200422 - USAID ISP Senegal WCIS - Final Restitution -Summary.pdf

USAID/INVESTMENT SUPPORT PROGRAM

Senegal - Weather and Climate Information

Services (WCIS) Business Case

Final Restitution

April 22th, 2020

Contents

Introduction

Deep-dive on Private-Public Partnership opportunities

Roadmap for overall WCIS value chain development

The objective of this study is to build a sustainable business case for WCIS in Senegal

Scope of the study

• An assessment of the market opportunity for WCIS: mapping, sizing and characterizing potential users with the end goal to draw a clear picture of the opportunity to scale

• A commercially viable business case for WCIS: understanding the target clients, their pain points, motivations and level of willingness to pay (WTP)

• Partnership opportunities: identifying potential private partners who will be interested in operationalizing the business case, as well as other types of partners who are required for a fully- and well-functioning WCIS value chain

Objective of the study

• Identify innovative strategies to sustain WCIS provision and transition to service delivery on a user-pay basis, building on the outcomes of the USAID/CINSERE project

• Identify WCIS production cost recovery opportunities for the national meteorological agency

(ANACIM)

• Build a sustainable business case for WCIS in Senegal, through the identification of partnership opportunities with the private sector along a structured value chain

It considers different private and public partnership opportunities along the WCIS value chain, in the most promising sectors

Initial screening of sectors

User segmentation

A

Prioritization

Overview of key sectors with potential for WCIS use

Identification of user macro-segments related to the sector

Prioritization of sectors and user segments based on their market potential

Production Translation Dissemination Use

Generate data and knowledge by analyzing historical data, monitoring the present, and forecasting the future

Transfer the information to the appropriate users through relevant channels

(television, radio, mobile phone, etc.)

Put the information to use in operational decision processes, policies, and plans

Transform or package data into information that is relevant to target sectors

The study explored different business models along the WCIS value chain…

… For select priority sectors and user segments B

There are three main categories of WCIS business models that can be considered

Model Description Current status

Public

• The national meteorological agency, alone or in partnership with other public institutions, produces, translates, and disseminates WCIS

Moderate opportunity – There are a few paid WCIS provided by the public sector, but there is no mass dissemination business model yet as users expect public service to be free

PPP

• The meteorological agency manages data production and private sector actors source data from the meteorological agency and international sources

• The meteorological agency partners with public and private sector actors to translate, package, and disseminate WCIS to users

Growing opportunity – There are companies providing services or developing products with high WCIS integration potential and willing to partner with ANACIM

Private

• Private sector actors produce data using their own observation and monitoring infrastructure and source additional data from the meteorological agency and international sources

• Private sector actors translate, package, and disseminate WCIS to users

Limited opportunity – There are very few initiatives leveraging free international data.

Private sector actors are not yet allowed to produce data or use international sources to develop paid services without ANACIM’s approval

Production Translation Dissemination

Production Translation Dissemination

Production Translation Dissemination

Public Private Both Actors involved

A

The study focuses on PPP as the most promising business model and provides recommendations for broader WCIS development

Public

D ir e c t sa le

Fixed-price: ANACIM provides WCIS directly to users (mainly institutions) at a fixed-price

Special agreements: ANACIM signs an agreement with institutions to provide tailored and on demand WCIS, charged on a case-by-case basis

Provides recommendations to sustain the main public business models developed by

ANACIM (e.g. Multidisciplinary Working

Groups – MWGs; Pastoral committee;

Fishing pirogue tracking systems)

PPP

R e v e n u e s h a ri n g

Bundling: A third party bundles its service offer with WCIS from ANACIM to add value for its customers; this could include a communication company who manages the dissemination

Distributor-enabled: ANACIM partners with a communication company to provide WCIS to individual user segments

(Main focus of the study)

Prioritizes the most promising business models; Details the delivery models, financial models; key implementation steps, support required, and potential impact of the PPP business models

Private

No revenue model was considered for this delivery approach given that private sector actors are not yet allowed to produce data or use international sources to develop paid services without ANACIM’s approval

Provides broader recommendations on the development of the WCIS value chain in

Senegal, from a policy standpoint

N o n e

A

Model Revenue models considered Coverage in this study

Prioritize crops, adapt farming practices to reduce crop losses, and control expenses

Agriculture

Livestock

Fishing industry

Forestry

Water and sanitation

Energy

Sector

Improve animal health, and inform on fodder and water availability for pastoralists

Improve fishery management, and provide early warnings on bad weather for the safety of fisherfolks

Reduce the effect of extreme weather

(bushfire, etc.) and climate change on forests as well as the risk on species

Plan water resource management and mitigate the effect of extreme weather

(flood, etc.)

