- Strengthening domestic revenue mobilization and streamlining nonpriority spending will help contain headwinds from more difficult access to the regional market.
- Negotiations for a new IMF-supported program are expected to begin in April.
A team from the International Monetary Fund (IMF), led by Mr Edward Gemayel, conducted a mission during March 8-14, 2023, to take stock of recent economic developments, update macroeconomic projections, and discuss potential options for a new IMF-supported program. The team met with his excellency Prime Minister Amadou Ba; Mr Mamadou Moustapha Ba, Minister of Finance and Budget; Ms Oulimata Sarr, Minister of Economy, Planning and Cooperation; Mr Ahmadou Al Aminou Lo, the National Director of the BCEAO, senior government officials, development partners, representatives of the business community as well as civil society.
At the end of the mission, Mr Gemayel issued the following statement:
“Fiscal revenues are estimated to have slightly underperformed, while current spending exceeded the target on the back of a higher public wage bill. Energy subsidies reached the record level of CFAF 692 billion (4 per cent of GDP), and investment spending was cut to keep the fiscal deficit in check. Public debt is estimated at 75.0 per cent of GDP, of which 67.5 per cent is for the central government. The current account deficit significantly widened on higher imports and debt interest payments.
“For 2023, economic activity is projected to rebound, albeit slower than initially envisaged, while inflation will moderate to 5 per cent. The medium-term outlook remains favourable and would benefit from the start of oil and gas production and structural reforms to strengthen private sector participation in economic activity in phase 3 of the National Development Plan (PSE).
“Early signs of tighter financing conditions in the regional bond market call for vigilance and contingency planning. In that context, enhancing domestic revenue mobilization and streamlining nonpriority spending will help ease financing pressures while preserving debt sustainability.
“Negotiations for a new IMF-supported program will begin on the sidelines of the IMF and WB Spring Meetings and will continue in Dakar in late April. The IMF team wishes to thank the Senegalese authorities and various stakeholders for their hospitality and constructive discussions.”