## Fiscal Transparency Evaluation — Senegal (IMF staff report, selected sections)

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### Preface: mission and engagement
- Mission mandate: Request from Mr. Amadou Ba, Minister of Economy, Finance and Planning (MEFP); FAD mission visited Dakar from April 5 to 17, 2018 to conduct an FTE.
- Mission leadership and team:
  - Mission head: Ms. Manal Fouad (Division Chief, FAD).
  - Team members: Messrs. Fabien Gonguet and Bruno Imbert (economists, FAD); Philippe Samborski (IMF Statistics Department); Adrien Tenne (FAD); Ms. Nour Chamseddine (Research Analyst, FAD).
  - Resident support: Mr. Jean-François Dagues (FAD Resident Advisor to the MEFP).
- Key counterparts: Mr. Bassirou Samba Niasse (Secretary General, MEFP); Mr. Amadou Ba (Minister, MEFP); focal points Mr. Alioune Ndong, Mr. Moustapha Ba (DGB), Mr. Abdoulaye Samb (DGCPT).
- External consultations: ANSD, BCEAO, EITI committee, APIX, Court of Accounts, NGO 3D, donors (World Bank, European Union, U.S. cooperation).

### Executive summary — framework, positioning, and headline findings
- Evaluation framework: IMF’s Fiscal Transparency Code (2014) built around three pillars: (I) Fiscal Reporting; (II) Fiscal Forecasting and Budgeting; (III) Fiscal Risk Analysis and Management; compliance assessed against 36 FTE principles (basic / good / advanced).
- Overall positioning: Senegal positioned at the average level for countries of similar income and institutional capacity.
- Relative strengths: Pillar II (Fiscal forecasting and budgeting) and Pillar I (Fiscal reporting).
- Pillar II — highlights:
  - Advanced practices (3): Macroeconomic projections are detailed; Fiscal policy anchored in clear and stable objectives; Fiscal legislation aligned with best international practices and relatively comprehensive.
  - Good practices (3): Medium-term budgetary framework informs the budget process; Fiscal documents published in a timely manner; Briefing notes for feasibility studies made public.
- Pillar I — highlights:
  - Good practices (3): Consolidated General Government Fiscal Operations Table (TOFE) produced; Statistical integrity via cross-comparisons; Fiscal data enable comparisons between budget and execution.
- Pillar III — fiscal risk analysis and management:
  - Only one "good" practice: monitoring risks triggered by subnational governments.
  - Many Pillar III practices rated "not met".
- Distribution of practice-level ratings:
  - 14 practices rated "basic" (mainly under Pillar I).
  - One third of practices rated "not met" (many in Pillar III).
- Noted transparency achievements:
  - First WAEMU country to present TOFE under GFSM 2001; since 2017 Senegal subscribes to IMF SDDS; Open Budget Index score 51 in 2017.

### Key public sector aggregates and coverage (selected figures, 2016)
- GDP 2016 total: CFAF 722.34 billion (measured before changeover to base year 2014).
- Selected consolidated public sector transactions and stocks (as presented in Table 0.2):
  - Revenue (Total Public Sector Transactions): 36.4
  - Expenditure (Total Public Sector Transactions): 38.1
  - Balance (Total Public Sector Transactions): -1.7
  - Financial assets (Consolidated public sector, financial): 40.0
  - Liabilities (Consolidated public sector): 121.1
  - Net financial worth (Consolidated public sector): -81.0
  - Civil servant pensions: 28.1
- Institutional composition of public sector (2016):
  - Total entities: 826.
  - Central government: 201 entities (17 ministries; 10 republican institutions; 11 Special Treasury accounts (CST); 150 extrabudgetary units).
  - Subnational governments sub-sector: 42 departments containing 557 communes.
  - Social security funds: 2 entities (CSS/SSF and IPRES).
  - Public corporations (statistical): 19 non-financial and 5 financial corporations (including national directorate of BCEAO).
- Impact of expanded coverage (2016):
  - General government expenditure: 33.1 percent of GDP.
    - Central government expenditure: 31.4 percent of GDP.
    - Extrabudgetary central government units expenditure: 9.5 percent of GDP.
    - Subnational governments and social security funds expenditure: 2.1 percent of GDP.
  - Including public corporations (public sector):
    - Revenue increases from 30.3 percent of GDP (general government) to 36.4 percent of GDP (public sector).
    - Expenditure increases from 33.1 percent of GDP to 38.1 percent of GDP.
    - Deficit lowers from 2.8 percent of GDP (general government) to 1.7 percent of GDP (public sector).
    - Gross debt increases from 97.2 percent of GDP (general government) to 121.1 percent of GDP (public sector).
    - Net financial worth goes from -74.0 percent of GDP to -84.0 percent of GDP.
- Institutional responsibilities (high-level):
  - DGCPT: compile GFS, consolidate budget execution accounts and main government financial statements.
  - DGB: prepare budget execution reports.
  - Public Debt Directorate (DDP/DDTCP): domestic and external public debt information.
  - DSP (Parapublic Sector Directorate): reports on parapublic execution and indebtedness.

### Fiscal reporting: coverage, classification, timeliness, and quality
- Coverage of stocks:
  - Fiscal reports do not meet basic practice to include cash flow, deposits and all debt; financial asset and liability data are fragmented.
  - DDP quarterly public debt bulletin excludes accounts payable, amounts owed to social security funds, government entity deposits in Treasury, comfort letter-related amounts, actuarial pension liabilities, PPP obligations.
  - Parapublic sector financial statements often produced but not consolidated; parapublic indebtedness report covers only 2013 and 2014.
  - Mission estimates of unmeasured balance sheet portions (2016):
    - Consolidated public sector: financial assets unmeasured = 27 percent of GDP; liabilities unmeasured = 51 percent of GDP.
    - General government: financial assets unmeasured = 17 percent of GDP; liabilities unmeasured = 39 percent of GDP.
  - Consolidated gross public sector debt (mission estimate, 2016): 121.1 percent of GDP.
  - Actuarial liabilities (civilian and military pensions, mission estimate, 2016): 28.1 percent of GDP (cumulative pension entitlements at end of fiscal year 2016; estimates based on updates of actuarial projections with an update rate chosen at 5 percent).
- Coverage of flows and accounting basis:
  - Government accounting is essentially cash-basis; GFS based on hybrid cash/accrual system.
  - TOFE relies on actual collections for revenue and payment order basis for expenditure; consolidated TOFE broken down per GFSM 2001/2014.
  - Accrual-based accounting not effective; non-monetary flows and holding gains/losses not recorded.
  - Action plan to modernize government accounting by 2020 being implemented.
- Coverage of tax expenditures:
  - Tax Expenditure Evaluation Report produced since fiscal year 2008; 2014 quantitative estimates available for 68.1 percent of tax expenditures listed; fiscal cost of quantified tax expenditures: 7.8 percent in 2014, or CFAF 588 billion.
  - Report irregular publication: 2014 evaluation published end-2016; 2015 evaluation completed but not published (contravenes WAEMU directive and 2012 transposing law).
- Frequency and timeliness:
  - DGB quarterly budget execution report: published within no more than 45 days of end of quarter.
  - DPEE monthly note: within 30 days of end of month (timeliness varies).
  - DDP quarterly public debt bulletin: published within no more than 90 days of end of quarter.
  - Current monthly TOFE covering budgetary central government: produced within 45 days of end of month.
  - SDDS commitments (subscribed November 2017): publish monthly TOFE and quarterly central government debt within one month and one quarter, respectively; consolidated general government TOFE within no more than six months; produce metadata.
  - Timeliness of Court of Accounts reporting: 2016 execution report transmitted December 28, 2017 (just before 12-month deadline); prior years 2015 and 2014 publications took 19 and 16 months, respectively.
- Quality and classification issues:
  - Legal framework (LOLF) and Decrees (Decree 2012-673 on NBE; Decree 2012-92 on PCE) align with international classifications (GFSM 2001, COFOG), but:
    - Classification shortcomings hinder reconciliation between authorizing officers’ and accounting officers’ accounts (e.g., wage components in capital chapters; payroll executed by employee registration number not administrative attachment).
    - Functional and programmatic classifications implemented in information systems but not yet used for budget preparation or execution; ministerial order approving final list of programs pending.
    - Internal consistency: only debt stock vs debt issuance/redemption reconciliation routinely performed; reconciliation between fiscal balance and financing and financing vs change in debt stock incomplete.
  - Historical revisions: national accounts reevaluation increased 2014 GDP by almost 30% (tertiary +18%, secondary +7%, primary +4%, net taxes on products +1%); no publication explaining main methodological impacts on revised TOFE (June 2015).

### Fiscal forecasting, budgeting, and programing (Pillar II)
- Comprehensiveness and budget unity:
  - Overall finding on budget unity: Not met (lack of tracking for financing and guarantees via letters of comfort; CA-PA system underused; lump-sum provisioning for guarantees in 2018 Budget Law well below needed coverage).
  - Empirical amounts of financing via letters of comfort (CFAF billions):
    - 2016: 37.7
    - 2017: 95.8
    - 2018: 104.3
    - 2019: 66.0
    - 2020: 17.1
  - Public debt servicing in connection with bank loans (CFAF billions, source PLF):
    - 2016: 31.4
    - 2017: 37.2
    - 2018: 29.1
    - 2019: -
    - 2020: -
  - % of GDP estimates for public debt servicing in connection with bank loans:
    - 2016: 0.4%
    - 2017: 1.0%
    - 2018: 1.1%
    - 2019: 0.6%
    - 2020: 0.2%
- Macroeconomic forecasts:
  - Overall finding: Advanced.
  - DPEE produces detailed macro forecasts (Economic and Financial Situation twice a year; Monthly Notes; Excel spreadsheet with five-year forecasts).
  - DPEE participates in Macroeconomic Framework Committee with BCEAO, DGCPT, DGB.
  - Credibility improvements suggested: explain forecast/outturn discrepancies and quantify macrofiscal impact of principal policy measures.
- Medium-term budget framework (MTBF):
  - Overall finding: Good.
  - DPBEP produced since 2013; includes outturn n-1 and n-2 and forecasts for n+1, n+2, n+3; validated by Council of Ministers; transmitted to Parliament and posted online.
  - CBMT: internal use, not published.
  - DPPD: ministry-level projections prepared and transmitted to Parliament; program budgeting not yet fully operational.
- Budget programming and aggregates:
  - Practice remains aggregated; DPBEP provides average multiyear growth figure example: DPBEP 2018-2020 average real GDP growth 7.2% (no disaggregation).
  - CA-PA system migration expected in 2020 to strengthen multiyear commitment monitoring.
- Investment projects and procurement transparency:
  - PTIP provides total cost and three-year disbursement timeline; updating total costs problematic.
  - Procurement Code revised 2014; spontaneous direct-contracting offers used for large contracts totaling CFAF 450 billion since 2015 (~5 percentage points of GDP), undermining competition.
  - Recommendation: PIMA evaluation to identify priorities.
- Orderliness and timeliness:
  - Fiscal legislation: Advanced (LOLF aligns with WAEMU directives).
  - Timeliness of budget documentation: Good (PLF transmission to Parliament in October; Parliament has 60 days; promulgation within weeks; example PLF dates for 2016–2018 provided).
- Public participation and performance information:
  - Performance information: Basic (legal framework in place; implementation expected by 2020; DPPD/PAP produced but indicators not systematically updated; RAPs not regularly produced).
  - Public participation: Basic (citizens’ budget and translated materials exist; active civil society participation limited; low Open Budget Survey public participation).

### Credibility, supplementary budgets, and independent evaluation
- Independent evaluation of forecasts:
  - Overall finding: Not met. No independent national entity assesses government forecasts; Court of Accounts lacks jurisdiction over draft budgets; Parliament lacks capacity to evaluate forecasts.
  - DPEE organizes by-invitation Economic Briefings; external scrutiny via IMF and WAEMU.
- Supplementary budget practice:
  - Not systematic despite LOLF Article 47 requirement.
  - Example 2017: no LFR presented despite substantial deviations; tax revenue shortfalls ~7 percent at end-December 2017 relative to LFI.
  - Recommendation: systematize presentation/adoption of LFR when material changes occur.
- Reconciliation of forecasts:
  - Not met: budget documents do not reconcile successive forecast vintages; recommended short/medium steps include tables of differences and quantitative analyses (Box 2.3).

### Fiscal risk analysis and management (Pillar III) — findings and quantitative indicators
- Context: heightened attention since 2008 crisis; Senegal exposed to macroeconomic shocks and diversified contingent liabilities; no consolidated outlook on most contingent liabilities (PPPs, government equity shares, financial sector).
- Risk disclosure and analysis:
  - Sensitivity/alternative scenario analyses published only for public debt (DSA).
  - DSA: baseline, historical, and extreme scenarios; suggested extension to 30-year horizon and inclusion of contingent liability scenarios.
  - National actuarial FNR study covers 2013–2050; no actuarial studies for other social security agencies.
- Selected specific fiscal risks (IMF staff estimates):
  - Government-guaranteed liabilities: 345 bn; 3.6 (Percentage of GDP)
  - Environmental risks: 57 bn; 0.6 (Percentage of GDP)
  - Debt of state-owned enterprises: 740 bn; 7.8 (Percentage of GDP)
  - Extractive sector revenue: 106 bn; 4.6 % (of government revenue and grants)
  - Discounted pension liabilities of the FNR: 2447 bn; 28 (Percentage of GDP)
  - Financial sector: n.c.; n.c.
- Budgetary contingencies and reserves:
  - Reserve for provisions and contingencies amounted to CFAF 25.5 billion in 2017 (≈1 percent of appropriations authorized in the initial budget law, excluding debt).
  - Management and precautionary reserves not transparent; not explicitly mentioned in budget law; allocation rules not pre-established.
- Guarantees and onlending:
  - Not met: weaknesses in monitoring, disclosure, and provisioning.
  - End-2017 outstanding debt explicitly guaranteed by government ≈ 3.6 percent of GDP.
  - Composition of guarantees: onlending CFAF 214 billion; guaranteed financing CFAF 80 billion (external financing alone); letters of comfort CFAF 49 billion.
  - Provisioning rule in LOLF: provision equal to 10 percent of annual maturities; special treasury account under-provisioned.
- Asset and liability management:
  - Not met: inadequate analysis of risks associated with government assets and liabilities; letters of comfort estimated at 1.9 percent of GDP not subject to legal control.
  - IMF staff estimates general government liabilities 97.2 percent of GDP and financial assets 23.2 percent of GDP at December 31, 2016.
- Specific areas of fiscal vulnerability:
  - PPPs: capital stock estimated at 6 percent of GDP; no consolidated liabilities disclosure; 14 PPP projects since 2008; total PPP investments since 2008 per World Bank: US$2.1 billion; Blaise Diagne airport investment US$730 million in 2012.
  - Financial sector exposure: 29 licensed financial institutions at end-2017; government direct/indirect shareholder in seven banks (5–34 percent equity) and seven insurance companies (Automobile Guarantee Fund 61 percent); CDC exposures and reporting gaps (equity shares, real estate losses); no comprehensive assessment of State exposure.
  - Natural resources: extractive sector contribution to national budget CFAF 105.9 billion in 2016 (4.6 percent of fiscal revenue and grants); no published statistics on reserves or valuation; probable oil reserves & natural gas figures noted but not quantified in fiscal reporting.
  - Environmental risks: contingent liabilities assessed at 0.6 percent of GDP; EM-DAT 1990–2018 flooding damage US$51 million; World Bank estimate annual economic impact of floods ≈ US$89 million.
- Long-term projections and demographic pressures:
  - Retirement and health-related expenditure should amount to almost 7 percent of GDP by 2050 (IMF estimates).
  - Recommendation: broaden actuarial analyses (CSS, IPRES), extend DSA horizon, include contingent liability scenarios.
- Heatmap — Pillar III key entries:
  - 3.1.1 Macroeconomic risks: Not met. Importance: High.
  - 3.1.2 Specific fiscal risks: Not met. Importance: High.
  - 3.1.3 Long-term sustainability analysis: Basic. Importance: Medium.
  - 3.2.1 Fiscal contingencies: Basic. Importance: High.
  - 3.2.2 Management of assets and liabilities: Not met. Importance: High.
  - 3.2.3 Guarantees: Not met. Importance: Medium.
  - 3.2.4 Public-private partnerships: Not met. Importance: Medium.
  - 3.3.1 Subnational governments: Good. Importance: Low.
  - 3.3.2 Public enterprises: Basic. Importance: High.

