Senegal has delayed the release of its quarterly budget execution reports for the final quarter of 2024 and the first quarter of 2025 to June 23, according to the Ministry of Finance. The decision, announced in a statement dated June 16, comes as the new administration seeks to restore fiscal transparency and credibility following a hidden-debt scandal that has severely impacted investor confidence.
The country is under intense scrutiny after the International Monetary Fund (IMF) suspended its disbursement programme last year. The suspension came in the wake of revelations that Senegal had misreported debt and fiscal deficit data. A February review by Senegal’s Court of Auditors revealed that the government had understated its budget deficits by as much as seven percentage points of GDP annually. This misreporting pushed Senegal’s actual debt-to-GDP ratio at the end of 2023 to nearly 100%, significantly higher than the 74% reported by the previous administration.
The finance ministry stated that the postponed budget reports aim to ensure the “sincerity and reliability” of the data, underscoring the government’s commitment to re-establishing fiscal discipline and transparency. “Identifying, reclassifying, and verifying data” is part of the broader strategy to clean up public finances, the ministry said.
Earlier this month, the IMF welcomed Senegal’s initiatives to improve tax compliance and reduce dependency on external financing. However, the Fund made it clear that these measures do not affect the process for obtaining a waiver, leaving the IMF-backed programme effectively frozen after more than a year without financial support.
Investor sentiment remains cautious. Kevin Daly, investment director at abrdn (formerly Aberdeen Investments), warned of a challenging path ahead for Senegal, noting, “We are negative on Senegal.” JPMorgan data shows Senegal’s dollar bonds have been the worst-performing in Africa this year, with losses of 11.5%, compared to an average 4.9% return for African sovereign bonds.
Senegal’s 2033 eurobonds were trading at 65.75 cents on the dollar, reflecting a significant discount relative to regional peers, according to Tradeweb and Ninety One portfolio manager Thys Louw.
The upcoming report release will be a critical test of the government’s ability to reassure both domestic stakeholders and international investors.
