## IMF Executive Board Completes the Fifth Review Under the Policy Coordination Instrument, and the Second Reviews under the Stand-By Credit Facility and the Stand-By Arrangement, and Request for Augmentation for Senegal _IMF News, June 22, 2022_ ## Source details **Canonical URL:** [IMF Executive Board Completes the Fifth Review Under the Policy Coordination Instrument, and the Second Reviews under the Stand-By Credit Facility and the Stand-By Arrangement, and Request for Augmentation for Senegal](https://www.imf.org/en/news/articles/2022/06/22/pr22221-senegal) ## Other formats - [Markdown version](/en/news/articles/2022/06/22/pr22221-senegal/index.md) - [Structured JSON version](/en/news/articles/2022/06/22/pr22221-senegal/index.json) - [Bundle manifest](/en/news/articles/2022/06/22/pr22221-senegal/bundle-manifest.json) ## Bibliographic details - Authors: Credit Facility - Published: June 22, 2022 --- ### Reviews completed and financing actions - The Executive Board completed the Fifth Review under the Policy Coordination Instrument (PCI) and the Second Reviews under the Stand-by Arrangement (SBA) and the Arrangement under the Standby Credit Facility (SCF). - The completion of the reviews enables the immediate release of about US$215.78 million (SDR 161.82 million) to Senegal. - The Board approved an augmentation of access and a waiver of the non-observance of a performance criterion, and the modification of a performance criterion and quantitative targets. - Total access under the blended 18-month SBA/SCF arrangements approved in June 2021 was increased by about US$172.6 million (SDR 129.44 million), from about US$650 million (SDR 453 million) at the time of approval, to about US$776.67 million (SDR 582.44 million). ### Recent economic developments and projections - Growth this year was revised down to about 5 percent. - Inflation is expected to reach 5.5 percent, driven by higher food and energy prices. - The authorities adopted a supplementary budget in May 2022 to accommodate temporary and targeted measures to support the most vulnerable and to stabilize food prices consumed by lower and middle-income households. - The new spending incorporated in the supplementary budget will bring the fiscal deficit this year to 6.2 percent of GDP compared to 4.8 percent of GDP in the initial budget. - Public debt is expected to reach 75 percent of GDP in 2022. - Despite near-term headwinds, the outlook points to robust economic activity over the medium term provided appropriate policies are implemented; however, the outlook is subject to significant uncertainty and risks are tilted to the downside. ### Key risks and shocks cited - Soaring global fuel and food prices, compounded by the war in Ukraine. - The freeze on trade with Mali due to sanctions by the Economic Community of West African States (ECOWAS). - A protracted war in Ukraine. - A prolonged freeze on trade with Mali. - A flare-up of the COVID-19 pandemic. - A deterioration of the regional security situation. - Rising social demands. - A severe tightening of external financial conditions. - The possible impact of adverse climate conditions. ### Policy assessment and recommendations - The authorities’ fiscal policy response appropriately supports vulnerable households through temporary and targeted measures and a relaxation of the fiscal deficit. - Reducing debt vulnerabilities will require steadfast implementation of the medium-term fiscal consolidation strategy anchored by reaching a fiscal deficit of 3 percent of GDP by 2024. - Rising energy subsidies due to higher global oil prices are an important fiscal risk. - The recent increase of selective energy prices, carefully designed to protect the most vulnerable, is a step in the right direction to mitigate this risk. - Over the medium-term, a gradual elimination of energy subsidies is a priority, which should be accompanied by measures to strengthen existing social safety nets. - Fiscal and external resilience should be strengthened through: - An accelerated implementation of the domestic revenue mobilization strategy. - Prudent debt management. - Enhanced spending efficiency, notably by reducing recourse to single source procurement. - Finalizing the fiscal framework to manage oil and gas revenues and improving the business environment to attract private investment and create jobs remain priorities. - Financial system vulnerabilities need monitoring, and deficiencies in the AML/CFT framework need to be tackled with greater urgency to avoid possible negative macroeconomic and reputational repercussions. ### Exact key figures - Immediate release enabled: US$215.78 million (SDR 161.82 million) - Augmentation of access: about US$172.6 million (SDR 129.44 million) - Original total access (June 2021): about US$650 million (SDR 453 million) - New total access: about US$776.67 million (SDR 582.44 million) - Revised growth this year: about 5 percent - Expected inflation: 5.5 percent - Fiscal deficit after supplementary budget: 6.2 percent of GDP - Initial budget fiscal deficit: 4.8 percent of GDP - Public debt expected in 2022: 75 percent of GDP - Medium-term fiscal consolidation target: fiscal deficit of 3 percent of GDP by 2024 *IMF Press Release No. 22/221, June 22, 2022. IMF Communications Department.* --- ## References - [Senegal and the IMF](http://www.imf.org/external/country/SEN/index.htm) - [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [See Press Release No. 21/159)](https://www.imf.org/en/News/Articles/2021/06/07/pr21159-senegal-imf-execboard-approves-us-650m-sba-under-sbcf-comp-3rdrev-under-pci) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2022/06/22/pr22221-senegal_