By Thierno Seydou Nourou SY
President and Founder of Nourou Financial Consulting (NFC) – Dakar, Senegal
www.nouroufinancial.com
For decades, the Senegalese peanut sector has been evolving in an almost immutable cycle: produce, collect, store, arbitrate in urgency, and repeat. This system, inherited from a time when the state structured the entire value chain, is now running out of steam.
The question is no longer who should buy the peanuts, but how to transform them sustainably into economic, social, industrial, and environmental value.
A historically integrated sector, now fragmented
The creation of ONCAD, then SONACOS, was based on a systemic vision: support for producers, organized collection, local processing, and structured marketing. Peanuts were more than just a cash crop: they were a pillar of the rural economy, mobilizing millions of actors and generating powerful ripple effects on transportation, livestock, craftsmanship, and trade.
Partial liberalization, structural adjustment programs, and the gradual withdrawal of certain public instruments have disrupted this coherence. The state gradually found itself as the last resort buyer, while industrial capacities deteriorated and most of the added value left the territory.
A culture with strong social roots, but low local processing
Today, peanuts still support hundreds of thousands of households, mobilize a significant seasonal workforce, and play a central role in social stability and rural population retention. It remains a major social safety net.
But economically, the paradox is striking: Senegal produces between 800,000 and 1 million tons of peanuts per year, with an estimated crushing capacity of about 300,000 tons. This structural gap fuels unsold stocks, encourages the export of raw materials, and requires a massive annual mobilization of public resources.
A structural urgency, not a conjunctural one
Measures to secure producers’ incomes and organize collection are necessary and legitimate. But buying between 400,000 and 450,000 tons each year at around 305 FCFA/kg, totaling 140 to 190 billion FCFA, without sufficient processing capacity, means financing storage rather than development, with high risks of depreciation and losses.
By comparison, an industrial investment program of 150 to 180 billion FCFA, spread over five years, would create 8 to 10 modern processing units capable of sustainably absorbing most of the national production.
Rebuilding the value chain: key structural levers
Breaking out of the vicious circle requires a complete reconstruction of the sector around complementary and coherent pillars:
- Production reorganization, with improved yields and a focus on quality to make the seed economically accessible for industrial processing.
- Contracted production, aligned with the needs of processing units and integrating agroecological practices to preserve soil and water.
- Professionalized collection and storage, with logistical optimization to reduce costs, losses, and carbon footprint.
- Decentralized industrial processing, located close to production areas, relying on modern, efficient, and energy-efficient equipment.
- Full valorization of the seed, in a circular economy logic: edible oils, meal for livestock, shells for energy or organic amendments, but also development of high value-added derivative products.
- Secure markets, through a protective but realistic trade policy, limiting imports of low-cost oils often associated with deforestation, while remaining compatible with regional commitments.
- Financing oriented towards productive investment, through public-private partnerships, dedicated financial instruments, and increased mobilization of institutional investors.
Clarifying the responsibility of processing
The central principle of the proposed strategy is clear: processing must be led by the private sector, not by the state.
The role of the public authority is that of a strategist and a catalyst: it creates favorable economic, regulatory, and financial conditions, and conditions its interventions (public purchases, access to financing, tax and land benefits) on measurable commitments to industrial processing.
This approach allows to break away from a logic of permanent assistance and enter a dynamic of productive investment, job creation, and local added value, while offering targeted and temporary trade protection.
OPS, industrialists, and on-the-ground realities
It would be illusory to consider that all Private Storage Operators (OPS) have historically had the vocation to become industrialists. Many have built their economic model on trade, collection, and intermediary margins, with little incentive to invest in processing.
The proposed strategy is therefore based on a selection and transformation of the OPS model:
- those willing to invest in industrial tools, traceability, and value creation become central players in the new chain;
- those who remain in a purely commercial logic remain intermediaries, without privileged access to public support mechanisms.
In parallel, Senegal already has a often underestimated network of artisanal and semi-industrial units, especially in the peanut basin and around Touba, producing so-called “Seggal” crude oil and meal. These employment-intensive units, close to producers, constitute a real base for pre-industrialization. Upgrading their technology, providing access to financing, and integrating them into structured value chains should be a central axis of the industrial strategy.
A realistic and progressive transition
In the short term, calming measures are possible:
- regulated exports of a portion of the surplus to relieve stocks,
- conditioning public purchases to monthly processing commitments, verifiable and transparent,
- regular publication of stored, processed, and marketed volumes.
In the medium term, the goal could be to process up to 900,000 tons of peanuts, produce around 360,000 tons of oil and 540,000 tons of meal, significantly reduce imports, and strengthen food sovereignty.
An economic constraint to be lucidly integrated
It is important to recognize that peanut oil has faced a structural competitiveness constraint since the late 1990s, both in international markets and in the domestic market, due to the competition from low-cost vegetable oils.
This reality requires industrialization to be seen not as a replication of the past model, but as diversification of outlets, upgrading, full valorization of the seed, and a clear positioning on the regional market and food sovereignty.
Conclusion: from crisis management to industrial strategy
Peanuts should no longer be a budgetary adjustment variable. They can once again become a driver of rural industrialization, job creation, food sovereignty, and ecological transition.
Senegal has the raw material, the actors, the skills, and the financial resources. What is now lacking is a coherent, stable, and shared industrial strategy, where the state fully plays its role as a strategist and the private sector assumes its role as an industrialist.
