Senegal revised budget review advances path to new IMF deal
Senegal's National Assembly is moving to revisit a revised budget after an initial rejection complicated efforts to secure a new programme with the International Monetary Fund. The budget review comes as the country faces a heavy debt burden and weaker growth projections alongside a wider fiscal deficit.
Highlights
- Senegal's National Assembly, led by Ousmane Sonko, is sending the revised budget back to committee for further review amid IMF negotiations.
- The revised budget is critical for a new IMF deal as Senegal faces a debt burden projected to reach 132% of GDP by end-2024 due to prior misreported borrowing.
- Budget amendments cut real GDP growth estimate to 2.7% from about 5% and widen the deficit to 7.6% of GDP from 5.4%.
Parliamentary review and IMF timetable
As reported by Reuters, National Assembly President Ousmane Sonko says the finance committee will review the revised budget again after Finance Minister Cheikh Diba asked lawmakers during Tuesday's parliamentary debate to take another look at the text.Sonko says he is referring the bill back to the committee and will work to set dates for the committee proceedings and the next plenary session. The revised budget is seen as a key step toward sealing a new programme with the IMF.
Debt pressure and budget changes
Senegal is grappling with a debt burden that reaches 132% of gross domestic product by the end of 2024, according to IMF figures, after the government discovers billions of dollars in misreported borrowing by the previous administration.The amended budget cuts real GDP growth to 2.7% from roughly 5% and widens the deficit to 7.6% of GDP from 5.4%. Earlier this month, Sonko says lawmakers from his Pastef party would not vote for the bill as it stood, and the finance commission rejects it last week.
In our earlier article on the IMF’s updated outlook for sub-Saharan Africa, we highlighted that growth projections improved, but inflation risks were also rising as tighter monetary conditions and higher borrowing costs strained already fragile fiscal buffers. We also noted the IMF’s warning that debt-service pressures, delays in debt restructuring, weaker aid flows and climate shocks such as El Niño could complicate access to financing and force tougher policy choices across the region.
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