Although Senegal is going through a period of financial turbulence, the government’s transparency and responsiveness could prove crucial in restoring the confidence of international partners and rebuilding the foundation for sustainable growth.
Senegal’s $1.8 billion International Monetary Fund (IMF) program has been temporarily frozen due to financial imbalances, Finance Minister Cheikh Diba announced during the annual Bretton Woods meetings. Diba explained that the aid freeze follows an audit revealing significant discrepancies in previously reported budget figures.
Local media reports from October 28 indicate that the audit, initiated by the Senegalese government in September, uncovered worsening public finances. Senegal’s public debt climbed to 83.7% of GDP in 2023, well above the initially projected 73.6%. Over the last five years, the country’s average budget deficit was 10.4% of GDP, far exceeding the 5.5% previously reported under President Macky Sall’s administration.
These findings prompted Moody’s to downgrade Senegal’s credit rating from “Ba3” to “B1” earlier in October, complicating the country’s access to international funding.
Diba acknowledged the importance of this correction for financial transparency in Senegal. “We understood the importance of addressing these discrepancies after identifying major gaps in the figures provided to the IMF, which formed the basis of our relationship,” he stated. Following this, the Senegalese government has entered discussions with the IMF to restructure the aid program, aiming for a new agreement by the first quarter of 2025. As a result, payments originally scheduled for this year under the IMF funding agreement will also be suspended.
The IMF has urged Senegal to adopt strict budgetary measures to restore its financial stability. This recommendation follows an IMF assessment conducted by a team two weeks ago. Despite the current challenges, the IMF reaffirmed its commitment to working with Senegal to address its financial issues.
As Senegal grapples with significant challenges to stabilize its budget, the government is focused on regaining the trust of international creditors. The upcoming months will be critical as Senegal strives to reduce its budget deficit, projected at 7.5% of GDP this year, and aims to bring its debt down to 70% of GDP while maintaining economic stability.
• Global coffee consumption projected to hit a record 169.4 million 60-kg bags in 2025/2026, up from...
• Investors seem to keep focusing on yields, which are high for the moment• New Leadership might see...
• Algeria grants commercial 5G licenses to top three telecom operators: Mobilis, Djezzy, and Ooredoo...
• ECOWAS Bank funds 47.7-km stretch of strategic 700-km road project• Lagos-Calabar highway seen boo...
• IFC teams up with AfDB and Nigeria’s EbonyLife to assess a new fund for African cinema• Sector cou...
As work on the first phase of the Ahmed Sékou Touré International Airport expansion continues, Guinean authorities have announced their intention to move...
• Loulo-Gounkoto mine remains shut as Mali’s administrator seeks to restart it by selling stored gold• Barrick halted operations in January over export...
Hive Coega has officially entered its construction phase, with tenders now out for its core infrastructure. This milestone comes four years after the...
Côte d’Ivoire, the world’s leading cocoa producer, has set an ambitious target: to process 100% of its cocoa crop at the first stage by 2030. While the...
Located about 40 kilometers from Cape Town’s city center, Boulders Beach in Simon’s Town is one of the Cape Peninsula’s most iconic destinations. This...
The Gerewol tradition is a fascinating ritual celebrated by the Bororo Fulani, a nomadic community primarily located in Chad and Niger. This annual...