### Main recommendations and Action Plan (objectives and priority actions)
- Organization: recommendations around five objectives with Action Plan (short-term 2018; medium-term 2019–2020; long-term 2021+); priority ratings: low (*), medium (**), high (***).
- Objective 1: Strengthen coverage and integrity of fiscal and financial data — selected priority actions
  - Publish assessment report of budgetary cost of tax expenditure in a recent fiscal year (2015 or later) — Short-term (2018) — Priority ** — Responsible: DGID, DGD.
  - Produce permanent list of public sector entities and sectorize the units — Short-term (2018) — Priority *** — Responsible: DGCPT (DEES, DSP), ANSD & BCEAO.
  - Compile a consolidated general government balance sheet — Short-term (2018) — Priority *** — Responsible: DGCPT.
  - Compile TOFE and consolidated public sector balance sheet — Medium-term — Priority ** — Responsible: DGCPT.
  - Reinforce DEES and DSP (human, financial, I.T.) — Short-term (2018) — Priority *** — Responsible: DGCPT.
  - Bring use of letters of comfort in line with accounting and fiscal rules from the LOLF — Short-term (2018) — Priority *** — Responsible: DGB, DGCPT (DDP).
  - Put in place CA-PA monitoring mechanism and approve annual CA ceiling per Organic Law (Articles 17ff, 44 and 60) — Short-term (2018) — Priority *** — Responsible: DGB.
- Objective 2: Align budgetary and accounting standards with the Organic Budget Law (LOLF) — selected priority actions
  - Interface balances software with SIGFIP to monitor payroll execution by administrative classification — Short-term (2018) — Priority *** — Responsible: DGB (Balance, DSI, DPB).
  - Produce budget outturn using functional classification for revised budget law 2017 and subsequent years — Short-/Medium-/Long-term — Priority * — Responsible: DGB (DPB).
  - Validate list of budgetary programs and compile financial statements using program nomenclature — Short-/Medium-term — Priority *** — Responsible: DGB.
  - Introduce accrual basis and balance sheet accounting (comptabilité en droits constatés et patrimoniale) — Medium-term — Priority * — Responsible: DGCPT, DGB.
  - Apply market price-based valuation of assets and liabilities — Medium-term — Priority * — Responsible: DGCPT.
- Objective 3: Improve understanding and disclosure of fiscal and financial risks — selected priority actions
  - Publish guarantees and onlending on Public Debt Directorate website — Short-term (2018) — Priority ** — Responsible: DGTCP (DSP).
  - Publish government equity investment strategy — Short-term (2018) — Priority ** — Responsible: DGTCP (DSP).
  - Publish a statement of fiscal risks in the DPBEP — Short-/Medium-/Long-term — Priority *** — Responsible: DGB, DGCPT, DGPPE.
  - Establish and publish objective and transparent criteria for use of the reserve (target truly unpredictable outlays) — Medium-/Long-term — Priority *** — Responsible: DGB.
- Objective 4: Strengthen analysis of macrofiscal forecasts to boost credibility — selected priority actions
  - In DPBEP, provide detailed figures for multiyear forecasts and compare to other sources (BCEAO, IMF) — Short-/Medium-/Long-term — Priority ** — Responsible: DGPPE (DPEE), DGB.
  - Bolster explanations of macroeconomic and fiscal forecasts: (i) quantitative analysis of forecast vs actual deviations; (ii) details of grounds for revising forecasts — Short-/Medium-/Long-term — Priority *** — Responsible: DGPPE (DPEE), DGB.
  - Project alternative macroeconomic scenarios and show budget impact — Medium-term — Priority * — Responsible: DGPPE (DPEE).
  - Conduct simple sensitivity analyses of major budgetary flows to key macro variables (real GDP growth, inflation, oil price per barrel, exchange rate) and publish them — Short-term — Priority ** — Responsible: DGPPE (DPEE).
- Objective 5: Increase public participation in monitoring and debating fiscal policy — selected priority actions
  - Enhance quality of program-budget documents: prepare and disseminate manual for drafting MEPD, PAP and RAP; review existing MEPD and PAP — Short-/Medium-/Long-term — Priority * — Responsible: DGB, Line ministries.
  - Establish mechanism for public participation in fiscal policy discussion inspired by best international practices — Short-/Medium-/Long-term — Priority ** — Responsible: DGB.

### Concluding priorities for immediate action (synthesis)
- Consolidate and publish existing data to improve short-term indicators (TOFE consolidation, tax expenditure publication, consolidated balance sheet steps).
- Bring letters of comfort and guarantees into formal coverage and provisioning consistent with the LOLF.
- Publish a Fiscal Risk Statement (qualitative short-term, progressively quantitative) as part of DPBEP and budget documents.
- Strengthen accounting systems and SIGFIP interface to monitor payroll and implement accrual/balance sheet accounting by 2020.
- Improve transparency on PPPs, public enterprise liabilities, and financial sector exposures; extend DSA horizons and actuarial analyses.

*Source: IMF staff report excerpt — Fiscal Transparency Evaluation: Senegal (selected sections).*

### PREFACE __________________________________________________________________________________________ 5

### PREFACE

### Mission mandate and timing
- Request from Mr. Amadou Ba, Minister of Economy, Finance and Planning (MEFP), made during the 2017 annual meetings.
- Fiscal Affairs Department (FAD) mission visited Dakar from April 5 to 17, 2018 to conduct a fiscal transparency evaluation (FTE) in Senegal.

### Mission leadership and team
- Mission head: Ms. Manal Fouad (Division Chief, FAD).
- Team members:
  - Messrs. Fabien Gonguet and Bruno Imbert (economists, FAD)
  - Philippe Samborski (expert with the IMF Statistics Department)
  - Adrien Tenne (expert, FAD)
  - Ms. Nour Chamseddine (Research Analyst, FAD)
- Resident support: Mr. Jean-François Dagues (FAD Resident Advisor to the MEFP).

### Key counterparts and meetings
- Received and guided by:
  - Mr. Bassirou Samba Niasse, Secretary General of the MEFP (upon arrival)
  - Mr. Amadou Ba, Minister of Economy, Finance and Planning (presentation of conclusions and recommendations at end of stay)
- MEFP focal point and principal contacts:
  - Mr. Alioune Ndong, advisor to the MEFP and mission focal point
  - Mr. Moustapha Ba, Director General of Budget (DGB)
  - Mr. Abdoulaye Samb, Coordinator of the General Directorate of Government Accounting and Treasury (DGCPT)
- Departments within MEFP engaged:
  - Various departments in the DGB
  - DGCPT
  - General Directorate of Taxes and Domains (DGID)
  - General Directorate of Customs (DGD)
  - Office of the Director for Economic Forecasting and Studies (DPEE)
  - Office of the Director of Planning (DP)
  - Office of the Director responsible for Supervising Government Procurement (DCMP)
  - Office of the Director of Currency and Credit (DMC)
- External institutions consulted:
  - National Agency for Statistics and Demography (ANSD)
  - Studies and Planning Unit of the Ministry of the Environment and Sustainable Development
  - National Committee of the Extractive Industries Transparency Initiative (EITI)
  - National Office of the Central Bank of West African States (BCEAO)
  - Agency for Promotion of Investment (APIX)
  - Court of Accounts: Mr. Mamadou Faye, First President, and his staff
  - Nongovernmental organization 3D
- Donors consulted at start and end of visit:
  - World Bank
  - European Union
  - U.S. cooperation entities

### Activities, outputs, and engagement
- Presentation of conclusions and recommendations to Mr. Amadou Ba at end of mission.
- Technical feedback session organized with departmental focal points, chaired by Mr. Amadou Bousso Faye, advisor to the MEFP.
- The mission worked closely with MEFP departments and relevant national institutions to conduct the FTE.

### Acknowledgements
- The mission thanks the Senegalese authorities for their warm welcome, availability, and the high quality of discussions.
- Special thanks extended to:
  - Mr. Alioune Ndong for assistance in organizing the mission
  - Ms. Cemile Sancak, the IMF Resident Representative, and her staff for facilitating the mission and providing invaluable support

*Source: PREFACE, cr1934-senegal-fiscal-transparency*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Overview of the evaluation framework and context
- The evaluation applies the IMF’s Fiscal Transparency Code (the Code), adopted in 2014, built around three pillars: (I) Fiscal Reporting; (II) Fiscal Forecasting and Budgeting; and (III) Fiscal Risk Analysis and Management.
- The FTE assesses compliance with 36 FTE principles.
- The Code differentiates between basic, good, and advanced practices for each principle; if the basic level is not attained, the practice is regarded as "not met."
- Senegal is the first country in sub-Saharan Africa with a Francophone approach to public financial management to volunteer for an FTE.
- Senegal has revamped its legal framework in line with West African Economic and Monetary Union (WAEMU) directives and has adopted a code of transparency in public financial management.
- Since 2017, Senegal has officially endorsed the IMF’s Special Data Dissemination Standards (SDDS): the fourth country to do so in Sub-Saharan Africa and the first in the WAEMU area.
- Senegal earned an Open Budget Index (OBI) rating of 51 in 2017, "10 points higher than the global average and the third highest score in Sub-Saharan Africa."

### Main findings by pillar and practice-level assessments
- Overall positioning: Senegal is positioned at the average level for countries of similar income and institutional capacity.
- Areas of relative strength are mostly in Pillar II, followed by Pillar I, consistent with the OBI score.

Pillar II — Fiscal forecasting and budgeting
- Three practices rated "advanced":
  - Macroeconomic projections are detailed.
  - Fiscal policy is anchored in clear and stable objectives.
  - Fiscal legislation is in line with best international practices and relatively comprehensive.
- Three practices rated "good":
  - The medium-term budgetary framework informs the budget process.
  - Fiscal documents are published in a timely manner.
  - Briefing notes for feasibility studies are made public.

Pillar I — Fiscal reporting
- Three practices rated "good":
  - Senegal is the first WAEMU country to produce a consolidated General Government Fiscal Operations Table (TOFE).
  - Statistical integrity is ensured by cross-comparing different sources of information.
  - Fiscal data provided allow for comparing the budget and its execution.

Pillar III — Fiscal risk analysis and management
- Contains just one "good" practice: monitoring of risks triggered by subnational governments.
- Many Pillar III practices are "not met" (see below).

Aggregate ratings and notable distributions
- A relative majority of practices (14) are rated "basic"; these are mainly under Pillar I.
  - Many fiscal reports have gaps in scope of coverage and in observance of fiscal and accounting standards.
  - Few resources are devoted to documenting, analyzing, or revising data.
  - Frequency and timeliness of fiscal reports are adequate but could be improved.
  - Under Pillar II, "basic" scores relate to dissemination of information on public investment; program budgeting not yet operational; improper use of supplementary budget laws; and an incipient process for public participation.
  - Authorities have initiated some fiscal risk work (public debt sustainability analysis; draft analysis of environmental risks and public corporation risks; inclusion of a contingency reserve) but these practices remain nascent and do not meet advanced Code requirements.
- One third of all practices are rated "not met."
  - Some existing documents are not published (e.g., recent reports on tax expenditure; list of onlent loans or outstanding government-guaranteed debt).
  - Use of letters of comfort undermines the budget unity principle.
  - Most non-existent practices relate to Pillar III: absence of thorough analyses of fiscal risks, especially macroeconomic risks (oil price volatility), public corporation liabilities, and public-private partnership (PPP) contract risks.

### Key public sector financial overview (selected figures, 2016)
- GDP in 2016 totaled CFAF 722.34 billion (measured before the changeover to base year 2014).
- Selected consolidated public sector transactions and stocks (figures as presented in Table 0.2):
  - Revenue (Total Public Sector Transactions): 36.4
  - Expenditure (Total Public Sector Transactions): 38.1
  - Balance (Total Public Sector Transactions): -1.7
  - Financial assets (Consolidated public sector, financial): 40.0
  - Liabilities (Consolidated public sector): 121.1
  - Net financial worth (Consolidated public sector): -81.0
  - Civil servant pensions: 28.1
- Notes from table:
  - Wherever possible, figures are consolidated.
  - Extrabudgetary central government comprises a sample of the subsector accounting for most revenue and expenditure.
  - Public corporations comprise a sample of the subsector made up of the principal public corporations.

### Principal recommendations and action plan (objectives and priority actions)
- The evaluation proposes recommendations organized around five objectives, accompanied by an Action Plan (Table 0.3) with short-term (2018), medium-term (2019-2020), and long-term (2021 and beyond) steps, and priority ratings: low (*), medium (**), high (***).

Objective 1: Strengthen coverage and integrity of fiscal and financial data
- Priority actions (examples):
  - Publish the report on assessment of the budgetary cost of tax expenditure in a recent fiscal year (2015 or later) — Short-term (2018) — Priority ** — Responsible: DGID, DGD.
  - Produce the permanent list of public sector entities and sectorize the units — Short-term (2018) — Priority *** — Responsible: DGCPT (DEES, DSP), ANSD & BCEAO.
  - Compile a consolidated general government balance sheet — Short-term (2018) — Priority *** — Responsible: DGCPT.
  - Compile a Government Fiscal Operations Table (TOFE) and a consolidated public sector balance sheet — Medium-term — Priority ** — Responsible: DGCPT.
  - Reinforce the Economic Studies and Statistics Division (DEES) and the Parapublic Sector Directorate (DSP) (human, financial, and I.T. resources) — Short-term (2018) — Priority *** — Responsible: DGCPT.
  - Bring the use of letters of comfort in line with accounting and fiscal rules derived from the organic law — Short-term (2018) — Priority *** — Responsible: DGB, DGCPT (DDP).
  - Put in place a mechanism for monitoring multi-year government commitments via the commitment authorizations and payment appropriations (CA-PA) mechanism and approve an annual CA ceiling in the budget pursuant to the Organic Law (Articles 17ff, 44 and 60) — Short-term (2018) — Priority *** — Responsible: DGB.

Objective 2: Align budgetary and accounting standards with the Organic Budget Law (LOLF)
- Priority actions (examples):
  - Interface the balances software with SIGFIP to enable regular monitoring of payroll execution (at least by administrative classification) — Short-term (2018) — Priority *** — Responsible: DGB (Balance, DSI, DPB).
  - Produce a budget outturn statement using functional classification when preparing the revised budget law for 2017 (and subsequent years) — Short-/Medium-/Long-term — Priority * — Responsible: DGB (DPB).
  - Validate the list of budgetary programs and compile financial statements using program nomenclature for information purposes for a few tentative years — Short-/Medium-term — Priority *** — Responsible: DGB.
  - Introduce accrual basis and balance sheet accounting (comptabilité en droits constatés et patrimoniale) — Medium-term — Priority * — Responsible: DGCPT, DGB.
  - Apply market price-based valuation of assets and liabilities — Medium-term — Priority * — Responsible: DGCPT.

Objective 3: Improve understanding of fiscal and financial risks and their expected impacts
- Priority actions (examples):
  - Publish guarantees and onlending on the Public Debt Directorate website — Short-term (2018) — Priority ** — Responsible: DGTCP (DSP).
  - Publish the government equity investment strategy — Short-term (2018) — Priority ** — Responsible: DGTCP (DSP).
  - Publish a statement of fiscal risks in the Multiyear Budgetary and Economic Programming Document (DPBEP) — Short-/Medium-/Long-term — Priority *** — Responsible: DGB, DGCPT, DGPPE.
  - Establish and publish objective and transparent criteria for use of the reserve, targeting truly unpredictable outlays as a priority — Medium-/Long-term — Priority *** — Responsible: DGB.

Objective 4: Strengthen analysis of macrofiscal forecasts to boost credibility
- Priority actions (examples):
  - In the DPBEP, provide detailed figures for the multiyear forecasts of principal macroeconomic indicators and compare them against those produced by other sources (e.g., BCEAO, the IMF) — Short-/Medium-/Long-term — Priority ** — Responsible: DGPPE (DPEE), DGB.
  - Bolster explanation of macroeconomic and fiscal forecasts by providing (i) a quantitative analysis of differences between forecasts and actual outcomes; and (ii) details of the grounds for revising forecasts from one year to another — Short-/Medium-/Long-term — Priority *** — Responsible: DGPPE (DPEE), DGB.
  - Project alternative macroeconomic scenarios and show their impact on the budgetary and fiscal environment in the budget documents — Medium-term — Priority * — Responsible: DGPPE (DPEE).
  - Conduct simple sensitivity analyses of major variables in budgetary flows (revenue, expenditure, deficit) to key macroeconomic variables (real GDP growth, inflation, oil price per barrel, exchange rate) and publish them in the DPBEP and/or the Economic and Financial Report — Short-term — Priority ** — Responsible: DGPPE (DPEE).

