This Thursday, during a press conference, the Minister of Finance, Cheikh Diba, took the floor to address the issue of the cost of living and the impact of subsidies on Senegalese public finances.
Mr. Diba used a striking metaphor to describe the situation: “You see, subsidies for public finances are what cancer is for the human body. If we are not careful, it is an evil that will end up spreading throughout the body of our public finances, rendering State action ineffective.”
He added that this issue had sufficiently concerned the government and it was time to address it seriously to resolve it definitively. Mr. Diba recalled that over the period 2022-2023, the State spent 338 billion CFA francs only to fight against the high cost of living, without counting additional subsidies which reached 600 billion CFA francs.
“See what this represents to the detriment of the real development activities that the budget must assume. It is astonishing and it has stressed our public finances in more than one way. When we say that our public finances are stressed, we are referring “Today, it is appropriate to diagnose this problem, which we have done, while looking for solutions to improve the cost of living.”
The minister also specified that the envelope allocated to reduce the cost of living amounts to 53.4 billion CFA francs in 2024, compared to 142 billion CFA francs in 2023. “There is a considerable effort which has been done, but the solution lies in tax technique. We have carried out a redistribution of our indirect taxation to better target the products which really impact the Senegalese.
He explained that this approach consists of a re-taxation of certain products which do not have a significant return on the cost of living, while maintaining subsidies on essential products. “We are in a deceleration of tax expenditures and we continue to target products for which it is necessary to subsidize. The work will continue, particularly on energy products.”
This intervention by the Minister of Finance highlights the complexity and importance of effectively managing subsidies to maintain a healthy economy while seeking to relieve the cost of living for Senegalese citizens.
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