Evaluate renewable energy potential, plan energy projects, predict power demand, and reduce power failure

Application

Inform project design and planning options, and reduce construction problems due to extreme weather events Construction

Urban planning

Transport

Disaster management

Health

Sector

Improve urban infrastructure design and project planning for sustainability and climate smart-city development

Increase safety, improve rescue operation efficiency, and optimize scheduling and costs

Prevent the loss of life and property in case of climate related disasters and increase rescue operation efficiency

Plan tourism activities, increase the safety and comfort of the population, and improve tourism zones promotion and protection

Predict and monitor weather and climate-sensitive diseases

Application

Tourism and leisure

Finance and insurance Mitigate risk, define payout thresholds, and develop climate-smart investments

Extractive industries

Plan exploration and extraction projects, and manage operations to reduce environmental damages

Agriculture, livestock, fishing, and finance and insurance have the highest market potential for WCIS in Senegal

High Medium Low Market potential

B

Macro-segment Use of WCIS

Government (ministries, agencies, local authorities)

Development of adaptation and mitigation plans, design of infrastructure, civil protection

Universities and research institutions

Training, modeling tools development, studies on climate change and environmental degradation

NGO and development partners

Design and implementation of projects and programs to increase resilience to the effect of climate change

Companies Climate related risk management to improve business performance

General public (individuals, communities)

Development of adaptation and mitigation actions to increase safety and resilience

Producer groups (farmers, pastoralists, fisherfolks) Climate-related risk management to increase productivity

WCIS users across sectors can be categorized in six main groups of which producer groups are the most promising

Producer groups are the only mass market segment for which WCIS are a key input for decision making in day-to-day economic activities, to the extent that they are willing to pay for a timely and regular access.

Farmers, pastoralists and fisherfolks’s preferences are analyzed in-depth to provide recommandations across business models

Farmers Agriculture

Livestock

Fisheries

Finance and insurance

Sector

Pastoralists

Farmers, pastoralists, and fisherfolks

User segments

• There are ~900,000* households in Senegal who earn their living from agriculture

• Agriculture in Senegal is highly dependent on rainfed crops, making WCIS a key parameter in farmers’ decision making

Market potential

Fisherfolks

• There are ~50,000* households in Senegal who earn their living from pastoralism

• Pastoralists face risks with their livestock (fodder and water availability, bushfires, diseases…) which WCIS can help mitigate

• There are ~27,000 registered artisanal fishing pirogues in Senegal with an average of four fisherfolks per pirogue (~108,000 fisherfolks)

• Artisanal fisherfolks are highly vulnerable to weather events, making WCIS a critical input for safety management

• There is a large number of farmers (~393,880 in 2019) who benefit from insurance products through their cooperatives

• There is growing interest in insurance products from pastoralists and fisherfolks

• Financial institutions are partnering with insurance providers to lower the risk of credits to farmers, pastoralists, and fisherfolks

Sources: Agence Nationale de la Statistique et de la Démographie (ANSD); National Coordination of the Local artisanal fishing councils (CLPAs); National

Agricultural Insurance Company of Senegal (CNAAS)

Introduction

Contents

The assessment of PPP opportunities consisted of analyzing both the demand and supply sides of the WCIS value chain R e se a rc h t o o ls

One-on-one interviews with key stakeholders on WCIS provision opportunities

• Government

• Sector organizations

• Non-Governmental Organizations (NGOs)

• Companies providing services with WCIS integration potential

• Mobile Network Operators (MNO) and tech companies

HCD field research focused on user profiles, preferences, and WTP

• Individual users

(farmers, pastoralists, and fisherfolks)

• User organizations

• Field agents

Production Translation Dissemination Use

Generate data and knowledge by analyzing historical data, monitoring the present, and forecasting the future

Transfer the information to the appropriate users through relevant channels

(television, radio, mobile phone, etc.)

Put the information to use in operational decision processes, policies, and plans

Transform or package data into information that is relevant to target sectors

Supply analysis Demand analysis

This assessment approach followed four key steps

Analysis of target user segments Prioritization of business models

Detail of promising business models

Identification and prioritization of potential business models along the

WCIS supply chain

• Identification of potential business models

• Prioritization based on market reach and feasibility criteria

Analysis of user profiles and preferences based on the HCD field research

• Users’ key characteristics and preferences:

- Farmers

- Pastoralists

- Fisherfolks

• Design principles

Financial analysis

Financial analysis of each delivery model

• Assumptions on financials

• Cost estimation

• Revenue estimation

• Analysis of financial viability

Deep dive into the most promising business models looking at the different delivery models

• Recommended delivery model

• Recommended

Customer journey

• Recommended service features and pricing

1 2

4 3

57 people met in Saint-Louis and

Kaffrine regions

• 47 men, 10 women

• 14 group interviews, 2 individual interviews

• 18 fisherfolks (16 fishermen, 2 saleswomen)

• 14 pastoralists (10 of whom also farm)

• 21 farmers (10 irrigated, 11 rainfed)

• 8 cooperative leaders

• 3 agents (1 CLPA, 2 myAgro)

• 5 myAgro customers

• 1 vet

The design team conducted HCD research in Saint-Louis and Kaffrine over two weeks

Saint-Louis

Kaffrine

The following slides summarize the main findings of the field research; more details on user profiles and preferences are available in a separate HCD research report.

