Washington DC: An International Monetary
Fund (IMF) mission, led by Mr. Edward Gemayel, visited Dakar during April
27–May 11, 2023, to discuss the Senegalese authorities’ request for a new
financing arrangement.
At the end of the mission, Mr. Gemayel issued the following statement:
“The IMF team has reached a staff-level agreement on policies and reforms
under a 36-month
Extended Fund Facility
(EFF) and
Extended Credit Facility
(ECF) with access of SDR 1.132 billion (or about US$1.526 billion,
representing 350 percent of quota, combined with the
Resilience and Sustainability Facility
of SDR 242.7 million (or about US$327.1 million, representing 75 percent
of quota ). The financing arrangement under the EFF/ECF will provide a
policy anchor in a challenging external and domestic environment and
support the authorities’ efforts to advance reforms to build economic
resilience. The RSF will support Senegal’s efforts to strengthen its
resilience to the effects of climate change. The staff-level agreement is
subject to approval by the IMF Management and consideration by the
Executive Board. Consideration by the Board is tentatively scheduled for
mid-June 2023.
“In 2022, a confluence of external shocks largely linked to the war in
Ukraine have hindered the post-Covid-19 recovery, strained public finances,
widened external current account deficit, increased debt levels, and eroded
regional international reserves. For 2023, global economic slowdown and
tighter financial conditions will weigh down on the expected pickup in
economic activity. Non-hydrocarbon GDP growth is now projected at 5.3
percent in 2023 (compared to an initial projection of 6 percent).
Nevertheless, should oil and gas production start in the fourth quarter of
this year, total GDP growth could exceed 8 percent in 2023. Price pressures
are abating but remain elevated. Financial conditions in the regional
market have substantially tightened.
“The EFF/ECF arrangement will support the authorities’ efforts to safeguard
debt sustainability and rebuild depleted buffers. In this regard, the
authorities have reiterated their commitments to bringing the fiscal deficit
down to 3 percent of GDP by 2025. Achieving such goal will require further
revenue mobilization, including streamlining tax exemptions, and phasing out
regressive and elevated energy subsidies. Other policy priorities under the
EFF/ECF include strengthening governance and the anti-money laundering and
financing of terrorism framework (AML/CFT), and delivering a more inclusive
and job-rich growth, by strengthening social safety nets, promoting gender
equality, and improving the business environment.
“The RSF-supported reforms will help Senegal achieve its National
Determined Contribution (NDC) commitments under the 2015 Paris agreement.
Reforms will focus on climate mitigation and adaptation measures, and on
integrating climate-related considerations into budget preparation,
execution, and monitoring.
“The IMF team wishes to thank the authorities and other counterparts for
their excellent cooperation and candid and constructive discussions during
the mission and reaffirms the IMF’s support to Senegal.”
During the visit, the team met with his Excellency President Macky Sall,
head of state; Prime Minister, Amadou Ba; Minister of Armed Forces, Mr.
Sidiki Kaba; Minister of Justice, Mr. Ismaïla Madior Fall; Minister of Home
Affairs, Mr. Antoine Felix Diome; Minister of Finance and Budget, Mr.
Mamadou Moustapha Ba; Minister of Women, Family and Child Protection, Ms.
Fatou Diané; the Deputy Governor of the BCEAO, Mr. Norbert Toe; the
National Director of the BCEAO, Mr. Ahmadou Al Aminou Lo; senior government
officials; representatives of the business community and civil society, and
development partners.