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The IMF has frozen a USD 1.8 billion financial support package for the West African economy. Securing an IMF financing program requires a government setting out a clear path to put its finances, including its debt burden, on a sustainable footing.
The International Monetary Fund said that Senegal retained its sovereign right to decide how to deal with its debt, after discussing various options with Dakar on how to address the country’s “significant debt vulnerabilities”.
The IMF said the policy talks last week were part of the organization’s role to offer expert analysis and advice for government consideration. Prime Minister Ousmane Sonko said over the weekend that Fund officials were pushing for a restructuring of the country’s debt.
Sonko added that the government had ruled this out as a way to address the current strain on the state’s finances. Senegal has been facing difficulties since last year, after the then new government disclosed hidden debts that are now estimated at more than USD 11 billion.
This led to the IMF freezing a USD 1.8 billion financial support package for the West African economy. Securing an IMF financing program requires a government setting out a clear path to put its finances, including its debt burden, on a sustainable footing.
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The prime minister unveiled a new economic recovery plan for Senegal in August, pledging to finance 90 per cent of the initiative through domestic resources and avoid additional debt. Senegal has to manage debt that is now estimated at 132 per cent of GDP.
