Indeed, the electricity subsidy equation remains insoluble, while the country begins to exploit its hydrocarbon resources. Moreover, in his general policy declaration, the Prime Minister recognized the difficulty that the planned reforms in the energy sector will have to cause, here is an extract insisting in a premonitory manner “these reforms will be difficult, they will be difficult, these reforms will be difficult.
While Senelec occupies a strategic place within the framework of the “Gas to Power” project, pillar of the Senegal 2050 framework, it seems to be venturing into a risky diversification which could scatter its resources and harm its performance in its main sector.
The risks of poorly managed diversification for Senelec present themselves in two aspects: firstly an increased financial impact because diversification increases the asset base and the invested capital, forcing Senelec to generate more profits to ensure a return on capital invested (ROCE) adequately. Today, it is important to remember that Senelec is still obliged to rely on state subsidies (249.280 billion in 2023). Then a loss of specialization, by launching into telecommunications, Senelec risks losing expertise and efficiency in its core business, energy. Internal processes and procedures will have to be adapted to fundamentally different sectors: one stable and predictable (telecoms), the other very volatile (energy). In such diversification situations, companies often adopt intermediate solutions, which are not fully suitable for any of the sectors involved, thus compromising their overall effectiveness.
Return of the surcharge on incoming calls: an inappropriate decision?
The cream pie debate, relaunched during the Prime Minister’s general policy declaration on the return of the surcharge on incoming calls, highlights inadequacies in the strategic vision of the sector. This measure, the relevance of which had already sparked controversy under the regime of President Abdoulaye Wade, today seems even more questionable in the current context.
In fact, international call volumes have fallen drastically in recent years, in particular due to the emergence of alternative platforms such as OTT (Over-The-Top) WhatsApp, Viber, or even Messenger which allow free communication via the Internet. In this context, the surcharge appears not only obsolete, but also counterproductive. By reintroducing this surcharge, the State risks destroying more value than it generates.
At the time this measure was in force, players in the sector had already proposed alternatives to compensate for the State’s parafiscal expectations. One of the solutions put forward was the increase in the corporate tax (IS) rate, considered more sustainable and structuring than the surtax. This suggestion was adopted in 2013 as part of the finance law, with an increase in the corporate tax rate from 25% to 30%. This reform marked the repeal of the decree establishing the surcharge, thus providing a more coherent and lasting solution for the telecommunications economy.
Finally, the telecommunications and digital economy sector represents an essential lever for the socio-economic transformation of Senegal, but it is today fragmented by incoherent political choices and misaligned strategies. Whether it is poorly optimized digital infrastructure projects or unsuitable tax reforms, these inconsistencies hinder the emergence of an innovative and competitive ecosystem.
Restoring coherence to the sector means first of all refocusing each actor on their missions (ARTP, FDSUT, SENUM, SENELEC and the Directorate in charge of telecommunications) to avoid costly duplication and loss of efficiency. It also means establishing a clear strategic vision where public and private initiatives complement each other instead of competing with each other. Finally, it is to ensure that each investment generates a real impact on the lives of citizens and strengthens Senegal’s competitiveness on the international scene.
To achieve these objectives, unified governance, capable of coordinating the missions of the different actors, is essential. Such an approach would make it possible to maximize the added value of existing infrastructure, stimulate innovation and place Senegal at the heart of the African digital economy, in perfect alignment with the ambitions of the Senegal 2050 framework.
Abdou Lahad Diakhate
Telecommunications engineer and strategy consultant
