IMF Staff Country Reports

This paper focuses on Senegal’s Sixth Review under the Policy Coordination Instrument and Third Reviews under the Stand-By Arrangement and the Arrangement under the Standby Credit Facility. Weaker external demand, rising food and energy prices, tightening financial conditions, and the US dollar appreciation have negatively impacted the Senegalese economy. Moreover, multiple challenges are facing the country, including heightened regional insecurity and growing social demands amid soaring cost of living. Program performance was broadly satisfactory. All end-June 2022 performance criteria and two out of three indicative targets were met. Three out of nine structural benchmarks were implemented on time. Revenue collection through end- September was stronger than expected but soaring energy subsidies led the government to delay some investment projects. Spending pressures are mounting in 2023, making the much-needed fiscal consolidation more difficult. The authorities and staff agreed on a revised 2022 budget that maintains the fiscal deficit at 6.2 percent of gross domestic product, in line with the previous program review, through additional revenue measures and savings to offset larger energy subsidies.