IMF Staff Completes Review Mission to Senegal

IMF News, June 14, 2020

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A staff team from the International Monetary Fund (IMF), led by Ms. Corinne Deléchat, conducted a virtual mission from June 2-12, 2020 as part of the first review of the IMF’s Policy Coordination Instrument (PCI) approved in January 2020.
The IMF team reached staff-level agreement with the authorities on economic and financial policies that could support approval of the first review of their three-year program under the PCI.
The IMF Executive Board could consider the first review in the second half of July 2020.
End-of-mission statements convey preliminary findings and the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

The COVID-19 pandemic has had a significant impact on economic activity, exacerbated by border closures, a curfew, and social distancing.
The GDP growth rate is projected at 1.1 percent for 2020 compared to 5.3 percent in 2019.
These forecasts are based on:
- control of the spread of the pandemic;
- implementation of measures to support the economy; and
- a gradual recovery of economic activity during the second half of 2020.
The forecasts are nonetheless subject to major downside risks.

In April 2020, the IMF disbursed US$442 million (100 percent of Senegal’s quota), i.e., about CFAF 263 billion or approximately 2 percent of GDP under the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF).
A comprehensive assessment of the impact of the pandemic on revenue collection and supplementary expenditure requirements raises the estimated budget deficit to 6.1 percent of GDP in 2020.
The authorities intend to return gradually to a budget deficit of 3 percent of GDP through 2022 (WAEMU convergence criterion) as the crisis abates.
The authorities have stated their commitment to implementing measures that are temporary, well-targeted, cost-effective, and fully reflected in a revised budget.
The authorities are also committed to taking steps to strengthen transparency and accountability regarding emergency expenditure.

The performance of the PCI-supported program is satisfactory.
At end-December 2019, all quantitative targets under the program, except for one on the share of single-sourced public tenders, were met.
Significant progress was achieved in attaining the reform objectives for end-June.
Fund staff welcome the finalization of the medium-term revenue mobilization strategy, whose implementation in the second half of 2020 will support economic revitalization measures.
Structural reforms of public financial management will continue, including:
- full implementation of program budgets beginning with the 2021 budget law;
- tightened control over treasury deposit accounts (comptes de dépôt);
- strengthening of the Treasury Single Account; and
- sound debt management.
The government is also continuing to prepare the governance framework to manage revenues generated by hydrocarbon operations.

Ensure financing assistance for firms is properly coordinated and targeted, and clarify requirements for eligibility for the various facilities.
Design support based on appropriate risk-sharing to limit moral hazard and fiscal costs.
Evaluate direct transfers intended for viable firms on a basis of cost-benefit analysis.
The crisis represents an opportunity to:
- expand social safety nets and enhance the effectiveness of instruments for supporting small- and medium-sized enterprises (SMEs);
- examine broadening social safety nets in cooperation with development partners; and
- accelerate strengthening of coordination of entities and programs whose mission is to support SMEs.

IMF Communications Department — Press Release No. 20/243 (June 14, 2020).