Farmers are mostly interested in short-term rain forecasts along with advisory services (1/2)

• Most farmers make seasonal predictions based on the color of leaves on the trees, on experience from the previous years and/or listening to the radio, but these approaches are not satisfactory because climate and weather have become more unpredictable

• Farmers need a way to predict the timing and length of the rainy seasons to make decisions on seeds and other inputs

• They need information on when it will rain and for how long, in order to plan when to plant, harvest, and store their seeds and crops

• For irrigated farmers, rain forecasts can help them use water more efficiently and save money

• In summary: Weekly and seasonal rain forecasts are the most interesting WCIS for farmers. Short-term (<2 weeks) forecasts are preferred given the limited accuracy of seasonal forecasts

• In-person support when deciding on and using new farming products and techniques is also important

WCIS needs

• The features farmers are looking for are convenient access (via their phones), accuracy, and localization

• Some farmers already access products via multi-actor platforms supported by the government, public extension agencies and NGOs - which might be leveraged in delivery (if not payment) of a WCIS

• Cooperative meetings are an important channel to access information and receive advice, particularly around selecting inputs, taking collective decisions, and learning about new products and services

Channels

• Farmers are willing to pay for weather forecasts on a monthly basis -1,000-3,000 XOF per month

• They are willing to trial paid WCIS, then assess the accuracy before deciding whether to repeat their subscription

• Forecasts are most relevant for around 3 months of the year: interest in receiving forecasts during the early rains (May to July in central

Senegal), but mostly during the full season (July to October); knowing the weather throughout the rest of the year is non-essential

• Most farmers aren’t interested in bundling payment for a WCIS with their loans

• In case of bundling with other services, there is a preference to keep payment for WCIS separate to other purchases - Farmers see the service as separate and would like flexibility on when to pay for and use the service

• According to farmers, the value proposition of myAgro’s product offering would improve, if it also included WCIS and support services from agents

Information related to payments

Farmers are mostly interested in short-term rain forecasts along with advisory services (2/2)

Seasonal map Quotes

“We tell farmers to wait for the second rains before planting so they don’t miss the main rains.”

Ablaye, myAgro Agent, Kaffrine

“We can’t continue to farm like our fathers and forefathers. We need innovation and technology.”

Amadou,, Farmer, Kaffrine

Pastoralists are mostly interested in rain forecasts and information on fodder location (1/2)

• Pastoralists want to know when it will rain and for how long; rain is a key variable in the availability of low-cost feed

• Pastoralists are mostly interested in information and technology to speed up finding fodder, particularly during dry season and droughts

• Finding fodder has been more difficult in recent years as commercial farms take more lands and restrict areas for grazing

• Some cooperatives collect money from their members (120,000 XOF/ year) to pay for someone to rent a car and search for grazing land -when land is found, a meeting is called to describe locations using landmarks, quantifying the amount of fodder and number of animals

• Forecasts and associated advice should consider interdependencies with farming - many pastoralists also farm, which allows them to diversify their incomes and provide fodder (e.g. cereal by-products) for their animals

WCIS needs

• Features pastoralists are looking for are convenient access (via their phones), accessibility (voice-based information), accuracy and localization

• Some pastoralists typically depend on the radio for weather information each week

• They also rely on their - and their animal’s - memory and senses to find grazing land

• Members of cooperatives work together to find fodder; group meetings often include items on locations for grazing and members often call each other to get a more recent picture

• Vets are trusted actors who deliver products and services that are weather-related and seasonal and could be leveraged for payment, delivery or bundled Weather and Climate Information (WCI) and advisory services

Channels

• Pastoralists are interested in paying for weather forecasts on a monthly basis -1,000-3,000 XOF per month

• Their interest in forecasts is highest before and during the early rains (May to August in northern Senegal) - e.g. when they must use their savings to buy feed; knowing the weather throughout the rest of the year is non-essential

• Some pastoralists would be interested in having payment for WCIS bundled with their feed purchase given convenience and timing; others prefer paying for WCIS separately

Pastoralists are mostly interested in rain forecasts and information on fodder location (2/2)

“Typically each morning we spend 2-3 hours looking for somewhere our cattle can graze.”

Omar, Jamm (Saint-Louis)

“Knowing the monthly rainfall can help me plan correctly. It lets me know when to farm and when to take care of the cattle.”

