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Why Senegal Will Wait Longer Before Receiving $1.9 Billion Loan From IMF

November 12, 2024
603 1 minute read
Why Senegal Will Wait Longer Before Receiving $1.9 Billion Loan From IMF
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S.

Senegal will have to wait until at least June to get any sort of resolution of its lending programme with the International Monetary Fund that could lead to fresh disbursements, according to Reuters.

There was no immediate comment from the finance ministry on the prospect of a delay that will be a test for a government seeking quick support to help it deal with an increasingly precarious fiscal situation.

A $1.9 billion IMF programme agreed in June 2023 has been on hold since a government audit three months later uncovered larger debt and deficit figures than the previous administration had reported, sending yields on the West African nation’s dollar bonds soaring and triggering credit ratings downgrades.

Dakar is seeking a new programme with the Fund, but the source said the IMF will not even consider the request before the audit findings, which are scheduled to be certified by Senegal’s court of auditors mid-December, are subsequently reviewed by the Fund’s executive board.

“They need to start by sorting out the issues identified in the audit,” the source said. Following the certification, the Fund’s board was expected to determine the next steps towards a resolution, a process expected to take another six months, the source added.

Also Read: Senegal to Reaffirm €2.5 Billion Green Energy Pact at COP29

Senegal’s finance ministry did not immediately respond to a request for comment.

Senegal secured in June last year $1.526 billion under a three-year IMF Extended Fund Facility and Extended Credit Facility programme plus additional financing of $371.1 million from the Resilience and Sustainability Facility providing long-term concessional cash for climate-related spending.

Senegal got payouts of $216 million when it reached the loan agreement with the Fund and another $279 million in December last year after getting sign off on the first review by the executive board.

Subsequent reviews and IMF board sign-off, the step that ultimately triggers more payouts, have not been completed.

The IMF board is expected to consider various remedies for the misreporting, the source said, including demanding potential reimbursements for any loans advanced on the basis of the misreported data.

 

November 12, 2024
603 1 minute read
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