IMF Puts Senegal’s New Program on Hold Until Data Misreporting Is Resolved

By: Manaoh Kikekon

Fund Demands Clarity on Past Fiscal Discrepancies Before Proceeding with Fresh Financial Support  

IMF

The International Monetary Fund (IMF) stated on Monday that discussions on a new financial program for Senegal cannot proceed until the government resolves past inaccuracies in economic reporting under the previous administration.  

The IMF has suspended Senegal’s existing $1.8 billion credit line pending a review of public finances, which last month confirmed that debt and budget deficits were significantly higher than reported by former President Macky Sall’s government.  

Senegal’s Finance Minister, Cheikh Diba, expressed hopes for a new IMF program by June. However, IMF mission chief Edward Gemayel, in an interview with Reuters in Dakar, remained non-committal on the timeline, stating, “Everything is possible.”

“We cannot discuss a new program before we settle the misreporting issue,” Gemayel said, though he noted that once resolved, the IMF could act “very, very fast.”

When questioned about potential credit risks—such as debt restructuring or default—Gemayel responded that it was “too early to make that call.” 

A recent review by Senegal’s Court of Auditors revealed long-standing misreporting of key economic indicators, including debt and deficit figures. The report showed that outstanding debt at the end of 2023 stood at 99.67% of GDP, far exceeding the previously reported 74.41%.

Gemayel emphasized that cutting energy subsidies would be a critical component of economic reforms under President Bassirou Diomaye Faye.  

Fuel subsidies have surged to 4% of GDP since the COVID-19 pandemic, disproportionately benefiting wealthier households rather than vulnerable groups, Gemayel noted. “Most of these subsidies go to the wealthiest households,” he said, advocating for a gradual phase-out.  

The IMF’s visit aimed to assess the causes of past misreporting and recommend measures to prevent future discrepancies. Gemayel suggested that a supplementary budget, incorporating the audit findings, could be released in Q2 or Q3 2024.  

Additionally, Senegal’s emerging oil and gas sector could significantly boost public finances. The IMF projects annual revenues from these resources to average 1% of GDP over the next five years.  

In a positive development, Senegal’s Energy Ministry reported that the Sangomar offshore field exceeded its 2024 crude output target, producing 16.9 million barrels against an initial goal of 11.7 million.  

(REUTERS)