Objective 5: Increase public participation in monitoring and debating fiscal policy
- Priority actions (examples):
  - Enhance the quality of program-budget documents: prepare and disseminate a manual for drafting Multiyear Expenditure Programming Documents (MEPD), Priority Action Plans [PAP] and Annual Performance Reports (RAP); and review existing MEPD and PAP — Short-/Medium-/Long-term — Priority * — Responsible: DGB, Line ministries.
  - Establish a mechanism for public participation in discussion of fiscal policy inspired by best international practices — Short-/Medium-/Long-term — Priority ** — Responsible: DGB.

### Fiscal reporting coverage and institutional responsibilities (high-level)
- General Directorate of Government Accounting and Treasury (DGCPT) is responsible for compiling Government Finance Statistics (GFS) and consolidating budget execution accounts and main government financial statements.
- General Directorate of Budget (DGB) prepares budget execution reports.
- Public Debt Directorate produces information on domestic and external public debt.
- Parapublic Sector Directorate (DSP) produces reports on budget execution and indebtedness of public entities, agencies, and public corporations.
- Since 2015, GFS in Senegal have been compiled following GFSM 2001; Senegal is the first WAEMU country to present its TOFE in accordance with WAEMU Directive 2009 on the TOFE, consistent with GFSM 2001.
- The current government accounting system records transactions using a hybrid (cash basis and accrual basis) accounting system; government balance sheet data remain partial and fragmented.
- Many central government fiscal reports are published regularly, but financial statements for extrabudgetary units, social security funds, subnational governments, and most public corporations are not published.

*Executive Summary, cr1934-senegal-fiscal-transparency*

### 6.      Since end-2017, Senegal has been producing a consolidated annual TOFE covering

### cr1934-senegal-fiscal-transparency - 6.      Since end-2017, Senegal has been producing a consolidated annual TOFE covering

### Coverage and consolidation of fiscal reporting
- Since end-2017, Senegal produces a consolidated annual TOFE covering all sub-sectors of public administration; expanded GFS coverage improves measurement of public administration activities and relations with other sectors.
- Remaining gaps:
  - Reports on extrabudgetary entities cover only a fraction of such entities.
  - Public corporation data are not consolidated with government accounts; available reports mainly cover those corporations’ indebtedness and government equity.
- Measures under way:
  - Establishment of a parapublic sector observatory and a subnational government finance observatory to strengthen dissemination of public sector fiscal data.

### Institutional composition of the public sector (2016)
- Total entities in the public sector: 826.
- Central government: 201 entities, including:
  - 17 ministries,
  - 10 republican institutions (Presidency, National Assembly, Supreme Court, and so on),
  - 11 Special Treasury accounts (CST),
  - 150 extrabudgetary units (government institutions, agencies and other similar bodies).
- Subnational governments sub-sector: 42 departments containing 557 communes (including 5 towns [villes]).
- Social security funds sub-sector: 2 entities (Social Security Fund (CSS/SSF) and Institution de prévoyance retraite du Sénégal–IPRES).
- Public corporations (statistical definition): 19 non-financial corporations and 5 financial corporations, including the national directorate of the BCEAO.

### Key fiscal aggregates and impacts of expanded coverage (2016)
- General government expenditure: 33.1 percent of GDP.
  - Central government expenditure: 31.4 percent of GDP.
  - Extrabudgetary central government units expenditure: 9.5 percent of GDP.
  - Subnational governments and social security funds expenditure: 2.1 percent of GDP.
- Impact of including public corporations in the public sector:
  - Revenue: increases from 30.3 percent of GDP (general government) to 36.4 percent of GDP (public sector).
  - Expenditure: increases from 33.1 percent of GDP to 38.1 percent of GDP.
  - Deficit: lowers from 2.8 percent of GDP (general government) to 1.7 percent of GDP (public sector).
  - Gross debt: increases from 97.2 percent of GDP (general government) to 121.1 percent of GDP (public sector).
  - Net financial worth (valeur financière nette): goes from -74.0 percent of GDP to -84.0 percent of GDP.

### Institutional and financial breakdown (2016) — selected figures (As a percentage of GDP)
- Central government (201 entities): Revenue 28.3; Expenditure 31.4; Net Balance -3.2.
  - Budgetary (51): Revenue 25.8; Expenditure 28.6; Net Balance -2.8.
  - Extrabudgetary (150): Revenue 9.1; Expenditure 9.5; Net Balance -0.4.
- Social Security Funds (2): Revenue 1.5; Expenditure 1.2; Net Balance 0.2.
- Sub-national governments (599): Revenue 1.0; Expenditure 0.9; Net Balance 0.2.
- General government consolidation: Revenue -0.5; Expenditure -0.5; Net Balance 0.0.
- General government (802): Revenue 30.3; Expenditure 33.1; Net Balance -2.8.
- Public corporations other than the Central Bank (23): Revenue 6.5; Expenditure 5.5; Net Balance 1.0.
- Central Bank (1): Revenue 0.2; Expenditure 0.1; Net Balance 0.1.
- Consolidation of the Public Sector: Revenue -0.6; Expenditure -0.6; Net Balance 0.0.
- Public Sector (826): Revenue 36.4; Expenditure 38.1; Net Balance -1.7.

### Coverage of stocks and balance sheet issues
- Senegal does not meet the basic practice that fiscal reports must include cash flow, deposits and all debt; some financial asset and liability data are compiled but fragmented with gaps.
- DDP quarterly public debt bulletin covers loans and debt securities issued by the government but excludes:
  - Accounts payable, amounts owed to social security funds, government entity deposits in the Treasury, comfort letter-related amounts, actuarial liabilities for pensions, obligations from PPPs.
- DSP publishes government equity investments at cost and annual revaluations of that portfolio.
- Current accounting practices do not permit establishment of government net worth (patrimoine de l’État); Treasury trial balance is not accrual-based and cannot reconstruct all outstanding assets and liabilities.
- Action plan to modernize government accounting by 2020 is being implemented.
- Parapublic sector entities:
  - Majority produce complete annual financial statements (per SYSCOA and CIPRES for CSS/SSF and IPRES) but are not consolidated in fiscal reports; transmitted to DSP.
  - Parapublic sector accrual-based (données patrimoniales) data largely not included in statistical reports covering all balance sheet accounts.
  - Report on parapublic sector indebtedness produced but covers only 2013 and 2014.
- Unmeasured portions of balance sheets (mission estimates, 2016):
  - Consolidated public sector: financial assets unmeasured = 27 percent of GDP; liabilities unmeasured = 51 percent of GDP.
  - General government: financial assets unmeasured = 17 percent of GDP; liabilities unmeasured = 39 percent of GDP.
- Consolidated gross public sector debt (mission estimate, 2016): 121.1 percent of GDP.
  - Central government gross debt: 97.2 percent of GDP.
  - Public corporations (excluding the Central Bank) liabilities: 16.8 percent of GDP.
  - Note: gross debt of public corporations (excluding the Central Bank) was equivalent to 12.2 percent in an alternative measure because liability included Government equity investment.
- Actuarial liabilities relating to retirement pensions for civilian and military personnel (mission estimate, 2016): 28.1 percent of GDP (cumulative pension entitlements at end of fiscal year 2016; estimates based on updates of actuarial projections with an update rate chosen at 5 percent).

### Coverage of flows and accounting basis
- Government accounting practice is essentially on cash-basis; GFS are based on a hybrid accounting system between cash-basis and accrual accounting.
- TOFE relies on:
  - Monitoring of budget execution: actual collections for revenue; payment order basis for expenditure.
  - Consolidated general government TOFE shows fiscal transactions and financing operations, broken down by asset/liability type and counterparty residence per GFSM 2001/2014.
- Accrual-based government accounting is not yet effective, preventing recording of non-monetary flows (accrued interest not yet due, in-kind transactions, fixed capital consumption) and other economic flows (holding gains and losses, other changes in volume).
- Incomplete integration of stocks and flows, including foreign currency-denominated debt data.

### Coverage of tax expenditures
- Since fiscal year 2008, internal revenue departments produce a Tax Expenditure Evaluation Report coordinated by DGID.
- Good practice elements in the report:
  - Comprehensive list of tax expenditures.
  - Quantitative estimates of revenue shortfalls for most (quantitative estimates available for 68.1 percent of tax expenditures listed for fiscal year 2014).
  - Aggregated presentation by classifications (sectoral, by type of tax).
  - Socio-economic impact studies for some sectors (mining, microfinance).
- Limitations:
  - Report is not published regularly; evaluation for fiscal year 2014 was produced at end of 2016 and is available online; evaluation for fiscal year 2015 completed but not published (contravenes annual publication obligation in 2009 WAEMU directive and 2012 law transposing the directive).
  - Fiscal cost of quantified tax expenditures: 7.8 percent in 2014, or CFAF 588 billion.
  - Publication of 2015 and 2016 reports would help sensitize public and Parliament to rationalize tax expenditures, especially exemptions for economic and social purposes.

### Frequency and timeliness of fiscal reporting
- In-year reports produced:
  - DGB quarterly report on budget execution: published within no more than 45 days of end of quarter.
  - DPEE provisional monthly survey and monthly note on economic conditions: monthly note within 30 days of end of month (timeliness varies).
  - DSP quarterly budget execution report on government institutions, agencies and administrative bodies (timeliness varies).
  - DDP quarterly public debt statistics bulletin: published within no more than 90 days of end of quarter.
  - Current monthly TOFE covering budgetary central government: produced within 45 days of end of month.
  - Good practice benchmark: quarterly reports published within one month.
- IMF SDDS subscription:
  - Senegal subscribed to the IMF’s SDDS in November 2017.
  - Commitments: publish monthly TOFE and quarterly statement of central government debt using an open data model within one month and one quarter, respectively; consolidated general government TOFE to be published within no more than six months; produce metadata per the standard.
- Timeliness of annual financial statements:
  - MEFP compiles annual government accounts by no later than six months after fiscal year end (by June 30) per WAEMU Directive No. 07/2009.
  - In 2017, Court of Accounts received draft final budget, CGAF and budget execution record by deadlines but delay in producing key operating accounts prevents their use in the general statement of conformity (DGC).
  - Court of Accounts received public debt statement only on December 5, 2017.
  - Court of Accounts transmitted its report on execution of the 2016 budget to the National Assembly on December 28, 2017 (published just before the 12-month deadline from end of fiscal year 2016; good practice would be within 9 months).
  - For fiscal years 2015 and 2014, publication took 19 and 16 months, respectively.

### Quality of fiscal reporting and classification
- Senegal has adopted a legal framework with budgetary and accounting nomenclature compliant with international classification standards (e.g., GFSM 2001, COFOG) established by the Organic Budget Law (LOLF) and two implementing instruments.
- Fiscal revenues are shown according to economic classification; expenditures follow administrative and economic classifications.
- These classifications are used for budget preparation, execution and accounting (draft Budget Review Law, CGAF).

*Source: https://www.imf.org/-/media/files/publications/cr/2019/cr1934-senegal-fiscal-transparency.pdf.*

### 26.      Some classification shortcomings make it difficult to reconcile the authorizing

### Some classification shortcomings make it difficult to reconcile the authorizing officers’ and the accounting officers’ accounts

### Classification, execution, and accounting anomalies
- Numerous inconsistencies identified during execution (e.g., the presence of wage or current components in the capital chapters) complicate monitoring and analysis and require manual reprocessing at the end of the fiscal year.
- Payroll execution is performed according to employee registration number rather than administrative attachment, so execution of wage bill appropriations is manually reconstructed ex post for accounting purposes.
- Work to remedy these anomalies is being carried out in the DGB and the DGCPT.
- The SIGIF integrated reporting system is expected to automate the budgetary-accounting process eventually.
- Decree references: Decree 2012-673 on government budget classification (NBE) and Decree 2012-92 on the government chart of accounts (PCE).

### Functional and programmatic classifications
- Some implementation work on the functional classification system has been carried out and is available in the information system, but it is not used for budget preparation, monitoring, or drafting fiscal reports.
- The programmatic classification system is being implemented but is not yet fully in place and is not used for budget preparation, approval, or execution; it currently functions mostly for information purposes.
- The ministerial order approving the final list of programs is still pending.

### Internal consistency and reconciliations
- The internal consistency indicator requires three reconciliations: (i) fiscal balance vs. financing; (ii) stock of debt holdings vs. debt issuance/redemption; and (iii) financing vs. change in debt stock. In Senegal, only the second reconciliation is performed, and it could be improved.
- Reconciliation between the fiscal balance and financing is performed in the Government Fiscal Operations Table (TOFE) published by the Economic Studies and Statistics Division (DEES) of the DGCPT.
  - The gap between the two calculation methods, shown in the Errors and Omissions line, has been less than 0.1 percent of GDP, on average, for the past 15 years (Figure 1.6).
  - This is not strictly a reconciliation with creditor data.
- The authorities present a debt stock/debt flow adjustment framework in an annex to the Debt Sustainability Analysis Report, which breaks down outstanding debt to GDP ratio fluctuation by identified debt-creating flows and a residual value.
  - That residual amount is significant in the case of Senegal (Figure 1.7) and may be linked to changes in the scope of the debt, changes in its rating, or debt relief.
- The government does not publish any reconciliation between debt issued and debt held by creditors.
  - The WAMU Securities Agency (UMOA titres) publishes a geographical breakdown of holders in its quarterly bulletin and is required to produce a monthly breakdown of holdings in the second market, but the report is currently not available due to data transmission failures and lack of knowledge about third-party transfers.
- Heatmap indicator: "The unexplained portion of the public debt stock/flow adjustment exceeds two percentage points of GDP."

### Historical revisions
- Major revisions are being made to macroeconomic statistics: implementation of GFSM 2001/2014, SNA 2008, and a change of base year.
- Following the national accounts reevaluation, 2014 GDP was increased by almost 30%.
  - The 30% increase breaks down as follows: tertiary sector (+18%), secondary sector (+7%), primary sector (+4%), and net taxes on products (+1%).
- ANSD disseminated a summary of revisions from the national accounts reevaluation describing methodological changes and impacts.
- There has been no publication explaining the impact of the main methodological changes made in the revised TOFE in June 2015 following migration to GFSM 2001.

### Integrity of fiscal reporting and statistical governance
- Responsibilities for compiling and publishing statistical data are clearly established:
  - Government fiscal statistics: DEES.
  - Real sector statistics: ANSD.
  - Balance of payments and financial and monetary statistics: National Directorate of the BCEAO.
- Most data are compiled and disseminated in accordance with recognized international standards; for financial and monetary statistics, MFSM 2000 remains the applicable standard for the BCEAO National Directorate.
- Senegal does not publish GFS based on functional classification of general government because functional classification is still being implemented.
- Senegal shares the schedule of data publication for the on-going month and at least for the up-coming three months; fiscal statistics are published with periodicity and timeliness required by the SDDS.
- Institutional strengthening:
  - A National Statistics Council (CNS) and a Technical Committee for Statistical Programs (CTPS) coordinate compilation and dissemination under the Prime Minister’s authority.
  - The DGCTP has created a TOFE sub-committee responsible for implementing GFS according to GFSM 2001/2014.

### External audit and comparability
- The Court of Accounts meets the main criteria for independence required by international standards (Constitution; Organic Law No. 2012-23 of December 27, 2012, Articles 29–32).
  - Competences: jurisdictional supervision over accounts compiled by government accounting officers, supervision of budget execution, oversight of the parapublic sector, and punishment of administrative misconduct.
- The Court of Accounts produces and publishes several reports (annual public report, RELF, DGC, specific reports); these are published online but need updating.
  - The Court compares execution of the budget law against initial authorization and verifies consistency between different documents and financial statements; it may express reservations on discrepancies.
  - For 2016 budget execution, the Court highlighted inconsistencies between the budget execution record (compte administratif) and the Fiscal Management General Account (CGAF) due to matching issues between the budget classification (NBE) and the Government Chart of Accounts (PCE).
- The Court of Accounts does not certify the national accounts; certification is a long-term objective.
- Comparability: Fiscal forecasting, budgets, and related reports are presented to ensure comparability; however, there is no formal process reconciling GFS with fiscal accounting.
  - The new WAEMU economic budget classification harmonized with GFSM 2001 is expected to enhance consistency.

