An International Monetary Fund (IMF) mission led by Ali Mansoor visited Senegal from April 24 to May 7, 2015 to conduct discussions with the Senegalese authorities on their economic program, which may be supported by a new three-year IMF arrangement under the Policy Support Instrument (PSI)1. Subject to IMF management approval, the staff-level agreement is expected to be submitted to the IMF Executive Board for its consideration in June 2015. Members of the mission met with H.E. President Macky Sall, Prime Minister Mohammed Dionne and senior government officials, including those in charge of the Plan Sénégal Emergent (PSE), as well as representatives of the banking and private sectors, civil society, and development partners. At the conclusion of the visit, Mr. Mansoor made the following statement:
“The mission is pleased that the Senegalese authorities share the consensus that achieving emerging country status in the economic and social areas will require maintaining a sound macroeconomic environment and accelerating reforms aimed at improving productivity and the business climate. In this context, the Senegalese authorities and the mission have reached a staff level agreement on a macroeconomic and structural program for the period 2015-17 which may be supported by a Policy Support Instrument (PSI).
“This program aims to support Senegal in implementing the Plan Sénégal Emergent (PSE) with the goal of increasing growth and further reducing poverty while preserving macroeconomic stability and debt sustainability. Efforts in this context will focus on increasing tax revenues by broadening the tax base, as well as on rationalizing current expenditures to create fiscal space for financing infrastructure and social expenditures. Particularly close attention will be paid to the quality of expenditure, including investment expenditure, and to strengthening public financing, transparency, and economic governance. Finally, the program will contribute to accelerating structural reforms to foster a more attractive business environment, thereby promoting development of the private sector.
“The program aims to achieve an economic growth rate of at least 5 percent in 2015 compared with 4.7 percent in 2014, while maintaining the inflation rate below 2 percent.
“Sustained efforts to scale back government spending and to improve mobilization of tax revenues will allow for an increase in investment and social expenditures and a concomitant decrease in the budget deficit to 4.7 percent.
“Medium-term targets include increasing the GDP growth rate to over 6 percent, containing inflation below 3 percent, and reducing the budget deficit to 3.6 percent by 2017, with the goal of reducing it to 3 percent by 2018. The current account deficit should continue to decrease from 9 percent of GDP in 2014 to 6.5 percent of GDP in 2017 as a result of export growth.
“Meeting these targets will require rigorous and robust efforts to implement the PSE initiatives and the government’s structural reforms.”
The IMF mission wishes to thank the Senegalese authorities for their gracious hospitality and cooperation.
1 The PSI is an instrument of the IMF designed for countries that do not need balance of payments financial support. The PSI helps countries design effective economic programs that, once approved by the IMF’s Executive Board, signal to donors, multilateral development banks, and markets the Fund’s endorsement of a member’s policies (see http://www.imf.org/external/np/exr/facts/psi.htm)
Source: International Monetary Fund (IMF)