Senegal’s Eurobonds fell after an audit revealed discrepancies in economic data from the previous administration. The new government under President Bassirou Diomaye Faye found that the reported debt and budget deficit figures were significantly understated. The IMF has suspended Senegal’s credit facility pending further review, highlighting the need for accurate financial reporting.
Senegal’s sovereign Eurobonds dropped following the revelation that economic data had been misreported under former President Macky Sall’s administration. Specifically, the 2033 dollar Eurobond fell over 2 cents, reaching a bid of 79.95 by 1413 GMT. Newly elected President Bassirou Diomaye Faye, who took office in April 2024, initiated an audit that uncovered discrepancies in the nation’s debt and budget deficit reporting.
As a result of the audit findings, Faye’s administration opted not to request additional funds from its existing $1.8 billion credit facility with the International Monetary Fund (IMF) during June. The IMF subsequently suspended the program pending a review by the Court of Auditors. An IMF spokesperson indicated that they are collaborating with Senegalese officials to assess capacity development needs and implement necessary corrective actions.
The Court of Auditors stated, “The work carried out by the Court shows that outstanding debt is higher than that shown in the reporting documents.” By the end of 2023, Senegal’s total debt reached 99.67% of its Gross Domestic Product (GDP), significantly exceeding the previously reported figure of 74.41%. Furthermore, the audit revealed various data inconsistencies from 2019 to March 2024.
The Court highlighted that the reported budget deficit was severely understated, noting, “The deficit calculated and reported to the IMF for the period under review is very far from its real value.” The revised budget deficit for 2023 is 12.3% of GDP, in stark contrast to the 4.9% previously reported by the former government.
The audit conducted by President Faye’s administration has unveiled serious discrepancies in Senegal’s financial reporting, leading to significant adjustments in the country’s debt and budget deficit figures. The suspension of the IMF program underscores the necessity for accurate economic data and transparency in fiscal policies. As Senegal navigates these challenges, collaboration with international financial institutions will be crucial for restoring confidence and ensuring economic stability.
Original Source: thepoint.gm
