Senegal wants to increase tax revenue in order to reduce its dependency on outside aid

Prime Minister Ousmane Sonko of Senegal has stated that the country intends to strengthen tax compliance in order to raise money and lessen its dependency on outside funding sources such as the International Monetary Fund.

The West African country is working with the IMF to draft a resolution after its $1.8 billion loan arrangement with the Fund was suspended due to misreporting debt and deficit levels.

“Good tax reform… can help us withstand the 250 billion CFA francs ($437.64 million) that the IMF gives us every year,” Sonko was cited by the Le Soleil daily on Tuesday as saying to Senegalese citizens residing in Guinea.

When asked for comment, Sonko’s office did not immediately reply. The prime minister was quoted in the article as stating that Senegal had not received any IMF payments in a year.

“Senegal is still standing… a country does not develop by being held by the hand, but by building on its own strengths, its own resources, and its own budgetary discipline,” stated the president.

In order to prevent tax increases, the prime minister was quoted in the publication as saying that the government would ensure that every Senegalese pays their due amount of taxes.

Senegal’s assets were severely damaged when its overstated debt was exposed.
According to a JPMorgan bond index, Senegal’s dollar bonds have dropped 7.3% for investors so far this year, while their African counterparts have gained an average of 3% during the same period.

The losses are also twice as large as those of Angola, the second-worst-performing African sovereign, whose bonds have lost 1.5% since the year began.

A 405 billion CFA franc ($708.97 million) bond issued in April is one example of Senegal’s increased debt issuance at the regional debt market, which has drawn criticism from the opposition, which is calling for greater debt transparency from the government.