Since December 31, 2024, the debate on social networks has revolved around the amounts borrowed by the State of Senegal in 2024 and 2025. On the special analysis platform of the address to the nation of the Head of State at the TFM, MP Tafsir Thioye argued that the State had borrowed 4,400 billion in 2024 and that it still planned to borrow more than 4,500 billion in 2025. It should be noted that it is incorrect to attribute the entire amount to the current regime.
After analyzing the two laws, namely the Initial Finance Law (LFI) of 2025 and the Amending Finance Law (LFR) of 2024, we can identify the reasons linked to these loans. Here are the details of our information sheet which is largely based on the exploitation of the LFI 2025 and the LFR 2024.
What is an initial and amending finance law?
An Initial Finance Law is a law whose purpose is to determine, for a financial year, the nature, amount and allocation of State resources and expenses, as well as the resulting budgetary and financial balance. . It sets a country’s initial budget for the coming year.
This amending law is the only law allowing significant modification during the year of the provisions of the initial finance law (LFI) concerning in particular the State budget expenditure ceilings.
Why did the amount of debt increase in the LFR 2024?
The LFR 2024 reassessed the financing need at 4,491.4 billion FCFA. A comparative table drawn up presents the data allowing us to understand this increase. Several factors explain this:
-Reduction in revenue:
Revenues fell from 4,693.7 billion FCFA in the LFI 2024 to 3,854.6 billion FCFA in the LFR 2024, a drop of 839.1 billion FCFA. This decrease is due to:
•A slowdown in economic activity,
•Initial forecasts that are too optimistic,
• Measures to waive duties and taxes.
-Increase in expenses:
Budgetary expenditure increased by 682.9 billion FCFA, from 5,533.9 billion FCFA in the LFI 2024 to 6,216.8 billion FCFA in the LFR 2024. This increase is explained in particular by:
•An increase in public debt charges (824.2 billion FCFA), due to the increase in borrowing conditions and the fluctuation of the dollar,
•Unforeseen expenses, such as compensation for victims of political demonstrations, support for the prices of basic foodstuffs, subsidies for the energy sector, the fight against floods, and the organization of early legislative elections.
-Need to finance the deficit:
The budget deficit increased from 840.2 billion FCFA in the LFI 2024 to 2,362.2 billion FCFA in the LFR 2024.
What is the budget deficit?
-The budget deficit corresponds to the difference between government revenues and expenditures over a given period. When expenditure exceeds revenue, we speak of a deficit. For Senegal in 2024, falling revenues combined with increasing budgetary spending have widened a huge gap between projections and reality.
Why 4,573 billion in debt in 2025?
In the LFI 2025, the financing requirement is set at 4,573 billion FCFA. This amount includes: the amortization of the debt, which increases to 2,900 billion FCFA, the budget deficit and other deficits (opex). This high amount is mainly due to the amortization of the debt, because 2,900 billion of FCFA of capital mature in 2025. A debt largely inherited from previous regimes.
The State releases what is called the gross financing requirement. It is made up of the State budget deficit and the amortization of the public debt (domestic and external). In the State’s gross financing requirement, the deficit represents 35% and debt amortization 65%.
What is a debt generating flow of the two components?
It is the budget deficit of 1600 billion which is a loan generating a flow of debt. So, it is new debt which will be added to the stock of debt for the year (n-1). The 2025 debt corresponds to the 2024 debt stock plus the budget deficit. So, in 2025, the new debt is the budget deficit of 1,600 billion FCFA.
Why is the amount of 2900 billion not a loan generating debt flows?
A source at the Ministry of Finance tells us that this is because “the amortization of this amount extinguishes a claim against Senegal’s creditors. For example, if Senegal borrows to pay the depreciation, nothing changes. The 2900 billion does not create additional debt. This operation is called the refinancing of a debt which is done as part of a medium-term debt management strategy.
DIAGNE holes
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