### Key fiscal statistics (Budget Outturn, 2016 — CFCA billions)
- Income
  - 1. Overall budget: Budget Law 2016 = 2925; Cumulative end-June = 1662; Cumulative end-December = 3424; Execution rate = 117.1%
  - A. Domestic resources = 2491; 1429; 2956; 118.7%
    - Tax revenue = 1721; 915; 1786; 103.8%
    - Nontax revenue = 113; 123; 84; 74.5%
    - Exceptional revenue = 64; 0; 255; 400.4%
    - Reimbursements of onlending = 3; 3; 2; 83.0%
    - Budget grants (dons bugétaires) = 58; 78; 71; 122.2%
    - Loans = 532; 310; 758; 142.5%
  - B. External revenue = 434; 232; 467; 107.7%
- Special Treasury Accounts revenue = 98; 33; 90; 91.8%
- Expenditure
  - 1. Overall budget = 2925; 1425; 3331; 113.9%
  - A. Expenditure using domestic resources = 2491; 1193; 2863; 115.0%
    - Public debt = 596; 310; 784; 131.6%
    - Payroll = 538; 278; 564; 104.7%
    - Other current expenditure = 746; 351; 822; 110.3%
    - Capital expenditure (dépenses en capital) = 611; 253; 694; 113.5%
  - B. Externally funded expenditure = 434; 232; 467; 107.7%
- Special Treasury Accounts expenditure = 98; 45; 105; 107.0%

### Conclusions and policy recommendations (selected)
- General: Information is available but often produced and used by various departments solely for internal purposes; gaps remain in measurement and consolidation of government balance sheet data. Some indicators could be improved in the short term by consolidating and publishing already available data.
- Recent progress: Expanded GFS coverage and Senegal’s subscription to the SDDS.
- Medium-term impact: Reforms under the new WAEMU harmonized public finance framework, adoption of new fiscal classifications, new government chart of accounts, and implementation by 2020 of accrual basis and balance sheet government accounting (comptabilité en droits constatés et patrimoniale) will enhance data comparability.

Recommendations (as listed)
- Recommendation 1.1: Provide more thorough insight into public finance
  - Publish the assessment report of the fiscal cost of tax expenditure for a recent (2015 or later) fiscal year
  - Compile the final list of government entities and list units by sector
  - Compile a consolidated general government balance sheet
  - Compile a Government Fiscal Operations Table (TOFE) and a consolidated public sector balance sheet
  - Boost (human, financial and I.T.) resources for the departments responsible for economic studies and statistics, including the DEES and the DSP
- Recommendation 1.2: Apply the classifications specified in the Organic Budget Law (LOLF)
  - Interface balance software with the Integrated Public Finance Management System (SIGFIP) to allow regular monitoring of the execution of payroll expenditure (at the very least, according to the administrative classification)
  - Produce a budget execution statement using functional classification when preparing the draft Budget Review Law (PLR) for 2017 (and beyond)
  - Continue screening and harmonizing economic classifications to facilitate reconciliations between the accounts prepared by the authorizing officer and those prepared by the accounting officers
  - Validate the list of fiscal programs and produce financial statements using program-based budget nomenclature with data for a few tentative fiscal years
  - Produce a metadata (sources, concepts and methods) document on the migration to GFSM 2001/2014
- Recommendation 1.3: Implement accrual basis and balance sheet accounting (comptabilité en droits constatés et patrimoniale) as well as market-based valuation

*Source: IMF staff report excerpt on Senegal fiscal transparency (selected sections).*

### 47.      This section assesses the quality of Senegalese practices with respect to fiscal

### cr1934-senegal-fiscal-transparency - 47.      This section assesses the quality of Senegalese practices with respect to fiscal

### Assessment scope
- The analysis addresses four main areas:
  - The scope (comprehensiveness) of the budget law and budget documentation;
  - The clarity of the budget process;
  - Fiscal policy stance;
  - The credibility of fiscal forecasts.

### Principles and expectations for forecasting and budgeting
- Budgets and underpinning macroeconomic forecasts must:
  - Provide a thorough view of the outlook for public finance;
  - Establish prerogatives and responsibilities of the executive and legislative branches by law and ensure timely presentation, debate, and approval;
  - Be presented to facilitate analysis of policies and accounting;
  - Be credible.

### Legal and institutional framework
- The content of the budget law, responsibilities, deadlines, and presentation rules are established in the Constitution and in the LOLF.
- The legal framework reflects transposition of the WAEMU regional directives of 2009 and requires publication of several documents (implementation under way).
- Implementation status:
  - Implementation is under way and should be completed by 2020, three years after the initial deadline (January 1, 2017).
  - Senegal is at an intermediate stage with some provisions of the new legal framework coexisting with old rules and practices.

### Comprehensiveness (Section 2.1)
- Overall finding on budget unity: Not met.

- Progress and current coverage:
  - Budget documentation has expanded due to gradual implementation of the 2011 Organic Law (LOLF).
  - Budget documentation includes draft budget laws and explanatory annexes, Multiyear Budgetary and Economic Programming Document (DPBEP), Multiyear Expenditure Programming Document (DPPD), and Annual Performance Projects (PAP) as mandatory annexes to draft budget laws.
  - Some new documents have yet to be produced or are still being drafted (e.g., matrix tables).
  - The MEFP has substantially improved contents and presentation of budget documents.

- Central government coverage:
  - Budget laws and annexes contain all tax and nontax revenue (including parafiscal taxes), grants, and exceptional revenue.
  - External financing data are available, with more extensive description for some contributions (example: cooperation aid from Luxembourg).
  - Expenditure is shown by type and by section (ministries/institutions).
  - Budget specifies amounts of transfers of current and capital appropriations to government entities and extra-budgetary funds.
  - Revenue and expenditure recorded in Special Treasury accounts (CST) are available, along with debt and fiscal deficit information.

- Other public entities:
  - Budgetary and fiscal data for other public entities are incomplete but available in part (Table 2.2).
  - DPBEP contains subnational governments’ revenue (own and transfers) aggregated by source (overall transfers, transfers via investments, earmarked taxes).
  - DPBEP includes information on government-owned enterprises (government shares in certain corporations, e.g., SOMCOS) and government outlays for struggling corporations (e.g., Postal Service, LONASE).
  - Data are available for social security funds IPRES and CSS (but with limitations described below).
  - DPPD with PAP contain medium-term projections of ministry and institution expenditures and performance indicators; these documents are still being perfected but were transmitted to Parliament for the proposed 2018 budget.

- Gaps affecting budget unity:
  - Lack of information on “lettres de confort” weakens budget unity and fails to convey a comprehensive picture of public debt.
    - Letters of comfort enable payment to a third party outside the Treasury pathway or beyond annual ceilings; they function as borrowings not recorded as such in the PLF and can also act as government guarantees enabling third-party financing.
  - Existing budgetary mechanisms (commitment authorizations and payment appropriations — CA-PA — under LOLF Articles 17 et seq.) could track such transactions and record the government’s overall commitment to a project.
  - Guarantees should be provisioned in the corresponding Special Treasury account (Guarantees and endorsements) pursuant to Article 42 of the LOLF.
    - The lump-sum amount provisioned in the 2018 Budget Law is well below what is needed to cover all existing guarantees, including letters of comfort.

- Empirical figures on letters of comfort (Table 2.3):
  - Annual amounts of financing through letters of comfort (CFAF billions):
    - 2016: 37.7
    - 2017: 95.8
    - 2018: 104.3
    - 2019: 66.0
    - 2020: 17.1
  - Public debt servicing in connection with bank loans (source PLF) (CFAF billions):
    - 2016: 31.4
    - 2017: 37.2
    - 2018: 29.1
    - 2019: -
    - 2020: -
  - % of GDP (estimates) for public debt servicing in connection with bank loans:
    - 2016: 0.4%
    - 2017: 1.0%
    - 2018: 1.1%
    - 2019: 0.6%
    - 2020: 0.2%

- Additional data needs:
  - Fiscal reporting outside central government is heterogeneous and patchy.
  - In the DPBEP:
    - Data for Social Security Fund (CSS) are not provided.
    - Data for IPRES should be more disaggregated.
    - For public corporations only transfers from the government budget are shown; entities’ own funds are not consolidated or presented in the DPBEP.

- Box: Definitions of “letters of comfort” (types described):
  - Budgetary (or fiscal) coverage letter: Minister of Finance commits appropriations to finance a project.
  - Bank domiciliation letter: Minister of Finance commits to depositing payments from a project in a bank account at a specified bank.
  - Letter of comfort (strict sense): Minister of Finance requests financing to be repaid out of future appropriations (normally via a subsequent budget law).
  - Guarantee letters: Government guarantees a transactor to enable financing from a lending institution.

### Macroeconomic forecasts (Section 2.1.2)
- Overall finding on macroeconomic forecasts: Advanced.

- Institutional arrangements and publications:
  - The Office of the Director of Economic Forecasting and Studies (DPEE) reports in detail on economic forecasts for the current and subsequent years.
  - DPEE publishes "Economic and Financial Situation" twice a year covering:
    - Estimates or projections of real GDP for the prior/current or current/next year, with resource and expenditure components;
    - Forecasts for inflation, the Government Fiscal Operations Table (TOFE), and the balance of payments;
    - Assumptions underlying projections and information on government policies, reforms, and private sector efforts.
  - DPEE produces Monthly Notes on Current Economic Conditions (Notes mensuelles de conjuncture) and posts an Excel spreadsheet on its website with macroeconomic forecasts for the next five years.
  - DPEE participates in the Macroeconomic Framework Committee with BCEAO, DGCPT, and DGB to ensure consistency.

- Integration with budget documents:
  - The Economic and Financial Report (REF) attached to the proposed budget (PLF) reflects material from the DPEE Economic and Financial Situation report.
  - The DPBEP includes a macroeconomic outlook for the next three years based on DPEE multiyear forecasts.

- Presentation and credibility issues:
  - Real GDP growth forecasts underlying proposed budgets of recent years do not show significant bias (Figure 2.1 indicates gaps between forecasts used for the budget proposal and outturn; negative bars represent under-estimation).
  - Credibility could be improved by:
    - Explaining reasons for discrepancies between forecasts and outturn;
    - Providing figures on the macrofiscal impact of government’s principal economic policy measures.
  - The DPBEP’s multiyear macroeconomic scenario is currently brief and essentially qualitative; more detailed multiyear scenario information would aid understanding of the medium-term fiscal framework and contingencies.

### Medium-term budget framework (Section 2.1.3)
- Overall finding: Good.

- Practice and evolution:
  - Medium-term budget framework (MTBF) practice is recent but well established.
  - Since 2013 the DPBEP has been produced; fiscal forecasts have been formatted similarly to TOFE.
  - MTBF has become increasingly important for annual budget preparation and strategic fiscal choices.
  - Senegal now elaborates an MTBF for internal purposes based on economic classification and is beginning to produce multiyear expenditure programming documents (DPPD) regularly in line with LOLF provisions, though these documents still require perfection.

- Document contents and dissemination (Table 2.4 summary):
  - DPBEP:
    - Includes execution of revenue and expenditure n-1 and n-2; forecasts for n+1, n+2, and n+3.
    - Validated by Council of Ministers.
    - Published/transmitted: Yes (transmission to Parliament for the DOB, posted online, annexed to the PLF).
  - Medium-term Budget Framework (CBMT):
    - Includes outturn n-1; projected outturn for year n; fiscal expenditure projection (economic and administrative classifications).
    - Prepared by Ministry of Economy, Finance and Planning (MEFP).
    - Publication: No (MEFP internal use).
  - DPPD:
    - Includes projection of ministry expenditure (economic and program classifications).
    - Prepared by MEFP / Line ministries.
    - Publication/transmission: Yes (transmission to Parliament with the PLF, posted online in various forms).

*Source: IMF staff.*

### 60.      To move toward a more advanced practice, a less aggregated (ministry or program-

### cr1934-senegal-fiscal-transparency - 60.      To move toward a more advanced practice, a less aggregated (ministry or program-

### Budget programming and aggregates
- Current practice remains aggregated; a less aggregated (ministry or program-based) approach is needed to move toward a more advanced practice.
- DPBEP programming overview is limited to a Table in TOFE format and provides only a very broad idea of the path the budget will take.
- No overall DPBEP data conveys ministerial or sectoral budget performance.
- Example: DPBEP 2018-2020 macroeconomic forecasts provide only an average for real GDP growth in that period: 7.2%, without specifying whether an uptick is expected for the period; the section lacks tables or charts.
- Construction of the CBMT is too focused on aggregate projection of expenditure by economic category.
- Ongoing work aims to complete the framework with detailed expenditure projections for each section of the budget and be more inclusive with line ministries according to a “bottom-up” approach.
- Expected outcome: enhanced reliability of DPPD projections, which are the main tools for programming expenditures by ministry and by program.

### Investment projects — Good
- Fragmentation of public investment management jeopardizes transparency of programming, selection and procurement processes.
- Recent reforms: creation of the maturation committee for investment projects; revamping of the Procurement Code.
- Transparency is compromised notably by:
  - substantial spontaneous direct-contracting offers, and
  - failure to disclose total costs of projects for which letters of comfort are issued.
- Publication of feasibility studies needs strengthening despite recent progress.
- Shortcomings impair efficiency of public investment, although there is room to improve quality of public infrastructure and access.
- Recommendation: an evaluation using the Public Investment Management Assessment (PIMA) methodology could help authorities identify reform priorities.

### Multiyear programming (PTIP)
- Multiyear programming is based on the Three-year Public Investment Program (PTIP), which provides data on the total costs of budgeted projects.
- The PTIP is submitted to and adopted by Parliament before the end of each year.
- For each public investment project, the PTIP provides a total cost and a disbursement time line for the next three years.
- Projects are appropriated; totals for the first year of the PTIP are consistent with investment appropriations of the initial budget law.
- Presentation by economic sector is provided.
- Challenges:
  - Updating total costs is difficult, particularly for projects using domestic resources, jeopardizing execution and fiscal sustainability.
  - Room to improve separation of current from capital expenditures and programming of project maintenance costs.
- System migration: migration to the CA-PA system, which should take effect in 2020, will help reinforce the multiyear nature of expenditure and improve accounting and handling of public investment.
- Note: PTIP does not reflect projects financed through confort letters, which postpone the fiscal impact to subsequent fiscal years.

### Project appraisal, selection, and public availability
- Appraisal and selection mechanisms revamped in 2015:
  1. Establishment of the maturation and appraisal committee for investment projects, with Planning Directorate (DP) providing secretariat services.
  2. Creation of a database of mature projects maintained by the Committee, which monitors projects throughout their life cycle.
- According to the establishing decree, the Committee supports line ministries by tracking project maturation from identification to ex ante appraisal for inscription in the PTIP.
- Appraisal of projects potentially included in the PTIP “is based on their comprehensive project documentation (technical, economic and financial feasibility studies), submitted by the line ministries and other authorized stakeholders.”
- Implementation is currently being prepared.
- Since 2015:
  - 57 feasibility studies have been carried out,
  - followed by second technical expert opinions by the DP, and financial technical opinions by the Public Debt Directorate (DDP) and the Budget Programming Directorate (DPB).
- Fact sheets for these studies have been drawn up and are posted on the DP website.
- Concern: some large projects, especially spontaneous direct-contracting offers, appear to circumvent the selection procedure, even though they are subject to second expert opinions.

### Procurement transparency and competition
- Government Procurement Code revised in 2014; notification and tenders posted on the Government Procurement Portal.
- Waivers to competitive bidding (restricted tenders, single source procurement) are precisely defined.
- Spontaneous offers may be considered under conditions (innovative nature; obligation to outsource at least 10 percent of the contract to domestic enterprises).
- Issue: spontaneous offers option has been used for four large government contracts since 2015 totaling CFAF 450 billion or approximately 5 percentage points of GDP, including construction of hospitals and bridges that were not particularly innovative.
- Effect: spontaneous direct-contracting offers are a major impediment to opening up government procurement to competition.

### Orderliness — Fiscal legislation (Advanced)
- Revised legal framework for annual budget preparation set in the LOLF, which incorporated WAEMU Directive 06/2009/CM/UEMOA into domestic law.
- LOLF specifies:
  - main annual budgeting stages (budget orientation debate (DOB), presentation of the proposed budget (PLF), approval of the PLF, promulgation),
  - content of draft budget laws (initial budget law, revised budget law, financial statement law),
  - roles and responsibilities of the government (Ministry of Finance) and the Legislature (adoption, authority to amend).
- Table 2.5 summarizes principles set forth in Organic Budget Law 2011-015 (Articles and principles listed).

### Orderliness — Timeliness of budget documents (Good)
- In practice, Parliament has sufficient time to scrutinize and approve the budget and legal deadlines have regularly been met.
- Established starting date for budget implementation: January 1st of each year.
- Proposed budget is sent to Parliament on the opening day of the budget session (first half of October of year n – 1); this deadline has regularly been met (see Table 2.6).
- Parliament has 60 days to scrutinize and approve the budget; this period has always been prior to the end of the calendar year.
- Promulgation: President promulgates the budget law within one to two weeks of adoption (example: 2018 budget law promulgated on December 21, 2017).
- Budget laws and annexes are systematically published in the Official Gazette and posted online on the MEFP website and some Directorates’ websites.

