The mission of the International Monetary Fund (IMF) for Senegal drew up, Tuesday in Dakar, a satisfactory assessment of the Senegalese economy, estimating that “it is doing well compared to other economies”.
“As regards the situation of the Senegalese economy, it is doing well compared to other economies, whether on the African continent or outside Africa”, underlined the head of the mission of the IMF for Senegal, Edward Gemayel, during a press conference dedicated to the evaluation of Senegal’s economic policy.
The visit of the IMF mission comes for the last review of the Program supported by the Instrument for Economic Policy Coordination, the Standby Credit Facility and the Standby Arrangement. “In 2022, we estimate growth, we have seen it fall a little, 4.7% this year, which is quite a lot of growth taking into account the Covid or the war in Ukraine or the rise in the price of foodstuffs, at the level of petroleum products. All this leads us to a drop in growth but we are at 4.7% for this year”, added Mr. Gemayel at the end of the end of this visit which took place from November 04 to 15 in Dakar. .
“We have been in Senegal for two weeks, we have had very good discussions and I think that we will send the file in mid-December to the board of directors, just as a reminder, this is the last review in the context of the current program, the program ends in early January,” he said.
With regard to subsidies, the budget that had been submitted to parliament targeted an allocation of 350 billion FCFA for energy subsidies (electricity and petroleum products) but in view of the situation marked by unrest, particularly with the pandemic of Covid-19 and the war in Ukraine, subsidies intend to increase drastically by reaching 750 billion FCFA according to forecasts by the Bretton Woods institution. “We have discussed with the government to see if there is a possibility of increasing this allocation from 350 billion to 450 billion FCFA in the context of next year’s budget given the revenue performance we are optimistic that they will be good next year and therefore this will make it possible to increase the allowances a little”, noted Edward Gemayel, calling on the government to double the allowances in cash for vulnerable households.
On the debt, which is around 75% of GDP, the Head of the mission noted that it remains sustainable and recommends better management aimed at increasing room for manoeuvre.
“All we are encouraging is to try to reduce the deficits gradually so that if there is another shock in the years to come or if the current shock will continue so that the government can draw on these reserves,” said Mr. Gemayel. On another note, the IMF mission for Senegal also commented on inflation estimated at 8% for the year 2022 with projections of a drop of 2 to 3%. According to the head of the mission, the price reduction policy adopted by the government will contribute to lowering inflation.
“We believe that subsidies especially to food products are necessary and important in the current context, however we encourage the government to ensure that these subsidies are targeted so that low-income households benefit from them and that they are limited in the time,” Mr. Gemayel recommended.
On Tuesday, the Senegalese Prime Minister, Amadou Ba, received the head of the IMF mission at the end of his visit at the head of a delegation from the international monetary institution.