DAKAR (Reuters) – Senegal expects a budget deficit of about 7% of gross domestic product by 2025, according to government proposals seen by Reuters on Saturday, down from 10% outlined in a study that prompted the country’s $1.9 billion IMF freeze. system.
The International Monetary Fund’s agreed 2023 package has been on hold since a study found larger debt and credit deficit figures than those reported by previous administrations, causing yields on West African dollar bonds to rise and causing debt to fall.
The audit, ordered by the newly elected President Bassirou Diomaye Faye, showed that the deficit at the end of 2023 stood at more than 10% compared to about 5% reported by the previous government.
Any new IMF program or restart of the existing one will not happen before June 2025, Reuters reported.
The budget proposals, which are expected to be examined by the country’s new parliament in the coming days, say that Senegal will implement a “prudential” credit policy using traditional donors to finance projects in 2025 and the following years.
It will also seek to improve domestic financing and target a domestic bond market of about 1,500 billion CFA ($2.41 billion), according to the proposed budget.
The government, donors and investors are waiting for the auditor’s final report from the court of auditors, which is expected in mid-December.
“The consolidation of the results of the audit of the Court of Auditors on public finances will lead to a further review of the outstanding debt and debt service, especially in 2024 and 2025,” the government said.
It said in the budget proposal considering its current debt level that it plans to negotiate with investors on payment terms to spread payments and make debt management sustainable.
“This effective debt control program will also affect the issuance of international markets to accelerate the payment of debts, especially for 2026 and 2027, in order to maintain the limit of debt sustainability and free up budget space,” he said.
The next one (LON:) annual economic growth is seen at 8.8%, boosted by the launch of oil production this year but hampered by a decline in secondary and tertiary employment, the government said.
($1 = 623.5000 CFA francs)
