IMF approved on April 13 the disbursement of $442 million for Senegal under the Rapid Credit Facility (RCF) and the Rapid Financing Instrument (RFI) to help the country address the urgent needs of the balance of payments caused by the covid-19 pandemic.

The financing consists of the purchase under the RFI equivalent to SDR215.7 million (about $294.7 million or 67% of quota) and disbursement under the RCF equivalent to SDR107.9 million ($147.4 million, or 33% of quota). Since the pandemic appeared in Senegal, authorities have swiftly deployed measures to mitigate its impact by increasing health spending and providing targeted assistance to vulnerable households and businesses, including food aid, suspension of utility bill payments for the poorest populations and targeted tax relief.

These various measures, as well as the sharp reduction in economic activity due to the pandemic, have created an urgent need to finance Senegal's balance of payments and budget. IMF’s financing will be useful to preserve fiscal space and catalyze additional assistance from the international community, preferably in the form of grants.

While it was expected to reach 5.3% of GDP in 2019 according to preliminary IMF estimates, Senegal's economic growth is expected to decline to 3% in 2020 as a result of the covid-19. However, a rebound to 5.5% and 8% in 2021 and 2022, respectively, is expected.

Borgia Kobri