## Press Release: IMF Executive Board Approves Three-Year PSI for Senegal

_IMF News, June 24, 2015_

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**Canonical URL:** [Press Release: IMF Executive Board Approves Three-Year PSI for Senegal](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr15297)

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## Bibliographic details
- Published: June 24, 2015

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### Overview
- Date of press release header: June 24, 2015
- Publication note date: June 27, 2015
- The Executive Board of the International Monetary Fund (IMF) approved a three-year Policy Support Instrument (PSI) for Senegal.
- The PSI supports implementation of a three-year program of macroeconomic reforms designed to advance the Plan Sénégal Emergent (PSE), the authorities’ strategy to increase growth and reduce poverty while preserving macroeconomic stability and debt sustainability.
- The PSI is described as an instrument for countries that may not need, or want, IMF financial assistance, but still seek IMF advice, monitoring and endorsement of their policies.

### Program objectives and targets
- Short-term targets and intentions:
  - Achieve an economic growth rate of at least 5 percent in 2015 compared with 4.7 percent in 2014.
  - Maintain the inflation rate below 2 percent in 2015.
  - Decrease the budget deficit to 4.7 percent (implicit target for 2015).
- Medium-term targets:
  - Increase the GDP growth rate to over 6 percent by 2017.
  - Contain inflation below 3 percent by 2017.
  - Reduce the budget deficit to 3.6 percent by 2017.
  - Reduce the budget deficit to 3 percent by 2018.
  - Reduce the current account deficit from 9 percent of GDP in 2014 to 6.5 percent of GDP in 2017.

### Policy measures and reforms
- Revenue and fiscal policy:
  - Focus on increasing tax revenues by broadening the tax base.
  - Strengthen tax and customs administration.
  - Rationalize taxation of the financial sector and telecommunications.
- Expenditure policy:
  - Rationalize current expenditures to create fiscal space for financing infrastructure and social expenditure.
  - Reorient lower priority spending, particularly public consumption, to provide room for higher public investment.
  - Attention to the quality of expenditure, including investment.
- Structural reforms and governance:
  - Accelerate structural reforms to foster a more attractive business environment and promote private sector development.
  - Strengthen public financing, transparency, and economic governance.
- Program design and signaling:
  - The PSI aims to signal IMF endorsement of the authorities’ policies to donors, multilateral development banks, and markets.

### Risks, vulnerabilities, and mitigation
- Identified risks:
  - Political calendar may pose risks to planned fiscal consolidation.
  - Reforms to curb unproductive public consumption and raise expenditure efficiency may slow down.
  - Potential revenue shortfalls.
  - External downside risks including:
    - Slower growth in partner countries.
    - Continued volatility in oil prices—which may affect revenue targets and subsidies.
    - Spillovers from regional shocks including extremism and natural disasters.
- Mitigating actions by authorities:
  - Supplement fiscal deficit targets with a debt anchor.
  - Expand use of the precautionary reserve envelope to link project financing to reform progress.

### Statement by Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair
- The PSI supports a three-year program of macroeconomic reforms embedded in the PSE for inclusive growth and poverty reduction.
- The PSE’s growth goals of above 7 percent are described as achievable provided reforms are accelerated, broadened and deepened.
- Early signs indicate positive momentum owing to progress in reform implementation and favorable external factors, but more remains to be done to solidify momentum.
- The authorities are committed to meeting the West African Economic and Monetary Union target of a fiscal deficit of 3 percent of GDP by 2018.
- The 2015 budget targets a deficit of 4.7 percent of GDP.

*Source: Press Release: IMF Executive Board Approves Three-Year PSI for Senegal (June 24, 2015 / June 27, 2015).*

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## References

- [Senegal and the IMF](http://www.imf.org/external/country/SEN/index.htm)
- [Guinea-Bissau and the IMF](http://www.imf.org/external/country/GNB/index.htm)
- [Benin and the IMF](http://www.imf.org/external/country/BEN/index.htm)
- [Burkina Faso and the IMF](http://www.imf.org/external/country/BFA/index.htm)
- [Côte d'Ivoire and the IMF](http://www.imf.org/external/country/CIV/index.htm)
- [Mali and the IMF](http://www.imf.org/external/country/MLI/index.htm)
- [Niger and the IMF](http://www.imf.org/external/country/NER/index.htm)
- [Togo and the IMF](http://www.imf.org/external/country/TGO/index.htm)
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_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr15297_