IMF Says Senegal’s Economic Risks Increased, Remain Manageable

DAKAR (Capital Markets in Africa) – While risks to Senegal’s economy have increased, they remain manageable, the Washington-based International Monetary Fund said.

“Lack of progress on structural fiscal issues such as revenue mobilization, energy subsidies, and reforms to further reduce the treasury’s additional financing needs could undermine fiscal sustainability,” the lender said Monday in an emailed statement. “On the external side, security risks in the region could adversely affect investment and growth.”

The West African nation’s economy grew 7.2 percent in 2017 as its current-account deficit widened on higher oil prices, the IMF said in May. A continued increase in global crude prices will impact the 2018 budget, while fiscal pressure has risen on lower-than-expected revenue last year and higher wage spending.

Senegal needs to boost economic growth by attracting private investment and tackling impediments to access to credit, cost of energy and taxation issues, while improving the business environment, including developing special economic zones further, the IMF said.

The lender’s executive board completed the sixth review of Senegal under the Policy Support Instrument program. “In completing the review, the board also approved the authorities’ request for waiver of non-observance and modification of assessment criteria,” it said.

Source: Bloomberg Business News