The IMF will lend nearly 2 billion dollars to Senegal

2023-05-12 09:38:05

The International Monetary Fund (IMF) announced, Thursday, May 11, an agreement with Senegal, for an aid program of 1.8 billion dollars (1.7 billion euros), in exchange for policies to reduce debt, the fight against money laundering and terrorism, and the country’s adaptation to climate change. This 36-month agreement must now be validated by the IMF’s board of directors. Negotiations for a new aid program for Senegal were announced in mid-March.

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“IMF staff and the Senegalese authorities have reached an agreement on economic and financial policies that will be supported by 36-month financing under the Extended Credit Facility (MEDC) and the Extended Credit Facility (ECF). ) of approximately $1.526 billion, combined with the Resilience and Sustainability Fund (RST) of approximately $327.1 million”detailed the IMF in its press release.

In exchange, the Senegalese government will engage in reforms. “Policy priorities (…) include reducing debt vulnerabilities by initiating fiscal consolidation, strengthening the governance and anti-money laundering and counter-terrorist financing framework, and achieving more inclusive and sustainable growth. rich in jobssaid the Fund.

Price spike

In addition, part of the funds lent will support “Senegal’s climate change mitigation goals, [accéléreront] the country’s adaptation to climate change and [soutiendront] work to integrate climate change considerations into the budget process”is it still indicated in the press release.

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The West African country has already obtained an aid program totaling $776 million, the last disbursement of which was made in June 2022. But Senegal is still facing inflation of 9.7%, mainly as a result of soaring food prices on the international market after Russia’s invasion of Ukraine, which began in February 2022.

Growth in 2022 was 4.7%. The IMF had twice lowered its forecasts during the year, due to a fall in agricultural yields and industrial activity. For 2023, the Fund anticipates growth of 8.3% and inflation of 5%, according to forecasts published in mid-April.

The World with AFP