The Senegalese Government and International Monetary Fund (IMF) have reached an agreement on the country’s economic growth strategy and progress, as well as the financial institution’s support to bolster project implementation and GDP in the West African nation.
The agreement follows an IMF visit to Dakar, led by Edward Gemayel, Division Chief of the IMF, which organized meetings with top Senegalese authorities, including President Macky Sall and Prime Minister Amadou Ba, to evaluate the economic programs supported by the IMF in-country.
Programs reviewed by the IMF delegation have been supported by the institution through $1.5 billion in funding issued via its Extended Fund Facility (EFF) and Extended Credit Facility (ECF), as well as $320 million issued through its Resilience and Sustainability Facility (RSF).
“Performance under the Fund-supported programs has been satisfactory. All performance criteria and indicative targets for end-June 2023 but one have been met,” stated Gemayel, adding: “The staff-level agreement is subject to IMF Management approval and consideration by the IMF’s Executive Board, which is tentatively scheduled for mid-December 2023. Upon completion of the review, Senegal would have access to [$212 million] under the EFF/ECF and to [$63.7 million] under the RSF.”
The milestone comes as Senegal is anticipated to record a 4.1% increase in economic growth by the close of 2023 and a year-on-year decline in inflation from 9.7% to 6.5%, owing to a strong performance in the agricultural sector and lower commodity prices on the global market.
“With the presidential election behind and the start of hydrocarbon production in the second half of 2024, macroeconomic prospects are expected to be favorable. In 2024, real GDP growth is projected at 8.3%, with the non-hydrocarbon growth picking up by 5.3%,” added Gemayel.
That said, external shocks, rising food and energy prices and the US dollar appreciation has negatively affected the Senegalese economy. As a result, the IMF staff advocates for the implementation of a new fiscal framework to manage anticipated oil and gas revenues, alongside the adoption of an innovative, digital-based public procurement code.