Press Release No. 14/440

Press Release: IMF Staff Concludes 2014 Article IV Mission to Senegal and Final Review under the PSI

September 26, 2014

An International Monetary Fund (IMF) mission, led by Mr. Ali Mansoor, visited Dakar from 16 to 26 September 2014 to conduct discussions for the 2014 Article IV consultations and to undertake the eighth and final review of the three-year arrangement under the Policy Support Instrument (PSI) approved in December 2010.

At the end of the visit, Mr. Mansoor issued the following statement:

“Economic performance during the first half of the year was satisfactory. Economic growth picked up and inflation remained low. Budget execution was also satisfactory, with revenue exceeding the program target. The good revenue performance combined with expenditure restraint resulted in a lower budget deficit than programmed in the first half of the year. Overall, the implementation of the PSI was satisfactory with respect to all quantitative criteria and indicative targets through end-June 2014.

“The outlook for 2014 remains positive. The mission now expects economic growth to reach 4.5%, slightly below earlier estimates, reflecting the late start of the rainy season and an expected softening in the tourism sector. Inflation should remain low. The mission welcomes the commitment of the authorities to continue to conduct a sound fiscal policy, including by maintaining their original budget deficit target of 5.1% of GDP for 2014.

“The discussions between the authorities and the mission focused on economic policies and structural reforms that would allow Senegal to achieve and sustain high and inclusive growth. The mission welcomed the ambitious Plan Senegal Emergent (PSE) and agreed with the authorities that economic and social emergence requires the maintenance of a sound economic framework and the acceleration of reforms to enhance productivity and improve the business environment.

“The mission welcomed the authorities' commitment to implement the PSE while maintaining sound public finances and sustainable debt levels. This requires continued efforts to mobilize revenue and expenditure rationalization through a control of public consumption as well as improving the quality of public spending. In this context, the mission discussed with the authorities different measures that, without harming economic growth, would contain the budget deficit to their original target of 4% in 2015. The mission also stressed the need to continue to improve public financial management and economic governance and to reinforce capacity building to enhance the efficiency of public investment.

“The mission encouraged the authorities to accelerate the implementation of structural reforms, which are essential for the success of the PSE. These include measures to improve the business climate and governance and to deepen the financial sector. The mission also encouraged the authorities to continue the reform of the energy sector to boost electricity generation while achieving a lower cost.

“Subject to management approval, the IMF’s Executive Board is expected to discuss the 2014 Article IV consultation and eighth program review in December 2014

“The mission met with the President of the Republic, Ministers responsible for Finance, Economic Affairs, Planning and Budget, Higher Education and Energy, the National Director of the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), other senior public officials and representatives of the banking sector, private sector, civil society and development partners.

“The mission wishes to thank the authorities for their warm hospitality, their close cooperation and atmosphere of openness that prevailed throughout the talks.”