IMF Executive Board Completes Seventh Review under the Policy Support Instrument (PSI) for Senegal and Concludes 2018 Article IV Consultation

IMF News, January 18, 2019

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Canonical URL: IMF Executive Board Completes Seventh Review under the Policy Support Instrument (PSI) for Senegal and Concludes 2018 Article IV Consultation

Date: January 18, 2019
Press Release No. 19/05
The IMF Executive Board completed the seventh review of Senegal’s performance under the Policy Support Instrument (PSI) (approved June 24, 2015) and concluded the 2018 Article IV Consultation.
The PSI offers low-income countries advice and support without a borrowing arrangement.

Real GDP growth: 7.2 percent in 2017; projected to remain robust at 6.2 percent in 2018 (text) and table projections: GDP at constant prices—2015: 6.4; 2016: 6.2; 2017: 7.2; 2018: 7.0; 2019: 6.9; 2020: 7.5; 2021: 7.1; 2022: 11.6; 2023: 10.4 (annual percentage change).
Inflation: described as low; GDP deflator and consumer prices series in table include GDP deflator 2015: 1.1; 2016: 0.8; 2017: 1.8; 2018: 2.2; 2019: 2.3; 2020: 2.0; 2021: 1.3. Consumer prices (annual average) 2015: 0.1; 2016: 1.4; 2017: 0.3; 2018: 1.5.
External sector: current account deficit widened significantly in 2017 and is projected to remain above 7 percent of GDP in 2018. Table current account balance (official transfers included): 2015: -4.0; 2016: -7.3; 2017: -8.0; 2018: -7.5; 2019: -10.3; 2020: -10.8; 2021: -4.6; 2022: -4.4.

Fiscal deficit: projected to reach 3.5 percent of GDP in 2018 (text).
2019 budget: in line with WAEMU fiscal deficit convergence criterion of 3 percent of GDP (text).
Government financial operations (percent of GDP, table):
- Revenue: 2015: 20.7; 2016: 19.4; 2017: 18.7; 2018: 19.1; 2019: 19.5; 2020: 19.6; 2021: 20.1; 2022: 20.3.
- Total expenditure: 2015: 23.0; 2016: 24.0; 2017: 22.3; 2018: 22.9; 2019: 22.1; 2020: 22.0; 2021: 22.4; 2022: 22.6; 2023: 23.3.
- Net lending/borrowing (Overall Balance) excluding grants: 2015: -5.5; 2016: -5.1; 2017: -5.6; 2018: -5.4; 2019: -5.0; 2020: -4.9.
- Net lending/borrowing including grants: 2015: -3.7; 2016: -3.3; 2017: -2.9; 2018: -3.5; 2019: -3.4; 2020: -3.0.
- Primary fiscal balance: 2015: -2.2; 2016: -1.6; 2017: -1.0; 2018: -1.4; 2019: -1.1; 2020: -1.2.
In 2018, large expenditure cuts were needed to offset lower-than-projected revenues. Going forward, it is important to implement budgeted levels of public investment and social spending while maintaining fiscal discipline.
Policy priority: implement revenue reforms, including a streamlining of tax expenditures, to meet ambitious revenue projections and progress toward the WAEMU tax revenue convergence criterion of 20 percent of GDP.

Program performance under the PSI: broadly satisfactory.
- All but one of the end-June 2018 assessment criteria and indicative targets were met.
- Two prior actions were met.
- Four of the six structural benchmarks set for the PSI 7th review were met.
Recommendation: steadfast implementation of the comprehensive reform strategy in the Plan Sénégal Emergent (PSE) II to sustain high growth and make the private sector the main driver of growth.
Recommendation: create a strong policy framework for managing oil and gas resources consistent with international best practice to ensure optimal and transparent use.

Debt status: Senegal is at low risk of debt distress, but debt dynamics need close monitoring.
Total public debt (table): 2015: 44.5; 2016: 47.7; 2017: 60.6; 2018: 49.4; 2019: 64.5; 2020: 61.9; 2021: 60.2; 2022: 59.2; 2023: 55.0; 2024: 52.2 (table includes through 2023; note table formatting).
External public debt (table): 2015: 32.3; 2016: 33.6; 2017: 40.4; 2018: 42.8; 2019: 47.6; 2020: 47.2; 2021: 44.9; 2022: 43.0; 2023: 38.7; 2024: 35.7.
Domestic public debt (table): 2015: 14.1; 2016: 16.9; 2017: 15.3; 2018: 16.3; 2019: 16.5; 2020: 16.5.
Total public debt service (percent of government revenue, table): 2015: 34.0; 2016: 39.7; 2017: 28.2; 2018: 40.9; 2019: 30.9; 2020: 23.8.
Policy recommendation: adhere to the planned fiscal consolidation path, accelerate reforms to sustain high growth, and implement a prudent debt strategy that gives priority to concessional borrowing.

GDP at constant prices (annual percent change): 2015: 6.4; 2016: 6.2; 2017: 7.2; 2018: 7.0; 2019: 6.9; 2020: 7.5; 2021: 7.1; 2022: 11.6; 2023: 10.4.
Nonagriculture GDP growth (annual percent change): 2015: 5.5; 2016: 6.5; 2017: 6.3; 2018: 6.7; 2019: 6.0; 2020: 6.6; 2021: 12.0.
Hydrocarbon GDP share: 2018 hydrocarbon GDP: 50.2 (table entry formatting); Share of Hydrocarbon in total GDP (%): 0.0; 4.6.
Exports, f.o.b. (CFA francs, annual percent change): 2015: 11.7; 2016: 3.6; 2017: 12.2; 2018: 11.9; 2019: 11.5; 2020: 10.5; 2021: 46.6; 2022: 15.7.
Imports, f.o.b. (CFA francs, annual percent change): 2015: 2.7; 2016: -2.6; 2017: 20.6; 2018: 11.8; 2019: 10.9; 2020: 8.2; 2021: 14.6; 2022: 9.8; 2023: 2.5; 2024: 5.8.
Broad money (changes in percent of beginning-of-year broad money): 2015: 19.3; 2016: 13.8; 2017: 9.2; 2018: 10.7; 2019: 12.6; 2020: 9.6.
Gross domestic investment (percent of GDP): 2015: 26.1; 2016: 25.3; 2017: 27.5; 2018: 25.9; 2019: 26.3; 2020: 27.7; 2021: 28.7; 2022: 30.7; 2023: 29.5; 2024: 33.2.
Gross national savings (percent of GDP): 2015: 20.4; 2016: 21.3; 2017: 17.9; 2018: 19.0; 2019: 20.2; 2020: 18.4; 2021: 24.9; 2022: 28.9.
Gross domestic product (CFAF bill.): 2015: 10,509; 2016: 11,252; 2017: 12,278; 2018: 13,407; 2019: 13,340; 2020: 14,524; 2021: 15,924; 2022: 17,268; 2023: 19,653; 2024: 21,921.
WAEMU gross official reserves (billions of $US, end-Sept 2018 value shown for 2018): 12.5; 15.1. Percent of broad money: 47.0; 37.7. Months of WAEMU imports of GNFS: 3.8.

IMF Press Release No. 19/05, January 18, 2019.