Senegal gets $300m loan in alternative market after IMF halt

Senegal has raised $300 million on the international market to cover its financing needs following an alarming financial audit and the postponement of disbursements by the IMF, the government said Wednesday.

Six months after taking office, the government in September presented the conclusions of its review of public finances in the West African country, with Prime Minister Ousmane Sonko describing the situation as "catastrophic."

The government audit put the budget deficit at 10.4% of GDP, rather than the 5.5% announced by the previous administration.

Public debt stood at 76.3% of GDP, the audit concluded, rather than the previously announced 65.9%.

'Manipulated financial figures'

Sonko accused the former administration of having manipulated the financial figures given to international partners including the IMF, something the previous leaders deny.

The IMF said in mid-October that it had begun assessing the audit's impact on past programmes and those under way under agreements approved in 2023.

Media reports quoted Finance Minister Cheikh Diba as saying that a $1.8 billion aid programme had been suspended and a disbursement of around $559 million had been postponed until 2025.

The IMF did not confirm this when asked by AFP.

Raised $300 million

The finance ministry said in a statement on Wednesday that Senegal had raised $300 million on the international market "in response to the need to consolidate financing, due to the postponement of disbursements initially planned by the International Monetary Fund."

The transaction was underwritten by US bank JP Morgan and has an interest rate of 6.33%, the statement said.

Senegal had already raised $750 million in Eurobonds in June, at an interest rate of 7.75% and with a maturity of seven years.

"The success of this fund-raising... reflects the renewed confidence of international investors in Senegal's signature", the ministry statement said, adding that it would be Senegal's last bond issue on the international market for the 2024 year.

Credit rating downgraded

The government "plans to enter into discussions with the IMF to establish a new programme" aimed at stabilisation and development, the statement said.

Moody's downgraded Senegal's credit rating following the conclusions of the public finance audit and placed the country under observation.

Standard and Poor's maintained its rating, but revised its outlook from stable to negative.

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