IMF Staff Concludes Visit to Senegal

IMF News, March 18, 2022

Source details

Press Release No. 22/79; March 18, 2022.
A hybrid IMF staff mission led by Mr. Edward Gemayel conducted during March 9-15, 2022.
Purpose: take stock of recent economic developments, evaluate the economic impact of the war in Ukraine and sanctions against Mali, and assess reform progress under the Policy Coordination Instrument, the Stand-By Arrangement, and the Stand-By Credit Facility.
Discussions for the next review under the Policy Coordination Instrument, the Stand-By Arrangement, and the Stand-By Credit Facility are planned for late April 2022.
IMF team met with Mr. Abdoulaye Daouda Diallo, Minister of Finance and Budget, Mrs. Sophie Gladima, Minister of Energy, senior government officials, and representatives of business community as well as civil society.

Real GDP growth in 2021 is estimated at 6.1 percent, about one percentage point higher than previously anticipated.
Average inflation in 2021 was contained at 2.2 percent.
Food prices increased by 2.9 percent in 2021.
Overall fiscal deficit in 2021 was 6.3 percent of GDP.
Growth surprised on the upside in 2021.
Outlook is clouded by the impact of the war in Ukraine, which is likely to put the economy under strain.
The war in Ukraine, rising global food and energy prices, lingering effects of the pandemic, regional insecurity, and rising social demands (in the run up to the July parliamentary elections) increase downside risks to growth, are likely to add to inflationary pressure, and result in significant additional spending.

Senegal’s fiscal space has significantly narrowed as public debt has risen steadily over the last decade, largely reflecting the scaling-up of public investment.
Shortfalls in tax revenues occurred in 2021, though budget execution was broadly in line with target.
With limited resources, enhancing revenue mobilization, streamlining and better targeting subsidies, and reprioritizing spending will be essential to avoid significant budget slippages and preserve debt sustainability.

Accelerate the implementation of the medium-term revenue strategy (MTRS).
Operationalize the new fiscal framework governing the use of hydrocarbon revenues.
Prepare a roadmap to gradually eliminate energy subsidies, while enhancing the existing mechanism to protect the poorest.
Revise the legal framework for public procurement to rely more regularly on open and competitive tenders.
Staying the course with the reform agenda is important to strengthen the resilience of the economy.

The IMF team thanked the authorities and other counterparts for excellent cooperation and candid and constructive discussions during the visit.
The IMF reaffirmed its support for the government’s efforts to implement its economic reform program.

IMF Communications Department — March 18, 2022