Senegal: Sixth Review Under the Policy Support Instrument, Request for a Three-Year Policy Support Instrument and Cancellation of Current Policy Support Instrument-Staff Report; Debt Sustainability Analysis; Press Release; Executive Director Statement

IMF Staff Country Reports, December 15, 2010

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The economy has started to recover from a slowdown associated with the global financial crisis.
Senegal has made significant progress under a three-year Policy Support Instrument (PSI), but challenges remain.
Increasing growth and reducing vulnerabilities and poverty require broad-based reforms.
Higher revenues and better spending quality are essential to creating more fiscal space for priority spending, including infrastructure spending.
To help address growth bottlenecks, higher infrastructure investment will temporarily raise fiscal deficits.
The contributions of the financial sector and the energy sector to growth should be enhanced.

Recovery from the global financial crisis slowdown has begun.
Progress achieved under the three-year PSI is significant, yet additional reforms are necessary to sustain and broaden growth.
Infrastructure investment is prioritized to address growth bottlenecks, acknowledging near-term increases in fiscal deficits.

Increase revenues through a revenue-enhancing tax reform strategy.
Improve spending quality to free fiscal space for priority expenditures, notably infrastructure.
Accept temporary fiscal deficit widening associated with higher infrastructure investment while safeguarding debt sustainability.