(Bloomberg) — The International Monetary Fund is assessing the impact of revisions to Senegalese budget data that showed the West African country’s national debt and budget deficit were higher than previously reported.
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“Preliminary findings indicate substantial revisions to budget implementation data for the period 2019-2023,” the fund said in a statement following a staff visit. “These revisions are mainly attributed to investments financed through external loans and loans from domestic banks.”
The result of the changes is that Senegal’s budget deficit and public debt over the period “are now estimated to be significantly higher than previously reported in the budget and settlement laws,” the IMF said.
Prime Minister Ousmane Sonko announced last month that an assessment commissioned by new President Bassirou Diomaye Faye showed that the budget deficit was more than 10% at the end of 2023, almost double the previously reported 5.5%. The debt-to-gross domestic product ratio averaged 76.3% during former President Macky Sall’s last five years in power — higher than the 65.9% originally indicated, Sonko said.
The findings prompted Moody’s Ratings to downgrade Senegal’s long-term foreign currency rating to B1 earlier this month, four notches below investment grade. Sall rejected the outcome of the review in an interview with Bloomberg TV on October 14.
“I regret the Prime Minister’s comments which are false, completely false and which have led to a downgrade by Moody’s,” Sall said.
Senegal continues to face “a challenging environment” with budget implementation showing signs of further tension, the IMF said in Wednesday’s statement. The revenue shortfall reported from an earlier visit continued until the end of September, with the budget deficit expected to exceed the previous estimate of 7.5% of GDP, the report said.
“Looking ahead, it is critical that authorities take bold and timely action to ensure fiscal sustainability and put public debt on a downward trajectory,” the IMF said.
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