IMF Executive Board Completes Fourth Review Under the Policy Support Instrument (PSI) and Extends Arrangement for Senegal
IMF News, June 26, 2017
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Bibliographic details
- Published: June 26, 2017
Overview
- Press Release No. 17/250
- Date: June 26, 2017
- The Executive Board completed the fourth review of Senegal’s economic performance under a program supported by the Policy Support Instrument (PSI).
- The Board approved the authorities’ request for a one-year extension of the PSI arrangement.
- The PSI for Senegal was approved on June 24, 2015.
Macroeconomic performance and outlook
- Under the Plan Sénégal Emergent (PSE), growth increased steadily to 6.7 percent in 2016.
- Inflation remained low in 2016.
- The fiscal deficit fell to 4.2 percent of GDP in 2016.
- Senegal is projected to meet the West African and Monetary Union convergence criteria of 3 percent of GDP in 2018, one year earlier than mandated.
- Statement by Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair: “Senegal’s economic outlook is broadly positive and risks remain manageable.”
Program aims and policy focus
- The program aims to implement economic policies and structural reforms needed to sustain strong growth and ongoing fiscal consolidation to meet the regional fiscal criteria.
- The PSI supports authorities’ reform efforts to increase growth while maintaining economic stability.
- To achieve PSE goals of sustaining high growth and reducing poverty over the medium term, authorities are committed to further reforms to facilitate private investment.
Structural reforms and investment promotion
- Reforms needed to facilitate private investment include:
- Implementation of high quality infrastructure projects.
- Strengthening the business environment by reducing energy costs.
- Strengthening governance.
- Implementing judicial and land reforms.
- A Special Economic Zone (SEZ) with high standards of economic governance and low tax rates could act as a catalyst to attract high levels of private investment.
Fiscal policy, revenue, and public investment
- Authorities have implemented important fiscal reforms to support ongoing consolidation while increasing public investment.
- Consolidation achieved through containment of public consumption, including the wage bill.
- To create further fiscal space for infrastructure spending, authorities are committed to:
- Increasing revenues through improving revenue administration.
- Lowering tax exemptions.
Debt management and public financial management
- Authorities recognize the importance of strengthening debt management to support fiscal sustainability.
- Required reforms include:
- Addressing weaknesses in Treasury operations.
- Containing additional financing needs from the Post Office and civil service pensions.
- Improving public financial management.
Executive Board assessment and priorities
- Continued implementation of sound policies and reforms is important to sustain high growth and meet Senegal’s development objectives.
- Priority areas identified:
- Strengthen implementation of reforms to improve the quality of public investment and promote private investment.
- Address weaknesses in Treasury operations to ensure fiscal sustainability.
Contact and press information
- IMF Communications Department, MEDIA RELATIONS
- PRESS OFFICER: Lucie Mboto Fouda
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
IMF Executive Board Completes Fourth Review Under the Policy Support Instrument (PSI) and Extends Arrangement for Senegal — Press Release No. 17/250, June 26, 2017