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IMF in Senegal: Red alert or glimmer of hope?

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FMI au Sénégal : Alerte rouge ou lueur d’espoir ?

According to information from Jeune Afrique, the International Monetary Fund (IMF) dispatched a "technical" mission to Dakar on March 18 to meet with Economy Minister Abdourahmane Sarr and his Budget counterpart, Cheikh Diba. The financial institution's legal and tax department will closely examine the audit recently published by the Court of Auditors. Good news or bad news?

A few weeks ago, Prime Minister Ousmane Sonko revealed that Senegal's debt had been underestimated. The Court of Auditors, in its report, confirmed the Senegalese head of government's statements, highlighting a debt approaching 100% of GDP.

The IMF, which has received Senegal's public finance documents, has decided to take a serious look at the matter. The institution's findings will be crucial, especially since the IMF has suspended its $1.8 billion program with Senegal (signed in 2023 under Macky Sall), worth $770 million, of which has already been disbursed.

In the meantime, Senegal is waiting on these conclusions. On the one hand, there is cause for concern, as the IMF is reportedly very concerned about Senegal's debt ratio. According to Jeune Afrique, the institution even approached the BCEAO (Central Bank of West African States) to reassure itself about the state of the country's public finances, even before the Court of Auditors' audit was published. And a country struggling to pay its debts could have difficulty raising funds.

On the other hand, the IMF audit could be a boon for Senegal. If the institution validates the country's new figures and obtains guarantees, it could relaunch another program for Senegal. "Once we have completed our review of the file, we will report back to our board of directors, which will decide whether the country team's conclusions and the arguments of the executive director representing Senegal allow for the initiation of a new program," an IMF spokesperson told the pan-African newspaper. Senegal's diplomatic partners are reportedly pushing for the IMF to implement a waiver to validate the 2025 program quickly. They hope for a disbursement decision by the end of April. This could allow the government to raise funds to boost its projects.

Auteur: Mouhamed Camara
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