On June 7, 2021, the IMF Executive Board approved a Standby Agreement and Standby Credit Facility Arrangement in the amount of SDR 453 million (approximately $ 650 million or CFAF 350 billion) and thus completes the third review of the program supported by the instrument for the coordination of economic policy.
The approval of the FCC agreement and standby agreement paves the way for an immediate disbursement of approximately SDR 129.4 million or approximately $ 187 million. It follows an emergency aid that the IMF had granted to Senegal in April 2020 for an amount of 442 million dollars at the date of approval.
The 18-month funding agreement, combined with the Economic Policy Coordination Instrument, will provide an economic policy anchor for the next phase of the authorities’ response to COVID-19 and will support a strong and job-creating recovery.
The COVID-19 pandemic has hit the Senegalese economy hard and put many households in difficulty, especially those working in the informal economy. Growth in 2020 is estimated at 1.5%, thanks to record harvests, despite a severe contraction in the hotel, restaurant, tourism and transport sectors. The effective implementation of an economic and social resilience program (PRES) by the government has helped strengthen the health sector and mitigate the loss of household and business income. A timid recovery is expected in 2021 with growth of 3.7%.
In addition, the report of the monitoring committee of the Force COVID-19 fund has been finalized. The annual audit of public procurement procedures, including COVID-19 expenditure procedures, will be completed at the end of June and the Court of Auditors will publish its report on the execution of the 2020 finance law in October.
IMF staff and Senegalese authorities agreed on a revised fiscal deficit path for 2021–23, taking into account the deployment of COVID-19 vaccines and a new program to promote employment for young people and workers. women. A resolute execution of the medium-term revenue strategy and a redefinition of priority spending will make it possible to free up fiscal space, while the overall deficit should regain the anchoring of the deficit set by the WAEMU, i.e. 3% of GDP, by 2023.
Collaboration between the IMF and Senegal under the ICPE will continue in parallel with the new terms of the standby agreement and the FCC until the end of 2022.