Senegal’s Court of Auditors confirmed that the previous administration misreported key economic data, with outstanding debt now reported at 99.67% of GDP instead of 74.41%. The audit revealed a larger budget deficit for 2023 at 12.3% of GDP, impacting Senegal’s eurobonds. The government under President Faye is initiating reforms to centralize debt management and will not seek further IMF disbursements pending analysis of these findings.
Senegal’s Court of Auditors released a report confirming that the previous government misrepresented crucial economic data, notably debt and deficit figures. Following this revelation, Senegal’s eurobonds saw a significant drop in value. The audit indicated that the outstanding debt is considerably higher than reported, aligning with concerns raised by the new government under President Bassirou Diomaye Faye, who assumed office in April 2024.
As per the report, the total outstanding debt at the end of 2023 constituted 99.67% of the country’s gross domestic product (GDP), compared to the earlier figure of 74.41%. The audit highlighted that former President Macky Sall’s administration downplayed the scale of Senegal’s debt and budget deficit. In light of these findings, Faye’s government opted not to request additional disbursements from an ongoing $1.8 billion credit facility with the International Monetary Fund (IMF).
The IMF had put the program on hold, pending the completion of the Court of Auditors’ review. An IMF spokesperson commented that they would analyze the court’s report and engage in discussions with Senegalese authorities regarding the issues highlighted. The audit, covering public finances from 2019 to March 2024, also noted various discrepancies between reported data and actual figures.
For instance, the budget deficit for 2023 was reassessed to be 12.3% of GDP, substantially higher than the 4.9% previously indicated by the former administration. Leo Morawiecki, an associate investment specialist at Abrdn, projected that the debt-to-GDP ratio for 2024 could exceed 110%, likely escalating the risk status of Senegal as per IMF evaluations.
In response to the audit findings, Senegal’s finance ministry announced plans to centralize public debt management and enforce stringent controls over external project financing. Preparations are underway for a call with global investors to outline these fiscal strategies and reaffirm the commitment to sound financial management.
In conclusion, the report from Senegal’s Court of Auditors reveals significant misreporting of economic data by the previous government, especially regarding debt levels and budget deficits. These discrepancies have led to serious financial repercussions, including a drop in eurobond values and a reevaluation of Senegal’s debt risk by the IMF. The new administration is focused on improving fiscal transparency and managing public finances more effectively moving forward.
Original Source: www.voanews.com
