(Bloomberg) -- Senegal is weighing a liability management plan to extend debt maturities after a state audit showed public finances were worse than previously thought.
The exercise will aim to achieve “a more appropriate repayment profile favoring re-profiling with extended maturities,” according to draft budget documents.
The move comes as Senegal awaits for results from an audit of public finances, after previously concluding that its debt was more than 80% of economic output at the end of last year, compared with the previously announced 73%.
Senegal’s ambition is to “implement a proactive and strategic approach to public debt management aimed at optimizing its repayment profile while strictly honoring its commitments to investors,” the finance ministry said in emailed comments on Wednesday. The government “has no intention of renegotiating or restructuring its debt.”
The audit also showed that the budget deficit represented more than 10% of gross domestic product, almost double the 5.5% that was reported under former President Macky Sall, leading the International Monetary Fund to freeze $1.8 billion in loans earlier this year. The Washington-based lender will discuss the country’s loan program in January.
The data revisions, which are now being assessed by Senegal’s court of auditors, have weighed on the country’s finances. The review by the auditors expected by mid-December will lead to “an upward revision of the outstanding debt and debt service” in 2024-2025, the finance ministry said. The budget deficit will exceed 11% in 2024, it said.
“This active debt management exercise will also concern issues on the international market to smooth debt service, in particular in 2026 and 2027,” the 2025 budget published on the government’s website said.
The country has $3.2 billion equivalent of dollar and euro bonds falling due in the next 10 years, according to data compiled by Bloomberg.
Senegal is targeting a 7% budget shortfall next year for a 6.4 trillion CFA franc ($10.2 billion) budget, according to the draft budget, which should be approved by lawmakers in the coming days.
Diaspora Bonds
The West African nation plans 1.5 trillion CFA franc in diaspora bonds to wean the country off external funding, according to the document. It also aims to finalize a review of the mining code by May to optimize how revenues are shared.
Senegal wants to increase the amount of local content used and jobs created by foreign operators in the oil and gas sector. Similarly it will update its tax code to maximize the state’s benefits.
Economic growth is seen at 8.8% in 2025 based on oil production that started this year, followed by gas production from the $4.8 billion BP Plc-operated Grand Tortue Ahmeyim field in 2025.
Inflation is expected to average 1.9% next year, according to the draft budget.
(Updates with finance ministry’s comment in fourth paragraph.)
©2024 Bloomberg L.P.