- Selected PLF transmission/adoption/promulgation/publication dates (Table 2.6):
  - PLF 2016: Transmission to Parliament October 13, 2015; Adoption by Parliament December 11, 2015; Promulgation December 18, 2015; Publication JO No. 6901 of January 11, 2016.
  - PLF 2017: Transmission to Parliament October 14, 2016; Adoption by Parliament December 10, 2016; Promulgation December 23, 2016; Publication JO No. 6983 of December 31, 2016.
  - PLF 2018: Transmission to Parliament October 13, 2017; Adoption by Parliament December 11, 2017; Promulgation December 21, 2017; Publication JO No. 7061 of December 22, 2017.

### Policy orientation — Fiscal policy objectives (Advanced)
- Senegal governed by external budget rules serving as fiscal anchors: WAEMU and ECOWAS convergence criteria.
- DPEE produces multiyear convergence programs for WAEMU and ECOWAS providing retrospective ratios and a strategy for meeting criteria in the next five years.
- DPBEP annex to the proposed budget (PLF) exercises comprehensive, quantitative supervision over WAEMU convergence criteria; targets set for next three years.
- All first-tier criteria were observed in 2017.

- Observance of the WAEMU Convergence Criteria (2014-2018) (Table 2.7):
  - First-tier criteria:
    - Overall fiscal deficit <=3%: 2014 3.8%; 2015 3.7%; 2016 3.2%; 2017p 2.8%; 2018p 2.7%.
    - Inflation rate (GDP deflator for 2017 and beyond) <=3%: 2014 -1.1%; 2015 0.1%; 2016 0.8%; 2017p 2.5%; 2018p 2.3%.
    - Outstanding public debt as a percentage of GDP <=70%: 2014 41.9%; 2015 43.6%; 2016 46.5%; 2017p 46.5%; 2018p 45.2%.
  - Second-tier criteria:
    - Ratio of payroll to fiscal revenue <=35%: 2014 32.7%; 2015 32.9%; 2016 32.0%; 2017p 29.5%; 2018p 28.6%.
    - Tax burden >=20%: 2014 15.1%; 2015 15.2%; 2016 15.7%; 2017p 15.9%; 2018p 16.2%.

- Source of Table 2.7: Multiyear Program for the Convergence, Stability, Growth and Solidarity Pact 2018-2022, October 2017.
- Note: The targets for the overall fiscal deficit, the public debt and tax burden must be met by 2019. p: forecasts.

### Performance information — Basic
- Legal framework for results-based management in place; full impact expected in 2020.
- LOLF Articles 12, 52 and 45 provide for budget appropriations being distributed among programs (ministries) or allocations for specific institutions (dotations).
- Programs required to present, approve, execute, and report the State budget; each program must include in its DPPD/PAP a performance framework with objectives and indicators adjusted every year.
- Performance must be tracked at fiscal year end in annual performance reports (RAP), which are mandatory annexes to the draft budget settlement law (loi de règlement).
- Implementation timeline: initiation of reform originally scheduled for January 1, 2017, pushed back to 2020 (Organic Law No. 2016-34 of December 23, 2016 amending the LOLF).

- Current status:
  - Performance documents (DPPD and PAP) have been produced and attached to draft budget law in recent years.
  - For 2018 PLF, DPPD and PAP were prepared and submitted to Parliament by line ministries; a presentation of the State budget in program-budget mode (objectives and indicators) was attached for information.
- Shortcomings:
  - System to classify programs not yet established; coordination with other fiscal classifications not yet incorporated into SIGFIP.
  - Regulatory document on the format and contents of the DPPD/PAP not yet available.
  - No systematic updating of indicators or tracking of objectives.
  - Annual performance reports not produced or sent to the Court of Accounts on a regular basis.

### Public participation — Basic
- Authorities have produced vulgarized fiscal information: an annual “citizens’ budget”, short leaflets explaining the Proposed Budget (PLF) and the Quarterly Public Investment Plan (PTIP) (“Budget at a Glance” and “PTIP at a Glance”).
- DGB, with ONG 3D, is working on translations of certain documents into Wolof and Pulaar.
- A gender-based budget is produced.
- Public consultations have involved trade unions, elected officials, civil society organizations and representatives of subnational governments in establishing elements of the Plan Sénégal Émergent (PSE).

- Gaps to achieve higher practice:
  - Active civil society participation in the budget process remains limited.
  - Past presentations of the budget to the press have been discontinued.
  - Senegal ranked low in public participation in the 2017 Open Budget Survey.
  - Some donor-supported initiatives (e.g., USAID) exist but have not materialized in budget preparation contexts.
  - Recommendation: draw on other countries’ experiences for organizing public participation (examples and mechanisms listed).

### Credibility — Independent evaluation
- Status: Not met.

*IMF staff report excerpt.*

### 75.      There is currently no independent national entity assessing the credibility of the

### cr1934-senegal-fiscal-transparency - 75.      There is currently no independent national entity assessing the credibility of the government's economic and fiscal forecasts

### Independent evaluation of forecasts
- There is currently no independent national entity assessing the government’s economic and fiscal forecasts.
- The Court of Accounts has no jurisdiction over draft budgets or fiscal forecasts and therefore does not issue opinions on them.
- Parliament lacks both the technical and material capacity to evaluate forecasts presented during the budget orientation debate or in draft budget laws.
- The DPEE organizes by-invitation-only Economic Briefings (Points Economiques) on a quarterly basis, which present forecasts or studies and allow potential discussion with invitees.
- External scrutiny: The IMF examines forecast credibility in connection with monitoring of supported programs; WAEMU validates multiyear programs during annual December meetings.
- Recommendation implied: Publication of comparisons between government forecasts and those of independent public or private bodies (e.g., banks, IMF, BCEAO regional headquarters) could boost credibility by showing proximity to national and international consensus forecasts.

### Supplementary budget (LFR) practice and 2016 budget amendments
- Fiscal legislation (Article 47 of the LOLF) requires a supplementary budget law (LFR) to validate major changes to revenue and expenditure; virements and transfers can be used for less important deviations; a budget settlement law after the fiscal year provides the outturn and may regularize ex post changes.
- Despite provision for amendments, supplementary budgets are not a systematic practice in Senegal.
- Example: Fiscal year 2017 — no LFR was presented to Parliament despite substantial deviations from the initial budget (LFI); tax revenue shortfalls reached approximately 7 percent at end-December 2017 vis-à-vis the amount envisaged in the LFI (sources: TOFE and LFI).
- Use of letters of comfort involves sizable amounts that significantly alter the budget balance as voted in the LFI. For 2018, expected reimbursements constitute approximately 10 percent of the (domestic and external) investment amount envisaged in the budget law.
- The absence of extra fiscal space implies these costs would translate into crowding-out of projects included in the budget; such reimbursement events occurring during execution should warrant parliamentary clearance and amendment to the initial budget law.
- Preparing and adopting a supplementary budget is a virtuous practice to maintain budgetary and fiscal balances and enhance sincerity of budget information.

- Table 2.8. Budget Amendments for Fiscal Year 2016 (CFAF billions, excluding debt) — figures from source:
  - Wages: Initial budget (LFI) 538.2; Virements and transfers -7.0; Appropriation carryovers 0.0; LFR 34.4; Actual appropriations 565.6; Actual appropriations / LFI (%) 5%
  - Operating (fonctionnement): Initial budget (LFI) 353.7; Virements and transfers 1.1; Appropriation carryovers 0.0; LFR 3.4; Actual appropriations 358.1; Actual appropriations / LFI (%) 1%
  - Current transfers: Initial budget (LFI) 392.1; Virements and transfers 51.1; Appropriation carryovers 0.0; LFR -3.0; Actual appropriations 440.2; Actual appropriations / LFI (%) 12%
  - Investments carried out by the State: Initial budget (LFI) 162.3; Virements and transfers -23.9; Appropriation carryovers 5.3; LFR 1.5; Actual appropriations 145.3; Actual appropriations / LFI (%) -11%
  - Capital transfers: Initial budget (LFI) 448.7; Virements and transfers 21.5; Appropriation carryovers 26.5; LFR 138.9; Actual appropriations 635.6; Actual appropriations / LFI (%) 42%
  - Special Treasury Accounts: Initial budget (LFI) 97.8; Virements and transfers 0.1; Appropriation carryovers 0.0; LFR 0.0; Actual appropriations 97.9; Actual appropriations / LFI (%) 0%
  - Total: Initial budget (LFI) 1 992.8; Virements and transfers 43.0; Appropriation carryovers 31.8; LFR 175.1; Actual appropriations 2 242.7; Actual appropriations / LFI (%) 13%
  - Sources: SIGFIP, CGAF.

### Reconciliation of forecasts
- Budget documents appended to initial budget laws do not account for departures from the previous fiscal year’s forecasts.
- Departures between forecasts and outturns can be substantial for both macroeconomic and fiscal forecasts; changes to GDP growth projections are often key to explaining changes in tax revenue forecasts.
- The Economic and Financial Situation paper and the Economic and Financial Report attached to the PLF sometimes provide revised forecasts for the current year, but tables showing those revised forecasts make no reference to previous fiscal year forecasts; discrepancies are not accounted for, even qualitatively.
- No reconciliation is attempted between successive multiyear forecasting exercises. The DPBEP provides neither a quantitative review of previous DPBEP forecasts nor a qualitative explanation of reasons for revisions.
- Only supplementary budget laws refer to initial forecasts and explain reasons for changes, providing comparative tables and detailed explanations in the explanatory statement; however, this is insufficient for a "basic level practice" rating under the IMF Code of Transparency, which requires at least a qualitative explanation of all updates to forecasts in the budget documentation (not only those in an LFR).

- Box 2.3 (short-term and medium-term steps to improve analysis of deviations — recommended analytical steps included in source):
  - Short term:
    - Show a Table of differences between macroeconomic forecasts and outturns with explanations (e.g., sectoral supply and demand contributions); plus a Table of discrepancies between fiscal forecasts and outturns with qualitative explanations.
    - Compile Tables comparing macroeconomic forecasts with those of the preceding fiscal year and do the same for fiscal forecasts, using standard presentation; in the PLF for year N+1, compare revised forecasts for year N with those of the LFI for year N.
  - Medium term:
    - Provide a quantitative analysis of reasons for differences between fiscal forecasts and outturn.
    - Provide a quantitative analysis of reasons for revising fiscal forecasts from one exercise to another (sample standard presentation provided in source).

### Conclusions and recommendations (selected, verbatim where numeric or legislative references appear)
- The quality and coverage of budget information have improved noticeably thanks, inter alia, to the gradual implementation of the LOLF. Budget documentation has expanded considerably and provides increasingly comprehensive and accurate information regarding the various facets of fiscal management. The scope of budget documentation has likewise improved and now covers not only budgetary central government but also the other public bodies, even though further improvements are needed for a comprehensive overview.
- Main remaining issues:
  1. The less than exhaustive coverage of the budget information provided, which, albeit improving, still presents major gaps.
  2. The level of analysis required for reliable budget programming, which still lacks certain data and analyses.
  - Over the medium term, major improvements could be made with respect to the general public’s participation in budget preparation debates and monitoring of public policies.

- Recommendation 2.1: Strengthen fiscal integrity and ensure that all government commitments are included in the budget
  - Bring the use of letters of comfort into line with the accounting and fiscal rules derived from the LOLF and reflect them in the public debt calculations;
  - Implement the provisions of the LOLF regarding the provisioning of government guarantees (including those granted via letters of comfort);
  - Put a mechanism in place for the monitoring of multiyear government commitments using the commitment authorization and payment appropriation system (AE/CP) and approve an annual AE ceiling in the budget law, pursuant to the LOLF (Articles 17ff, 44 and 60).

- Recommendation 2.2: Enrich the information and analysis contained in budget programming documents.
  - Show in the DPBEP the evolution of budget appropriations using the administrative and/or sectoral classification;
  - Add to the DPBEP quantitative detail on multiyear forecasts of the main macroeconomic indicators (e.g., real GDP growth, inflation, exchange rate) and compare them with forecasts made by other stakeholders (e.g., the BCEAO, IMF);
  - Complement the information provided in the DPBEP with data currently missing, including for example: (i) own resources of public corporations and agencies, (ii) more disaggregated data on subnational governments and a breakdown of revenue, and (iii) expenditures of both social security funds, using a format that allows for comparisons.
  - Provide more explanations for macroeconomic and fiscal forecasts by providing: (i) quantitative analysis of the deviations between forecasts and outturns; and (ii) explanations of the reasons that led to the revision of projections from one fiscal year to the next (Box 2.4).

- Recommendation 2.3: Enhance public participation in the discussions and monitoring of fiscal policy.
  - Systematize the preparation and adoption of a LFR in the event of a substantial alteration of the initial budget balance. A mid-year update on revenue and expenditure execution should make it possible to gauge the extent of changes vis-à-vis initial forecasts. The Quarterly Budget Execution Report (RTEB) for the second quarter of year N is the ideal tool for that analysis.
  - Boost the quality of budget documents in program-budget format: (i) draft and disseminate a manual for preparing the DPPD, PAP and RAP; and (ii) carry out a review of the existing DPPD and PAP.
  - Put a mechanism in place for public participation in fiscal policy discussions, drawing on best international practices (see Box 2.3).

### Heatmap – Pillar II (selected entries)
- 2.1.1 Budget unity: Not met. Although budget documentation coverage is good, no track is kept of financing and guarantees via letters of comfort. Importance: High.
- 2.1.2 Macroeconomic forecasts: Advanced. The REF attached to the PLF contains forecasts and explanations for the major macroeconomic forecasts and their components and the assumptions underlying them. Importance: Low.
- 2.4.1 Independent evaluation: Not met. There is no independent entity evaluating the government’s forecasts or comparing them with those of other institutions. Importance: Low.
- 2.4.2 Supplementary budget: Basic. Although provided for in the regulations, the presentation of supplementary budgets is not yet an established practice. Importance: High.
- 2.4.3 Reconciliation of forecasts: Not met. There is no qualitative or quantitative reconciliation between successive forecast vintages in budget documents attached to PLFs. Importance: High.

*Source: https://www.imf.org/-/media/files/publications/cr/2019/cr1934-senegal-fiscal-transparency.pdf*

### 86.      The importance attached to the monitoring and management of fiscal risks is mainly

### The importance attached to the monitoring and management of fiscal risks is mainly the result of the global economic and financial crisis of 2008

### Overview and context
- The global economic and financial crisis of 2008 highlighted the need for monitoring and managing fiscal risks, notably because conditional commitments (financial sector bailouts, liquidity support, activation of guarantees, interventions in subnational governments) materialized without prior consideration of their risk.
- Senegal faces high macroeconomic risks and diversified contingent liabilities, with no consolidated outlook on most contingent liabilities (risks relating to PPPs, government equity shares, or the financial sector).

### Sources of fiscal risks (as presented)
- Macroeconomic shocks (general risks)
- Specific risks, including fiscal contingencies
- Fiscal contingencies:
  - Explicit: Guarantees (public enterprises, PPP), Settlement of litigation
  - Implicit: Financial system bailout, Sub-national government bailouts, Public enterprise bailouts, Bailout of private nonfinancial enterprises
  - Other specific risks: Natural disasters, PPP, Other specific risks

### Findings on fiscal risk disclosure and analysis
- Sensitivity and alternative scenario analyses:
  - Published only for public debt (Debt Sustainability Analysis, DSA).
  - The Report on Public Debt Sustainability Analysis uses a range of scenarios including a historical scenario and an extreme scenario (IMF methodology). It is the only document with quantitative analysis of macroeconomic shocks’ impact on a fiscal aggregate.
  - The DPBEP and the REF do not contain sensitivity or alternative scenario analyses. The Plan Senegal Émergent (PSE) includes baseline, optimistic takeoff (central), and pessimistic scenarios, but in practice only the pessimistic scenario’s financing consequences are considered.

- Macroeconomic volatility and uncertainty:
  - The standard deviation for nominal GDP growth over the past fifteen years has been the lowest in the sub-region (Figure 3.2).
  - According to the government’s DSA, if growth and the primary deficit return to their historical averages, debt would exceed WAEMU’s regulatory threshold of 70 percent of GDP within 15 years.
  - Sources of uncertainty include exchange rate volatility, security threats, and oil price volatility; administered prices for oil and electricity can exacerbate fiscal instability.

- Specific fiscal risks (no consolidated report):
  - Types of non-exhaustive risks identified:
    - Risks affecting government tax revenue not directly linked to macroeconomic determinants (environmental risks, security risks, health risks).
    - Legal risks (litigation involving central government; no consolidated overview or State Judicial Agency report).
    - Risks related to management of government assets and liabilities (including holdings of state-owned enterprises).
    - Risks related to possible government liabilities (guarantees, management of public entities).
    - Risks related to PPPs (no consolidated overview; future PPP development is a long-term fiscal risk).
    - Risks related to exploitation of natural resources (likely to grow).
  - Except for state-owned enterprises, no analytical summary of major fiscal risks is published; budget laws and DPBEP present some risks related to state-owned enterprises and IPRES, but no consolidated prioritized report exists.