Alou, Herdsman (Saint-Louis)

Seasonal map Quotes

Fisherfolks are interested in swell, wind, and visibility forecasts; and willing to pay a higher price as their life is at stake (1/2)

• Fisherfolks need improved data to decide on where and what to fish, where to sell, how to fish safely, and when there’s likely to be fish

• Safety is the primary reason fisherfolks want WCIS – they are concerned about swell, wind, and visibility (to avoid crashes with other boats) above other types of weather information, e.g. rainfall which might influence the size of the catch

• It is important for fisherfolks to have means to receive warmer alerts and communicate with mainland or other boats while at sea

• Weather information should be highly localized, as weather and its effect on sea conditions can vary significantly by location - for example, the swell at the transition from Saint-Louis river to the sea can be greater than further out

• Fisherfolks are most interested in the weather for their location, but some of them appreciate knowing the weather for the place they are going to, as well as regional patterns (as they have to travel further to get their catch)

• Most of them are interested in accessing better market price data to optimize when and what they fish – providing this information in advance and ideally before going to sea would be highly valued

WCIS needs

• Oral information is better understood than text as illiteracy rate is high in fishing communities – phone calls are preferred

• Currently, some receive forecasts by SMS but wait for group leaders to translate it into a voice note which is shared in WhatsApp groups

• Limited access to channels or good data to take decision on when to go out or return from sea causes great anxiety amongst fisherfolks

• While colored flags communicate fishing conditions, most weather imagery is unfamiliar – any image-based information might leverage familiar symbols (colored flags) rather than other symbols and information formats

• Currently, most fisherfolks use sight and experience to assess the swell risk both at shore and at sea - if there is a storm, a volunteer would need to risk going to sea to inform other boats

Channels

• Fisherfolks value weather information for which they are willing to pay 3,000-6,000 XOF per month

• They have relatively regular income, so paying a monthly subscription wouldn’t be an issue – interest in weather forecasts are lower between September to November when there are low catch and high boat repair costs

• Most fisherfolks prefer keeping payment for WCIS separate, so they can have discretion on when to buy it

Fisherfolks are interested in swell, wind, and visibility forecasts; and willing to pay a higher price as their life is at stake (2/2)

“No price for our lives is too high.”

- Mohamadou, Saint-Louis

“The best way to get weather information is a phone call. I cannot read so voice is better.”

- Papa, Saint-Louis

Seasonal map Quotes

1| Leverage sector relationships

Producers’ organizations will be leveraged to support users (awareness raising, guidance on first use, advisory, etc.) and collect feedback

2| Disseminate services via phone

All delivery models will use mobile phone as the main dissemination channel

3| Share information orally

Dissemination platforms, depending on the technical feasibility and cost, will propose voice-based information, especially for fisherfolks

4| Standardize forecasts by sector priorities

Each delivery model will propose standard service features for each target segment focusing on the most important information they need

5| Allow content and payment customization

Subscription will be optional if WCIS is bundled with other existing services

6| Use existing metaphors

Relevant metaphors and visual representations will be used to increase user understanding – specific words in text and vocal messages, context-based visuals in onboarding/training materials

7| Communicate forecast accuracy

Forecast messages will clearly indicate the likelihood of occurrence and feedback will be collected to estimate and disseminate the actual accuracy rate - e.g. adding data on actual rainfall in the next message

8| Demonstrate productivity benefits

Communication campaigns will include information on the potential impact on productivity based on regular surveys and field studies

9| Serve households, not individuals

Customer acquisition activities will target households - e.g. inviting farmers and their wives to training and information sessions

Implications for delivery models: The HCD research identified nine design principles* that were taken into account in all delivery models

*These principles may apply differently to the different user segments

Implications for delivery models: Each user segment will be provided with a standardized service package including their preferred features

User segments

WCI with basic recommendations

(frequency and period)

Advisory services

Farmers

• Downscaled rain, temperature, and wind forecasts and actual rainfall of the day before (daily; May-Sept.)

• Downscaled rain and temperature forecasts + dry/wet spells (weekly; every two weeks for spells; May-Sept.)

• Seasonal forecast + cumulative rain (monthly; May-Sept.)

• Onset and cessation dates (seasonal; May-July)

• False start (10-day; May-July)

Agronomic advisory based on forecasts

Pastoralists

• Downscaled rain and temperature forecasts + dry/wet spells (weekly; every two weeks for spells; May-Sept.)Seasonal forecast (monthly; May-Sept.)

• Pasture and water availability, bushfire, disease occurrence (monthly; year-round)

• Transhumance corridors and livestock concentrations

Fisherfolks

• Localized alerts on swell, visibility and wind forecasts (when relevant; year-round)

We define business models as a combination of options at each node of the WCIS value chain

Production Translation Dissemination Use

Free

Crowdsource Medium value addition Pull Pay per use (PPU)

Own network Push SubscriptionLow value addition

Own network + crowdsource Subscription + PPUHigh value addition Push + pull

Potential options at each node of the WCIS value chain

The combination of these options resulted in 11 potential business models based on what exists nationally and internationally

Push

Pull Pay per use (PPU)

Subscription

Push + pull Free

Push + Pull Subscription+PPU

Push Subscription

Push + pull Subscription+PPU

Production Translation Dissemination Use

Push + Pull

Push + Pull

Subscription+PPU

Free

Own network

Own network

Crowdsource

Crowdsource

Crowdsource

Crowdsource

Own network + Crowdsource

Own network + Crowdsource

Own network + Crowdsource

Own network + Crowdsource

Own network + Crowdsource

Low

Low

Low

Medium

Low

High

Low

Low

Medium

High

High

Push + Pull

Push + Pull

Push + Pull

Subscription+PPU

Subscription+PPU

Free

BM1

BM2

BM3

BM4

BM5

BM6

BM7

BM8

BM9

BM10

BM11

Each possible business model has been assessed against two criteria

Criteria Assessment

• What is the potential user base for the business model?

