Dakar (AFP) – Senegal’s prime minister unveiled an economic recovery plan for the highly indebted nation on Friday, focused on reviving its economy with a shift towards greater domestic funding. The west African country faces a deteriorating economy, marked by a 14-percent budget deficit and outstanding public debt that represents 119 percent of GDP, said Senegal Economy Minister Abdourahmane Sarr.
Prime Minister Ousmane Sonko declared that under the new economic plan “90 percent of resources are expected to come from the mobilisation of internal resources and without external debt”. The declaration received strong applause at the Grand Theatre de Dakar, where it was revealed in a ceremony before members of the government, including President Bassirou Diomaye Faye. Faye took power more than a year ago promising economic and political sovereignty, including putting an end to economic dependence on foreign countries, notably former colonial ruler France.
Sonko, a political mentor to Faye, was ineligible to run in the March 2024 election, pushing his mentee to the forefront instead. Together, the pair have presented themselves as left-wing pan-Africanists. Faye and Sonko claim to have inherited a heavy burden from their predecessor, president Macky Sall, whom they accuse of having presided over widespread financial mismanagement since he assumed power in 2012. An International Monetary Fund (IMF) team that visited Senegal in March confirmed that officials had made false statements regarding budget deficits and public debt for the period 2019–2023. It said the 2023 budget deficit was 12.3 percent of GDP, when the last government said it was 4.9 percent.
– Reductions, renegotiations – Sonko told the ceremony that the new economic plan “reflects the strong commitment of reinforcing our country’s sovereignty”. The plan includes a reduction in government expenditures and increased taxation in the digital, land and mining sectors. It will focus on three main areas: reduction of public debt, mobilisation of domestic resources and additional internal financing that does not create debt. It will also involve the renegotiation of contracts in the oil, gas and mining sectors, among other measures such as the targeting of energy subsidy beneficiaries.
According to Sonko, the measure should raise 5.7 trillion CFA francs (8.6 billion euros, $9.9 billion), which is equivalent to the country’s 2025 budget. The proposal comes as the unemployment rate is estimated at 20 percent, while poverty affects 36 percent of the population, according to Sarr, the economy minister. The new economic plan was unveiled ahead of an IMF mission to Senegal expected later this month. The fund suspended planned disbursements to Senegal as it waits on the current government to take corrective measures following the previous misrepresentations.
In unveiling the new plan, Sonko said it was based on principles including “respect for Senegal’s international commitments”, particularly debt repayment. But “we want to reverse this legacy situation without worsening public debt and without selling off our natural and land resources”, he said. He added that the plan would be implemented “without imposing excessive additional taxes on investors, to the detriment of our country’s attractiveness”.
© 2024 AFP
