IMF Executive Board Completes Second Review Under the Policy Coordination Instrument for Senegal
IMF News, January 12, 2021
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Bibliographic details
- Published: January 12, 2021
Program objectives and status
- The Policy Coordination Instrument (PCI) for Senegal supports the authorities’ development objectives under the “Plan Senegal Emergent” and focuses on three main pillars:
- (i) achieving inclusive and private sector-led growth;
- (ii) consolidating macroeconomic stability through prudent fiscal policy and sound debt management; and
- (iii) managing prospective oil and gas revenues in a sustainable and transparent manner.
- The PCI for Senegal was approved on January 10, 2020.
- The Executive Board completed the second review under the PCI; the Executive Board’s decision was taken without a meeting.
COVID-19 economic impact and policy response
- Although the pandemic has remained fairly contained in Senegal, its economic impact was severe through the first half of 2020.
- Strong fiscal and monetary policy support bolstered the health system and cushioned the economic shock, but led the projected 2020 fiscal deficit to increase from 3 to about 6 ½ percent of GDP.
- The IMF disbursed US$442 million (100 percent of quota) under the RCF/RFI in April to support the pandemic response.
- Drawing lessons from the crisis, the authorities adjusted their economic development plan for 2021-23 to build a more resilient and inclusive economy, including by upgrading the social safety net.
- A broad-based recovery started in the second half of 2020 and favorable perspectives for end-year agricultural production mean the contraction initially expected for the full year will likely be avoided.
- Growth is projected at about 5 percent for 2021.
2021 budget and fiscal consolidation
- The 2021 budget approved in December 2020 balances support for the recovery and a gradual fiscal consolidation aimed at returning to the regional deficit anchor of 3 percent of GDP by 2023.
- The 2021 budget envisages a consolidation of about 1½ percent of GDP, underpinned by:
- withdrawal of COVID-19 stimulus;
- implementation of the authorities’ Medium-Term Revenue Strategy; and
- further current spending rationalization.
- In line with regional understandings, the authorities are committed to return to the WAEMU fiscal deficit target of 3 percent of GDP by 2023, which would help contain debt vulnerabilities.
- Public debt remains at moderate risk of debt distress with limited space to absorb shocks in the near term.
Reforms and institutional measures
- Reforms are advancing to:
- gradually reduce tax expenditures;
- enhance budget execution transparency; and
- monitor fiscal risks.
- The authorities are finalizing the revised legal framework for PPPs and the legal framework for the management of hydrocarbon revenue, which should be aligned with international best practices.
Key economic and financial indicators (selected)
- GDP at constant prices:
- 2019: 5.3
- 2020 (Prel.): -0.7
- 2021 (Proj.): 5.2
- 2022 (Proj.): 6.0
- 2023 (Proj.): 11.9
- 2024 (Proj.): 8.7
- Of which: Non-hydrocarbon GDP:
- 2019: 7.3
- 2020: 7.2
- Of which: Hydrocarbon GDP:
- 2022 (Proj.): 44.0
- Of which: Non-agriculture GDP:
- 2019: 5.8
- 2020: -1.4
- 2021 (Proj.): 6.2
- 2022 (Proj.): 12.6
- 2023 (Proj.): 9.0
- GDP deflator:
- 2019: 1.7
- 2020: 2.1
- 2021 (Proj.): 1.5
- 2022 (Proj.): 1.8
- Consumer prices (annual average):
- 2019: 1.0
- 2020: 2.0
- 2021 (Proj.): 1.4
- Consumer prices (end of period):
- 2019: 0.6
- 2020: 1.4
- 2021 (Proj.): 2.6
- 2022 (Proj.): 1.3
- External sector (exports, f.o.b., percent change in CFA francs):
- 2019: 12.3
- 2020: -5.1
