News from 2020-10-23 / KfW Development Bank
Senegal: "Team Europe" sets Corona Emergency Aid on the Way
Update – Status 23 October 2020
As part of their support for Senegal in overcoming the Covid 19 crisis, the European Union (EU) and Germany disbursed a total of EUR 211.7 million in budget support under Financial Cooperation (KfW) at the end of October 2020 (EUR 111.7 million from the EU and EUR 100 million from KfW).
The German Ambassador to Senegal, Stephan Röken, commented: "Senegal is one of the few countries in the world to receive such support from Germany in the fight against COVID-19. The fact that Senegal was chosen is due to the country's outstanding role in the stability of the West African region. Senegal is a privileged partner for Germany. The main objective of our budget support is to promote the Senegalese government's efforts to preserve jobs in the private sector".
This support for Senegal is based on a common reform matrix for dialogue with the government, developed at the initiative of the EU and to which Senegal's main partners have subscribed. The extensive implementation of the requirements in this matrix was a prerequisite for the disbursement that has now been made.
News from 14 September 2020
Together with the State Secretary of BMZ, Martin Jäger, the Senegalese Minister of Economics Amadou Hott and the EU Ambassador Irene Mingasson, the German Ambassador in Dakar, Stephan Röken, launched the first Corona budget support of Financial Cooperation in Africa. In the case of "budget support", financial resources are transferred directly to the national budget of a partner country. This also makes "emergency aid" possible - particularly important in the event of a pandemic.
For the implementation of the programme to counter the economic and social effects of the corona pandemic, the German Government is providing Senegal with a grant of EUR 100 million via KfW Development Bank. In parallel, the EU is providing a further grant of EUR 124 million. Within the framework of the German EU Presidency, the EU and Germany are thus the largest donors to the Senegalese budget and also the only ones to provide pure grants. The EU summarizes its corona response under the name "Team Europe". This includes all contributions from the EU member states, the EU Commission as well as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). So far, Team Europe has been able to mobilize almost 36 billion euros for this purpose.
"I am very impressed by the speed with which Senegal has taken measures to counter the effects of the pandemic and how the country as a whole has dealt with the crisis," said State Secretary Jäger, who joined in via video conference. "With the corona emergency aid, we want to support Senegal together with the EU even in difficult times in order to preserve jobs and prevent company bankruptcies," added Jäger. The central funding priorities are the promotion of MSMEs and job security. However, the Senegalese government may also decide to use funds directly in the health sector, for example.
The FC corona emergency aid underpins the reform partnership between Germany and Senegal concluded in November 2019 within the framework of the "Compact with Africa". The reform partnership is intended to help remove obstacles to investment in order to mobilize private sector investment and create jobs. One prerequisite for the success of the reforms, however, is that the economic consequences of the corona pandemic in Senegal can be contained. The Senegalese government has asked for support and, in view of the good implementation status of the current reform program, BMZ has provided Senegal with the corona emergency aid, which is to be disbursed by early October 2020.