- Table of selected specific fiscal risks (IMF staff estimates):
  - Government-guaranteed liabilities: Ministry of Finance; 345 bn; 3.6 (Percentage of GDP)
  - Environmental risks: Estimate; 57 bn; 0.6 (Percentage of GDP)
  - Debt of state-owned enterprises: Ministry of Finance; 740 bn; 7.8 (Percentage of GDP)
  - Extractive sector revenue: Ministry of Finance, EITI; 106 bn; 4.6 % (of government revenue and grants)
  - Discounted pension liabilities of the FNR: Ministry of Finance; 2447 bn; 28 (Percentage of GDP)
  - Financial sector: Ministry of Finance and BCEAO; n.c.; n.c.

- Long-term fiscal sustainability analysis:
  - Public Debt Directorate produces an annual DSA using IMF methodology, projecting public and external debt over 20 years with baseline, historical, and extreme scenarios; findings align with IMF staff analyses covering 20 years.
  - The National Retirement Fund (FNR) has produced actuarial studies twice; latest covers 2013-2050 (published 2016). Baseline: FNR expenditures slightly exceed contributions until 2022; thereafter projected to make a profit. The report simulates six modifications to the retirement plan.
  - No actuarial studies for other social security agencies. Social Security Fund and IPRES expenditures together equaled 1.2 percent of GDP in 2016; ageing, especially by 2030, is expected to push health and pension expenditures upward.
  - Suggested improvements:
    - Extend DSA horizon to 30 years.
    - Include scenarios involving materialization of contingent liabilities (e.g., debt assumption from a state-owned enterprise).
    - FNR actuarial study could include estimate and analysis of pension liabilities already incurred.

### Findings on fiscal risk management
- Budgetary contingencies:
  - Budgetary mechanisms account for approximately 4 percent of appropriations, excluding debts.
  - Types of reserves: unallocated expenses (reserve for provisions and contingencies), management reserve (investment), precautionary reserve (current).
  - Management and precautionary reserves are appropriations rendered unavailable and released after predetermined actions; they are not general reserves for contingencies.
  - The LOLF (Article 14) provides for establishing general appropriations as an endowment for accidental and unforeseen expenses, but such a reserve is not yet in place.
  - The reserve for provisions and contingencies amounted to CFAF 25.5 billion in 2017 (approximately 1 percent of appropriations authorized in the initial budget law, excluding debt).
  - Lack of transparency: the contingency reserve is not explicitly mentioned in the budget law and is not monitored in budget execution reports; allocation rules are not established or known in advance and depend on MEFP decisions.

- Asset and liability management:
  - Not met: no document/publication on risks associated with government asset and liability management.
  - IMF staff estimates: general government liabilities equivalent to 97.2 percent of GDP at December 31, 2016; financial assets equal to 23.2 percent of GDP.
  - Legal and strategic exemptions exist for some public sector liabilities; government and state-owned enterprise debt regulated by law, but letters of comfort (estimated at 1.9 percent of GDP) are not subject to legal control.
  - Some public debt (state-owned enterprises and extrabudgetary entities) not covered by Medium-Term Debt Strategy.
  - Information on central government financial assets is sketchy and no risk analysis is conducted (examples: PPPs create liabilities and related public capital should be valued; IPRES held CFAF 193.3 billion at end-2016 but no risk analysis; CDC experienced very low returns and investment losses).
  - Historical performance issues cited:
    - IPRES: no dividend received from equity shares since 2008; external auditor requested provisions; investments in real estate worsened liquidity and income.
    - CDC: income account declined by 69 percent between 2008 and 2012, from CFAF 1.5 billion to CFAF 475 million.

- Guarantees:
  - Not met: weaknesses in monitoring, disclosure, and provisioning of guarantees.
  - At end-2017, all outstanding debt explicitly guaranteed by the government ≈ 3.6 percent of GDP.
  - Composition of guarantees: onlending CFAF 214 billion; guaranteed financing CFAF 80 billion (external financing alone); letters of comfort CFAF 49 billion.
  - Additional contingent risk: guaranteed purchase of energy contract involving SENELEC and a private third party estimated in 2016 at CFAF 2.4 billion.
  - Rules: Article 42 of the LOLF requires guarantees/endorsements by decree in the Council of Ministers; net change in outstanding guarantees supposed to be subject to annual ceiling by budget law, but practice not followed recently; no mandatory remuneration of guarantees.
  - DDP monitors guarantees and provisioned via an account for guarantees and endorsements; LOLF prescribes a provision equal to 10 percent of annual maturities. The special treasury account appears markedly under-provisioned relative to government liabilities.
  - Monitoring gaps:
    - Onlending monitored by DGB’s external cooperation and financing department (separate from DDP), impeding consolidation of guaranteed liabilities.
    - Letters of comfort constitute a derogatory practice; lack of monitoring prevents gauging government exposure.
    - No regular publication of government guarantees, beneficiaries, or resulting liabilities; DGCPT has access to information except for letters of comfort.
    - Little analysis or disclosure of likelihood of guarantee activation; notable qualitative mention of SENELEC purchase guarantee in DPBEP and LFI annex on fiscal risks associated with public enterprises.

### Identified gaps and recommended directions (implicit from findings)
- Develop consolidated quantitative analyses of fiscal risks (various techniques shown in Annex IV) to:
  - Better identify key risks.
  - Improve monitoring.
  - Implement more effective management measures.
- Produce consolidated reports establishing the most significant fiscal risks, including non-state-owned-enterprise risks (legal, environmental, health, PPPs, natural resource-related).
- Enhance transparency and rules for contingency reserve use (publication in budget law, monitoring in execution reports, predefined allocation rules).
- Publish and analyze government guarantees and contingent liabilities (beneficiaries, amounts, likelihood of activation).
- Create documents on government asset and liability risks; improve valuation and risk analysis of holdings (PPPs, IPRES, CDC, state-owned enterprises).
- Improve provisioning for guarantees (re-evaluate special treasury account coverage relative to outstanding contingent liabilities).
- Extend DSA horizon to 30 years and incorporate contingent liability scenarios; broaden actuarial analysis across social protection agencies.

*Source: Authorities; IMF staff assessment as presented in the provided document.*

### 107.      There is a dual framework for public-private partnerships (PPP) in Senegal. They

### cr1934-senegal-fiscal-transparency - PPPs, financial-sector exposure, natural resources, and environmental risks

### Public-Private Partnerships (PPPs): legal framework, institutions, and fiscal risks
- Dual PPP framework:
  - Outsourcing of public services (délégations de service public - DSP).
  - Partnership contracts (CP).
- Sector exclusions:
  - Telecommunications, energy and mining sectors are excluded from general partnership contract regulations and remain governed by sectoral regulations.
- Institutional responsibilities:
  - Ministry for the Promotion of Investment, Partnerships and the Development of Government Teleservices, through its Directorate of Financing and Public-Private Partnerships (DFPPP).
  - MEFP, particularly through its Central Directorate of Public Procurement.
- Eligible contracting parties:
  - Central government, subnational government, public corporation, government-controlled or government-owned independent company (société nationale), or a joint stock company with majority government ownership.
- Institutional implementation gap:
  - National Committee to Support PPPs (Article 1 of Law No. 2014-09) is established to validate project appraisals, assist public entities in preparing, negotiating and monitoring PPPs, and publicize/promote them, but is not yet operational—limiting framework implementation and potentially hampering PPP development.
- Transparency and monitoring shortcomings:
  - No documents showing general government liabilities related to PPPs, whose capital stock is equivalent to 6 percent of GDP.
  - No comprehensive analysis of PPP-related liabilities despite long-term fiscal commitments and project sizes.
- PPP project record and scale:
  - According to World Bank data, 14 projects have been undertaken as PPPs since 2008.
  - Average project size has increased over time; notable projects include railroad projects, toll highway concession between Dakar and Diamniadio, container terminal at the Autonomous Port in Dakar, numerous electricity generation projects, and the Blaise Diagne international airport.
  - Blaise Diagne international airport investment totaled US$730 million in 2012.
  - Projects registered by the World Bank were much smaller for 2016 and 2017 (US$76 million and US$ 88 million, respectively).
  - According to World Bank data, all PPP investments taken together since 2008 amount to US$2.1 billion.
  - More than one third of the PPPs since 2008 involved unsolicited private sector bids.
- Fiscal risk drivers:
  - Large project sizes, potential for contract renegotiation, and creation of long-term liabilities (extending over 25 or 30 years) may heavily impact public finances.
  - Lack of consolidated monitoring prevents accurate assessment of risks involved.

### Financial sector exposure: structure, public participation, and contingent risks
- Banking sector overview:
  - At end-2017, Senegal had 29 licensed financial institutions, including 14 international banks and 10 subregional banks.
  - Sixteen lending institutions had balance sheets above or equal to CFAF 100 billion, including 12 with a balance sheet above or equal to CFAF 200 billion.
  - Shareholders of credit institutions are largely international banking groups that control more than 51 percent of the capital stock of 16 institutions.
- Government shareholdings in financial institutions:
  - Government is a direct or indirect shareholder in seven banks, with equity shares of between 5 percent and 34 percent.
  - IPRES and CSS hold shares in banks (for example BNDE), increasing public sector participation without making it the majority shareholder.
  - Government holds stock in seven insurance companies, including one with a majority share: the Automobile Guarantee Fund, with 61 percent of the capital.
- Other government-linked financial exposures:
  - CDC (Deposit and Consignment Office), Postal Service through Poste Finances, IPRES, CSS, and FONSIS create direct government liabilities and are included for monitoring by the National Financial Stability Committee.
  - FONSIS budget appropriations: CFAF 3 billion in 2014 and 2015, 2 billion in 2016, CFAF 5.5 billion in 2017 and CFAF 3 billion in the initial budget law (LFI) for 2018.
  - Government stake in BCEAO equity shares: CFAF 16.8 billion.
- Deposit guarantee and resolution funds:
  - WAMU-level mechanisms established but not yet operating domestically: Deposit Guarantee Fund, Financial Stability Fund; possibility of setting up a resolution fund is being studied.
  - Domestic microfinance Fund is due to receive an appropriation but is not yet operating.
  - No assessment of Senegalese State’s exposure to these contingent risks has been undertaken despite savings deposits totaling more than CFAF 707 billion at end-2016.
- Evidence of materialized financial sector interventions and information gaps:
  - Government interventions to recapitalize CNCAS and address Postal Service financial difficulties have occurred.
  - Stress tests carried out at BCEAO level exist, but information on central government’s financial sector exposure is sketchy and fragmented.
- Deposit and Consignment Office (CDC) specific exposures and reporting gaps:
  - CDC established by Law No. 2006-03 of January 4, 2006; mandated to manage deposits, safeguard securities, receive administrative and judicial deposits and guarantees, and manage entrusted funds; also finances affordable housing, subnational government equipment, and loans to medium-sized enterprises.
  - According to the DPBEP, CDC made CFAF 145 million in 2015.
  - CDC exposure level at end-2016:
    - CFAF 74.9 billion in equity shares in a number of companies (CFAF 38 billion already paid up).
    - CFAF 14 billion outstanding, to be recouped through buyback agreements.
    - CFAF 33 billion invested in real estate projects with a very low level of return.
  - CDC dividends: at end-December 2015, only CFAF 20.7 million in dividends for SONATEL shares was recorded in the institution’s operating account.
  - CDC has complex financial ties to numerous government entities (shareholder in several public enterprises, managing Poste Finances deposits, SENELEC creditor, manager of public funds).
  - Published financial data on the CDC are patchy and insufficient for risk assessment (no annual report and no information on its financial statements published).
- Assessment conclusion:
  - The development of guarantee mechanisms and other financial safety nets gives rise to new risks for the government which have not been assessed.
  - The government’s financial sector exposure has barely been analyzed or quantified.

### Natural resources: current contribution, transparency gaps, and fiscal risk
- Resource base and current contribution:
  - Senegal possesses notable natural resources (oil and gas, gold, silver, phosphates, basalt, limestone, sands and other minerals).
  - Mining of mineral and oil resources contributes modestly to the Senegalese economy but should increase in the medium term.
  - According to interviews conducted by the mission, extractive industry resources could account for nearly 10 percent of fiscal revenue by 2022.
- Data and valuation gaps:
  - Authorities do not publish statistics on natural resource reserves and their valuation.
  - Government statistics and national accounts do not take natural resource reserves into account, nor their extraction and expected value in the medium and long term.
  - Partial estimates provided in the EITI Reconciliation Report (examples):
    - Gold reserves at the Sabadola mine total 46 metric tons.
    - In the Rufisque and Sangomar deposits, probable reserves discovered in 2014 are valued at more than one billion barrels of oil, in addition to natural gas.
    - The sum of natural gas reserves from two deposits are close to two billion cubic meters.
  - A valuation of these reserves based on different price and extraction scenarios is not available.
- Budget classification and revenue reporting shortcomings:
  - Budget documentation does not include details on natural resource–related revenue; extractive sector revenue is not singled out in government accounts, the TOFE or budget documents.
  - EITI Reconciliation Report figures (2016):
    - Extractive sector contribution to national budget: CFAF 105.9 billion in 2016, i.e., 4.6 percent of fiscal revenue and grants.
    - Mining sector: CFAF 99.2 billion (94 percent of extractive-sector fiscal revenue).
    - Oil sector: CFAF 6.7 billion.
- Public sector links to extractive industries:
  - Apart from tax revenue, extractive industries contribute to pension and social security institutions (CSS and IPRES), subnational governments through an equalization fund, and to FONSIS.
  - State-owned enterprises with majority government stock involved in sector promotion/development: Petrosen and Miferso; other enterprises with minority government share participation also intervene.
- Fiscal risk management gaps:
  - DPEE provides limited assumptions regarding extractive sector activity, but documentation is insufficient to determine importance in the national budget.
  - Lack of consolidated overview of public sector impacts hampers ability to measure fiscal risks associated with resource development.

### Environmental risks: exposure, institutional response, and fiscal implications
- Identified environmental hazards:
  - Major risks: coastal erosion, bush fires, flooding, drought, locust plagues, chemical and industrial hazards.
  - Vulnerable populations: one third of the Senegalese population is exposed to drought and 60 percent of the population lives in coastal areas.
- Institutions and instruments:
  - Ecological Monitoring Center (CSE) established in 1986 to assess environmental risks and manage risks and disasters (e.g., tracking bush fires).
  - Senegalese National Agricultural Insurance Fund (CNAAS) established in 2008 as a licensed insurance company in which the government has a minority stake; capital currently CFAF 1.5 billion could soon be raised to CFAF 5 billion; today 52 percent owned by the private sector.
  - Senegal is a member of the Green Climate Fund.
  - Senegal joined African Risk Capacity (ARC) in 2011; Senegal was one of the first countries to benefit from ARC insurance coverage in 2014.
- Data on disaster impacts and fiscal costing:
  - Between 1990 and 2018, the EM-DAT initiative listed 16 flooding episodes causing damage estimated at US$51 million; World Bank estimates the annual economic impact of floods as close to US$89 million.
  - Disaster risk management has focused on operational responses rather than quantifying budget costs based on historical data.
  - Example budget item: Fire Fighting Fund allocated CFAF 200 million in the initial 2018 budget mainly for development of civil protection facilities (Fire Brigade).
- Fiscal risk quantification gap:
  - Environmental risks give rise to contingent liabilities currently assessed at 0.6 percent of GDP, a figure that could grow.
  - The quality of fiscal information and the government’s ability to mobilize budgetary resources depend on better assessment of both short- and long-term environmental impacts.

### Fiscal coordination: subnational government finances
- Subnational government structure and fiscal importance:
  - There are 599 subnational governments: 42 departments and 557 communes (which include 5 major cities).
  - Regions and differences between commune statutes were eliminated under act III of the decentralization process.
- Consolidated reporting:
  - A consolidated overview of subnational government finances is provided annually in the DPBEP.
  - 2016 figures:
    - Subnational government expenditure: CFAF 90.3 billion, or 1 percent of GDP.
    - Subnational government revenue: CFAF 122.7 billion, or 1.4 percent of GDP.