• How open is the WCIS production policy for the business model?

• How complex are the production and translation steps?

Market reach

High Medium Low

Feasibility High Medium Low

Criteria Assessment

Among the 11 potential business models, two stand out based on their feasibility and market reach potential

Prioritized for the detailed assessment

High

Low

Medium

M a rk e t re a c h

Feasibility

BM2

BM1

BM3

BM9

BM10

BM6

BM7

BM4

BM5

BM11

BM8

Most promising business models

Moderately promising business models

Least promising business models

Low Medium High

Results of the assessment of business models

The most promising business models have the following characteristics

Production Translation Dissemination Use

Free

Crowdsource Medium value addition Pull Pay per use (PPU)

Own network Push SubscriptionLow value addition

Own network + crowdsource Subscription + PPUHigh value addition Push + pull

Potential options at each node of the WCIS value chain

The most promising business models have hybrid production models and medium to high value addition for which users pay

Common building blocks of the most promising business models

The most promising business models can be developed in Senegal through four potential delivery models

*A feasibility study will be required to refine the design of the climate insurance / credit bundle

(not detailed in this document)

Input financing bundle

Market information bundle

Climate insurance/ credit bundle* myAgro

Mlouma

CNAAS/LBA

MNO

(technical support to send SMS and manage calls)

Farmers

Farmers

Farmers (+potentially pastoralists & fisherfolks)

Production Translation Dissemination Use

Integrated platform

ANACIM

Jokalante

Farmers

Pastoralists

FisherfolksANACIM

ANACIM & CSE

or ACF

ANACIM

ANACIM

ANACIM

[BM10] Bundling: Existing user-pay services to which WCIS could be integrated as an option in order to increase value proposition and reduce transaction costs

Example of existing services with high WCIS integration potential

[BM9] Distributor-enabled: Standalone model using one platform to target multiple user segments in order to mutualize costs

MNO

(technical support to send SMS and manage calls)

Potential partners

Beyond HCD research results, the delivery models integrate insights from stakeholder interviews and successful benchmarks

Implications for the delivery models Insights from stakeholders and benchmarks

Disseminating downscaled daily information orally requires high operational costs

Collecting payment through field agents increases transaction costs

Sharing revenues after deducting the actual costs incurred by the front-end actor is the best option for PPP models

Anchoring the model on a front-end actor who manages information dissemination, customer relationships, and payments

1. IVR, voice notes and calls are costly means to disseminate daily downscaled information to a large number of users, however they can be used to provide advisory and information that is not too specific and doesn’t change often

2. All individual payments by users will be done through a mobile platform and collective payments will be made directly to the front-end actor

3. Key actors’ contribution should be compensated through a revenue sharing scheme according to their respective role after deducting the direct costs of the service delivery

4. Each delivery model should be anchored on a private sector actor with the required capacity, and bundling options should be limited to actors who have the potential to reach a large number of users

All services will be delivered in the form of messages or voice-based communication through mobile phone

User segments Dissemination channels

Farmers

Pastoralists

Fisherfolks

SMS MMS* Call

• Weather and climate forecasts with basic recommendations are disseminated via SMS (push)

• Advisory and non-climate information are accessed via a call center (pull)

• Weather and climate forecasts are disseminated via SMS (push)

• Environmental information

(bushfires, diseases, pasture, and water location) are accessed via a call center (pull)

Voice notes

• Maritime weather alerts are disseminated via SMS and voice notes (push)

• Information on ongoing alerts and market prices are accessible via a call center (pull)

*MNOs in Senegal do not have an MMS service proposition for businesses

** Orange is planning to offer IVR services to businesses by the end of year 2020

IVR**

The profitability of each delivery model over five years is calculated as a way to assess its sustainability

Revenue estimation approachCost estimation approach

• The delivery models are additional services for anchor companies and therefore some operating costs are shared among the different types of services

• All new investments and additional operational costs specific to the delivery model are fully included as direct costs

• The costs of information produced by ANACIM are not included as it is used for other purposes

• Users pay for the service individually or in groups or a sponsor pays for them

• Revenues are generated by charging users based on

SMS and voice notes they receive or their calls to the call center

• All revenues are channeled through the front-end actor

Is there a positive operating income?

