IMF Staff Completes Review Mission to Senegal

IMF News, August 30, 2016

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Mission led by Ali Mansoor visited Dakar from August 17–30, 2016 to conduct Article IV consultations and discussions on the third review of the three-year arrangement under the Policy Support Instrument (PSI) approved in June 2015.
End-of-Mission press releases convey preliminary findings of IMF staff; views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
The IMF Executive Board is tentatively scheduled to discuss the report on the 2016 Consultations under Article IV and the third review under the PSI-supported arrangement in December 2016.
The mission met with the President of the Republic, the Prime Minister, Ministers in charge of Economy, Finance, Planning, Budget, and other senior government officials and representatives of the banking sector, private sector, civil society and development partners.

“The macroeconomic framework remains stable with robust growth.”
Projected growth rate for 2016 and 2017: above 6 percent.
Growth drivers identified:
- more efficient agriculture
- recovery of industry
- continued momentum in the service sector
Inflation: expected to remain low.

Budget execution in the first six months is satisfactory although customs revenues are below the program target.
Authorities' original budget deficit target for 2016: 4.2% of GDP.
Mission notes budget deficit projected at 3.7% of GDP in 2017.
Overall implementation of the PSI: remains satisfactory with respect to almost all quantitative criteria and indicative targets for end June 2016.
Recommendations to restore fiscal space and maintain sustainable debt:
- improve revenue mobilization
- rationalize government consumption
- accelerate modernization of Tax and Customs administration
- continue computerization of financial processes and administration, including the Treasury
- further strengthen public debt management capacity
- improve the management of public finances and economic governance
- build capacity to improve the quality of public investment

Mission welcomes authorities' commitment to continue to implement the Plan Senegal Emergent (PSE) while maintaining a sustainable level of debt.
Importance of accelerating implementation of structural reforms essential for the growth of private investment and the success of the PSE.
Structural reform priorities highlighted:
- measures to improve the business climate
- open and provide quality economic space to investors, including small and medium enterprises
- improve productivity and the business environment
- promote the private sector to maintain growth momentum, strengthen inclusiveness and improve economic resilience

Mission welcomes progress in the process of accession by Senegal to the Special Data Dissemination Standard (SDDS) expected by end of March 2017.
Additional efforts needed to improve economic governance and build capacity to improve the quality of public investment.

Real challenge for Senegal: maintain sustainable and inclusive growth to create jobs for the youth and significantly reduce poverty.
Emphasis on policies and structural reforms that enable inclusiveness and resilience to domestic, regional and international shocks.

Source: Press Release No. 16/384, IMF Staff Completes Review Mission to Senegal, August 30, 2016.