IMF Executive Board Completes Sixth Review of Policy Support Instrument for SenegalPress Release No. 13/539
December 20, 2013
The Executive Board of the International Monetary Fund (IMF) completed today the sixth review of Senegal’s economic performance under the program supported by the Policy Support Instrument (PSI).
The PSI was approved by the Executive Board on December 3, 2010 (see Press Release No. 10/469). The IMF's framework for PSIs is designed for low-income countries that may not need, or want, IMF financial assistance, but still seek IMF advice, monitoring and endorsement of their policies. PSIs are voluntary and demand driven (see Public Information Notice No. 05/145).
Following the Executive Board’s discussion, Mr. Min Zhu, Deputy Managing Director and Acting Chair, issued the following statement:
“Economic developments and prospects remain favorable. Activity has accelerated slightly and GDP growth is on track to reach 4 percent in 2013. Inflation remains subdued, with consumer price inflation below 1 percent. Growth is expected to increase further in 2014 while inflation would remain moderate.
“Program performance has been mixed. While all quantitative program targets for mid-2013 have been met, structural reform implementation has slowed significantly and most structural benchmarks have been met with delay.
“Prudent macroeconomic management will continue to help preserve debt sustainability and restore margins for fiscal maneuver. The fiscal deficit target for 2013 remains within reach, and a further reduction of the deficit is expected in 2014. Attaining future targets will require strengthening the revenue base and streamlining current expenditure while allowing for an increase in public investment and the development of the social safety net.
“A more rapid implementation of the structural reform agenda, including of public financial management reforms, would bring substantial benefits. The reform of public agencies and greater use of cost-benefit analysis for the selection of investment projects will improve transparency and efficiency of public spending. Better control over the wage bill will eliminate inefficiencies and create room for social spending.
“Slow reforms in the energy sector represent a major obstacle to economic growth and carry substantial fiscal risks. The introduction of cost-effective technologies needs to accelerate. The investment plan should focus on a few critical projects and have a realistic implementation timeline. The situation of the sector—including the true fiscal cost of supporting it—the reform strategy, and its implementation should be clearly communicated to all the stakeholders,” Mr. Zhu said.