Between March 2023 and March 2024, marking the attempt at a third term and the renunciation of running in the presidential election, President Macky Sall plunged Senegal into an atmosphere of the “tragic” end of his reign. Political authorities and AP dignitaries took advantage of this free-for-all climate to plunder public finances. Systematic looting linked to tax exemptions granted to “friends”, fictitious markets, extra-budgetary spending, creation of personal wealth, capital flight, etc. A difficult economic environment inherited by the new authorities meant that they could hardly remedy the situation. Very optimistic initial forecasts with an expected 20% increase in revenue compared to 2023 achievements could not be achieved. Ultimately, the 2024 amending finance law is distorted by the loss of revenue of nearly 600 billion CFA expected at the end of December. These poor performances, embezzlements and looting against a backdrop of financial “barbarity” have impacted initial forecasts.
During the 2023-2024 budget years, the former regime of President Macky Sall pushed Senegal into an end-of-reign atmosphere deemed “tragic”, thus leaving public finances open to systematic looting. However, the latest missions from the IMF and the World Bank had warned the new authorities of a worrying drop in revenue and a huge increase in spending. These international financial control institutions had recommended urgent recovery measures regarding the end of energy subsidies and tax exemptions. So wanting to follow the trajectory of budgetary transparency, the State recognizes poor performances which have considerably impacted initial forecasts with capital losses of nearly 600 billion francs at the end of December. The amending finance bill which will be tabled by the Government confirms a drop in resources and an increase in spending. “The revenue situation indicates that the cumulative amount at the end of November 2024 amounts to 3,310.9 billion FCFA, an amount distributed between the General Directorate of Taxes and Domains, the General Directorate of Customs and the General Directorate of Public Accounting and the Treasury, for respectively, 2,143 billion FCFA, 1,018.0 billion FCFA and 149.4 billion FCFA. Compared to the cumulative objective of 3,822.1 billion FCFA, there is a loss of 511.2 billion FCFA which could even reach 600 billion FCFA at the end of December 2024,” we read throughout the document.
These incompressible expenses noted by the LFR
The economic slowdown in 2024 caused by a very tense political climate of a regime which hesitated to clearly declare the democratic trajectory of the holding or not of the presidential election and the 3rd term of Macky Sall. The impact was felt in revenue mobilization. Hence significant underperformance. Very optimistic initial forecasts with an expected increase of 20% compared to 2023 achievements could not be achieved. To this must be added the measures to waive duties and taxes, for nearly 140 billion FCFA. Added to this is the fact that external revenues were only mobilized to the tune of 65.5 billion FCFA, out of a forecast of 303.8 billion FCFA, a significant drop of 238.3 billion FCFA. . In total, general budget revenues (external and internal) fell by 839.1 billion FCFA, compared to the LFI 2024, informs the services of the Ministry of Finance and Budget Cheikh Diba.
Extrabudgetary spending against a backdrop of systematic looting
The document of the Amending Finance Law (Lfr) indicates that the State was forced to take charge of priority and incompressible expenses, in particular interest on the debt for an additional amount of 245.9 billion FCFA, under the effect of the increase in borrowing conditions, compensation for victims of pre-electoral political demonstrations and sustained efforts to support the agricultural sector, with 73.675 billion FCFA, under clearance of arrears.
In the same wake, an additional amount of 289 billion francs was granted as an additional subsidy to the energy sector for the tariff compensation paid to Senelec and the commercial losses induced by the blocking of hydrocarbon pump prices. The State had to face unforeseen expenses in the fight against flooding following the heavy rains of the 2024 winter season, with the Senegal River overflowing. The State has mobilized substantial financial and material resources, intended to provide assistance to people affected in the North and East regions of the country (departments of Tambacounda, Bakel, Matam and Saint-Louis).
The amending finance bill proposes a downward revision of budgetary revenues in the amount of 839.1 billion CFA francs and an increase in budgetary expenditure in the amount of 682.9 billion CFA francs. Thus, in this same PLFR, the overall budgetary amount goes from a deficit of 840.2 billion FCFA of LF 2024 to a budgetary deficit of 2362.2 billion FCFA, i.e. a widening of the budget deficit of 1522 billion FCFA.
The State’s financial services consider it essential, on the basis of these adjustments, the establishment of a new budgetary framework for the finance law. With a budget deficit of 11.6% of GDP, the objective is to move towards budgetary consolidation in 2027 and reach 3% of GDP, in accordance with the convergence directives of the West African Economic and Monetary Union. (UEMOA). The amending finance law shows a GDP growth rate of 6.7% compared to 9.2% initially forecast, particularly in connection with the new profile of oil producer and the situation of tensions in the first quarter on the economy and of the slowdown in economic activity, inflation which would stand at 2% and a tax pressure rate projected at 17.8% compared to 19.4% in the 2024 LFI
Upon analysis, we must deplore the fact that the Diomaye-Sonko government inherited a state of Senegal that was almost in deficit. A worrying situation due to the absence of management or even rigorous control of public finances which has led to losses of 600 billion in revenue.
