Senegal’s Finance Minister Cheikh Diba confirmed no plans for debt restructuring during a meeting with international investors. The country’s dollar bonds saw gains after this announcement. Senegal is managing a public debt close to 100% of GDP amid a review of its finances and potential reforms. Officials aim to establish a new IMF financing program by June 2025, emphasizing fiscal management and subsidy reform.
Senegal’s Finance and Budget Minister Cheikh Diba reassured international investors regarding the country’s debt situation, stating that there will be no debt restructuring. During a recent private meeting, Diba highlighted the government’s strategy to manage liabilities effectively to meet its debt obligations.
In light of public debt reaching nearly 100% of GDP as of 2023, Senegal’s dollar bonds experienced a favorable rise for the second consecutive day. The 2048 bond climbed by 1.6 cents to 69.8 cents on the dollar following a 1.1 cent increase the previous day.
Despite concerns raised by state auditors about higher-than-anticipated budget deficits, Diba confirmed that the government is not currently facing liquidity issues. The country is exploring alternative funding sources, possibly through sukuk issuance or loans backed by development banks, in anticipation of delays regarding a new IMF program.
Senegal aims to finalize its new financing arrangement with the IMF by June, following the suspension of a $1.8 billion program amid financial investigations. Furthermore, reforms are being considered to manage public expenditures in the energy sector and implement debt management strategies effectively.
Diba also indicated intentions to reform energy subsidies, ensuring that such measures are manageable for the population. These measures are part of the broader economic strategy aimed at stabilizing Senegal’s financial landscape while addressing public concerns.
In summary, Senegal’s government reassured investors about its commitment to managing debt without restructuring, witnessed by the rising value of its bonds. The assurance comes amidst a backdrop of heightened public debt, with plans for alternative financing and impending reforms in energy subsidies. Continued collaboration with the IMF is anticipated, aiding in the fortification of the country’s economic stability.
Original Source: financialpost.com
