2023-06-28 22:24:50
A new IMF program for Senegal. It was approved on Monday June 26 by the Board of Directors of the International Monetary Fund. An agreement on the record amount of 1.8 billion dollars of financing over three years, which should allow the country to resist inflation, in exchange for structural reforms.
From our correspondent in Dakar,
It’s a real breath of fresh air for Dakar. The agreement is made up of two parts: approximately 1.5 billion dollars ” under the Extended Credit Facility (MEDC) and the Extended Credit Facility (ECF) », « combined with the Resilience and Sustainability Fund (RST) of approximately $327 million.
Why this financial support? ” First, it’s multiple crises, starting with Covid to Russia’s invasion of Ukraine. “recalls Edward Gemayel, IMF mission chief for Senegal, online from Washington. ” Second, there is difficulty in accessing financing. The third factor is the question of the reserves of the Regional Central Bank, which have been falling for more than a year.. »
Negotiations went very quickly. In return, Senegal is committed to reforms, in particular to fight against money laundering, for projects to adapt to climate change, and to reduce the debt. “ The fiscal consolidation strategy has two components explains Mesmin Koulet Vikot, IMF resident representative in Dakar. ” It is to mobilize more internal resources by rationalizing the exemptions and in the expenditure component, by limiting, by eliminating the subsidies to some energy products. We are targeting super, diesel and also the high end of electricity. »
Financial support amid political tensions
An agreement welcomed Monday, June 26 by the Senegalese Minister of Finance and Budget before the National Assembly. “ One of the challenges of this program is the possibility for our country to mobilize resources of 1 150 billion CFA francs, at very favorable costs, without affecting our debt, to cover the deficits of the budgets of 2023, 2024, 2025 “, declared Mamadou Moustapha Ba at the opening of the budget orientation debate.
This financial support comes against a backdrop of political tensions, after deadly violence in early June, and in view of the presidential election scheduled for February. But for now, the IMF is displaying its confidence. ” Of course, we have some concern, but for the moment, we think that Senegal could exceed this period. It is a country which, in the past, has always been able to overcome its internal differences “, emphasizes Edward Gemayel.
Senegal recorded last year a growth of 4.2%. But if the production of gas and oil starts well at the end of the year, the IMF anticipates a rebound to more than 8% in 2023.
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