"Caisse de dépôts" in Africa

Mar 19, 2019
Aliou Sall, CEO of the Caisse des dépôts et consignation (Cdc) of Senegal, answers the questions of
Arnaud Floris (Financial Sector Advisor _ MFW4A) on the "caisse des dépôts".

What is the purpose of a “Caisse des Dépôts”? A “Caisse des dépôts” is a public institution whose mission is to receive, preserve and manage private resources and transform them to finance priorities of general interest. It is a trusted third party. The strategic factor is the securing of funds. Private resources come from regulated savings, deposits from notaries or legal professions, administrative and guarantee deposits, national savings banks funds or social security funds. The resources also come from pension funds and pension schemes from insurance and guarantee funds, through various distribution and collection networks such as the Post Office, affiliated banks, savings banks, dedicated windows or dedicated platforms. The central, concentrating, public and independent role makes it possible to work in close collaboration with the financial system. These financial institutions statutes grant them a special character, significant managerial flexibility to be able to access national and international financial markets while having an obligation of securing, that is, having a prudent management and a significant level of equity capital, well above the average of financial institutions. Being counter-cyclical, this model is the combination of a policy mix based on the mobilization of domestic savings, future investments, good governance and excellence criteria to create and maintain trust and, finally, on the sense of general interest and professionalism of the teams working for economic development. What is the difference between a “Caisse des Dépôts” and a sovereign wealth fund or a bank? Caisse des dépôts have a strong similarity with public or private banks but have an obligation to invest or finance projects of general public interest in line with the mandate conferred by governments and/or parliaments. Caisse des dépôts have a different model from international development banks, which do not have regulated deposits but generally issue long-term bonds in line with asset duration. Indeed, development banks have resources that consist mainly of long-term loans issued on international markets, they have a high financial ratings and public guarantee granted by the State in return for their missions in the public interest, they can obtain low-cost financing and on-lend on favourable terms. Also, Caisse des dépôts are different from sovereign wealth funds because Caisse des dépôts manage private funds while sovereign wealth funds manage public funds. They have significant equity capital, resulting from a patient preservation of results accumulated over the years and allowing them to absorb short-term fluctuations in financial markets (relying on reserves in bad years and funding them in good years), such as sovereign wealth funds, and unlike many private investors. The transformation of funds managed to finance and thus support the growth and development of countries gives the Caisse des Dépôts an identity as a long-term investor, and therefore as a privileged local partner for international DFIs and donors. To what extent can a “Caisse de Dépôts” finance infrastructure development? Infrastructures are normally promoted, financed and built by the public sector. Increasing the role of the private sector in the financing, construction and, above all, management of infrastructures can help improve the quality of services and performance and consequently benefit individuals and communities and improve social cohesion. The role of African Caisse des Dépôts in promoting and co-financing of infrastructure is primarily linked to the fostering and assistance of central and local authorities in the conception, implementation and management of the project cycle, by intervening in financial engineering and defining the best balance between the public and private sectors. The Caisse des Dépôts already play this role in several countries and have become the financial arm of the administration in these processes. Regarding some specific projects, the funds can also co-finance projects either as venture capital funds or as long-term lenders to the government and also by issuing guarantee instruments to provide support to financial efforts by international donors or development banks. I would like to cite Morocco's CDG, as an example for the African continent, which assisted the central administration in promoting Tangier Med, by participating from the initial phase. It also invested with a long-term vision, often being the sole active investor during the global crisis and guaranteeing the continuity of government efforts which are in line with the country's general interest. Can you explain what the objectives of the Forum on “Caisse des Dépôts” are? What will be the objectives of the Dakar event? The “Caisse des Dépôts Forum" is a platform for exchanges and dialogue between the various Caisse des Dépôts which exist in Europe (France and Italy) and Africa (Morocco, Tunisia, Gabon, Mauritania, Senegal and Niger). Two others are being set up in Burkina Faso and Côte d'Ivoire in particular. Projects have existed for several years in Cameroon, Chad, Togo, Benin and Congo (sinking funds exist in these two countries) and Equatorial Guinea. Previous Forum took place in January 2011 in Marrakech, then Paris, Tunis, Rome and next year we will meet in Dakar under the chairmanship of the CDC of Senegal. Together, we are creating a network of knowledge, mutual support and experience sharing that can be transformed into an interconnected network of common savings and investment instruments. On 18 September 2019, the fifth Forum of Caisse des Dépôts will be held in Dakar, organized by the CDC of Senegal, to present the "Caisse des Dépôts model" to all African countries. In Dakar, the members of the Forum called on financial authorities as well as public and private financial institutions from African countries to discuss financial inclusion, prudential models, long-term resource mobilization, financing of social infrastructure and mobilization of African savings, both within and outside the continent, and their transformation into sustainable and long-term public and private investments.