According to L’Observateur, in its publication of this Monday, October 28, 2024, the IMF freezes the aid program of 1.8 billion dollars (1,093 billion FCFA) obtained in 2023 and postpones the payment of 338 billion FCFA to 2025 The American site Bloomberg revealed some crucial information late yesterday evening, Sunday.
“The Minister of Finance, Cheikh Diba, announced on the sidelines of the annual IMF meetings in Washington that Senegal’s program with the international institution must be revised, after an audit revealed a higher debt and budget deficit to the figures previously declared,” we read, in English, on the site. This revelation, initially reserved for subscribers, was quickly relayed by Senepluswho provided the translation. According to Cheikh Diba, “the current program must be updated. We are in discussions with the Fund. The government is now aiming for a new agreement with the IMF no later than the first quarter of 2025.”
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It all started with the declaration of the Prime Minister, Ousmane Sonko. During a press conference, the head of government announced that a report from the General Inspectorate of Finance (IGF) had been finalized, highlighting alarming figures concerning the last five years of Macky Sall’s presidency. “The Macky Sall regime lied to the people, deceived partners, manipulated the figures to give an economic and financial image that has nothing to do with reality,” declared the PM, insisting on the fact that “responsibilities must be established.”
These revelations had immediate repercussions: Moody’s downgraded the country’s credit rating, plunging it deeper into the junk category, with a further downgrade potentially on the horizon. Senegalese Eurobonds suffered a wave of massive sales, triggering a heated controversy and a reaction from former President Macky Sall himself. “These comments are false, completely false. Let’s wait for justice to confirm or deny before accusing people. I left a country where the indicators were green,” defended the former head of state.
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However, yesterday Sunday, the IMF seemed to agree with Sonko. According to the audit’s findings, corroborated by an independent IMF assessment, the budget deficit actually amounts to more than 10% of GDP, almost double the 5.5% initially declared. The debt-to-GDP ratio at the end of 2023 reaches more than 80%, compared to 73% previously announced. As a result, the $1.8 billion program obtained from the IMF in 2023 is now suspended. A payment of 338 billion FCFA planned for this year is postponed to 2025.
“We were aware of the consequences,” admitted Cheikh Diba. The Finance Minister continued: “But when we realized that there were these fundamental discrepancies between the figures reported to the Fund, which formed the basis of our relationship, we understood that we had to report them.” Funds already disbursed will not have to be reimbursed, according to the minister. “This would have been the case if we had tried to cover up the facts and been discovered. In this case, Senegal carried out the audit and came back to the IMF with the correct figures,” explained Cheikh Diba.
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Concerning the oil contracts supposed to stimulate the country’s economic growth, expected at 6% this year and more than 10% in 2025, Minister Cheikh Diba adopts an almost philosophical posture. “We cannot change the rules of the game during the game, but the State has the right to check whether the contracts respect the mining and oil codes in force at the time.”
