Budget rejection could delay IMF’s $2.2bn loan to Senegal
By the AFREEQUE newsroom, based on Senego
Senegalese economist Seydou Sow says rejection of the supplementary budget could delay the IMF’s consideration of a $2.2 billion credit programme. He puts the state’s outstanding arrears at 1,956 billion CFA francs and says payments to companies could be postponed, according to an interview published by Seneweb.
Rejection of Senegal’s supplementary finance bill could delay the International Monetary Fund’s (IMF) consideration of its $2.2 billion financing programme, financial economist Seydou Sow said in an interview published by Seneweb. He considers a delay more likely than the programme being scrapped; the IMF executive board has yet to approve the 36-month financing.
According to Seydou Sow, the absence of an adopted supplementary budget would weaken the fiscal framework presented to creditors. The government’s arrears to companies amount to about 1,956 billion CFA francs, while the bill provides 300 billion to continue clearing them. If the bill is rejected, payments to construction and public works companies, suppliers and subcontractors could be delayed.
The economist also points to a gap between the energy subsidies set out in the initial budget, at 250 billion CFA francs, and the 790 billion he estimates are needed. Without budget authorisation, the government would, he says, have to incur off-budget spending or pass the increase on through higher fuel and electricity prices.
Senegal raised 55 billion CFA francs on the regional market on 23 October, compared with 90 billion planned in the official calendar, Sow reports. Rates exceeded 8% across all maturities. The supplementary budget is due to return to a plenary session on 3 November, after several parliamentary stages, including the committee rejection announced on 30 October.