*Source: IMF staff report excerpt on Senegal fiscal transparency (selected paragraphs).*

### 126.      Financial ties with central government remain substantial and complex. In 2016,

### cr1934-senegal-fiscal-transparency - 126.      Financial ties with central government remain substantial and complex. In 2016,

### Central government transfers to subnational governments
- Transfers from the government to subnational governments in 2016 totaled CFAF 48.5 billion, or 40 percent of subnational government revenue.
- That revenue derives in particular from the Decentralization Appropriation Fund (FDD), the Subnational Government Equipment Fund (FECL) and revenue transfers.
- Transfers were up 13 percent over 2015 and are likely to continue to increase, almost doubling between 2014 and 2020.
- The Equalization and Support for Subnational Government Fund (FPACL) received CFAF 7.6 billion from fiscal years 2010 to 2015.
- There is a Special Treasury account for loans to subnational governments allocated CFAF 800 million in the initial budget for 2018 and a Special Treasury Account for advances to subnational governments also allocated CFAF 800 million in LFI 2018.

### Subnational government debt and monitoring
- Subnational government borrowing is governed by Article 54 of the LOLF; the operating budget must be balanced without recourse to borrowing.
- The implementing regulation governing and capping borrowing to finance subnational government investment has not yet been adopted.
- Article 245 of Law No. 2013-10 of December 28, 2013 provides that debt and guarantees remain subject to prior approval by the Minister of Finance.
- Information on debt and budget execution is gathered at the Ministry of Finance; the Municipal Development Agency (ADM) organizes borrowing for municipalities.
- Outstanding non-institutional debt of subnational governments with the ADM at end-2016 totaled CFAF 4.1 billion.
- The city of Dakar has received loans from the French Development Agency (AFD) and Islamic Bank of Sénégal.
- Subnational government debt servicing increased by 500 percent between 2015 and 2016, from CFAF 0.8 billion to CFAF 5.1 billion.
- Recommendation implication: better monitoring of subnational government debt is needed, particularly as communes expand under act III of decentralization and as a subnational finance observatory develops in the DGCPT.

### Government portfolio, public enterprises, and related fiscal risks
- Government participation in enterprises:
  - 13 government-owned companies (sociétés nationales).
  - 11 companies in which the government owns a majority of the stock.
  - 33 companies in which the government holds a minority of the stock.
  - 3 companies governed by specific laws in which the government owns a majority of the equity capital.
- The total subscribed capital stock is equivalent to 5.2 percent of GDP.
- By end-2016, 34 performance contracts between the government and the parapublic sector had been signed.
- Two annual documents (the report on the parapublic sector published by the DSP and the DPBEP produced by the DGB, and the LFI) show main changes, but:
  - Some transfers, including taxation, are left out of analysis.
  - Analysis of public enterprise debt and fiscal performance indicators is scant or nonexistent.
  - DSP has developed software for consolidation of public enterprise balance sheets and financial statements to enhance reporting.
- Fiscal impacts and observed figures:
  - Subsidies and dividends amounted to nearly 2 percent of GDP in 2017.
  - The total debt of a sample of public enterprises, at end-2016, totaled 7.8 % of GDP.
  - Government has on several occasions converted debts into capital to recapitalize enterprises.

### Quasi-fiscal activities and disclosure gaps
- Certain public enterprises, especially sociétés nationales, conduct quasi-fiscal activities or operate with social tariffs or regulated prices.
- Some quasi-fiscal activities are explicitly compensated via performance contracts, but disclosure of the cost of those activities is patchy and does not allow exact calculation.

### Fiscal risk analysis, conclusions, and prioritized recommendations
- Conclusions:
  - The government in Senegal is exposed to numerous fiscal risks that could threaten macro-fiscal targets, the Plan Sénégal Émergent (PSE), and investor/market trust.
  - It is crucial to acquire analytical tools for comprehensive identification, monitoring, and transparent disclosure of fiscal risks and mitigation steps.
  - Macroeconomic risks warrant specific action and upgrades to budgetary documentation due to their significant size.
  - The reserve for provisions and contingencies is currently the main (and most operational) fiscal risk mitigation mechanism but is poorly handled.
  - Senegal has little available fiscal space; improving operation of the reserve is the most effective immediate mitigation option.

- Key quantitative risk-related figures and projections highlighted:
  - Retirement and health-related expenditure should amount to almost 7 percent of GDP by 2050 (IMF estimates).
  - Financial liabilities and assets are estimated at 97.2 percent of GDP and 23.2 percent of GDP, respectively.
  - Outstanding explicit government guarantees are equivalent to 3.6 percent of GDP.
  - The capital stock of PPPs is estimated at 6 percent of GDP.
  - Contribution of natural resources to fiscal revenue is 4.6 percent of revenue.

- Recommendations (as stated)
  - Recommendation 3.1: Fully disclose the government’s strategy vis-à-vis enterprises in which it holds all or part of the capital stock or liabilities.
    - Publish the government shareholdings strategy (strategy drawn up in 2016 and validated by the Minister of Finance).
    - Publish guarantee and onlending data on the DDP website (data already available internally).
  - Recommendation 3.2: Enrich the 2019-2021 DPBEP by adding a chapter on fiscal risks (qualitative at first as a Fiscal Risk Statement (FRS), to be enriched with quantitative analyses in the medium run). A specific Action Plan is cited in Annex 5.
  - Recommendation 3.3: As part of the FRS, strengthen analysis in budget documents of the impact of macroeconomic risks on public finance aggregates.
    - Produce basic sensitivity analyses of major fiscal flow variables (revenue, expenditure, deficit) to key macroeconomic variables (real GDP growth, inflation, oil price per barrel, exchange rate) for publication in the DPBEP (FRS) and/or the REF.
    - Construct alternative macroeconomic scenarios and show their impact on budgetary and fiscal environment in budget documents.
  - Recommendation 3.4: Improve handling of the reserve for provisions and contingencies.
    - Establish objective and transparent criteria for using that reserve (e.g., in the annual budget circular), targeting expenditures of a truly unpredictable nature.

### Heatmap – Pillar III (Fiscal Risk Analysis and Management) — selected entries
- 3.1.1 Macroeconomic risks: Not met. Sensitivity analyses and alternative scenarios applied only to public debt. Importance: High. Relevant recs: 3.2, 3.3.
- 3.1.2 Specific fiscal risks: Not met. Main specific fiscal risks not specifically disclosed, except for risks to public enterprises. Importance: High. Relevant rec: 3.3.
- 3.1.3 Long-term sustainability analysis: Basic. Public debt sustainability over 20 years and FNR liabilities over 40 years published; no actuarial analyses of CSS and IPRES. Importance: Medium.
- 3.2.1 Fiscal contingencies: Basic. A reserve for provisions and contingencies exists but is not mentioned in the budget law and rules governing its use are not established; actual use not monitored. Importance: High. Relevant rec: 3.4.
- 3.2.2 Management of assets and liabilities: Not met. Not all risks associated with general government debt analyzed; certain loans not authorized by law. Importance: High. Relevant rec: 3.3.
- 3.2.3 Guarantees: Not met. No annual document showing government liabilities with respect to guarantees, onlending or letters of comfort. Importance: Medium.
- 3.2.4 Public-private partnerships: Not met. PPP-related liabilities not disclosed. Importance: Medium.
- 3.2.6 Natural resources: Not met. No general government report on reserves or fiscal revenue from exploitation of natural resources. Importance: Low.
- 3.3.1 Subnational governments: Good. Borrowing limited by law and a consolidated annual statement exists. Importance: Low.
- 3.3.2 Public enterprises: Basic. Key transfers disclosed annually, but government shareholding policy not published. Importance: High. Relevant recs: 3.1, 3.3.

*Source: cr1934-senegal-fiscal-transparency - 126.*

### Annex I. FTE Questionnaire

### Annex I. FTE Questionnaire

### I. FISCAL REPORTING: Fiscal reports should provide a comprehensive, relevant, timely, and reliable overview of the government’s financial position and performance.

- Principle: BASIC / GOOD / ADVANCED
- 1.1. Coverage: Fiscal reports should provide a comprehensive overview of the fiscal activities of the public sector and its subsectors, according to international standards.
  - 1.1.1. Coverage of Institutions:
    - BASIC: Fiscal reports cover all entities engaged in public activity according to international standards.
    - GOOD: Fiscal reports consolidate all central government entities according to international standards.
    - ADVANCED: Fiscal reports consolidate all general government entities and report on each subsector according to international standards.
    - ADVANCED (highest level): Fiscal reports consolidate all public sector entities and report on each subsector according to international standards.
  - 1.1.2. Coverage of Stocks:
    - BASIC: Fiscal reports include a balance sheet of public assets, liabilities, and net worth.
    - GOOD: Fiscal reports cover cash and deposits; and all debt.
    - ADVANCED: Fiscal reports cover all financial assets and liabilities.
    - ADVANCED (highest level): Fiscal reports cover all financial and non‐financial assets and liabilities, and net worth.
  - 1.1.3. Coverage of Flows:
    - BASIC: Fiscal reports cover all public revenues, expenditures, and financing.
    - GOOD: Fiscal reports cover cash revenues, expenditures and financing.
    - ADVANCED: Fiscal reports cover cash flows, accrued revenues, expenditures and financing.
    - ADVANCED (highest level): Fiscal reports cover cash flows, accrued revenues, expenditures and financing; and other economic flows.
  - 1.1.4. Coverage of Tax Expenditures:
    - BASIC: The government regularly discloses and manages revenue loss from tax expenditure.
    - GOOD: The estimated revenue loss from tax expenditures is published at least annually.
    - ADVANCED: The estimated revenue loss from tax expenditures is estimated by sector or policy area, and is published at least annually.
    - ADVANCED (highest level): The estimated revenue loss from tax expenditures is estimated by sector or policy area, and is published at least annually. There is control on, or budgetary objectives for, the size of tax expenditures.
- 1.2. Frequency and Timeliness: Fiscal reports should be published in a frequent, regular, and timely manner.
  - 1.2.1. Frequency of In‐Year Reporting:
    - BASIC: In‐year fiscal reports are published on a frequent and regular basis.
    - GOOD: In‐year fiscal reports are published on a quarterly basis, within a quarter.
    - ADVANCED: In‐year fiscal reports are published on a quarterly basis, within a month.
    - ADVANCED (highest level): In‐year fiscal reports are published on a monthly basis, within a month.
  - 1.2.2. Timeliness of Annual Financial Statements:
    - BASIC: Audited or final annual financial statements are published in a timely manner.
    - GOOD: Audited or final annual financial statements are published within 12 months of the end of the financial year.
    - ADVANCED: Audited or final annual financial statements are published within 9 months of the end of the financial year.
    - ADVANCED (highest level): Audited or final annual financial statements are published within 6 months of the end of the financial year.
- 1.3. Quality: Information in fiscal reports should be relevant, internationally comparable and internally and historically consistent.
  - 1.3.1. Classification:
    - BASIC: Fiscal reports classify information in ways that make clear the use of public resources and facilitate international comparisons.
    - GOOD: Fiscal reports include administrative and economic classifications consistent with international standards, where applicable.
    - ADVANCED: Fiscal reports include administrative, economic and functional classifications consistent with international standards, where applicable.
    - ADVANCED (highest level): Fiscal reports include administrative, economic, functional and program classifications consistent with international standards, where applicable.
  - 1.3.2. Internal Consistency:
    - BASIC: Fiscal reports are internally consistent and include reconciliations between alternative measures of summary fiscal aggregates.
    - GOOD: Fiscal reports include at least one of the following reconciliations: (i) fiscal balance and financing, (ii) debt issued and debt holdings, or (iii) financing and the change in the debt stock.
    - ADVANCED: Fiscal reports include at least two of the following reconciliations: (i) fiscal balance and financing, (ii) debt issued and debt holdings, or (iii) financing and the change in the debt stock.
    - ADVANCED (highest level): Fiscal reports include all three of the following reconciliations: (i) fiscal balance and financing, (ii) debt issued and debt holdings, and (iii) financing and the change in the debt stock.
  - 1.3.3. Historical Revisions:
    - BASIC: Major revisions to historical fiscal statistics are disclosed and explained.
    - GOOD: Major revisions to historical fiscal statistics are reported.
    - ADVANCED: Major revisions to historical fiscal statistics are reported with an explanation for each major revision.
    - ADVANCED (highest level): Major revisions to historical fiscal statistics are reported with an explanation for each major revision and a bridging table between the old and new time series.
- 1.4. Integrity: Fiscal statistics and financial statements should be reliable, subject to external scrutiny and facilitate accountability.
  - 1.4.1. Statistical Integrity:
    - BASIC: Fiscal statistics are compiled and disseminated in accordance with international standards.
    - GOOD: Fiscal statistics are disseminated in accordance with international standards.
    - ADVANCED: Fiscal statistics are compiled by a specific government agency and disseminated in accordance with international standards.
    - ADVANCED (highest level): Fiscal statistics are compiled by a professionally independent body and disseminated in accordance with international standards.
  - 1.4.2. External Audit:
    - BASIC: Annual financial statements are subject to a published audit by an independent supreme audit institution which validates their reliability.
    - GOOD: An independent supreme audit institution publishes an audit report on the reliability of the government’s annual financial statements.
    - ADVANCED: An independent supreme audit institution publishes an audit report stating whether the government’s annual financial statements present a true and fair view of its financial position and without a disclaimer or adverse audit opinion.
    - ADVANCED (highest level): An independent supreme audit institution publishes an audit report consistent with international standards which states whether the government’s annual financial statements present a true and fair view of its financial position and without major qualifications.
  - 1.4.3. Comparability of Fiscal Data:
    - BASIC: Fiscal forecasts, budgets, and fiscal reports are presented on a comparable basis, with any deviations explained.
    - GOOD: At least one fiscal report is prepared on the same basis as the fiscal forecast/budget.
    - ADVANCED: Fiscal forecast/budget and outturn are comparable plus the outturn is reconciled with either the fiscal statistics or final accounts.
    - ADVANCED (highest level): Fiscal forecast/budget and outturn are comparable plus the outturn is reconciled with both fiscal statistics and final accounts.

### II. FISCAL FORECASTING AND BUDGETING: Budgets and their underlying fiscal forecasts should provide a clear statement of the government’s budgetary objectives and policy intentions, and comprehensive, timely, and credible projections of the evolution of the public finances.

