The Senegalese government has submitted a revised 2026 budget that reflects a significant deterioration in the country's fiscal balances. The revised budget, known as the Projet de loi de finances rectificative (PLFR), forecasts total revenues of 5,848.7 billion FCFA, a decrease of 340.1 billion FCFA from initial projections. This decline is attributed to various factors, including a shortfall in expected revenues from the Plan de redressement économique et social (PRES).
The government's expenditure plans have been revised upward by 150 billion FCFA to 7,583.9 billion FCFA. This increase is largely driven by a surge in energy subsidies, which are expected to rise from 250 billion FCFA to 790.3 billion FCFA. The increased spending, coupled with lower revenues, has resulted in a significant widening of the budget deficit to 7.6% of GDP, equivalent to 1,735.2 billion FCFA, from an initial 5.4%.
A major contributor to the revenue shortfall is the PRES, which is now expected to generate 311.5 billion FCFA, down from 762.9 billion FCFA. This decline is due to the non-implementation of several fiscal measures, including taxation on games, land regularization, and a tax on gold. In an effort to mitigate the impact of these developments, the government has reduced investment spending by 555 billion FCFA.
Despite these adjustments, the government has prioritized social sectors and family security grants, with the allocation for these areas doubling to 70 billion FCFA. The revised budget also highlights a significant financing need of 6,774.2 billion FCFA, which the government plans to cover through financial market borrowing and program loans.
To address the fiscal challenges, the PLFR introduces several reforms, including a change to the taxation of electronic money. The new system replaces a transaction tax with a progressive contribution based on turnover. Additionally, the government plans to implement a fiscal marking of goods to combat fraud.
The revised budget also includes the integration of 300 billion FCFA of non-financial debt into the state's accounts and ratifies a decree for a 7.2 billion FCFA advance for food assistance. These measures reflect the government's efforts to manage the current economic difficulties while maintaining essential public expenditures.
The PLFR was submitted by the government and will be reviewed by the relevant authorities. The revised budget reflects the challenges posed by global economic trends, including the impact of rising Brent crude prices on energy subsidies, and the need for careful fiscal management in response.
Key points
- The Senegalese government's revised 2026 budget projects a wider deficit of 7.6% of GDP due to increased energy subsidies and lower-than-expected revenues.
