No talks on new Senegal programme until misreporting addressed: IMF

The International Monetary Fund said on Monday that talks on a new programme for Senegal could not go ahead until the government addressed the misreporting of key economic data under the previous government.

 

The IMF suspended its existing $1.8 billion credit facility to Senegal pending a review of state finances, which confirmed last month that the debt and budget deficit were much wider than former President Macky Sall's administration had reported.

Finance Minister Cheikh Diba said Senegal was hoping for a new IMF programme by June. 

In an interview with Reuters in Dakar on Monday, IMF mission chief Edward Gemayel said "everything is possible" but did not commit to that timeline. 

"We cannot discuss a new program before we settle on the misreporting," he said, though he added that once that was done the IMF could move "very, very fast". 

Gemayel said it was also "too early to make that call" when asked if Senegal was heading for a credit event such as a debt restructuring, rescheduling or default. 

Senegal's Court of Auditors last month released a long-awaited review of the country's finances that confirmed the previous government misreported key economic data including debt and deficit figures. 

At the end of 2023, the total outstanding debt represented 99.67% of gross domestic product, the court's report said. That compared with a previously recorded figure of 74.41%. 

SUBSIDY CUTS 

Gemayel also said energy subsidy cuts would be an essential part of economic reforms under current President Bassirou Diomaye Faye. 

Fuel subsidies have "exploded" to up to 4% of GDP since the COVID-19 pandemic, he said, adding that they should be gradually phased out. 

"The problem with these subsidies is that it's not the vulnerable households that benefit from them," he said.

"Most of these subsidies, they go to the wealthiest households." 

Gemayel's mission to Senegal was intended to determine how the misreporting happened and what steps the government would take to avoid similar misreporting in the future. 

He said a supplementary budget reflecting the findings of the Court of Auditors report released last month could be released in the second or third quarter of this year. 

Oil and gas revenues could have a "big positive impact" on the budget, and the IMF estimates these will average 1% of GDP per year over the next five years, Gemayel said. 

Senegal's energy ministry said in January that the Sangomar offshore oil and gas field raised its output of crude to 16.9 million barrels in 2024, exceeding its initial target of 11.7 million.