The International Monetary Fund (IMF) has put on hold Senegal's $2.2 billion program due to three outstanding conditions. According to Julie Kozack, Director of the IMF's Communications Department, the institution is waiting for Senegal to adopt a budget that aligns with its legal framework and policies outlined in the technical agreement of September 1. This condition is crucial for the program's approval.
Another condition is the completion of corrective measures on hidden debt. The IMF has acknowledged progress made by Senegal, including audits, statistical revisions, and reforms in public debt management. However, the institution is seeking additional measures to prevent future erroneous financial declarations. These measures include strengthening budget controls, eliminating letters of comfort used in certain financing arrangements, and launching an audit by a private international firm.
The third condition involves securing financing assurances from partners. The IMF is also working with Senegal to establish a committee of creditors to address the country's external debt. A meeting with external creditors was held on October 6, but the committee responsible for organizing exchanges between bilateral public creditors and facilitating an agreement on debt treatment had not been established six weeks later.
The IMF program is awaiting approval from the institution's Board of Directors, which is the only body authorized to approve the $2.2 billion program. The Board's approval is contingent upon Senegal meeting the three conditions outlined by the IMF. Once these conditions are met, the program can move forward, providing Senegal with much-needed financial support.
The delay in approving the program has significant implications for Senegal's economic development. The country is counting on the IMF program to support its economic growth and stability. The program's approval will also help Senegal to access other sources of financing and to restore investor confidence.
The IMF has expressed its willingness to explain the program to Senegalese stakeholders who request it. The institution is committed to supporting Senegal's economic development and is working closely with the country's authorities to address the outstanding conditions.
The three conditions set by the IMF are crucial for the program's approval. Senegal must adopt a budget that aligns with its legal framework, complete corrective measures on hidden debt, and secure financing assurances from partners. Once these conditions are met, the IMF program can move forward, providing Senegal with the financial support it needs to achieve economic stability and growth.
Key points
- IMF requires Senegal to adopt a budget that aligns with its legal framework and policies.
- Completion of corrective measures on hidden debt is another condition for the program's approval.
- Securing financing assurances from partners is the third condition for the IMF program.
