The International Monetary Fund (IMF) says that it welcomes Senegal’s efforts to improve tax compliance and reduce reliance on external finance, but stressed that these measures will have no bearing on the outcome of a pending debt misreporting issue.
Senegal has been in talks with the IMF to mitigate the repercussions from erroneous debt and deficit estimates. As a result, disbursements from its $1.8 billion program have been halted for more than a year.
Despite the suspension, Prime Minister Ousmane Sonko stated this week that the country has proven its ability to handle the economy independently. His office has yet to reply to calls for comment.
The IMF reiterated its commitment to working with Senegal to reach a resolution “as soon as possible.”
According to the publication Le Soleil, Sonko stated that the government’s goal is to ensure that all citizens pay their fair amount of taxes, hence preventing rate increases.
The uncovering of unreported debt has had a significant impact on Senegalese financial markets.
This year, the country’s dollar-denominated bonds have performed the poorest of any African issuer.
The crisis has also prompted the government to rely more heavily on regional debt markets, which has sparked criticism from opposition leaders calling for greater openness.