Yes No

Sustainable delivery model Non-sustainable delivery model

The total operating income increases proportionally to the number of active users for each delivery model

Year 1 Year 2 Year 3

Year 4 Year 5

Integrated platform Input financing Market information platform

Number of users over five year

’000

-100

-50

Year 5Year 1 Year 2 Year 3 Year 4

The integrated platform has nearly eight times the number of active users than both the input and market information bundle combined

Total operating income per delivery model

Million XOF

Source: Dalberg analysis

The cost per user is higher for the integrated platform compared to the input and market information bundles

2,000

1,500

2,500

3,000

3,500

4,000

4,500

5,000

Year 1 Year 5Year 2 Year 4Year 3

Integrated platform

Input financing bundle

Market information bundle Cost per user

XOF/user

The cost per user for input and market information bundle decreases faster than for the integrated platform

Source: Dalberg analysis

The operating income per user converge toward the fifth year for all three models, as they operate at scale

-2,000

-1,500

-1,000

-500

1,000

Year 5Year 1 Year 2 Year 3 Year 4

Both the input and market information bundles realize positive operating incomes in year 2

Source: Dalberg analysis

Market information platform

Integrated platform

Input financing Operating income per user

XOF/user

All delivery models have different value propositions to farmers, however they could be competing in a longer term

32 43

Year 1

498499

Year 2

Year 3

Year 4

Year 5

790 812 858 882

Integrated platrform*Input financing bundle Market information bundle Untapped user base

Estimated number of subscriptions per delivery model

´000

Total number of rainfed farming households in Senegal

• Targets mainly farmers who subscribe to input packages

• Currently active in the central and Southern regions of Senegal

• Targets farmers who have not subscribed to either the input financing or market information bundle

• Includes all rainfed farmers who have not subscribed to any of the services

• The delivery models have distinct value propositions, limiting competition against each other

• The subscription to each service is optional. giving the possibility to farmers to choose the model that works best for them

• However, the likelihood of competition will increase over time as the untapped user base shrinks

• Targets mainly farmers who subscribe Xan Sa Mbay packages via their cooperatives

• Currently focused on onion and cowpea value chains in

Northern Senegal

Sources: National agency for statistics and demography (ANSD); Dalberg analysis

*The number of users for integrated platform supposes high investment in extensive sensitization and awareness raising campaigns notably in the first year – nationwide campaigns through all URAC’s member radios every semester

The integrated platform is the only delivery model targeting pastoralists and fisherfolks

Year 1 Year 2

32 33

Year 3

16 17

Year 4

Year 5

51 52 54

Pastoralists

´000

Sources: National agency for statistics and demography (ANSD); Dalberg analysis

Year 2

17 18

Year 1

10 10

Year 3

Year 4

Year 5

29 29 30

Subscriptions Untapped user base Subscriptions Untapped user base

Fisherfolks

´000

While the integrated platform is currently the best suited to target pastoralists and fisherfolks, other delivery models could tap into these user segments over time.

Estimated number of subscriptions to the integrated delivery platform

As all these business models aim to generate revenue from users, the main risk faced is the competition of public business models

Risk Description Mitigation strategy

Low uptake from potential users

Number of active users below the minimum required for the sustainability of each business model

• Invest in extensive marketing campaign using local radios, field information campaigns, etc.

• Strengthen collaboration with producer organizations, and

MWGs in order to facilitate user sensitization and training

• Include youth and women in sensitization campaigns to increase service adoption rates

Competition from public business models

Low willingness to pay for the services provided if the same information are available for free from other actors through similar channels

• Differentiate the type, the frequency, and the geographical scale of WCI provided in paid and free services (e.g. departmental level WCI for free services versus downscaled WCI for paid services)

Dissemination of premium information by third parties

Information sharing to other large user groups in order to reduce the number of subscriptions

• Define and communicate measures (suspension, etc.) against the dispatching of WCIS received from paid services to a large group of non-subscribed users – for ex through WhatsApp groups, social media, etc.

Competition between business models

Multiplicity of business models providing similar services, or different pricing for the same type of WCIS

• Develop business models based on their distinctive value proposition (leveraging bundling options rather than duplicating several stand-alone business models), and avoid inconsistent pricing from one model to another as much as possible

Various types of support will be required to jumpstart the business models

Production Translation Dissemination Use

Financial support

Technical support

Marketing support

• Finance the high production costs of downscaled WCI for

ANACIM

• Improve technical expertise of ANACIM

(e.g. adoption of innovative solutions to reduce production costs)

• N/A

• Provide working capital financing schemes to the anchor actors of the business models

• Provide training to the staff and agents involved in each business model

• N/A

• Reduce the unit cost of SMS, calls, and voice notes charged by

MNOs to increase the sustainability of the business models

• N/A

• Communicate on

WCIS services during regular interactions with potential users

• Sponsor access to

WCIS for users

• Subsidize the price of

WCIS for users

• Provide training to users to improve their understanding of the service and foster

WCIS uptake

• Include the promotion of WCI use as a key tool of climate adaptation for farmers, pastoralists, and fisherfolks