- 2021 (Proj.): 8.9
- 2022 (Proj.): 15.0
- 2023 (Proj.): 67.7
- 2024 (Proj.): 16.1
- Imports, f.o.b. (CFA francs percent change):
- 2019: 4.7
- 2020: 4.6
- 2021 (Proj.): 9.7
- 2022 (Proj.): 19.3
- Export volume:
- 2019: 12.8
- 2020: -2.5
- 2021 (Proj.): 13.0
- 2022 (Proj.): 12.7
- 2023 (Proj.): 88.4
- 2024 (Proj.): 15.6
- Import volume:
- 2019: 9.4
- 2020: 7.9
- 2021 (Proj.): 10.1
- 2022 (Proj.): 14.7
- 2024 (Proj.): 7.8
- Terms of trade ("–" = deterioration):
- 2019: 3.7
- 2020: 4.8
- 2021 (Proj.): -0.5
- 2022 (Proj.): 2.5
- 2023 (Proj.): -14.4
- 2024 (Proj.): -0.4
- Nominal effective exchange rate:
- 2019: -1.3
- Real effective exchange rate:
- 2019: -2.1
- Broad money:
- 2019: 8.2
- 2020: 9.1
- 2021 (Proj.): 8.6
- Net domestic assets:
- 2019: 7.5
- 2020: 8.8
- 2021 (Proj.): 5.1
- Credit to the economy (net):
- 2019: 6.1
- 2020: 1.9
- 2021 (Proj.): 5.0
- Government financial operations (percent of GDP unless noted):
- Revenue:
- 2019: 20.2
- 2020: 21.1
- 2021 (Proj.): 20.6
- 2022 (Proj.): 20.9
- 2023 (Proj.): 21.7
- 2024 (Proj.): 21.9
- Grants:
- 2019: 1.6
- 2020: 3.2
- 2021 (Proj.): 2.2
- 2022 (Proj.): 2.3
- Total expenditure:
- 2019: 24.0
- 2020: 27.6
- 2021 (Proj.): 25.5
- 2022 (Proj.): 24.9
- 2023 (Proj.): 24.7
- Net lending/borrowing (Overall Balance) excluding grants:
- 2019: -5.5
- 2020: -9.7
- 2021 (Proj.): -7.1
- 2022 (Proj.): -6.3
- 2023 (Proj.): -4.9
- 2024 (Proj.): -4.7
- Net lending/borrowing (including grants):
- 2019: -3.8
- 2020: -6.5
- 2021 (Proj.): -4.0
- 2022 (Proj.): -3.0
- Net lending/borrowing (excl. one-off operations):
- 2019: -3.1
- 2020: -6.4
- 2021 (Proj.): -4.8
- Primary fiscal balance:
- 2019: -1.9
- 2020: -4.3
- 2021 (Proj.): -2.7
- 2022 (Proj.): -0.9
- Savings and investment:
- Current account balance (official transfers included):
- 2019: -7.5
- 2020: -10.9
- 2021 (Proj.): -10.7
- 2022 (Proj.): -10.6
- 2023 (Proj.): -4.6
- 2024 (Proj.): -3.6
- Current account balance (official transfers excluded):
- 2019: -7.7
- 2020: -12.3
- 2021 (Proj.): -11.2
- 2022 (Proj.): -11.3
- 2023 (Proj.): -5.0
- Gross domestic investment:
- 2019: 31.7
- 2020: 30.7
- 2021 (Proj.): 33.9
- 2022 (Proj.): 34.3
- 2023 (Proj.): 35.7
- 2024 (Proj.): 33.5
- Government investment (percent of GDP):
- 2019: 9.2
- 2020: 8.3
- Nongovernment investment (percent of GDP):
- 2019: 24.4
- 2020: 24.8
- 2021 (Proj.): 26.0
- 2022 (Proj.): 26.8
- 2024 (Proj.): 24.2
- Gross national savings:
- 2019: 24.1
- 2020: 19.8
- 2021 (Proj.): 23.2
- 2022 (Proj.): 23.7
- 2023 (Proj.): 31.1
- 2024 (Proj.): 29.9
- Government savings:
- 2019: 6.6
- 2020: 6.7
- 2021 (Proj.): 7.0
- 2022 (Proj.): 10.3
- 2023 (Proj.): 17.6
- 2024 (Proj.): 13.2
- Total public debt:
- 2019: 64.1
- 2020: 67.6
- 2021 (Proj.): 68.2
- 2022 (Proj.): 68.1
- 2023 (Proj.): 63.7
- 2024 (Proj.): 61.0
- Domestic public debt:
- 2019: 10.9
- 2020: 12.2
- 2021 (Proj.): 13.9
- 2022 (Proj.): 14.3
- 2023 (Proj.): 15.3
- 2024 (Proj.): 16.5
- External public debt:
- 2019: 53.2
- 2020: 55.3
- 2021 (Proj.): 55.5
- 2022 (Proj.): 54.3
- 2023 (Proj.): 49.5
- 2024 (Proj.): 45.7
- Total public debt service (percent of government revenue):
- 2019: 22.9
- 2020: 27.1
- 2021 (Proj.): 24.6
- 2022 (Proj.): 28.5
- Memorandum items:
- Gross domestic product (CFAF billions):
- 2019: 13,815
- 2020: 14,006
- 2021 (Proj.): 14,991
- 2022 (Proj.): 16,154
- 2023 (Proj.): 18,347
- 2024 (Proj.): 20,313
- of which non-hydrocarbon (CFAF billions):
- 2022 (Proj.): 17,260
- 2024 (Proj.): 18,718
- Gross domestic product (USD billions):
- 2019: 23.6
- Share of hydrocarbon in total GDP (%):
- 2019: 5.9
- National Currency per U.S. Dollar (Average):
- 2019: 586
Source: IMF Communications Department press release, January 12, 2021.
