The IMF praised Senegal for acting to engage reforms to strengthen its economy, while also working with the IMF to clarify and amend it’s debt position after it uncovered misreporting of how much the African country owed creditors, a spokesperson for the Fund said Thursday, (June 12) in Washington, D.C.
The IMF, a key financier for the debt-laden country, froze disbursements on its program with Senegal last year after an audit under new President Bassirou Diomaye Faye found the previous administration had understated deficits, pushing its end-2023 debt ratio to roughly 100% of GDP, versus the previously reported 74%.
“We strongly welcome the new (Senegalese) government's commitment to transparency in revealing the discrepancies in the reported debt and the fiscal deficits. The authorities are conducting their own audit, and that audit is ongoing. We understand that the audit is close to being finalized, and we're waiting for its completion to better understand the challenges and how we can move forward. And so ultimately, as we wait for that report, we are going to refrain from, kind of commenting on, on any numbers. We're waiting for the report and we will remain very closely engaged,” IMF spokesperson Julie Kozack told reporters at her regular press briefing.
Kozack also noted that Egypt was seeing gains after working with the IMF on a program of reforms aimed at tackling its deep-seated economic problems.
She announced that the Fund would combine the fifth and sixth reviews of Egypt's $8 billion support program this fall to give authorities more time to meet critical objectives of its economic reform program.
“Egypt continues to make progress under its macroeconomic reform program. And, we can say that there's been notable improvements in inflation and in the level of foreign exchange reserves which have increased. To move further and to really safeguard macroeconomic stability in Egypt and to bolster the country's resilience to shocks. It is going,, it is essential to deepen reforms. And this is particularly important to reduce the state footprint in the economy, level the playing field and improve the business environment,” Kozack told reporters at the IMF’s regular press briefing.
Finally, the IMF realizes that low-income and developing countries are facing a rising debt issue, and that trade tensions and a long-term decline in international aid spending are threatening to make things worse.
“And on the aid side, what we've been warning about for quite some time is that official development assistance in general has been on a declining downward trend for many, many years. And we see the impact of the decline in official development assistance in low income countries,” said Kozack
Kozack said that that the Fund was working with countries in a ‘three pillar approach’ to help them work on fiscal reform to their economies, increase revenue, and to work with multinational development banks and organizations to tackle their debt.
“So this is a broad trend that we observe globally across many countries, affecting low income countries. But what it means for those countries is that they are going to have to both, you know, work with, you know, the IMF, other MDBs, donors who are still, providing financing, but most importantly, those countries are going to look are going to need to look for ways to mobilize domestic resources so that they can fund, many of their own development needs,” she continued.
A copy of the full transcript is available at IMF.org
