IMF Staff Completes Staff Visit to Senegal

IMF News, September 21, 2020

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IMF staff concluded a virtual mission from September 9-18, 2020.
The Senegalese economy is expected to contract in 2020 as a result of disruptions due to the COVID-19 pandemic.
Real GDP growth now expected to contract by 0.7 percent in 2020.
A gradual recovery started in May with lifting of most COVID-19-related restrictions and reopening of borders in July.
Output in 2021 is projected to rebound back to above 5 percent, boosted in part by favorable prospects for agriculture.
The projection is subject to significant downside risks, reflecting uncertainties around the speed of the global recovery and the evolution of the pandemic, which could continue to affect tourism, transport and hospitality.

Execution of the revised 2020 budget is proceeding largely in line with expectations.
Budget execution through end-August 2020 was broadly satisfactory.
The mission encourages the authorities to maintain the deficit at around 6 percent of GDP as envisaged in the 2020 revised budget.
The mission commends the authorities for strong and transparent implementation of their Economic and Social Resilience Program (PRES).
Most of the planned COVID-19 measures under the PRES have already been executed, as detailed in the June 2020 quarterly budget implementation report.
The mission welcomes the repeal of the decree on derogatory procurement procedures for COVID-19 related spending; COVID-19 spending will follow the normal procurement procedure going forward.

The authorities and IMF staff made considerable progress on key parameters for the draft 2021 budget ahead of the second PCI review mission planned for late October 2020.
Given high uncertainty and lingering sectoral effects of the pandemic, the draft 2021 budget should:
- Strike a balance between supporting the recovery (including through a robust investment plan) and ensuring fiscal and debt sustainability consistent with WAEMU’s external stability.
- Continue to signal a strong commitment to return gradually to a budget deficit of 3 percent of GDP by 2022, in line with the WAEMU convergence criterion, as the situation normalizes.
The authorities have finalized a new recovery plan focusing on accelerating structural transformation and enhancing resilience through diversification of the productive base.

The mission and the authorities will continue discussion on the draft 2021 budget in the coming weeks.
The second PCI review mission will take place in late October 2020, with a Board meeting tentatively planned for December 2020.
The mission thanked the authorities for frank, open and constructive dialogue.

IMF Press Release No. 20/297 — September 21, 2020.