At the end of the IMF mission in Dakar, the institution’s technical services announced a staff-level agreement on a new program, with a total disbursement amount of approximately $2.2 billion, or nearly 1,243 billion CFA francs.
After two years of tug-of-war over “misreporting”, Senegal faces new conditions set by the International Monetary Fund (IMF), which demands guarantees on debt sustainability, public finance recovery, and structural reforms. Majdi Debbich, the IMF’s resident representative, discusses the contours of the new program amounting to 1,243 billion CFA francs, the staggering burden of debt management, and the delicate equation of energy subsidies, which are expected to exceed 800 billion CFA francs this year — all realities that the government has not yet fully disclosed to the public.
A New Program, But Under Strict Conditions
At the end of the IMF mission in Dakar, the institution’s technical services announced a staff-level agreement on a new program, with a total disbursement amount of approximately $2.2 billion, or nearly 1,243 billion CFA francs. This figure has been prominently highlighted by Senegalese authorities in recent days. However, what the official discourse tends to downplay is that this agreement is only a first step: the program must be validated by the IMF Board of Directors before any actual disbursement. Nothing is therefore definitively secured.
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This step comes after two years during which the authorities had to shed light on the hidden liabilities of the debt — a long and painful exercise that preceded discussions on this new program. Regarding the instrument mobilized, namely the Extended Fund Facility, Majdi Debbich reminds us that it is a mechanism allowing the IMF to support member countries facing sustained economic and financial difficulties — and not just a one-time cash support.
When asked about the conditions set by the Fund, the resident representative is clear: one of the fundamental requirements of the institution is to ensure that the country’s debt remains sustainable in the medium term. He also emphasizes the need for a program that restores macroeconomic and budgetary balances — a condition that, implicitly, requires adjustment efforts whose magnitude remains unclear for Senegalese citizens.
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Energy Subsidies, the Troubling Knot
This is undoubtedly the most sensitive point, and the least publicly commented on by the government: energy subsidies, which are expected to exceed 800 billion CFA francs this year, play a central role in discussions with the IMF. According to Majdi Debbich, the current system disproportionately benefits households that need it the least — a finding that calls into question the social effectiveness of a mechanism that is presented as a safety net.
The challenge for the authorities now is to better target these mechanisms so that public resources genuinely benefit the most vulnerable populations, while controlling the budgetary burden they represent for the state. A reform that, if undertaken, will not be without consequences for the purchasing power of certain households that have so far benefited from the current system.
The IMF’s resident representative finally emphasizes the need for better transparency in public finance management. For him, budget consolidation must restore the trust of partners and markets and create the conditions for sustainable growth.
All these elements — the actual magnitude of the adjustment, the timeline for subsidy reform, and the specific conditionalities of the program — are details that the government has not yet publicly elaborated on, even as the IMF Board of Directors is set to weigh in on this matter in the coming weeks.