It will take ‘a few more weeks’ for the IMF to discuss Senegal’s debt fraudulent reporting
The International Monetary Fund said after a week-long visit to Senegal that it needs a few more weeks of talks with the country before it can think about a waiver that would let it give the country more money.
Senegal’s $1.9 billion loan program was stopped by the IMF in October 2024 after the country’s newly elected government said it had found hidden debts worth more than $11 billion.
The country needs the IMF board to agree to the debt misreporting waiver in order to get a new IMF program. If it doesn’t have that, it might have to pay back money from the last scheme.
In a statement, Edward Gemayel, the mission head of the IMF, said that talks with the Senegalese government had been productive. However, he said that talks over “corrective measures” would continue for the next few weeks before the case of the false reporting could be brought to the attention of the IMF executive board.
Gemayel said that the IMF was ready to help Senegal with its “ambitious reform agenda.”
The IMF said in a statement that the government had said they wanted to get a new IMF program.
The government of Senegal didn’t say anything right away about the IMF statement, but they have been waiting for months for the waiver.
On Wednesday, the price of government debt was slightly lower. For example, the 2028-maturing eurobond was bid at just under 88 cents on the euro, which is more than the 77 cents it was worth in July.
BEING SURE
Investors should feel better knowing that Senegal will likely get more help from the IMF by 2026, according to Charlie Robertson, head of macro strategy at FIM Partners, an emerging market-focused company.
Aberdeen asset manager Leo Morawiecki also said that the fact that no more secret debt was found and that the government planned to ask for a new IMF program were both good signs.
After President Bassirou Diomaye Faye was elected last year, the secret debts were made public. They have grown, and by the end of 2024, Dakar’s debt-to-GDP ratio will be almost 120%.
They were also embarrassing for the IMF, which had been keeping an eye on the country’s funds as part of a loan program.
Senegal plans to take corrective actions as well as rebasing its economy for the first time since 2018. This could bring the debt-to-GDP ratio back into the double digits, according to some experts.
This month, Prime Minister Ousmane Sonko presented an economic recovery plan and promised to pay for 90% of it with money from within the country so as not to take on more debt.