- 2.1. Comprehensiveness: Fiscal forecasts and budgets should provide a comprehensive overview of fiscal prospects.
  - 2.1.1. Budget Unity:
    - BASIC: Revenues, expenditures, and financing of all central government entities are presented on a gross basis in budget documentation and authorized by the legislature.
    - GOOD: Budget documentation incorporates all gross domestic tax revenues, expenditures, and financing by central government ministries and agencies.
    - ADVANCED: Budget documentation incorporates all gross domestic tax and non‐tax revenues, expenditures, and financing by central government ministries, agencies and extra‐budgetary funds.
    - ADVANCED (highest level): Budget documentation incorporates all gross domestic and external revenues, expenditures, and financing by central government ministries, agencies, extra‐budgetary funds, and social security funds.
  - 2.1.2. Macroeconomic Forecasts:
    - BASIC: The budget projections are based on comprehensive macroeconomic forecasts, which are disclosed and explained.
    - GOOD: The budget documentation includes forecasts of key macroeconomic variables.
    - ADVANCED: The budget documentation includes forecasts of key macroeconomic variables and their underlying assumptions.
    - ADVANCED (highest level): The budget documentation includes forecasts and explanations of key macroeconomic variables and their components, as well as their underlying assumptions.
  - 2.1.3. Medium‐term Budget Framework:
    - BASIC: Budget documentation includes outturns and projections of revenues, expenditures, and financing over the medium term on the same basis as the annual budget.
    - GOOD: Budget documentation includes the outturns of the two preceding years and medium‐term projections of aggregate revenues, expenditures, and financing.
    - ADVANCED: Budget documentation includes the outturns of the two preceding years and medium‐term projections of revenues, expenditures, and financing by economic category.
    - ADVANCED (highest level): Budget documentation includes the outturns of the two preceding years and medium‐term projections of revenues, expenditures, and financing by economic category and by ministry or program.
  - 2.1.4. Investment Projects:
    - BASIC: The government regularly discloses its financial obligations under multi‐annual investment projects and subjects all major projects to cost‐benefit analysis and open and competitive tender.
    - GOOD: One of the following applies: (i) the government regularly discloses the value of its total obligations under multi‐annual investment projects; (ii) subjects all major projects to a published cost‐benefit analysis before approval; or (iii) requires all major projects to be contracted via open and competitive tender.
    - ADVANCED: Two of the following apply: (i) the government regularly discloses the value of its total obligations under multi‐annual investment projects; (ii) subjects all major projects to a published cost‐benefit analysis before approval; or (iii) requires all major projects to be contracted via open and competitive tender.
    - ADVANCED (highest level): All of the following apply: (i) the government regularly discloses the value of its total obligations under multi‐annual investment projects; (ii) subjects all major projects to a published cost‐benefit analysis before approval; and (iii) requires all major projects to be contracted via open and competitive tender.
- 2.2. Orderliness: The powers and responsibilities of the executive and legislative branches of government in the budget process should be defined in law, and the budget should be presented, debated, and approved in a timely manner.
  - 2.2.1. Fiscal Legislation:
    - BASIC: The legal framework clearly defines the timetable for budget preparation and approval, key contents of the budget documentation, and the powers and responsibilities of the executive and legislature in the budget process.
    - GOOD: The legal framework defines one of the following: (i) the timetable for budget preparation and approval; (ii) the key content requirements for the executive’s budget proposal; or (iii) the legislature’s powers of amendment to the executive’s budget proposal.
    - ADVANCED: The legal framework defines two of the following: (i) the timetable for budget preparation and approval; (ii) the key content requirements for the executive’s budget proposal; or (iii) the legislature’s powers to amend the executive’s budget proposal.
    - ADVANCED (highest level): The legal framework defines all of (i) the timetable for budget preparation and approval; (ii) the key content requirements for the executive’s budget proposal; and (iii) the legislature’s powers to amend the executive’s budget proposal.
  - 2.2.2. Timeliness of Budget Documents:
    - BASIC: The legislature and the public are consistently given adequate time to scrutinize and approve the annual budget.
    - GOOD: The budget is submitted to the legislature and made available to the public at least one month before the start of the financial year and is approved and published up to one month after the beginning of the financial year.
    - ADVANCED: The budget is submitted to the legislature and made available to the public at least two months before the start of the financial year and is approved and published by the start of the financial year.
    - ADVANCED (highest level): The budget is submitted to the legislature and made available to the public at least three months before the start of the financial year and is approved and published at least one month before the start of the financial year.
- 2.3. Policy Orientation: Fiscal forecasts and budgets should be presented in a way that facilitates policy analysis and accountability.
  - 2.3.1. Fiscal Policy Objectives:
    - BASIC: The government states and reports on clear and measurable objectives for the public finances.
    - GOOD: The government states and regularly reports on a numerical objective for the main fiscal aggregates which is either precise or time‐bound.
    - ADVANCED: The government states and regularly reports on a numerical objective for the main fiscal aggregates which is both precise and time‐bound.
    - ADVANCED (highest level): The government states and regularly reports on a numerical objective for the main fiscal aggregates which is both precise and time‐bound and has been in place for 3 or more years.
  - 2.3.2. Performance Information:
    - BASIC: Budget documentation provides information regarding the objectives and results achieved under each major government policy area.
    - GOOD: Budget documentation includes information on the inputs acquired under each major government policy area.
    - ADVANCED: Budget documentation reports targets for, and performance against, the outputs delivered under each major government policy area.
    - ADVANCED (highest level): Budget documentation reports targets for, and performance against, the outcomes to be achieved under each major government policy area.
  - 2.3.3. Public Participation:
    - BASIC: The government provides citizens with an accessible summary of the implications of budget policies and an opportunity to participate in budget deliberations.
    - GOOD: Government publishes an accessible description of recent fiscal performance and economic prospects, as well as a summary of the implications of the budget for a typical citizen.
    - ADVANCED: Government publishes an accessible description of recent fiscal performance and economic prospects and a detailed account of the implications of the budget for a typical citizen and provides citizens with a formal voice in budget deliberations.
    - ADVANCED (highest level): Government provides an accessible description of recent fiscal performance and economic prospects, a detailed account of the implications of the budget for different demographic groups and provides citizens with a formal voice in budget deliberations.
- 2.4. Credibility: Economic and fiscal forecasts and budgets should be credible.
  - 2.4.1. Independent Evaluation:
    - BASIC: The government’s economic and fiscal forecasts and performance are subject to independent evaluation.
    - GOOD: Budget documentation includes comparisons between the government’s   economic and fiscal projections and those of independent forecasters.
    - ADVANCED: An independent entity evaluates the credibility of the government’s economic and fiscal forecasts.
    - ADVANCED (highest level): An independent entity evaluates the credibility of the government’s   economic and fiscal forecasts, and its performance against its fiscal objectives.
  - 2.4.2. Supplementary Budget:
    - BASIC: Any material changes to the approved budget are authorized by the legislature.
    - GOOD: A supplementary budget regularizes expenditure exceeding the approved budget.
    - ADVANCED: A supplementary budget is required prior to material changes to total budgeted expenditure.
    - ADVANCED (highest level): A supplementary budget is required prior to material changes to total budgeted expenditure or substantially altering its composition.
  - 2.4.3. Forecast Reconciliation:
    - BASIC: Budget documentation and any subsequent updates explain any material changes to the government’s previous fiscal forecasts, distinguishing the fiscal impact of new policy measures from the baseline.
    - GOOD: Differences between the successive vintages of the government’s revenue, expenditure, and financing forecasts are shown at the aggregate level, with a qualitative discussion of the impact of new policies on the forecasts.
    - ADVANCED: Differences between successive vintages of the government’s revenue, expenditure, and financing forecasts are broken down into the overall effect of new policies and macroeconomic determinants.
    - ADVANCED (highest level): Differences between successive vintages of the government’s revenue, expenditure, and financing forecasts are broken down into the effects of individual policy changes, macroeconomic determinants, and other factors, such as technical or accounting adjustments.

### III. FISCAL RISK ANALYSIS AND MANAGEMENT: Governments should disclose, analyze, and manage risks to the public finances and ensure effective coordination of fiscal decision‐making across the public sector.

- 3.1. Risk Disclosure and Analysis: Governments should publish regular summary reports on risks to their fiscal prospects.
  - 3.1.1. Macroeconomic Risks:
    - BASIC: The government reports on how fiscal outcomes might differ from baseline forecasts as a result of different macroeconomic assumptions.
    - GOOD: Budget documentation includes discussion of the sensitivity of fiscal forecasts to major macroeconomic assumptions.
    - ADVANCED: Budget documentation includes sensitivity analysis and alternative macroeconomic and fiscal forecast scenarios.
    - ADVANCED (highest level): Budget documentation includes sensitivity analysis, alternative scenarios, and probabilistic forecasts of fiscal outcomes.
  - 3.1.2. Specific Fiscal Risks:
    - BASIC: The government provides a regular summary report on the main specific risks to its fiscal forecasts.
    - GOOD: The main specific risks to the fiscal forecast are disclosed in a summary report and discussed in qualitative terms.
    - ADVANCED: The main specific risks to the fiscal forecast are disclosed in a summary report, along with estimates of their magnitude.
    - ADVANCED (highest level): The main specific risks to the fiscal forecast are disclosed in a summary report, along with estimates of their magnitude and, where practicable, their likelihood.
  - 3.1.3. Long‐Term Fiscal Sustainability Analysis:
    - BASIC: The government regularly publishes projections of the evolution of the public finances over the long term.
    - GOOD: The government regularly publishes projections of the sustainability of the main fiscal aggregates and any health and social security funds over at least the next 10 years.
    - ADVANCED: The government regularly publishes multiple scenarios for the sustainability of the main fiscal aggregates and any health and social security funds over at least the next 30 years using a range of macroeconomic assumptions
    - ADVANCED (highest level): The government regularly publishes multiple scenarios for the sustainability of the main fiscal aggregates and any health and social security funds over at least the next 30 years using a range of macroeconomic, demographic, natural resource, or other assumptions.
- 3.2. Risk Management: Specific risks to the public finances should be regularly monitored, disclosed and managed.
  - 3.2.1. Budgetary Contingencies:
    - BASIC: The budget has adequate and transparent allocations for contingencies that arise during budget execution.
    - GOOD: The budget includes an allocation for contingencies.
    - ADVANCED: The budget includes an allocation for contingencies with transparent access criteria.
    - ADVANCED (highest level): The budget includes an allocation for contingencies with transparent access criteria and regular in‐year reporting on its utilization.
  - 3.2.2. Asset and Liability Management:
    - BASIC: Risks relating to major assets and liabilities are disclosed and managed.
    - GOOD: All borrowing is authorized by law and the risks surrounding the government’s debt holdings are analyzed and disclosed.
    - ADVANCED: All borrowing is authorized by law and the risks surrounding the government’s assets and liabilities are analyzed and disclosed.
    - ADVANCED (highest level): All liabilities and significant asset acquisitions or disposals are authorized by law, and the risks surrounding the balance sheet are disclosed and managed according to a published strategy.
  - 3.2.3. Guarantees:
    - BASIC: The government’s guarantee exposure is regularly disclosed and authorized by law.
    - GOOD: All government guarantees, their beneficiaries, and the gross exposure created by them, are published at least annually.
    - ADVANCED: All government guarantees, their beneficiaries, and the gross exposure created by them are published at least annually. The maximum value of new guarantees or their stock is authorized by law.
    - ADVANCED (highest level): All government guarantees, their beneficiaries, the gross exposure created by them, and the probability of their being called are published at least annually. The maximum value of new guarantees or their stock is authorized by law.
  - 3.2.4. Public Private Partnerships:
    - BASIC: Obligations under public‐private partnerships are regularly disclosed and actively managed.
    - GOOD: The government at least annually publishes its total rights, obligations, and other exposures under public‐private partnership contracts.
    - ADVANCED: The government at least annually publishes its total rights, obligations, and other exposures under public‐private partnership contracts and the expected annual receipts and payments over the life of the contracts.
    - ADVANCED (highest level): The government at least annually publishes its total rights, obligations, and other exposures under public‐private partnership contracts and the expected annual receipts and payments over the life of the contracts. A legal limit is also placed on accumulated obligations.
  - 3.2.5. Financial Sector Exposure:
    - BASIC: The government’s potential fiscal exposure to the financial sector is analyzed, disclosed, and managed.
    - GOOD: The authorities quantify and disclose their explicit support to the financial sector at least annually.
    - ADVANCED: The authorities quantify and disclose their explicit support to the financial sector at least annually, and regularly undertake an assessment of financial sector stability.
    - ADVANCED (highest level): The authorities quantify and disclose their explicit support to the financial sector at least annually, and regularly undertake an assessment of financial sector stability, based on a plausible range of macroeconomic and financial market scenarios.
  - 3.2.6. Natural Resources:
    - BASIC: The government’s interest in exhaustible natural resource assets and their exploitation is valued, disclosed, and managed.
    - GOOD: The government publishes annual estimates of the volume and value of major natural resource assets, as well as the volume and value of the previous year’s sales and fiscal revenue.
    - ADVANCED: The government publishes annual estimates of the volume and value of major natural resources assets under different price scenarios, as well as the volume and value of the previous year’s sales and fiscal revenue.
    - ADVANCED (highest level): The government publishes annual estimates of the volume and value of major natural resource assets under different price and extraction scenarios, as well as the volume and value of the previous year’s sales.
  - 3.2.7. Environmental Risks:
    - BASIC: The potential fiscal exposure to natural disasters and other major environmental risks are analyzed, disclosed, and managed.
    - GOOD: The government identifies and discusses the main fiscal risks from natural disasters in qualitative terms.
    - ADVANCED: The government identifies and discusses the main fiscal risks from natural disasters, quantifying them on the basis of historical experiences.
    - ADVANCED (highest level): The government identifies and discusses the main fiscal risks from natural disasters, quantifying them on the basis of historical experiences, and managing them according to a published strategy.
- 3.3. Fiscal Coordination: Fiscal relations and performance across the public sector should be analyzed, disclosed and coordinated.
  - 3.3.1. Subnational Governments:
    - BASIC: Comprehensive information on the financial condition and performance of subnational governments, individually and as a consolidated sector, are collected and published.
    - GOOD: The financial condition and performance of subnational governments is published annually.
    - ADVANCED: The financial condition and performance of subnational governments is published annually, and there is a limit on their liabilities or borrowing.
    - ADVANCED (highest level): The financial condition and performance of subnational governments is published quarterly, and there is a limit on their liabilities or borrowing.
  - 3.3.2. Public Corporations:
    - BASIC: The government regularly publishes comprehensive information on the financial performance of public corporations, including any quasi‐fiscal activity undertaken by them.
    - GOOD: All transfers between the government and public corporations are disclosed on at least an annual basis.
    - ADVANCED: All transfers between the government and public corporations are disclosed, and based on a published ownership policy, a report on the overall financial performance of the public corporations sector is published on at least an annual basis.
    - ADVANCED (highest level): All direct and indirect support between the government and public corporations is disclosed, and based on a published ownership policy, a report on the overall financial performance of public corporations sector, including estimates of any quasi‐fiscal activities undertaken, is published on at least an annual basis.

*Annex I. FTE Questionnaire — extracted from the provided PDF content.*

### Annex II. Proposed Structure of a Fiscal Risk Statement

### Annex II. Proposed Structure of a Fiscal Risk Statement (FRS)

### 1. Introduction (qualitative)
- Overview and presentation of the fiscal risk management framework in Senegal
- Analysis of institutional strengths and weaknesses and presentation of fiscal risk management measures

### 2. Summary of specific risks (qualitative)
- List of major fiscal risks and qualitative presentation of their impact
- Explanations for possible new developments or changes to this list

### 3. Macroeconomic and macro-fiscal risks
- Qualitative analyses of risks derived from the global and regional economy
- (In the medium term) Quantitative analyses of deviations between macroeconomic/macro-fiscal forecasts and outturns, of fiscal sensitivity to the price of fuel and the US$/CFAF exchange rate, alternative macroeconomic scenarios and impact on the budget and the public debt.

### 4. Political, legal and security risks
- Qualitative analysis of political instability and insecurity risks
- Qualitative analysis of the principal legal disputes involving general government
- (In the medium term) Quantitative analyses of projects in the pipeline that are not yet included in the DPBEP and of the legal risks.

### 5. Public enterprises
- Overview of the interactions between the portfolio and public finance (assets and liabilities, including arrears; fiscal flows and possible explicit liabilities for the sector, such as subsidies, capital transfers, guarantees; social debts and tax debts)
- Broad qualitative and quantitative overview of risks and discussion of measures to mitigate them (in connection with the chapter on public enterprises and the report on the parapublic sector)
- (In the medium-term) Sensitivity analysis of main fiscal aggregates to a limited number of identified risk scenarios (exchange rate, raw materials, etc.)

### 6. PPP
- (In the short term) List of the key approved PPP identified
- (In the medium term) Comprehensive list of approved PPP projects
- Details of the newly approved PPPs since the previous FRS
- Cumulative multiyear liabilities of the PPP program; gross exposure from guarantees and other contingent liabilities attached to existing PPP contracts; current and projected performance indicators; tariffs and prices; risk distribution
- Qualitative discussion of fiscal risk mitigation measures.

### 7. Guarantees and other contingent liabilities
- Exhaustive list of guarantees and other contingent (explicit) liabilities agreed to, by beneficiary; above a certain threshold, description of the amount, and of the reason for granting the guarantee, maturity profile, history of debt or liability servicing
- Budget spending due to activation of guarantees and revenue from guarantee fees

### 8. Social security funds and pension systems
- Qualitative presentation of the liabilities of social security systems and pension schemes
- Presentation of the key measures affecting fiscal risks associated with these entities
- (In the medium term) Quantitative presentation and (in the case of substantial liabilities) remedial measures

### 9. Financial sector
- Presentation of the history of financial sector bailouts and discussion of mitigation measures already adopted or in preparation
- Presentation of guarantee mechanisms generating explicit commitments of the government vis-à-vis the financial sector
- (In the medium term) Contingent explicit liabilities, liabilities of the sector broken down into liabilities of the private sector and of partly state-owned banks; summary of financial soundness indicators (key financial indicators, such as capital adequacy and nonperforming loans ratios) drawing on existing reports

### 10. Environmental risks / Natural disasters
- Qualitative analysis of fiscal risks related to natural disasters
- (In the medium term) Economic costs of past natural disasters, frequency and associated fiscal costs and discussion of mitigation measures

### 11. Subnational, including regional, governments
- Qualitative presentation of the changing role of subnational governments
- Subnational governments’ debts and possible central government liabilities
- (In the medium term) Quantitative analysis relating to subnational governments (for example, in the event of a default in respect of an investment project)

### 12. Long-term risks
- Presentation of the risks associated with general government indebtedness
- Presentation of the risks associated with the public debt
- (In the medium term) Presentation of the risks associated with government financial assets
- Analysis of alternative scenarios for next 10 years consistent with the DSA scenarios
- A shortened version of the already existing DSA, with analysis of debt maturity profiles

*Source: Annex II. Proposed Structure of a Fiscal Risk Statement (FRS) from the provided IMF content unit.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2019/cr1934-senegal-fiscal-transparency.pdf_