While there is much discussion about the country’s financing needs, the government has just raised a bond issue of more than 265 billion. This sum is in addition to the thousand billion borrowed by the State since last April. Without anyone knowing what this fund should be used for. In any case, the race for loans does not stop, despite the departure of Macky Sall.
A press release from the Regional Stock Exchange (BRVM) yesterday informed the public of the raising, by the State of Senegal, of 3 bond loans, for a total amount of 265 billion CFA francs, of variable maturity, ranging from 5 to 10 years, these 3 tranches of loans are also of different interests. The first loan, which goes from 2024 to 2029, is 6.45%, as is the third, which goes from 2024 to 2034, for an interest rate of 6.65%, while the second will bring 6.25% to the institutions that have committed to Senegal.
The press release from the Abidjan Regional Stock Exchange justified indicating that these borrowed amounts would be used to “finance investments planned in the 2024 Budget”; which allows the Director General Félix Edoh Kossi Amenounvè to rejoice that “these loans mark a very notable return of the State of Senegal to the Brvm”. At a time when oil is starting to flow freely, we can only rejoice in the strong reputation, even more established, of this country. We can also wonder at what time Senegal, one of the heavyweights of the regional financial market, has ever been absent from the Brvm in the last ten years. We know that before leaving power, the President of the Republic Macky Sall, through his various heads of government, had embarked on a train of mobilizing borrowing on the international level, and in particular sub-regional. This was done at amounts of almost 50 to 100 billion CFA francs on average per quarter.
There were, in bulk and without any pre-established order, 30 billion in September 2022, 50 billion by public offering, for an interest rate of 6.30% per year for 10 years, from 2015 to 2025. In October 2023, there was a loan of 120 billion Cfa, under the intermediation of Invictus Capital Finance. In fact, all the intermediation firms in the UEMOA zone each had their share with the Senegalese authorities on the financial operations that they regularly carried out.
This was also the refrain in the salons of Dakar on the “sustainability of debt”, from those who found that politicians were sinking the country into the inextricable mire of debt, which only served to mortgage the future of the youth, and especially to sell off “our barely discovered wealth”. Some said that things would go better on this level, with the change of regime. Once the leaders of Pastef were in power, the country would be definitively rid of Macky Sall’s Senegal Debt Plan (Pse) (sic).
It didn’t take long to realize that things weren’t moving as quickly as we would have liked.
It was necessary for the American site Bloomberg to announce that the government had raised a Eurobond of 450 billion CFA francs for the information to be officially confirmed. Unfortunately, nothing was said about the conditions of this loan, which were more draconian than those operated by African countries such as Kenya, Ivory Coast or Benin, which could not be presented as burdens financial heavyweights compared to Senegal.
The most extraordinary thing is that, as said during the handover between Presidents Macky Sall and Diomaye Faye, the current government did not inherit empty pockets. Macky Sall is said to have left him more than 320 billion in his accounts at the BCEAO. To which are added more than 150 billion CFA francs in bonds and obligations similar to the Treasury. All this does not exclude other payments from various sources such as the African Development Bank (AfDB), among others. Today, based on the figures announced, the State would have under it a kitty of more than 1000 billion CFA francs, accumulated in less than 3 months. Without saying what he would like to do with it.
In a rather gloomy economic and social situation, public opinion has the feeling that the country’s situation is not improving, even though the International Monetary Fund (IMF), the policeman of our finances, has taken the liberty of coming to Dakar. to declare that Senegal allowed itself to borrow more than its current needs, and put itself in a situation of over-financing. A situation all the more serious as IMF officials claim that some of these debt operations took place without their knowledge. We could then wonder how these colossal amounts that the government was able to raise on the financial markets could end up in the monetary circuit.
For the moment, the Table of State Financial Operations (Tofe), as included in the latest quarterly statistical bulletin for the first quarter of 2024, gives no indication of any trace of these billions which still seem miraculous.
Thus, neither “transferable deposits nor other deposits included in the money supply show a positive evolution”. Worse, “net external assets” with the Central Bank or commercial banks show only a negative evolution, on a year-on-year basis since the last quarter of 2023. None of the bankers interviewed has yet been able to tell the newspaper Le Quotidien where the kitty that the State is accumulating internationally is hidden. Only one economist was able to provide an explanation for the fact that the Statistical Bulletin was probably drawn up before the State’s latest operations. But if that is the case, we will soon find out. Or is it just smoke and mirrors that the country continues to get into debt without needing to?
