Senegal will have to wait until at least June 2024 to receive any resolution regarding its lending programme with the International Monetary Fund (IMF), a source familiar with the process confirmed.
The delay will put pressure on President Bassirou Diomaye Faye’s government, which is already struggling with a deepening fiscal crisis. The government had hoped for rapid IMF support, but the process will not even begin until after mid-December, when Senegal’s court of auditors is set to certify the results of a government audit.
In 2023, Senegal secured a $1.9 billion IMF programme, but the deal was put on hold three months later. The government’s audit revealed much larger debt and deficit figures than previously reported, triggering rising bond yields and multiple credit downgrades.
The IMF has indicated it will not consider Senegal’s request for new disbursements until the audit findings are reviewed. The IMF’s executive board will then determine the next steps, a process that could take several more months.
Senegal’s fiscal woes worsened before the audit, as the country struggled with slower growth and a growing budget deficit. Public debt was found to be 76.3% of GDP, significantly higher than the 65.9% previously reported. The end-2023 deficit stands at over 10%, double the original forecast.
To address the crisis, Senegal’s government raised $300 million by reopening a bond last month. However, the IMF’s findings have raised concerns over the country’s debt sustainability, and market reactions have been negative, with bond yields soaring.
Faye, elected in March, is facing mounting challenges as he seeks to implement economic reforms. His party, Pastef, is hoping to secure a parliamentary majority in upcoming elections, which are seen as critical to passing necessary legislation.
