IMF Staff Concludes Visit to Senegal

IMF News, October 16, 2024

Source details

Mission dates: October 9-16, 2024.
Team led by: Mr. Edward Gemayel.
Objective: Discuss preliminary findings of the General Inspectorate of Finance (IGF) report on public finances covering the period 2019-2024Q1, and assess fiscal outlook for the remainder of 2024.
Context: Assess implications of the IGF data revisions for past IMF-supported programs and for the ongoing Extended Fund Facility (EFF) and Extended Credit Facility (ECF), combined with the Resilience and Sustainability Facility (RSF) arrangements approved by the IMF Executive Board on June 26, 2023.

The IMF staff welcomes the IGF report and the government's commitment to strong governance and fiscal transparency.
Preliminary findings indicate substantial revisions to budget execution data for the period 2019-2023.
Revisions primarily attributed to investments financed through external loans and domestic bank borrowing.
As a result, the fiscal deficit and public debt during 2019-2023 are now estimated to be significantly higher than previously reported in budget and settlement laws.
Certification of the IGF's conclusions by the Court of Auditors is pending.
Revenue shortfall identified during the previous staff visit has been confirmed through end-September.
Expenditures have remained elevated, primarily driven by a substantial rise in investment spending, as indicated by the IGF preliminary findings.
Absent decisive expenditure measures, the fiscal deficit is projected to worsen in 2024, exceeding the previous estimate of 7.5 percent of GDP.

Immediate priorities:
- Evaluate the macroeconomic impact of the IGF revisions and determine next steps, including assessing whether any misreporting occurred during previous and current IMF-supported programs.
Fiscal consolidation measures recommended:
- Implement bold and timely measures to ensure fiscal sustainability and put public debt on a downward trajectory.
- Use the 2025 Budget Law as a critical opportunity to reaffirm commitment to essential reforms and address longstanding structural challenges.
- Enhance domestic revenue mobilization, particularly through the streamlining of tax exemptions.
- Phase out energy subsidies and non-essential transfers to foster fiscal discipline.
Governance and confidence:
- Strengthen fiscal transparency and public governance to rebuild trust and confidence, supporting a more inclusive and private sector-led growth model.

IMF staff will continue to work closely with the authorities in the coming weeks to outline next steps for the ongoing programs.
The IMF staff team expressed appreciation for the authorities’ cooperation and for candid and constructive discussions.
Principal government counterparts met by the team included:
- His Excellency, Prime Minister Ousmane Sonko;
- Mr. Abdourahmane Sarr, Minister of Economy, Planning, and Cooperation;
- Mr. Cheikh Diba, Minister of Finance and Budget;
- Mr. Ahmadou Al Aminou Lo, Minister, General Secretary of the Government;
- and other senior government officials and development partners.

Press Release No. 24/373