Via IMF (Den Internationale Valutafond)

IMF Executive Board Approves for Senegal a US$442 Million Disbursement Under the Rapid Credit Facility and Purchase Under the Rapid Financing Instrument







April 13, 2020











  • The IMF Executive Board approves the tenth request for emergency financial assistance to help its member countries address the challenges posed by COVID-19.
  • The approval of the request from Senegal will make available US$442 million to be drawn under the Rapid Credit Facility and the Rapid Financing Instrument and will provide much-needed liquidity to support the authorities’ response to the crisis.
  • The economic impact of the COVID-19 pandemic is rapidly unfolding, with the near-term outlook deteriorating quickly.
  • The authorities have acted fast by putting in place strong measures to help contain the spread of the disease and mitigate the pandemic’s impact on the economy.

The Executive Board of the International Monetary Fund (IMF) today approved
the purchase under the Rapid Financing Instrument (RFI) equivalent to SDR
215.7 million (about US$294.7 million, 67 percent of quota) and a
disbursement under the Rapid Credit Facility (RCF) equivalent to SDR 107.9
million (US$147.4 million, 33 percent of quota) to help Senegal meet the
urgent balance of payment needs stemming from the COVID-19 pandemic.

The Covid-19 pandemic is hitting Senegal hard. The sharp global economic
downturn and domestic containment measures have led to a substantial
reduction in economic activity, with sectors such as tourism, transport,
construction, and retail particularly hard-hit, and the pandemic in Europe
is also translating into lower remittances. As a result, the short-term
economic outlook has deteriorated significantly, with large uncertainties
surrounding the duration and spread of the pandemic.

The authorities have acted fast to mitigate the impact of the pandemic by
increasing health spending and providing targeted support to vulnerable
households and firms, including trough food aid, suspension of utility
bills, and targeted tax relief. IMF financing will help preserve fiscal
space and catalyze further assistance from the international community,
preferably in the form of grants.

The IMF continues to monitor Senegal’s situation closely and stands ready
to provide policy advice and further support as needed.

Following the Executive Board’s discussion of Senegal, Mr. Mitsuhiro
Furusawa, Deputy Managing Director and Acting Chair, issued the following
statement:

“The COVID-19 Pandemic is having a severe impact on Senegal, creating an
urgent balance-of-payments and fiscal financing need. To mitigate the
impact of the pandemic, the authorities have acted fast by increasing
health spending and providing targeted support to vulnerable households and
firms, including through food aid, suspension of utility bill payments for
the poorest, and targeted tax relief.

“The IMF’s emergency financing under the Rapid Credit Facility and the
Rapid Financing Instrument will provide much-needed liquidity to support
the authorities’ response to the crisis and could catalyze further
assistance from the international community, preferably in the form of
grants.

“A temporary widening of the budget deficit is appropriate to mitigate the
health and economic impact of the pandemic. It is also advisable that
macroeconomic policies continue to be guided by the objectives of the
current Policy Coordination Instrument (PCI) to the extent possible. Once
the crisis abates, a gradual return to the budget deficit target of 3
percent of GDP, in line with regional fiscal rules, is necessary to
preserve external and debt sustainability.

“Additional concessional donor support will be critical to close the
remaining financing gap, ease the adjustment burden, and preserve Senegal’s
impressive economic achievements. Ensuring that disbursed funds are used in
a well-targeted, cost-effective and transparent manner remains imperative.”




Table 1. Senegal: Selected Economic and Financial
Indicators, 2018–221

2018

2019

2020

2021

2022

Prel.

Prel.

Proj.

Proj.

Proj.

(Annual percentage change)

National income and prices

GDP at constant prices 1

6.4

5.3

3.0

5.5

8.0

Of which: Non-hydrocarbon GDP

6.4

5.3

3.0

5.5

6.8

Of which: Hydrocarbon GDP

Of which: Non-agriculture GDP

6.0

5.8

2.7

5.7

8.3

GDP deflator

-0.5

1.7

2.0

1.7

1.4

Consumer prices

Annual average

0.5

1.0

2.0

1.9

1.5

End of period

1.1

0.6

1.9

2.0

1.1

External sector

Exports, f.o.b. (CFA francs)

17.8

13.5

-3.7

12.3

27.1

Imports, f.o.b. (CFA francs)

16.0

9.4

-7.9

13.2

9.5

Export volume

8.3

15.0

2.0

12.8

36.7

Import volume

8.3

14.6

1.4

13.2

10.4

Terms of trade (“–” = deterioration)

1.5

3.4

4.0

-0.4

-6.2

Nominal effective exchange rate

4.1

-1.3

Real effective exchange rate

1.7

-4.5


(Changes in percent of beginning-of-year broad money)

Broad money

14.2

8.2

2.9

4.1

Net domestic assets

4.8

7.5

7.4

5.7

Credit to the government (net)

1.5

1.7

7.0

1.4

Credit to the economy (net)

1.4

6.1

1.5

5.6


(Percent of GDP, unless otherwise indicated)

Government financial operations

Revenue

18.8

20.2

19.3

19.5

20.3

Grants

2.0

1.6

2.2

2.0

1.9

Total expenditure

22.4

24.1

25.0

22.8

23.3

Net lending/borrowing (Overall Balance)

excluding grants

-5.6

-5.5

-7.8

-5.3

-5.0

including grants

-3.6

-3.9

-5.6

-3.3

-3.0

Net lending/borrowing (Overall Balance, excl. SENELEC
operation)

-3.6

-3.2

-5.6

-3.3

-3.0

Primary fiscal balance

-1.7

-1.9

-3.5

-1.2

-1.1

Savings and investment

Current account balance (official transfers included)

-8.8

-9.1

-11.3

-11.4

-8.5

Current account balance (official transfers excluded)

-9.2

-9.5

-11.6

-11.7

-8.8

Gross domestic investment

32.5

33.4

30.4

33.3

33.4

Government 2

6.3

7.3

8.0

7.9

8.6

Nongovernment

26.2

26.1

22.4

25.4

24.7

Gross national savings

23.7

24.3

19.1

21.9

24.9

Government

5.0

6.6

5.8

6.1

7.1

Nongovernment

18.7

17.7

13.3

15.7

17.8

Public Debt

Total public debt 3

62.1

64.2

67.4

67.6

66.5

Domestic public debt 4

13.9

11.2

13.3

13.7

14.7

External public debt

48.1

52.9

54.2

53.9

51.8

Total public debt service 3

Percent of government revenue

42.8

27.6

31.2

28.5

28.6

Memorandum items:

Gross domestic product (CFAF billions)

12,907

13,815

14,516

15,580

17,074

of which non-hydrocarbon (CFAF billions)

12,907

13,815

14,516

15,580

16,798

Gross domestic product (USD billions)

23.2

23.6

Share of hydrocarbon in total GDP (%)

1.6

National Currency per U.S. Dollar (Average)

555

586

Sources: Senegal authorities; and IMF staff estimates and
projections.

1
Based on new national accounts rebased to 2014.

2
Reflects reclassification of public investment.

3
Starting in 2017 debt level, debt service and government
revenue include preliminary data covering the broader
public sector.

4
Domestic debt includes government securities issued in
local currency and held by WAEMU residents.

For information on the emergency financing requests approved by the IMF
Executive Board, please see a link to the IMF Lending Tracker:

https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker

For upcoming discussions on the emergency financing requests, please see a
link to the calendar of the IMF Executive Board meetings:

https://www.imf.org/external/NP/SEC/bc/eng/index.aspx


IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Lucie Mboto Fouda

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








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