Senegal postpones releasing its quarterly reports on budget execution

Senegal’s finance minister said in a statement that the country has delayed the release of its budget implementation reports for the past two quarters until June 23 in an effort to restore investor confidence following a hidden-debt controversy.

It was not immediately apparent when the reports were originally released.

The International Monetary Fund suspended payments on its Senegal program last year after the country acknowledged falsifying its debt and deficit figures. Negotiations on a new agreement cannot begin until the matter is settled, according to the IMF, whose funding is considered crucial for the West African country.

Senegal’s court of auditors reviewed the government’s accounts in February and discovered that Dakar had misrepresented its deficits by as much as seven percentage points of GDP annually. As a result, the debt ratio at the end of 2023 was around 100% of GDP, rather than the 74% that the previous government had declared.

The first quarter and fourth quarter 2024 data will now be provided on June 23 in order to ensure the “sincerity and reliability” of the figures, according to a June 16 announcement from the finance ministry.

It added that finding, reclassifying, and validating data was part of the government’s plan to clean up public finances and that this showed its desire to “restore budget orthodoxy and transparency.”

The IMF applauded Senegal’s plan earlier in June to increase tax compliance and reduce dependency on outside funds, but emphasized that it had no bearing on the waiver process, leaving the program in limbo following a year without money.

According to Kevin Daly, director of investments at Aberdeen Investments, Senegal may still have “a very bumpy road ahead.” “We are negative on Senegal,” he declared. 

According to statistics from JPMorgan, Senegal’s dollar bonds are struggling the worst in Africa, giving investors losses of 11.5% so far this year compared to the average African sovereign’s 4.9% returns.

According to Tradeweb statistics, the price of Senegal’s 2033 bonds dropped 0.3 cents to 65.75 cents. “They are significantly cheaper than their regional counterparts,” Thys Louw, portfolio manager for Ninety One, stated.