Type

Overall, the models could impact 429k users and increase farmer revenue by 9.6 B XOF by year 5 of implementation

Input financing bundle

Market information bundle

Integrated platform

Delivery models Potential active users in year 5

Potential improvement in livelihoods and security

Farmers Pastoralists Fisherfolks

286K 17.3K 11K

Farmers

16.4K

Farmers

100K

9.6 B XOF*

total increase in the annual income of farmers by year 5 of implementation (24,000

XOF/ha/farmer)

*Assuming an increase in annual income of 24,000 XOF/ha based on USAID/CINSERE willingness to pay study and an average of 1ha/farmer

**Assuming death reduction rate is similar to the percentage of fisherfolks who decide not to go at sea if they receive alerts on extreme events (86% based on USAID/CINSERE willingness to pay study)

Figures from the CINSERE study on willingness-to-pay may need to be readjusted

~80%** reduction in the number of fisherfolks dying from extreme weather events

7-30% reduction in livestock mortality

Contents

Introduction

Different strategic options can be considered by ANACIM, different implications on the WCIS value chain’s sustainability*

ANACIM as an enabler for private sector engagement and investment in WCIS?

• WCI are a public good

• ANACIM provides information and expertise to foster the development of an ecosystem of services

ANACIM as an anchor and developer of WCIS?

• Weather and climate information (WCI) are publicly owned

• ANACIM develops WCIS alone

Illustration of potential strategic options for ANACIM

Public sector driven value chain Private sector driven value chain

• Low technological innovation that would enable the reduction production and dissemination costs

• Potential low willingness to pay due to competition between paid and free services

• High technological innovation capacity to reduce production and dissemination costs

• High value proposition and innovative services to users due to competition between private sector actors

Sustaina-bility rating

Medium High

*The PPP models studied fit into an intermediate policy scenario that sits between these two

International benchmarks* show evidence of successful private driven WCIS value chains

Countries with an emerging or mature WCIS market

Mature market

Emerging markets

Diverse WCIS targeted to different non traditional sectors/users

Leader in West Africa with strong PPP models (presented in the next page)

Leader in fintech and agtech solutions including WCIS in Africa

Emerging country with strong MNO-led

WCIS provision

France

Ghana

Kenya

Mali

* Further information is available in the inception report

Major private companies providing WCIS

(private or PPP models)

• aWhere, a US-based company with a global agronomic modeling platform that offers customized weather insights & analytical tools to transform how agricultural decisions are made

• Esoko, a Ghana-based actor that collects data and provides digital solutions for agriculture, to empower rural populations

• Manobi, based in Senegal and specialized in integrated and geographic information systems with strong web-mobile convergence

• Ignitia, a tropical weather forecasting company based in Sweden that helps farmers in West Africa manage their daily activities

• Kukua, a social enterprise based in Tanzania and specialized in weather data and forecasting services for local farmers in Africa

Ghana built private sector-led WCIS provision by gearing donor funding towards social entrepreneurship

Agriculture: Esoko’s PPP model

• The Ghana Meteorological Agency (GMet) is the main authority of weather and climate information production

• Ghana has the largest number of private companies

(eight) involved in WCIS provision in Sub-Saharan Africa

Most donor funding is channeled through local firms who participate in WCIS production and dissemination

WCI producers:

GMet, aWhere, Toto Agriculture

Agro-advisory services providers:

Ministry of Agriculture, Research institution

(CISR)

Famers

Good agricultural practices

Rainfall and temperature forecast

(daily, weekly, seasonal)

Sources: CCAFS, Scaling up climate information services through public-private partnership business models: An example from northern Ghana, 2019

WCIS environment Main WCIS for individual users

Regardless of the strategic option and beyond its public service mission, ANACIM can generate revenues from a share of its portfolio

ANACIM has the mission to contribute to the safety of people and property through the provision of weather forecasts, warnings, climate services, and decision support products for a wide variety of users

Services for public good

The Presidential Decree n2019-1120 signed in July 2019 redefines the fees that are due for the services rendered by ANACIM, as the only organization allowed to produce and sell some WCIS products in Senegal*

Commercial services

• General weather reports (every 24h, every 72h, and on a weekly basis), seasonal temperature and rain forecasts, and alerts on extreme weather events impacting the general public are provided for free

• ANACIM has the possibility to charge dissemination fees to users who prefer individualized communication channel (SMS, Call, etc.)

• Fees charged on a periodical basis (daily, monthly, yearly): special bulletins for tourism, artisanal fishing, industrial fishing, etc.

• Fees charged per unit: on demand weather forecasts for specific locations, extreme weather alert bulletins, value-added services, raw weather data, etc.

• Fees set through special agreements: TV bulletin, aviation weather bulletin for regional airports, weather bulletin for tourism or extractive industries (oil, gas, and mining), agrometeorological bulletins, climate trends and predictions, special maps, etc.

