Senegal conomic outlook becomes challenging: IMF

A staff team from the International Monetary Fund (IMF), led by Ms. Corinne Deléchat, conducted a virtual mission from April 6-27, 2021 to undertake the third PCI review and discuss the authorities' request for a combined 18-month financing arrangement under the SCF and SBA.

At the conclusion of the mission, Ms. Deléchat said the IMF team has reached staff-level agreement with the Senegalese authorities on economic and financial policies that could support approval of the third PCI review of thePCI and underpin an 18- month financing arrangement under the SCF and SBA. Consideration by the IMF's Executive Board is tentatively planned for early June 2021.

The new financing arrangement, with a requested access of SDR 453 million (140 percent of Senegal's IMF quota, about US$ 650 million or CFAF [348] billion), will help support the authorities' health crisis response and promote a broad-based recovery. It will build on the PCI's reform objectives and be carried out concurrently with the current PCI.

The COVID-19 pandemic hit the Senegalese economy hard in 2020, the authorities' preliminary estimates indicate that growth has decelerated to 1.5 percent compared to 4.4 percent in 2019. A record agricultural production and a resilient secondary sector helped avoid a recession, but the hospitality, tourism, and transport sectors suffered a severe contraction. The pandemic containment measures caused hardship for millions of workers, particularly those in the informal sector.

The government's forceful implementation of an Economic and Social Resilience Program (PRES) with financial support from Senegal's development partners, helped strengthen health resilience and mitigate households' and firms' income losses. The authorities continue to follow through on their commitment to accountability and transparency in execution of the PRES and will thus publish the report of the Fonds Force COVID-19 monitoring committee and the audit of the regularity of procurement contracts by end-June 2021.

"Despite these challenging circumstances, performance under the PCIsupported program remained good. All end-2020 quantitative targets were met, with the exception of the one pertaining to the share of single-sourced procurement contracts, which exceeded the program ceiling due to the emergency COVID-19 situation.

Budget execution resulted in a deficit of 6.4 percent of GDP, in line with the program's revised target. On the structural front, six out of nine endDecember reform targets were implemented.