font size
Senegal’s government announced on Wednesday that it had raised $300 million in international markets to cover its financing needs following an alarming financial audit and the postponement of disbursements by the IMF.
In September, six months after coming to power, the government announced the conclusions of a review of the West African country’s finances, with Prime Minister Ousmane Sonko describing the situation as “catastrophic”.
A government audit showed the budget deficit was 10.4% of GDP, instead of the 5.5% announced by the previous government.
The audit concluded that public debt was 76.3% of GDP, not 65.9% as previously announced.
Sonko accused the previous government of manipulating financial figures provided to international partners including the IMF, a charge denied by former leaders.
The IMF announced in mid-October that it had begun assessing the impact of the audit on past programs and on-going programs under agreements approved in 2023.
Media reports quoted Finance Minister Sheikh Dibba as saying that a $1.8 billion aid program had been suspended and approximately $559 million in disbursements had been deferred until 2025.
The IMF did not confirm this in response to questions from AFP.
The Ministry of Finance said in a statement on Wednesday that Senegal had raised $300 million in international markets “in response to the need for financial consolidation due to the postponement of originally planned disbursements by the International Monetary Fund.”
The deal was underwritten by US bank JPMorgan and carries an interest rate of 6.33%, according to a statement.
Senegal had already raised $750 million in Eurobonds in June with an interest rate of 7.75% and a maturity of seven years.
“This successful financing…reflects the renewed confidence of international investors in Senegal’s signature,” the ministry statement said, adding that this will be Senegal’s last bond issue on the international market in 2024. .
The statement said the government “will enter into discussions with the IMF to establish a new program” aimed at stabilization and development.
Moody’s downgraded Senegal’s credit rating and placed the country under surveillance following the results of the financial audit.
Standard & Poor’s maintained its rating but revised its outlook from stable to negative.
ral/acc/give