Note: Public institutions are required to pay for

ANACIM’s services when they are specifically used for projects funded by development partners

Source: ANACIM

Three opportunities stand out in terms of policy evolution, to support the overall development of the WCIS value chain in Senegal

Opportunities Description

Allow for flexibility in

ANACIM’s commercial products and value-added services’ pricing

• Adopt a different pricing approach depending on the type of usage:

o Set a base price for actors needing WCI from

ANACIM for social and public service purposes o Allow pricing on a case by case basis for actors using WCIS for commercial services

Define guidelines on how the private sector actors can work with

ANACIM

• Define guidelines for the private sector actors who wish to develop their own weather and climate observation network in Senegal

• Define guidelines for the private sector actors to (i) access weather and climate data from ANACIM, complemented or not by data from international sources (ii) independently develop paid WCIS in Senegal

Progressively position

ANACIM as a regulator

• Develop ANACIM’s technical capacity to install and maintain WCI equipment, as well as provide consulting services to actors operating their own WCI infrastructure

Implication

Revise the July 2019 decree which determines ANACIM’s products and services’ prices – in order to include this updated pricing approach in the upcoming meteorological code

Set clear rules in the upcoming meteorological code regarding private sector involvement in the WCIS value chain, including in WCI production

Update the regulatory framework, as the

WCIS value chain gains in maturity, to shift

ANACIM’s role to (i) the provision of WCIS as a public service and (ii) the regulation of private sector-led commercial services – which implies to progressively withdraw from being directly involved with private sector actors in commercial WCIS provision, to focus on strengthening the whole ecosystem

A phased approach will be required to support the WCIS value chain development in Senegal (1/2)

Phase 3

• Strengthen public business models including the MWGs, pastoral committee, and fisherfolk pirogue tracking platforms

• Pilot the Input financing bundle with department-level information

• Conduct a feasibility study for the

Climate insurance/credit bundle

• Scale up the Input financing bundle with downscaled information

• Launch other PPP models including the market information bundle and the integrated platform

• Pilot the Climate insurance/credit bundle

• Scale up the Climate insurance/credit bundle

• Develop guidelines for private sector engagement in WCIS production

• Channel innovations from private actors

Phase 1

Phase 2

Pave the way for WCIS adoption through increased training and awareness

Demonstrate the potential for user-pay

WCIS models

Foster increased private sector participation in the WCIS value chain

Priority Business Models

Priority Business Models

Priority Business Models

A phased approach will be required to support the WCIS value chain development in Senegal (2/2)

1. Finance the high production costs of downscaled WCI for ANACIM

2. Provide training to the staff and agents involved in each business model

3. Communicate on WCIS services during regular interactions with potential users

4. Provide training to users to improve their understanding of the service and foster WCIS uptake

5. Reduce the unit cost of SMS, calls, and voice notes charged by MNOs

6. Provide working capital financing schemes to the anchor actors of the business models

7. Sponsor access to WCIS for users

8. Subsidize the price of WCIS for users

9. Improve the technical expertise of

ANACIM (e.g. adoption of innovative solutions to reduce production costs)

10.Pursue the promotion of WCI use as a key tool of climate adaptation for farmers, pastoralists, and fisherfolks

Main support required

Main support required

Main support required

Phase 3

Phase 1

Phase 2

2023+

Phase 2

There are opportunities to create synergies between WCIS and initiatives addressing pressing needs arising from the sanitary crisis

• Opportunity to use WCIS dissemination channels to sensitize target users on recommended measures and possibilities to sustain their revenue during the sanitary crisis

• Opportunity to plug in the interventions that seek to increase users’ resilience to the crisis - especially in regions a with high number of cases - Dakar and Mbour (fisherfolks), Thies and Diourbel regions (farmers)

412 confirmed positive cases of COVID-19 were registered in Senegal on April 21, 2020. Most of the cases were identified in the three main economic regions

Dakar

Thies

Diourbel

Louga

Goudiry

Number of cases per region:

< 5 cases

5 – 30 cases

> 30 cases

Source: Ministère de la santé et de l’action sociale

There are also implications for the WCIS roadmap, to be considered

WCIS roadmap extract Potential risks Key questions

Strengthen the sustainability of public business models

(MWGs and Pastoral committee)

• Limited possibility of in-person meetings

• Insufficient funding for the MWGs and

Pastoral Committee as other activities may be prioritized in response to the crisis

Which alternatives to sustain

WCIS initiatives (MWGs, Pastoral committee, etc.) in the short-term?

Pilot the Input financing bundle with department-level information

• Limited in-person communication and assistance to farmers through the networks of agents, agrodealers, and village leaders

How to support/adapt the launch of myAgro’s pilot for the upcoming rainy season?

Conduct a feasibility study for the climate insurance/credit bundle

• Lack of funding to conduct such a study due to budget reallocation to other activities in response to the crisis

• Potential biases in customers’s behaviours, related to the sanitary situation

Shall the feasibility study be postponed, to be able to run it in

‘real’ market conditions?

Main implications of the sanitary crisis on the WCIS roadmap