(Bloomberg) -- Senegal’s prime minister wants a probe into the previous administration for painting an unrealistic picture of the country’s finances as the new government seeks funding to implement its economic program.
Senegal’s public debt was bigger at an average of 76.3% of gross domestic product during the last five-year term of President Macky Sall instead of the 65.9% of GDP that was previously reported, Prime Minister Ousmane Sonko said in the capital, Dakar. Checks reveal that the budget deficit during the period that ended in 2023 was an average of 10.1% of GDP and not the 5.5% that was recorded, Economy Minister Abdourahmane Sarr said.
“There is an amount of 605 billion CFA francs ($1 billion) of credits planned for 2024 and which was spent in 2023,” Sonko said. “Macky Sall’s regime lied to the people, lied to the partners. The actors of this carnage will have to justify themselves before the people.”
Senegal borrowed 604.8 billion CFA francs more in 2023 for debt service requirements in the first four months of 2024.
Abdou Mbow, head of Sall’s Alliance for the Republic party declined to comment when he was contacted by phone. Senegal has shared “the preliminary findings with us, and we await the full report,” an International Monetary Fund spokesman said.
Senegal seeks funds to execute its economic program, compelling the government to look for new sources of resources barely six months into office. Even though it successfully raised $750 million in eurobonds in June, marking a massive endorsement from investors, the young government’s swift market fray was unexpected.
Sarr said they have informed the IMF and will seek a solution within the current program or a separate one. The West African nation has been under a $1.83 billion arrangement with the Washington-based lender since June last year.
Senegal’s facing a widening fiscal deficit and slower economic growth ahead of parliamentary elections scheduled for Nov. 17, in which the new administration’s hoping to shore up support for its reforms.
President Bassirou Diomaye Faye, who won a presidential vote in March by a landslide, is seeking a legislative majority to reassure voters and investors that he can fulfill his pledges to tackle corruption, ease a cost-of-living crisis and review oil and gas contracts with the country’s foreign partners.
The IMF recently revised Senegal’s 2024 economic-growth forecast down to 6%, from an earlier estimate of 7.1% in June. It attributed the downward revision to weaker economic activity in the first quarter, stemming from political tensions around the presidential elections as well as delays in the start of gas production, now pushed to the fourth quarter. Oil production started in June.
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