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IMF Approves Stand-By Arrangement for Senegal, Modifies Performance Criteria

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The International Monetary Fund (IMF) has approved a Stand-By Arrangement and an arrangement under the Standby Credit Facility for Senegal, with modifications to performance criteria and quantitative targets.

Background

The agreement was reached following discussions between IMF staff and Senegalese authorities from October 22 to November 29, 2021. The mission team consisted of Ms. Deléchat (head), Messrs. Rosa, Stenzel, Hamliri, Hart, and others. The team commended Senegal’s resilience during the COVID-19 pandemic, which had a significant social impact on the country.

Challenges Faced by Senegal

However, the pandemic has also highlighted underlying challenges, including:

  • High youth unemployment
  • Widespread income losses

To address these issues, Senegal is implementing a large youth and women employment spending package with a significant public hiring component.

Key Policy Themes

The IMF staff emphasized the importance of balancing spending needs with debt sustainability, improving public service delivery through revenue mobilization and transparency, and strengthening the foundation for a strong, inclusive, and job-rich post-pandemic recovery. The key policy themes discussed during the mission included:

  • Balancing Spending Needs with Debt Sustainability
    • Improving fiscal management to ensure sustainable debt levels
  • Improving Public Service Delivery by Enhancing Revenue Mobilization and Spending Transparency and Efficiency
    • Increasing revenue collection through tax reform and efficiency measures
    • Improving transparency and accountability in public spending
  • Strengthening the Foundation for a Strong, Inclusive, and Job-Rich Post-Pandemic Recovery
    • Implementing structural reforms to promote economic growth and job creation

IMF Approval

In response, the IMF approved a Stand-By Arrangement with modified performance criteria and quantitative targets to support Senegal’s economic recovery and reform efforts.

Conclusion

The full report can be accessed on the IMF website. The approval of the Stand-By Arrangement is an important step in supporting Senegal’s economic recovery and reform efforts, and demonstrates the IMF’s commitment to working with its member countries to address their unique challenges.