Press Release No. 24/373

IMF Staff Concludes Visit to Senegal

October 16, 2024

• An IMF staff team visited Senegal to start assessing the implications of the data revisions resulting from the General Inspectorate of Finance (IGF) report for past and current IMF-supported programs.
• IMF staff welcomes the IGF report and the government's commitment to strong governance and fiscal transparency. IMF staff will continue to work closely with the authorities in the coming weeks to outline the next steps for the ongoing programs.
• Senegal is facing significant fiscal challenges. Bold and timely reforms, including streamlined tax exemptions and reduced energy subsidies, are crucial for fiscal sustainability and putting debt on a downward trajectory.

Dakar, Senegal: A staff team from the International Monetary Fund (IMF), led by Mr. Edward Gemayel, conducted a mission to Senegal during October 9-16, 2024, to discuss the preliminary findings of the General Inspectorate of Finance (IGF) report on public finances covering the period 2019-2024Q1, as well as the fiscal outlook for the remainder of the year. The mission aimed to start assessing the implications of the data revisions resulting from the report for past IMF-supported programs, and the ongoing Extended Fund Facility (EFF) and Extended Credit Facility (ECF), combined with the Resilience and Sustainability Facility (RSF) arrangements that were approved by the IMF Executive Board on June 26, 2023.

At the conclusion of the visit, Mr. Gemayel issued the following statement:

“IMF staff welcomes the IGF report on public finances and the government's commitment to strong governance and fiscal transparency. Preliminary findings indicate substantial revisions to budget execution data for the period 2019-2023. These revisions are primarily attributed to investments financed through external loans and domestic bank borrowing. As a result, the fiscal deficit and public debt during this period are now estimated to be significantly higher than previously reported in budget and settlement laws. While the certification of the IGF's conclusions by the Court of Auditors is pending, IMF staff will continue to work closely with the authorities in the coming weeks to evaluate the macroeconomic impact and outline the next steps, which will include assessing whether any misreporting occurred during previous and current IMF-supported programs.

“Senegal continues to face a challenging environment, with budget execution showing signs of further strain. The revenue shortfall identified during the last staff visit has been confirmed through end-September. Meanwhile, expenditures have remained elevated, primarily driven by a substantial rise in investment spending, as hinted by the preliminary findings of the IGF report. Absent decisive expenditure measures, the fiscal deficit is projected to worsen this year, exceeding the previous estimate of 7.5 percent of GDP.

“Looking ahead, it is critical for the authorities to implement bold and timely measures to ensure fiscal sustainability and put public debt on a downward trajectory. The 2025 Budget Law offers a critical opportunity for the government to reaffirm its commitment to essential reforms and address longstanding structural challenges. Strategic actions to enhance domestic revenue mobilization—particularly through the streamlining of tax exemptions—alongside efforts to phase out energy subsidies and non-essential transfers, will be instrumental to foster fiscal discipline and strengthen trust and confidence in public governance, laying the foundations for a more inclusive and private sector-led growth model.”

The IMF staff team expresses its sincere appreciation to the authorities and all counterparts for their excellent cooperation and for the candid and constructive discussions held during the mission.

The IMF staff team met with His Excellency, Prime Minister Ousmane Sonko; Mr. Abdourahmane Sarr, Minister of Economy, Planning, and Cooperation; Mr. Cheikh Diba, Minister of Finance and Budget; Mr. Ahmadou Al Aminou Lo, Minister, General Secretary of the Government; and other senior government officials. The team also engaged in productive discussions with development partners.”