(Agence Ecofin) – During the press conference to launch the biannual Economic Outlook for Sub-Saharan Africa report, Abebe Aemro Selassie, director of the Africa department, indicated that the IMF was willing to work with the Senegalese authorities on the issue. of the “hidden” debt recently discovered by the new authorities.
This statement followed a question from the Ecofin Agency on the possibility of short-term support for Senegal, which, according to corroborating sources, faces liquidity challenges due to a recently “hidden” debt. discovered by the new authorities and estimated at 83% of GDP in 2023, a gap of around 2,000 billion FCFA compared to initial data. “ We welcome the desire of the new Senegalese authorities to carry out an audit of the existing debt, as well as their decision to make the results public. We remain ready to work with countries that face challenges and ask us to do so. ” said Mr. Abebe.
The IMF therefore does not indicate whether or not there will be immediate financial support for the West African country. For now, attention is focused on the final conclusions that the Court of Auditors will deliver, concerning the audit carried out by the General Inspectorate of Finance. “ We are still waiting for the final figures from the Court of Auditors “, specified Abebe Selassie.
Beyond the political debate on the revelation of this “hidden” debt and possible responsibilities, the issue remains whether Senegal is able to repay its creditors, both on the international capital market and at the level of the UEMOA. Otherwise, urgent measures will be necessary.
However, even in the event of an urgent procedure, the IMF generally takes some time to assess its commitment. The multilateral institution’s decision to intervene or not will be closely monitored by rating agencies and international creditors. Moody’s particularly emphasized that the discovery of hidden debts is not unprecedented in emerging countries, although that of Senegal seems to be exceptional.
This information was revealed when the country had already not achieved its budgetary resource mobilization objectives. Also, even without the hidden debt, its public deficit would already reach 7.5% of GDP in 2024, a level well above the objective of 3.9% set in the finance law for the current financial year.
A Senegalese delegation is present in Washington DC for the fall meetings of the Bretton Woods institutions. After a first meeting in Dakar last September, it is certain that discussions will continue with the IMF to find solutions to the current situation.
On the Eurobond market, Senegal’s securities, all maturities combined, have lost value and remain in the red this Friday, October 25, 2024. A sign that investors perceive the country as risky and only invest there for a fee. more attractive returns.
