## IMF Executive Board Completes Second Review Under the Policy Coordination Instrument for Senegal

_IMF News, January 12, 2021_

## Source details

**Canonical URL:** [IMF Executive Board Completes Second Review Under the Policy Coordination Instrument for Senegal](https://www.imf.org/en/news/articles/2021/01/12/pr217-senegal-imf-executive-board-completes-2nd-review-under-the-policy-coordination-instrument)

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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.*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No. 20/06](https://www.imf.org/en/News/Articles/2020/01/10/pr206-senegal-imf-executive-board-approves-three-year-policy-coordination-instrument)
- [https://www.imf.org/en/About/Factsheets/Sheets/2017/07/25/policy-coordination-instrument](https://www.imf.org/en/About/Factsheets/Sheets/2017/07/25/policy-coordination-instrument)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/01/12/pr217-senegal-imf-executive-board-completes-2nd-review-under-the-policy-coordination-instrument_