IMF Staff Concludes Mission to Senegal on Second Reviews of the Extended Fund Facility and Extended Credit Facility, and the Resilience and Sustainability Facility

IMF News, June 19, 2024

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Canonical URL: IMF Staff Concludes Mission to Senegal on Second Reviews of the Extended Fund Facility and Extended Credit Facility, and the Resilience and Sustainability Facility

Mission led by Mr. Edward Gemayel conducted in Dakar during June 6-19.
Purpose: review progress under the authorities’ economic program supported by the IMF’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements of SDR 1,132.6 million (about US$ 1.5 billion), combined with the Resilience and Sustainability Facility (RSF) of SDR 242.70 million (about US$320 million).
The EFF/ECF and RSF arrangements were approved by the IMF Executive Board on June 26, 2023.
End-of-mission statement summarizes preliminary findings; staff will prepare a report for the IMF's Executive Board subject to management approval.

Economic growth projected at 7.1 percent in 2024 and 10.1 percent in 2025.
Inflation expected to fall and remain within the BCEAO's target range by end-2025.
Elevated current account deficit expected to narrow in 2024-2025, reflecting the impact of the start of the hydrocarbon production and the fiscal consolidation efforts.

Performance under the IMF-supported programs described as "broadly satisfactory" despite political tensions and a difficult external environment.
All performance criteria for end-December 2023 have been met.
All but one indicative targets have been met.
Structural reform progress:
- Three out of six benchmarks for the second review under the EFF/ECF program already completed.
- One out of two reform measure under the RSF is expected to be completed ahead of the Board meeting scheduled for the second half of July.
Key structural measures highlighted:
- Strengthening the Office for National Anti-Corruption (OFNAC).
- Adopting a law protecting whistleblowers.
- Completing the remaining two measures necessary to exit the Financial Action Task Force (FATF) grey list.
- Enhancing governance in the extractive sector by disseminating information on the ultimate beneficiaries of companies engaged in this sector, in line with Senegal’s adherence to the Extractive Industries Transparency Initiative (EITI) standards.

Government will propose a supplementary budget to parliament, raising the fiscal deficit to 4.5 percent of GDP.
This represents a 0.6 percentage point increase from the commitment made at the time of the last review.
Authorities committed to pursuing fiscal consolidation through enhanced domestic revenue mobilization and decisive implementation of the energy subsidy reform in line with their roadmap to gradually phase-out these subsidies.
Despite a challenging global and regional financing environment, Senegal has:
- Issued a new Eurobond.
- Secured substantial regional financing.
Authorities intend to use this financial leverage for liability management operations with the goal of enhancing the country's debt sustainability.

IMF team met with Mr. Cheikh Diba, Minister of Finance and Budget; Mr. Abdourahmane Sarr, Minister of Economy, Planning and Cooperation; and other senior government officials.
Productive discussions held with representatives of civil society and development partners.
IMF team thanked authorities and counterparts for cooperation and noted that discussions will continue in the coming days to finalize details of some policies prior to reaching a staff-level agreement.

Press Release No. 24/226 — June 19, 2024, IMF Communications Department